Geothermal Resources Leasing and Operations

SUMMARY: This final rule amends the regulations which implement the

Geothermal Steam Act of 1970, as amended (the Steam Act). This

rulemaking addresses leasing, permitting and operational requirements

for geothermal exploration, drilling, and utilization operations. The

final rule rewrites all the geothermal resource development regulations

in a plain language style; reduces and streamlines permitting and

information requirements; provides the Bureau of Land Management (BLM)

with the maximum possible flexibility regarding permit issuance

allowing BLM to accommodate the full range of potential geothermal

operations and development scenarios; and reorganizes the regulations

to provide specific permit application informational requirements

allowing BLM and our customers to interpret regulatory requirements

more consistently.

EFFECTIVE DATE: October 1, 1998.

ADDRESSES: You may send inquiries or suggestions to: Director (630),

Bureau of Land Management, 1849 C Street, N.W., Washington, DC 20240.

FOR FURTHER INFORMATION CONTACT: Richard Hoops, (702) 861-6568.

SUPPLEMENTARY INFORMATION:

I. Background.

II. Final Rule as Adopted.

III. Responses to Comments.

IV. Procedural Matters.

I. Background

This final rule revises 43 CFR parts 3200, 3210, 3220, 3240, 3250,

and 3260 which implement the classification, leasing, exploration,

drilling, and utilization requirements of the Steam Act. The new rule

eliminates existing parts 3210, 3220, 3240, 3250, and 3260 as currently

written. It also rewrites the corresponding subparts under part 3200

into plain language, and reorganizes the existing regulations so that

all permitting requirements and operator responsibilities for each

phase of development may be found in a specific subpart. The rule more

clearly delineates the existing permitting and informational

requirements.

The existing part 3280, concerning unit agreements, is not affected

by this final rule. We intend to revise part 3280 along similar lines

in a separate rulemaking sometime very soon.

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

reordered to correspond with the sequence in which leasing procedures

occur. The exploration regulations are moved from existing subparts

3209 and 3264 to a new 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

in the new rule as subpart 3270.

The following table lists how each subpart is reorganized:

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

Existing regulations New regulations as revised

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

3200--Geothermal Leasing: 3200--Geothermal Resource Leasing.

General.

3201--Available Lands.

3203--Obtaining a Lease.

3202--Qualifications of 3202--Lessee Qualifications.

Lessees.

3216--Transfers.

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

3207--Additional Lease Term.

3208--Extending the Primary Lease Term.

3209--Conversion of a Lease Producing

Byproducts.

3210--Additional Lease Information.

3204--Surface Management 3250, 3260, 3270--Exploration, Drilling,

Requirements. Utilization Operations.

3205--Fees, Rentals and 3211--Fees, Rents, and Royalties.

Royalties.

3206--Lease Bonds............ 3214--Personal and Surety Bonds.

3215--Bond Collection After Default.

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

or Future Interest.

3208--(Reserved).............

3209--Geothermal Resources 3250--Exploration Operations.

Exploration.

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

General.

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

General.

3241--Transfers.............. 3216--Transfers.

3242--Production and Use of 3272--The Contents and Review of a Plan

Byproducts. of Utilization and Facility Construction

Permit.

3243--Cooperative 3217--Cooperative Conservation

Conservation Provisions. Provisions.

3244--Terminations and 3213--Relinquishment, Termination,

Expirations. Cancellation, and Expiration.

3250--Utilization of 3273--Applying for and Obtaining a Site

Geothermal Resources. License.

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

Operations:. 3270--Utilization of Geothermal

--General Resources--General.

3261--Jurisdiction and 3260--Geothermal Drilling Operations--

Responsibility. General.

3262--Conducting Drilling Operations.

3263--Well Abandonment.

3270--Utilization of Geothermal

Resources--General.

3262--Requirements for 3261--Permitting of Drilling Operations.

Operating Rights Owners.

3262--Conducting Drilling Operations.

3271--Permitting of Utilization

Operations.

3272--The Contents and Review of a Plan

of Utilization and Facility Construction

Permit.

3275--Conducting Utilization Operations.

3263--Measurement of 3275--Conducting Utilization Operations.

Production.

3264--Reports to be Made by 3261--Permitting of Drilling Operations.

All Lessees.

3264--Reports: Drilling Operations.

[[Page 52357]]

3274--Applying for and Obtaining a

Commercial Use Permit.

3265--Procedure in Case of 3265--Inspection, Enforcement, and

Violation of the Regulations. Noncompliance (drilling).

3277--Inspection, Enforcement, and

Noncompliance (utilization).

3264--Appeals................ 3256--Exploration Operations Relief and

Appeals.

3267--Geothermal Drilling Operations

Relief and Appeals.

3279--Utilization Relief and Appeals.

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

The final rule published today is the last stage of a rulemaking

process that amends the regulations in 43 CFR group 3200. This rule was

preceded by a proposed rule published in the Federal Register on

October 8, 1996 (61 FR 52736). The proposed rule invited public

comments for 90 days, from October 8, 1996, through January 6, 1997.

BLM received comments from four members of the geothermal industry and

from the Forest Service. These comments were carefully considered prior

to making any changes to the final rule.

II. Final Rule as Adopted

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

Leases; 3220 Competitive Leases; and 3240 Rules Governing Leasing

Because this rule is structurally different from the existing rule,

we are including here a full discussion of the changes between the

existing and final rule.

First, the final rule restructures the definitions section at 43

CFR 3200.1. The new definitions section retains many of the existing

terms, removes several technical terms (such as ``the Secretary'' and

``the Service'') which no longer fit within the plain language style,

and adds new terms (such as ``MMS'') which play a significant role in

the new rule. For the sake of clarification, BLM has also added several

common leasing terms which are often misused or misunderstood. For

example, BLM has defined the terms ``primary term,'' ``extended term''

and ``additional term.''

We have also added definitions for the new or revised permit

applications. We have clarified other terms, such as ``commercial

operation'' and ``exploration operations.'' We have expanded the

definition of ``commercial quantities'' to address the difference

between quantities for individual leases and unit production.

Unlike the existing rules, the revised definitions section contains

only those terms which are used repeatedly throughout the regulations.

Therefore, some existing definitions of terms which have narrow

applicability, such as ``significant thermal features within units of

the National Park System,'' have been relocated to the specific

sections to which they apply. Finally, we have alphabetized the

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

forth, in keeping with current Federal Register guidance.

Section 3200.2 describes the information collection requirements

associated with the regulations under part 3200, section 3200.3

describes changes of agency responsibilities, and section 3200.5

indicates where the hearings and appeals regulations are found. Neither

section contains any substantive change from current practices.

Next, BLM has condensed and rewritten into plain language subpart

3201, which describes lands subject to geothermal leasing. Section

3201.10 describes those lands which are available while section 3201.11

covers those which are not. Neither section changes the existing rules

in any substantive way.

New subpart 3202 contains the provisions setting forth the

qualifications for a lessee. Again, no substantive changes have been

made. Lessees must meet the same citizenship requirements; we may

request that a lease offeror submit proof that it qualifies; offerors

may act through another person; and if the offeror dies before we issue

the lease, we will continue to use the current procedures to resolve

the situation.

New subpart 3203 contains all of the existing provisions generally

applicable to geothermal resource leasing, such as how to obtain a

lease. Most significantly, this subpart describes how we determine

whether leases will be issued through competitive or noncompetitive

bidding. Subpart 3204 then describes the procedures for obtaining a

noncompetitive lease, while subpart 3205 describes the competitive

bidding process.

The only substantive change between the existing and final rule in

subpart 3204 is that we will no longer prepare an availability list of

relinquished or terminated leases. Instead, lands will become available

for noncompetitive leasing as soon as we close each case. Under the new

43 CFR 3204.15, an offeror may apply for these lands at any time, and

instead of collecting applications in one-month application periods, we

will open each application upon receipt and immediately begin

processing it. This new process will substantially improve the way BLM

handles noncompetitive lease applications. By eliminating the one-month

delay, we will create a rolling application review process which will

permit us to approve or deny an application much sooner than under the

existing, more formal process. If we receive multiple, overlapping

applications before approving a noncompetitive lease, we will examine

the land to determine whether to designate a known geothermal resource

area (KGRA), in which case we will reject all noncompetitive

applications and the lands will be leased competitively. Otherwise, we

will offer the lease to the first person who submits an application

which meets all the requirements.

New subpart 3205 contains the provisions for competitive leasing.

No substantive changes have been made to the core provisions between

the existing and final rule. We will continue to issue competitive

leases as in the past, relying on published notices of available lands

and a sealed bidding process. However, the new regulations permit us to

use a wider variety of methods for providing public notice of a sale,

such as posting the list in local BLM offices or on the Internet, or

preparing external affairs news releases. Publishing sale notices in

local newspapers is no longer required, but remains an option for

providing notice of the sale.

Subparts 3206 through 3210 cover generally applicable lease terms,

such as length of lease terms, acreage limitations, and other

obligations. These subparts contain most of the existing lease terms,

although we have made a few substantive and organizational changes

since the proposed rule. For example, we no longer require operators to

conduct diligent exploration during lease years 11 through 15, since

these lease years are not part of the primary period. In addition,

final 43 CFR 3208.10(a)(1) modified the current option to extend a

lease by performing

[[Page 52358]]

diligent drilling over the end of the primary period. To qualify, the

operator must diligently strive to reach a reasonable drilling target

with a well permitted and designed for production, which we will define

based on local geology and the type of development proposed by the

operator.

Under 43 CFR 3208.10(a)(4) of the final rule, leases may be

extended in an additional situation. For leases committed to a unit,

leases which expire before the unit does could be extended to match the

unit term, as long as diligent unit development is occurring. So, any

lease or portion of a lease not part of a participating area may then

be eligible for other types of extensions. This is true even after it

is eliminated from a unit by contraction or unit review--unless the

lease previously was extended under 3208.10(a)(2), as these extensions

must be successive. Extensions are intended to alleviate operator's

concerns that leases adjacent to producing areas may be terminated,

regardless of diligence, due to the lack of viable electrical sales

contracts or continual poor energy market conditions.

While this rule does not define ``diligent unit development,'' BLM

generally measures diligence by comparing your actions in that year

with the objectives you set in your currently approved plan of

development. We will establish clearer guidance on what is ``diligent

unit development'' in the forthcoming unit regulations.

The final rule includes other minor substantive changes. For

example, we eliminated the special requirements (formerly at 43 CFR

3203.4(d)) for describing unsurveyed public lands adjacent to tidal

waters in southern Louisiana and in Alaska. If you wish to lease

minerals in these areas you must describe the unsurveyed land in

accordance with the general regulations now found at 43 CFR 3204.11.

Several other portions of existing subpart 3203 are relocated. Plans of

development and operation (existing section 3203.6) are now described

in various sections within new subparts 3260 and 3270. Provisions for

oil, gas and helium reservations are moved from section 3203.7 to

section 3210.17. The section concerning converting leases to a mineral

lease are relocated from section 3203.1-6 to section 3209.10.

The new subpart 3211 replaces existing provisions for fees, rents

and royalties previously found in subpart 3205 with regulations that

are easier for the public to understand and for BLM to manage. The only

substantive change here is that we have removed the limitations on

overriding royalties for two reasons: we no longer track overriding

royalties and therefore cannot enforce this requirement; and

maintaining the limitation requirement may unnecessarily involve the

government in private business negotiations. Sections 3212.15 and

3212.16 of the revised rule contain procedures which provide sufficient

protection for the United States' royalty interests.

Subparts 3212 and 3213 contain consolidated procedures for altering

the terms of a lease, including suspensions, relinquishments,

terminations, cancellations, and expirations. The only significant

change between the existing and final rule is that we have relocated

the waivers and suspensions of payments provisions from the fees, rents

and royalties regulations in part 3205 to a separate section in subpart

3212. All other changes in the final rule are limited to consolidation

and plain language rewrites.

Subpart 3214 expands existing bonding regulations to give greater

detail about how bond amounts may change. We may increase a bond amount

when we determine an operator has a history of noncompliance or is

deficient in paying royalties to the Minerals Management Service (MMS).

BLM will not set a bond amount higher than the total sum of the

estimated costs of plugging and abandoning a well and reclaiming the

surface, uncollected royalties due to MMS, and any unpaid amount owed

to BLM due to previous violations.

Subpart 3215, formerly 43 CFR 3206.7, deals with bond collection

after default. Subpart 3216, formerly 43 CFR 3241, contains the

regulations governing transfers. Subpart 3217, formerly 43 CFR 3243,

governs cooperative conservation provisions. These sections do not

substantively differ from the existing regulations.

Subpart 3250--Geothermal Resource Exploration Operations: General

One of the most important changes this final rule will make is to

relocate separate functions to separate subparts, in order to make each

function easier to locate and understand. Subpart 3250 will contain the

exploration operation rules previously published at part 3209. Also, in

order to separate operational regulations from the leasing provisions,

the geothermal resources utilization regulations previously found in

part 3250 are now relocated to subpart 3270. This change allows us to

consolidate the permitting procedures and operational responsibilities

for exploration operations into a single set of standards which will

now be found in part 3250.

Part 3250 sets out the regulations applicable to exploration

operations. Subpart 3250 explains when the exploration regulations

apply and general operational standards. Subpart 3251 sets forth the

permitting requirements for exploration operations. The regulation is

formatted to follow the logical exploration sequence from stating what

permits are required (3251.10), to the contents of the permit

applications (3251.12), to the actions we will take on a permit

(3251.13), to bonding requirements for exploration operations

(3251.15).

This final rule clarifies several other requirements: operational

(section 3252.10) and environmental (3252.11) requirements; what types

of resource evaluation activities you may conduct (3252.13); and

gradient well completion and abandonment requirements (3252.14 and

3252.16). We are also changing some requirements. For example,

Geothermal Resources Operational Order 1 limited the depth of

temperature gradient wells to 500 feet unless we granted specific

authorization to drill deeper. However, new section 3252.12 allows an

operator to propose a temperature gradient well to any depth necessary

to adequately measure temperature gradients. Subpart 3254 sets out the

provisions applicable to inspection, enforcement and non-compliance.

Section 3254.10 permits BLM to inspect exploration operations, and

under section 3254.11 we can require corrective action when operations

are not in compliance. The new regulations will also allow the core

drilling of temperature gradient wells, whereas the existing

regulations limited this use of core drilling. Finally, sections are

added which identify how proprietary and confidential information will

be handled (subpart 3255) and explain appeals procedures (subpart

3256).

Subpart 3260--Geothermal Resource Operations: General

In order to consolidate drilling operations regulations into a

single, separate location, we amended subpart 3260 to address only

drilling permit application, approval, reporting and related

requirements. Regulations addressing permits for utilization facilities

and information requirements related to the utilization of geothermal

resources are moved to a new part 3270. In the noncompliance provisions

(section 3265.12) we clarified our authority to take post-permit

actions, such as requiring modifications or shutting down operations

that are in

[[Page 52359]]

noncompliance or pose an immediate threat to the public, the

environment or private property.

We rewrote the regulations in subpart 3261 for permitting drilling

operations to make them more flexible by allowing the operator two

options to submit the required plan and permits. Under the first

option, the operator could submit an operations plan, drilling permit

and drilling program at the same time. If and when we complete the

applicable environmental review and approve a drilling permit, the

operator could commence pad construction and drill and test the well.

Under the second option, the operator could submit the operations plan

and a sundry notice for pad construction only. We would then begin an

environmental review of both the pad construction and drilling

operations. If and when that was completed, and we determined that the

plan was acceptable, we would approve the sundry notice, authorizing

drill pad and access road construction. The operator would then submit

the drilling permit and drilling program for review at a later date.

The final regulations reduce the operations plan information

requirements to cover only specific drilling activities. This

eliminates the existing requirement that applicants also address

resource utilization, which will now be covered by the utilization

plan. An applicant may prepare an operations plan and drilling program

which could apply to more than one well when similar environmental

situations exist and the same drilling procedures are utilized.

However, separate geothermal drilling permits are required for each

proposed well.

New subpart 3262 contains the requirements for conducting drilling

operations. These regulations clarify the operational (3262.10) and

environmental (3262.11) requirements an operator must meet when

drilling a well. We may also require permittees to post signs at each

well (3262.12), to space wells (3262.13), and to take samples or

perform certain tests and surveys (3262.14). We already require each of

these actions under the existing regulations.

New subpart 3263 discusses well abandonment requirements. These

regulations do not differ substantively from existing rules. Subpart

3264 as revised identifies the informational requirements of each

report an operator must submit during the completion, use, and

abandonment of a well. Operators must submit a geothermal sundry notice

for actions such as casing program changes, well stimulation, or

plugging and abandoning a well, or to amend an approved permit or

sundry notice. We may waive the sundry notice requirement for specific,

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

resulting in an environmental impact not already described in an

operations plan, the applicant must submit a geothermal sundry notice

to amend the operations plan. You may not begin activity described in

the sundry notice until we have approved the notice.

These permit review options provide both BLM and resource users the

greatest flexibility to address the broad range of operational and

environmental issues encountered during geothermal development. As a

result, we will be able to respond to industry requests more

efficiently and ensure all environmental requirements are met.

Several other sections were modified to improve the way in which we

oversee existing drilling operations. New section 3264.14 will change

the existing requirement to notify BLM of all accidents occurring on

Federal lands (current 43 CFR 3262.7) to requiring notification and

reports only when an accident affects geothermal operations or causes

environmental hazards. Section 3266 as revised sets forth how we treat

confidential documents. If we require you to submit a document you

regard as confidential, you must clearly mark each page of the document

with the words ``confidential information.'' We must ultimately

determine whether the document contains any information exempt from

public disclosure under the Freedom of Information Act (FOIA) and the

Department of the Interior regulations set forth in 43 CFR part 2.

We have revised the noncompliance rules in subpart 3265 to more

clearly define what we can do when an operator fails to promptly

commence or complete a required remedial action. Our responses may

include requiring modification of project operations, temporary or

permanent shut down of operations, or lease termination. Subpart 3267

provides procedures for requesting operational variances and filing

appeals.

Because the requirements specified in some of the current

Geothermal Resources Operational Orders have become out-dated, we

revised the requirements and incorporated them into these regulations.

This final rule changes some standards and requirements from existing

Orders.

Subpart 3270--Geothermal Resource Utilization: General

This final rule establishes a new part 3270, consolidating the

existing permitting procedures and operator responsibilities for

producing and utilizing geothermal resources, with some changes.

In order for the permit titles to more clearly identify the

operational authorization each permit grants when it is approved, we

have renamed the current utilization permit as the ``facility

construction permit,'' and production permits as the ``commercial use

permit.''

Subpart 3270 identifies general operational standards and facility

operator responsibilities when utilizing geothermal resources. Subpart

3271 explains what authorization an operator needs to construct and

test a utilization facility. Subpart 3272 describes the utilization

plan and facility construction permit requirements, while the site

license requirements are found in subpart 3273. The requirements will

vary depending on the status of the lands and any underlying leases,

but in general, an operator must submit a utilization plan, facility

construction permit, and a site license, where applicable (3271.10).

Applicants must also submit the utilization plan and facility

construction permit together. You could choose to submit the site

license separately, though BLM will not approve the facility

construction permit until we receive an acceptable site license and

related bond. If the operator wishes to use Federal geothermal

resources to test a utilization facility located on private or split

estate lands, the Federal lessee or unit operator must submit a sundry

notice for our approval prior to the use of Federal geothermal

resources (3271.13). To obtain authorization to place a utilization

facility into commercial operation, an operator must submit a

commercial use permit (3271.14).

We changed the utilization permitting process to make the

application process more flexible by allowing the operator to submit

necessary information as it becomes available. Also, all types of

utilization facility proposals will go through the same permitting

process; operators will no longer have to undergo separate permitting

procedures based on generation capacity, research and demonstration

facilities, and individual well facilities.

Before you can begin any utilization facility construction and

testing that will cause a surface disturbance, BLM must review your

utilization plan and approve your facility construction permit and site

license. What permits you need to begin operations depends on what part

of your operation is on Federal lands. If your facility is located on

Federal lands leased for Federal geothermal resources, you need an

[[Page 52360]]

approved facility construction permit and site license to begin site

preparation, construction and testing, and a commercial use permit to

begin operating the facility or using the resources. [Commercial

operation is defined as delivering any form of geothermal resources for

sale or for use by the operator.] By contrast, if a proposed

utilization facility, pipelines and other related structures are

located on private or split estate (private surface and Federal

mineral) lands, and the facility is receiving production allocated to

or from wells located on BLM-managed leases, you only need a commercial

use permit to begin utilizing Federal resources.

If the pipelines are located on BLM-managed lands and the

utilization facility is not, the utilization plan only needs to address

the pipelines. Approval of a commercial use permit authorizes

construction of the pipelines. An approved sundry notice also

authorizes preliminary site investigations if not already described in

a utilization plan.

A utilization plan describes the proposed facility and its

environmental protection measures, and consists of most of the same

information which the existing regulations require for an operations

plan (existing 43 CFR 3262.4). However, the new utilization plan will

differ from the old operations plan in some respects. For example,

instead of always requiring you to collect baseline environmental data

before beginning commercial operations, we will determine which, if

any, specific environmental parameters must be addressed, and how long

(not exceeding one year) each parameter will be monitored (3272.12(c)).

We may also require monitoring of facility operations as a condition of

approval of a commercial use permit to ensure environmental compliance

(3272.12(b)).

The site license requirements are relocated from 43 CFR 3250.6 to

subpart 3273 and incorporated directly into the utilization permitting

process. Now, when you apply for a utilization permit, you must also

identify a site license area located on Federally-leased lands.

Applicants will have to submit a site license bond with their license

application (3273.19). 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,

remain unchanged. BLM may not require a site bond for a direct use

facility.

These regulations eliminate the requirement that a lessee or unit

operator pay a minimum annual rent of $100 per acre for the site

license area, because a lease already grants the right to utilize a

reasonable amount of surface (3273.18). However, if an entity other

than a lessee or unit operator owns the utilization facility, you must

pay the site license rent.

We eliminated the requirements for a joint utilization agreement

found under existing part 3250 because they duplicate the authorization

granted under the site license. When a proposed facility is owned by

someone other than the lessee or unit operator, the facility operator

must provide us a copy of its written agreement with the lessee or unit

operator to site a utilization facility on the leased land. The third

party, as the facility operator, then assumes full responsibility for

all phases of facility permitting and operations.

Subpart 3274 addresses the requirements for obtaining a commercial

use permit, which authorizes the sale and/or use of Federal geothermal

resources. We must approve this permit before a utilization facility

starts commercial operation. To apply, you must provide specific

information about the proposed facility's operations, particularly its

production and royalty metering. The new rules no longer require

detailed engineering drawings; generalized schematics of the facility

are adequate. We may attach conditions of approval to the commercial

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

with environmental and/or operational standards, and we may modify or

shut down the facility operation when it is in noncompliance with

environmental or operational standards.

Subpart 3275 identifies the operational and environmental

requirements the facility operator must meet. The revised regulations

incorporate and add greater detail to Geothermal Resource Operational

Order 7, which contains standards for the types and accuracy of meters

used to measure production or utilization or to determine royalties.

The new rules specify the following for both electrical generation and

direct use facilities: (1) where the operator must locate the various

types of meters (43 CFR 3275.16); (2) meter accuracy standards which

vary depending on the volume of resource measured (43 CFR 3275.15);

and, (3) meter accuracy standards for installation and measurement

(3275.16).

Subpart 3276 contains monthly well and facility operations

reporting requirements, including contents and accuracy standards. The

information you must provide in the monthly facility report will vary

depending on the type of utilization facility operated. For simplicity,

you may combine monthly well and facility reports in certain instances.

Subpart 3277 addresses inspection, enforcement and noncompliance

procedures. We will routinely inspect utilization facility operations,

and these rules identify the types of records an operator must have

available for inspection. In cases of noncompliance, we will issue an

Incidence of Noncompliance requiring corrective action to be taken

within a specified time period. This subpart identifies what additional

action we may take to correct problems of noncompliance which continues

or is serious in nature, including bond collection, modification of

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

lease termination. Finally, sections are revised which identify how

proprietary and confidential information will be handled (subpart 3278)

and appeals procedures (subpart 3279).

We have made a number of other changes between the proposed and

final rule. The vast majority of these changes were made to further

clarify a provision or are merely editorial in nature. We also made a

few substantive changes to the rule which are necessary to correct

errors in the proposed rule. For example, we revised and added

definitions in section 3200.1 for ``interest'' and ``person.'' Each of

these was added to enable us to simplify other definitions, such as

``lessee.'' We also edited the definition of operating rights to bring

it in line with the same term used in the BLM's oil and gas

regulations.

We added a provision at section 3208.17 to make it clear that if

production begins, a person is not entitled to a credit for payments

made in lieu of production in commercial quantities or significant

expenditures. This is not a substantive change from the existing

regulations, but this provision is necessary to avoid any disputes in

the future.

Section 3214.18 also re-defines what a person is liable for. The

final rule now states that the liability of an interest owner for rents

and royalties will be determined under the applicable MMS regulations.

The proposed rule had stated that all interest owners assume full

liability for rents and royalties, and this was not in keeping with MMS

regulations.

Finally, we made editorial changes between the existing and new

rule to correct several cross-references. We will modify our forms to

accommodate the numerous changes in the proposed regulations, as well

as to account for existing forms which have expired.

[[Page 52361]]

III. Responses to Comments

During the public comment period in response to the proposed rule,

BLM received a total of five comments. The commenters included four

private geothermal resource developers and the Forest Service, and

generally consisted of suggestions to revise lease extension provisions

and address unitization issues. The commenters also addressed the need

to maintain a site license provision in the regulations, suggested

changing the names of some of the permits to more accurately describe

the authorization provided by the permit, noted the need for

additional, required coordination between BLM and institutions

financing power plant projects, and identified issues pertaining to

confidential and proprietary information requirements, and production

reporting. The Forest Service suggested means for improving BLM and

surface management agency coordination of permit application review and

completing the National Environmental Policy Act of 1969 (NEPA)

documentation.

Lease extensions. Several comments suggested that we change the

proposed procedures for requesting successive 5-year lease extensions,

at sections 3208.11-12. Two commenters said BLM should allow a lessee

to change its election to either make payments in lieu of commercial

quantities production or to make significant expenditures on an annual

basis during each 5-year extension period. This change would allow

companies much greater flexibility in deciding how to allocate

resources as energy market conditions fluctuate. Another comment

suggested that BLM allow excess significant expenditures from the first

extension period to be applied to the second extension period.

BLM is not adopting these recommendations because we believe they

contradict the intent of Congress expressed in the Steam Act

amendments. Our review of the legislative history suggests that the

House Committee on Interior and Insular Affairs (Report 100-664) did

not intend to provide such options. Lessees must make the election to

either make payments in lieu of commercial quantities production or to

make significant expenditures at the beginning of each extension

period, and significant expenditures from one extension period may not

be applied to a subsequent extension period.

A number of comments suggested changing the lease extension

provisions related to unitization. Several companies requested that BLM

allow 5-year lease extensions upon removing a lease from a unit either

by segregation or contraction. We cannot adopt this suggestion,

however, because we believe that unit administration actions should not

directly result in lease extensions. The new provisions at subpart 3208

broaden lease extension provisions when a lessee diligently completes

unit operations, and also on an individual lease basis once a lease is

no longer involved in a unit. These rules give diligent lessees ample

opportunities to extend their lease.

Unit Administration. Many comments addressed unit administration

procedures such as effective dates of a participating area and

suspensions of drilling obligations and unit contraction provisions. We

intend to publish a proposed rule in the Federal Register to rewrite

the unit regulations (part 3280) and we will address these issues at

that time.

Project Financing. One company submitted several comments regarding

the requirement that we coordinate with the lending institution which

has provided project financing. The comments recommended requiring us

to provide formal notice to the lender of a recorded lien on the

Federal lease when an operator is in noncompliance with lease terms or

permit conditions of approval. BLM would then be required to allow and

accept corrective action taken by the lender. Another comment said that

we should grant a replacement lease directly to the lender and cancel

the operator's lease if the operator files for bankruptcy.

We believe these are standard business arrangements which are best

resolved and coordinated between the operator and lender themselves.

The operator and lender should decide among themselves as to when the

operator will notify the lender of our actions taken on the lease. We

cannot justify the additional administrative burden we would undertake

by adopting this comment. Furthermore, we cannot replace a lessee on

its own initiative, although BLM does have the authority to cancel a

lease.

Site Licenses. In the preamble to the proposed rule, we requested

comments regarding the need for maintaining the site license provisions

(subpart 3273). Two companies responded that the site license should be

maintained, but the term of the site license should be longer and

independent of the Federal lease on which it is located. These changes

would lessen a lender's concerns for the continued viability of a

project. Unfortunately, we cannot adopt these suggestions because they

would go beyond our authority under the Steam Act.

Expenditures. Another comment recommended that the types of

activities for which an operator may receive approval of significant

expenditures (subpart 3208) and diligent exploration expenditures (DEE)

(subpart 3210) should be broadened to include expenditures related to

well field maintenance, environmental compliance, and negotiating power

purchase contracts.

BLM has decided not to accept this recommendation. Under the

existing regulations, activities qualifying as significant expenditures

already include environmental review and the design and construction of

utilization facilities, in addition to conducting drilling and

geophysical operations. The purpose of the DEE requirement is to

identify new geologic information related to the lease. Thus, the

qualifying activities are limited to drilling and geophysical

operations and activities related to obtaining permits to conduct those

operations. Maintenance of a well field and related facilities are

routine expenses incurred once the facilities are in place and

therefore do not meet the requirements of either significant

expenditures or DEE.

Utilization Permits. Several comments suggested changing the names

of the various permits related to the utilization phase of development

(part 3270). Some companies believed that the titles of the proposed

permits made it difficult to understand what types of activities each

permit authorized. Based on these comments, we have revised the title

of each permit granting authorization to utilize Federal geothermal

resources to more accurately describe the authorization granted by each

permit. The new names are identified in Section II of this preamble

discussing rule revisions of part 3270--Utilization of Geothermal

Resources.

Proprietary and Confidential Information. One commenter suggested

that instead of requiring operators to stamp each page of a document it

considers to be proprietary or confidential information (PCI) as

``confidential,'' only the document cover should be stamped. Otherwise,

to implement the proposed PCI policy of stamping each page we would

have to stamp every page of PCI received and filed over the past 20

years, which would be very burdensome for both BLM and the geothermal

industry. We are unable to accept this comment. BLM is currently

preparing language to use in all BLM regulations which will call for

people in this situation to mark confidential information page by page.

[[Page 52362]]

The reason is that when we consider releasing documents under the FOIA,

we cannot withhold an entire document if only part of it qualifies for

withholding. We must exercise our FOIA duties on a line-by-line basis,

protecting only that information which qualifies for protection and

releasing the rest. Therefore, the final rule now requests that you

mark each page that you think contains confidential information,

consistent with the forthcoming BLM FOIA rules. This does not mean that

we have to review every document filed in the last 20 years. As FOIA

requests come in, we will review the documents included in the request

for confidentiality as FOIA requires us to do, whether past documents

are marked as PCI or not.

Reporting Venting and Leakage. One comment recommended that

proposed section 3276.11(g), requiring the operator to report the

amount of steam or hot water lost to venting or leakage, not be

required for every well every month, because significant venting or

leakage is a relatively rare occurrence, and it adds an additional

reporting requirement that would almost always be ``zero.'' We agree,

and the final rule requires operators to report venting or leakage only

if it is in significant quantities, which is defined to be more than

0.5 percent of total lease production in any given month.

Surface Management Agency Involvement. The Forest Service

recommended that for leases located on lands managed by the Department

of Agriculture, we obtain concurrence from the surface management

agency prior to renewing a lease which is in an additional term and

eligible to be renewed for a second 40-year term. We agree with the

comment since this situation involves a leasing decision. In this final

rule we revised section 3207.11 to require surface management agency

concurrence before we grant the renewal. Another comment from the

Forest Service suggested BLM revise section 3250.10(a)(2) to state that

the surface management agency must concur with surface use and

reclamation requirements before we grant an exploration permit. BLM

disagrees with this comment since it exceeds the standard of the Steam

Act. We will consult with the Federal surface management agency.

Well Pad Authorization. One comment expressed the concern that

authorizing an operator to construct a well pad prior to granting

authorization to drill a well (section 3261.15) may cause well pads to

remain unattended for extended periods of time, or cause operators to

build well pads which are not used. However, we do not share this

concern; it is unlikely that an operator will waste money building

drill pads and access roads without drilling a well in a reasonable

amount of time. Furthermore, this provision is necessary to permit

flexible solutions when well pad construction cannot occur in close

timing to the drilling of the well. For example, in some areas the dirt

work associated with access road and pad construction can occur only

during limited periods of the year without causing significant soil

erosion. As a result, an operator may not know which specific drilling

equipment will be used, or which drilling procedures to follow, at the

time the pad construction must take place. This provision would give

BLM and the operator the tools to prevent unnecessary delays.

Accident Reporting Requirements. One commenter, concerned with

overlapping reporting requirements, recommended we revise the accident

reporting requirements in section 3264.14 and 3276.15 to allow other

notification requirements, such as the requirement to report hazardous

spills, to supersede this requirement. We do not agree with this

comment. We should be notified of accidents regardless of whatever

other reporting requirements are in effect. The operator may send us a

copy of another report to satisfy this requirement.

A related comment recommended that we should include language to

require reporting within less than 24 hours in some instances. Because

of the numerous types of accidents that could occur, we felt that it

would be overly burdensome to define different reporting requirements

for different types of accidents. Each individual office will still

have the flexibility to reduce reporting times on a case by case basis.

Environmental Protection Requirements. BLM received two comments

regarding environmental protection requirements an operator must meet

when drilling a well. One suggested changing the phrase ``as much as

possible'' in section 3262.11(a)(3) to ``as necessary,'' because while

accommodating other land uses could involve a wide variety of possible

actions, we will determine which are actually necessary. We have made

this change. A second comment suggested adding another requirement to

this section: ``Meet any other specific environmental conditions,

stipulations, or mitigation measures required as a result of the NEPA

environmental review.'' We have not adopted this suggestion. All

mitigation measures developed during the NEPA review will be included

as conditions of approval on the permit authorizing the action.

Therefore, this comment has already been addressed in section 3262.10

(c), which says ``[y]ou must conduct operations in accordance with

conditions of approval.''

Finally, two comments addressed facility operations environmental

and safety requirements. One suggested adding the phrase ``and the

surface management agency'' to the end of the paragraph at section

3275.12(f). This change was not adopted. Although we will consult with

the surface management agency before approving facility abandonment

procedures, we are ultimately responsible for issuing the approval of

the operation. The other comment suggested requiring operators to

``meet all conditions, stipulations, and mitigation measures required

by the environmental review.'' We will incorporate any mitigation

measures developed through the NEPA review process into the conditions

of approval for the permit authorizing the action. Under 3275.11(d),

the operator must comply with conditions to the approved plan or

permit. Therefore, we do not believe the change is necessary and have

not adopted it.

IV. Procedural Matters

National Environmental Policy Act

BLM prepared an environmental assessment (EA) and determined that

this final rule would not constitute a major Federal action

significantly affecting the quality of the human environment under

section 102(2)(C) of NEPA, 42 U.S.C. 4332(2)(C). BLM has placed the EA

and the Finding of No Significant Impact 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).

Paperwork Reduction Act

The Office of Management and Budget has approved the information

collection requirements in the final rule under 44 U.S.C. 3501 et seq.,

and has assigned clearance number 1004-0132. Sections of this final

rule with information collection requirements include several sections

in subparts 3260-3267, and BLM estimates the public reporting burden of

these sections to average as follows:

(1) Geothermal drilling permit, 10 hours per response.

(2) Geothermal sundry notice, 1 hour per response.

(3) Geothermal well completion report, 2-6 hours per response.

[[Page 52363]]

(4) Monthly report of geothermal operations, 1 hour per response.

This estimate includes 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 estimate or any other aspect of

this collection of information, including suggestions for reducing the

burden, to Information Collection Clearance Officer, Bureau of Land

Management, U.S. Department of the Interior, 1849 C Street, N.W., Mail

Stop 401-LS, Washington, DC 20240, and the Office of Information and

Regulatory Affairs, Desk Officer for the Department of the Interior

(1004-AB18), Office of Management and Budget, Washington, DC 20503.

Regulatory Flexibility Act

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

amended, 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 on a substantial number of small entities.

BLM has determined that this rule will not have a significant economic

impact on a substantial number of small entities for two reasons.

First, the Small Business Administration has defined a small entity,

for purposes of geothermal resource development, as a business with no

more than 500 employees or a business with no more than $9 million in

annual receipts. 13 CFR 121.201 (1997). Based on ongoing operations,

BLM estimates that there are no more than two existing operators that

would qualify as small entities under either definition. Second, as the

rule is focused on reorganizing and streamlining BLM's current

regulations without making any major substantive changes, it will not

have any economic impact on any sector of the geothermal resources

industry. BLM therefore certifies that this rule will not have a

significant economic impact on a substantial number of small entities.

Small Business Regulatory Enforcement Fairness Act

This rule is not a ``major rule'' and therefore does not require

Congressional approval under Subchapter E of the Small Business

Regulatory Enforcement Fairness Act, P.L. 104-121 Title II, 5 U.S.C.

804(2). Because these regulations are limited to the stylistic,

organizational and minimal substantive changes described above, they

will not have an annual effect on the economy greater than $100

million; they will not result in major cost or price increases for

consumers, industries, government agencies, or regions; nor will they

have significant adverse effects on competition, employment,

investment, productivity, innovation, or the ability of U.S.-based

enterprises to compete with foreign-based enterprises.

Unfunded Mandates Reform Act

Because these regulations are limited to the stylistic,

organizational and minimal substantive changes described above, they

will not impose an unfunded mandate on State, local, or tribal

governments or the private sector of more than $100 million per year;

nor will they have a significant or unique effect on State, local, or

tribal governments or the private sector. Therefore, BLM is not

required to prepare a statement containing the information required by

the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.).

Executive Order 12612, Federalism Assessments

Again, because these regulations are limited to the stylistic,

organizational and minimal substantive changes described above, the

final rule will not have a substantial direct effect on the States, on

the relationship between the national government and the States, or on

the distribution of power and responsibilities among the various levels

of government. Therefore, in accordance with Executive Order 12612, BLM

has determined that this final rule does not have sufficient Federalism

implications to warrant preparation of a Federalism Assessment.

Executive Order 12630, Takings Assessments

The final rule does not represent a government action capable of

interfering with constitutionally protected property rights. Section

2(a)(1) of Executive Order 12630 specifically exempts 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 final rule is to modify regulations to make them easier to read,

streamline them and make only minimal substantive changes intended to

enhance the geothermal resource leasing process, there will be no

private property rights impaired as a result. Therefore, the Department

of the Interior 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 12866, Regulatory Planning and Review

This final rule is not a significant regulatory action and was not

subject to review by the Office of Management and Budget under

Executive Order 12866. These revised regulations will not have an

effect of $100 million or more on the economy. They will not adversely

affect in a material way the economy, productivity, competition, jobs,

the environment, public health or safety, or State, local, or tribal

governments or communities. These revised regulations will not create a

serious inconsistency or otherwise interfere with an action taken or

planned by another agency. Finally, these regulations will not alter

the budgetary effects of entitlements, grants, user fees, or loan

programs or the right or obligations of their recipients; nor will they

raise novel legal or policy issues.

Executive Order 12988, Civil Justice Reform

Under Executive Order 12988, the Office of the Solicitor has

determined that this proposed rule would not unduly burden the judicial

system and that it meets the requirements of sections 3(a) and 3(b)(2)

of the Order.

Author: The principal authors of this rule are Richard Hoops and

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

Santillian of the BLM California State Office, Richard Estabrook of the

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

Oregon State Office, Dennis Davis of the BLM Prineville District

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

and Chris Fontecchio of the BLM Regulatory Affairs Group in Washington,

DC.

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,

[[Page 52364]]

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 18, 1998.

Sylvia V. Baca,

Assistant Secretary, Land and Minerals Management.

Accordingly, 43 CFR Chapter II is amended as follows:

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

1. Under the authority of 43 U.S.C. 1740, parts 3210, 3220, 3240,

3250 and 3260 are removed.

2. Part 3200 is revised to read as set forth below:

PART 3200--GEOTHERMAL RESOURCE LEASING

Subpart 3200--Geothermal Resource Leasing

Sec.

3200.1 Definitions.

3200.2 Information collection.

3200.3 Changes in agency duties.

3200.4 What requirements must I comply with when taking any actions

or conducting any operations under this part?

3200.5 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 available for geothermal leasing?

Subpart 3202--Lessee Qualifications

3202.10 Who may hold a geothermal lease?

3202.11 Must I prove I am qualified to hold a lease when filing an

offer to lease?

3202.12 Are other persons allowed to act on my behalf to file an

offer to lease?

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 a lease offer?

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

3204.12 What fees must I pay with my lease offer?

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

lease offer?

3204.14 What is the largest and smallest lease I can apply for?

3204.15 What happens when two or more offerors apply for a

noncompetitive lease for the same land?

3204.16 How does BLM determine the first qualified offeror?

3204.17 May I withdraw my lease offer?

3204.18 May I amend my lease offer?

Subpart 3205--Competitive Leasing

3205.10 How does BLM lease lands competitively?

3205.11 How do I get information about competitive lease terms and

conditions?

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 whether my bid is accepted?

Subpart 3206--Lease Issuance

3206.10 What must I do for BLM to issue my lease?

3206.11 What must BLM do before issuing my lease?

3206.12 What is the maximum acreage I may hold?

3206.13 How does BLM compute acreage holdings?

3206.14 How will BLM charge acreage holdings if the United States

owns only a fractional interest in the geothermal resources?

3206.15 Is there any acreage which is not chargeable?

3206.16 What will BLM do if my holdings exceed the maximum acreage

limits?

3206.17 What is the primary term of my lease?

3206.18 When will BLM issue my lease?

Subpart 3207--Additional Lease Term

3207.10 When may I get an additional lease term beyond the primary

term?

3207.11 May I renew my lease at the end of its additional term?

Subpart 3208--Extending the Primary Lease Term

3208.10 When may I extend my lease beyond the primary term?

3208.11 What must I do to have my lease extended?

3208.12 What information must I give BLM to show that I have made

bona fide efforts to produce or utilize geothermal resources in

commercial quantities?

3208.13 Will BLM extend my lease if I choose to pay instead of

produce in commercial quantities?

3208.14 What will BLM do if I choose to make significant

expenditures?

3208.15 What actions may I take which will count as significant

expenditures?

3208.16 During the extension, may I switch my choice to either pay

instead of produce in commercial quantities or make significant

expenditures?

3208.17 If I begin production, do I get credit for payments made

instead of production in commercial quantities or significant

expenditures?

Subpart 3209--Conversion of a Lease Producing Byproducts

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

3209.11 May I convert my geothermal lease to a mining claim?

3209.12 May BLM include additional terms and conditions to my

converted lease?

3209.13 How do I convert my geothermal lease to a mineral lease or

a mining claim?

Subpart 3210--Additional Lease Information

3210.10 When does lease segregation occur?

3210.11 Does a lease segregated from an agreement or plan receive

any benefits from unitization of the committed portion of the

original lease?

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 Can I do something instead of performing diligent

exploration?

3210.16 What happens if I do not meet the diligent exploration

requirement or pay the additional rent?

3210.17 Can someone lease or locate other minerals on the same

lands as my geothermal lease?

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

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

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

3210.21 What if I appeal BLM's decision to adjust my lease terms?

3210.22 Must I prevent drainage of geothermal resources from my

lease?

3210.23 What will BLM do if I do not protect my lease from

drainage?

Subpart 3211--Fees, Rent, and Royalties

3211.10 What are the filing fees, rent, and minimum royalties for

leases?

3211.11 When is my annual rental payment due?

3211.12 How and where do I pay my rent?

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

fractional interest lease?

3211.14 Will I always pay rent on my lease?

3211.15 Must I pay rent if my lease is committed to an approved

cooperative or unit plan?

3211.16 What is the royalty rate for production from or

attributable to my lease?

3211.17 When do I owe minimum royalty?

[[Page 52365]]

Subpart 3212--Lease Suspensions and Royalty Rate Reductions

3212.10 What is the difference between a suspension of operations

and production and a suspension of operations?

3212.11 How do I obtain a suspension of operations or operations

and production on my lease?

3212.12 How long does a suspension of operations or operations and

production last?

3212.13 How does a suspension affect my lease terms?

3212.14 What happens when the suspension ends?

3212.15 May BLM reduce or suspend the royalty or rental rate of my

lease?

3212.16 What information must I submit when I request that BLM

suspend, reduce or waive my royalty or rental rate?

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

3213.10 Who may relinquish a lease?

3213.11 What must I do to relinquish a lease?

3213.12 May BLM accept a partial relinquishment if it will reduce

my lease to less than 640 acres?

3213.13 When does my relinquishment take effect?

3213.14 How can my lease automatically terminate?

3213.15 Will my lease automatically terminate if my rental payment

is on time but for the wrong amount?

3213.16 Will BLM notify me if my lease terminates?

3213.17 May BLM reinstate my lease?

3213.18 Who may petition to reinstate a lease?

3213.19 What must I do to have my lease reinstated?

3213.20 Are there reasons why BLM would not reinstate my lease?

3213.21 When will my lease expire?

3213.22 Will BLM notify me when my lease's extended term expires?

3213.23 May BLM cancel my lease?

3213.24 When is a cancellation effective?

3213.25 What can I do if BLM notifies me that my lease is being

canceled due to violations of the laws, regulations or lease terms?

Subpart 3214--Personal and Surety Bonds

3214.10 Who must post a geothermal bond?

3214.11 Who must my bond cover?

3214.12 What activities must my bond cover?

3214.13 What is the minimum dollar amount required for a bond?

3214.14 May BLM increase the bond amount above the minimum?

3214.15 What kind of financial guarantee will BLM accept to back my

bond?

3214.16 Is there a special bond form I must use?

3214.17 Where must I submit my bond?

3214.18 Who will BLM hold liable under the bond and what are they

liable for?

3214.19 What are my bonding requirements when a lease interest is

transferred to me?

3214.20 How do I modify or extend the terms and conditions of my

bond?

3214.21 What must I do if I want to use a certificate of deposit to

back my bond?

3214.22 What must I do if I want to use a letter of credit to back

my bond?

Subpart 3215--Bond Collection After Default

3215.10 When may BLM collect against my bond?

3215.11 Must I replace my bond after BLM collects against it?

3215.12 What will BLM do if I do not restore the face amount or

file a new bond?

3215.13 Will BLM cancel or terminate my bond?

3215.14 When BLM releases my bond, does that end my

responsibilities?

Subpart 3216--Transfers

3216.10 What types of lease interests may I transfer?

3216.11 Where must I file a transfer request?

3216.12 When does a transferee take responsibility for lease

obligations?

3216.13 What are my responsibilities after I transfer my interest?

3216.14 What filing fees and forms does a transfer require?

3216.15 When must I file my transfer request?

3216.16 Must I file separate transfer requests 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 May I transfer record title interest for less than 640

acres?

3216.20 When does a transfer segregate a lease?

3216.21 When is my transfer effective?

3216.22 Does BLM grant all transfer requests?

Subpart 3217--Cooperative Conservation Provisions

3217.10 What are unit agreements and cooperative plans?

3217.11 What are communitization agreements?

3217.12 What does BLM need to approve my communitization agreement?

3217.13 When does my communitization agreement go into effect?

3217.14 When will BLM approve my operating, drilling or development

contract?

3217.15 What information does BLM need to approve my operating,

drilling or development contract?

Subpart 3250--Exploration Operations--General

3250.10 When do the exploration operations regulations apply?

3250.11 What types of operations may I propose when I send BLM my

exploration permit application?

3250.12 What general standards apply to my exploration operations?

3250.13 What orders or instructions may BLM issue me?

Subpart 3251-- Exploration Operations: Getting a Permit

3251.10 Do I need a permit before I start my exploration operations?

3251.11 May I conduct exploration operations on my lease, someone

else's lease or unleased lands?

3251.12 What does BLM need to approve my exploration permit?

3251.13 What action will BLM take on my permit?

3251.14 Once I have a permit, how can I change my exploration

operations?

3251.15 Do I need a bond for conducting exploration operations?

3251.16 When will BLM release my bond?

Subpart 3252--Conducting Exploration Operations

3252.10 What operational standards apply to my 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 How must I complete a temperature gradient well?

3252.15 When must I abandon a temperature gradient well?

3252.16 How must I abandon a temperature gradient well?

Subpart 3253--Reports: Exploration operations

3253.10 Must I share the data I collect through exploration

operations with BLM?

3253.11 Must I notify BLM when I have completed my exploration

operations?

Subpart 3254--Inspection, Enforcement, and Noncompliance for

Exploration Operations

3254.10 May BLM inspect my exploration operations?

3254.11 What will BLM do if my exploration operations do not meet

all requirements?

Subpart 3255--Confidential, Proprietary Information

3255.10 Will BLM disclose information I submit under these

regulations?

3255.11 When I submit confidential, proprietary information, how can

I help ensure it is not available to the public?

3255.12 How long will information I give BLM remain confidential or

proprietary?

Subpart 3256--Exploration Operations Relief and Appeals

3256.10 May I request a variance from any BLM requirements?

3256.11 How may I appeal a BLM decision regarding my exploration

operations?

Subpart 3260--Geothermal Drilling Operations--General

3260.10 What types of geothermal operations are covered by these

regulations?

3260.11 What general standards apply to my drilling operations?

3260.12 What other orders or instructions may BLM issue me?

[[Page 52366]]

Subpart 3261--Drilling Operations: Getting a Permit

3261.10 How do I get approval to begin well pad construction?

3261.11 How do I get approval for drilling operations and well pad

construction?

3261.12 What is an operations plan?

3261.13 What is a drilling program?

3261.14 When must I give BLM my operations plan?

3261.15 Must I give BLM my drilling permit application, drilling

program and operations plan at the same time?

3261.16 Can my operations plan, drilling permit and drilling

program apply to more than one well?

3261.17 How do I amend my operations plan or drilling permit?

3261.18 Do I need a bond before I build a well pad or drill a well?

3261.19 When will BLM release my bond?

3261.20 How will BLM review my application documents and notify me

of their decision?

3261.21 How do I get approval to change an approved drilling

operation?

3261.22 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 May BLM require me to follow a well spacing program?

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

surveys?

Subpart 3263--Well Abandonment

3263.10 May I abandon a well without BLM's approval?

3263.11 What must I give BLM to approve my sundry notice for

abandoning a well?

3263.12 How will BLM review my sundry notice to abandon my well and

notify me of their decision?

3263.13 What must I do to restore the site?

3263.14 May BLM require me to abandon a well?

3263.15 May I abandon a producible well?

Subpart 3264--Reports: Drilling operations

3264.10 What must I give BLM after I complete a well?

3264.11 What must I give BLM after I finish subsequent well

operations?

3264.12 What must I give BLM after I abandon a well?

3264.13 What drilling and operational records must I maintain for

each well?

3264.14 Must I notify BLM of accidents occurring on my lease?

Subpart 3265--Inspection, Enforcement, and Noncompliance for Drilling

Operations

3265.10 What part of my drilling operations may BLM inspect?

3265.11 What records must I keep available for inspection?

3265.12 What will BLM do if my operations do not comply with all

requirements?

Subpart 3266--Confidential, Proprietary Information

3266.10 Will BLM disclose information I submit under these

regulations?

3266.11 When I submit confidential, proprietary information, how

can I help ensure it is not available to the public?

3266.12 How long will information I give BLM remain confidential or

proprietary?

Subpart 3267--Geothermal Drilling Operations Relief and Appeals

3267.10 May I request a variance from any BLM requirements which

apply to my drilling operations?

3267.11 How may I appeal a BLM decision regarding my drilling

operations?

Subpart 3270--Utilizing Geothermal Resources--General

3270.10 What types of geothermal operations are governed by the

utilization regulations?

3270.11 What general standards apply to my utilization operations?

3270.12 What other orders or instructions may BLM issue me?

Subpart 3271--Utilization Operations: Getting a Permit

3271.10 What do I need to start preparing a site and building and

testing a utilization facility on Federal land leased for geothermal

resources?

3271.11 Who may apply for a permit to build a utilization facility?

3271.12 What do I need to start preliminary site investigations

which may disturb the surface?

3271.13 What do I need to start building and testing a utilization

facility which is not located on Federal lands leased for geothermal

resources, but the pipelines and facilities connecting the well

field are?

3271.14 How do I get a permit to begin commercial operations?

Subpart 3272--What is in a Utilization Plan and Facility Construction

Permit?

3272.10 What must I give BLM in my utilization plan?

3272.11 How should I describe the proposed utilization facility?

3272.12 How do I describe the environmental protection measures I

intend to take?

3272.13 How will BLM review my utilization plan and notify me of

their decision?

3272.14 How do I get a permit to build or test my facility?

Subpart 3273--How to Apply for a Site License

3273.10 When do I need a site license for a utilization facility?

3273.11 Are there any situations where I do not need a site

license?

3273.12 How will BLM review my site license application?

3273.13 Are any lands not available for geothermal site licenses?

3273.14 What area does a site license cover?

3273.15 What must I give BLM in my site license application?

3273.16 What is the annual rent for a site license?

3273.17 May BLM reassess the annual rent for my site license?

3273.18 Must all facility operators pay the annual site license

rent?

3273.19 What are the bonding requirements for a site license?

3273.20 When will BLM release my bond?

3273.21 What are my obligations under the site license?

3273.22 How long will my site license remain in effect?

3273.23 May I renew my site license?

3273.24 May BLM terminate my site license?

3273.25 May I relinquish my site license?

3273.26 May I assign or transfer my site license?

Subpart 3274--Applying for and Obtaining a Commercial Use Permit

3274.10 Do I need a commercial use permit to start commercial

operations?

3274.11 What must I give BLM to approve my commercial use permit

application?

3274.12 How will BLM review my commercial use permit application?

3274.13 May I get a permit even if I cannot currently demonstrate I

can operate within required standards?

Subpart 3275--Conducting Utilization Operations

3275.10 How do I change my operations if I have an approved

facility construction or commercial use permit?

3275.11 What are a facility operator's obligations?

3275.12 What environmental and safety requirements apply to

facility operations?

3275.13 Does the facility operator have to measure the geothermal

resources?

3275.14 What aspects of my geothermal operations must I measure?

3275.15 How accurately must I measure my production and

utilization?

3275.16 What standards apply to installing and maintaining my

meters?

3275.17 What must I do if I find an error in a meter?

3275.18 May BLM require me to test for byproducts associated with

geothermal resource production?

3275.19 May I commingle production?

3275.20 What will BLM do if I waste geothermal resources?

3275.21 May BLM order me to drill and produce wells on my lease?

Subpart 3276--Reports: Utilization Operations

3276.10 What are my reporting requirements for facility and lease

operations involving Federal geothermal resources?

3276.11 What information must I include for each well in the

monthly report of well operations?

3276.12 What information must I give BLM in the monthly report for

facility operations?

3276.13 What extra information must I give BLM in the monthly

report for flash and dry steam facilities?

[[Page 52367]]

3276.14 What information must I give BLM in the monthly report for

direct use facilities?

3276.15 Must I notify BLM of accidents occurring at my utilization

facility?

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 will BLM do if I do not comply with all BLM

requirements?

Subpart 3278--Confidential, Proprietary Information

3278.10 Will BLM disclose information I submit under these

regulations?

3278.11 When I submit confidential, proprietary information, how

can I help ensure it is not available to the public?

3278.12 How long will information I give BLM remain confidential or

proprietary?

Subpart 3279--Utilization Relief and Appeals

3279.10 May I request a variance from any BLM requirements?

3279.11 How may 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 Definitions

Acquired lands means lands or mineral estates that the United

States obtained by deed through purchase, gift, condemnation or other

legal process.

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

1001 et seq.).

Additional term means the period of years beyond the primary and

any extended term of a producing lease granted when geothermal

resources are produced or utilized in commercial quantities within the

primary term or extended term. The additional term may not exceed 40

years beyond the end of the primary term, even if BLM grants later

extensions.

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

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

steam, and which no person would extract and produce by themselves

because they are worth less than 75 percent of the value of the

geothermal steam or because extraction and production would be too

difficult.

Casual use means activities that ordinarily lead to no significant

disturbance of Federal lands, resources, or improvements.

Commercial operation means delivering Federal geothermal resources,

or electricity or other benefits derived from those resources, for

sale. This term also includes delivering resources to the utilization

point, if you are utilizing Federal geothermal resources for your own

benefit and not selling energy to another entity.

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 you meet all costs of production; or

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

to provide a reasonable return after you meet all costs of drilling and

production.

Commercial Use Permit means BLM authorization for commercially

operating a utilization facility and/or utilizing Federal geothermal

resources.

Cooperative agreement means an agreement to produce and utilize

separately-owned interests in the geothermal resources together as a

whole, where the individual interests cannot be independently operated.

Development contract means a BLM-approved agreement between one or

more lessees and one or more entities which makes resource exploration

more efficient and protects the public interest.

Exploration operations means any activity relating to the search

for evidence of geothermal resources, where you are physically present

on the land and your activities may cause damage to those lands.

Exploration operations include, but are not limited to, geophysical

operations, drilling temperature gradient wells, drilling holes used

for explosive charges for seismic exploration, core drilling or any

other drilling method, provided the well is not used for geothermal

resource production. It also includes related construction of roads and

trails, and cross-country transit by vehicles over public land.

Exploration operations do not include the direct testing of geothermal

resources or the production or utilization of geothermal resources.

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.

Facility Construction Permit means BLM permission to build and test

a utilization facility.

Facility operator means the person receiving BLM authorization 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 Drilling Permit means BLM permission to drill for and

test Federal geothermal resources.

Geothermal Exploration Permit means BLM permission to conduct only

geothermal exploration operations and associated surface disturbance

activities.

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 associated byproducts.

Interest means ownership in a lease of all or a portion of the

record title or operating rights.

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

determines that persons knowledgeable in geothermal development would

spend money to develop geothermal resources.

Lessee means a person holding record title interest in a geothermal

lease issued by the BLM.

MMS means the Minerals Management Service of the Department of the

Interior.

Notice to Lessees (NTL) 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. Notices to

Lessees may be obtained by contacting the BLM state office which issued

the NTL.

Operating rights (working interest) means any interest held in a

lease with the right to explore for, develop, and produce leased

substances.

Operating rights owner means a person who holds operating rights in

a lease. A lessee is an operating rights owners if he/she did not

transfer all of his/her operating rights. An operator may or may not

own operating rights.

Operations Plan, or plan of operations, means a plan which fully

describes the location of proposed drill pad, access roads and other

facilities related to the drilling and testing of Federal geothermal

resources, and includes measures for environmental and other resources

protection and mitigation.

Operator means any person who has taken formal responsibility for

the operations conducted on the leased lands.

Pay instead of produce in commercial quantities means payment in

lieu of commercial quantities production, as used in section 6(g)(1)(A)

of the Act.

[[Page 52368]]

Person means an individual, firm, corporation, association,

partnership, trust, municipality, consortium or joint venture.

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 resources.

Public lands means the general public domain lands or minerals, and

acquired lands or minerals, that the United States may lease for

geothermal resources.

Record title means legal ownership of a geothermal lease

established in BLM's records.

Relinquishment means the lessee's action to voluntarily end the

lease in whole or in part.

Secretary means the Secretary of the Interior or the Secretary's

delegate.

Site license means BLM authorization to site a utilization facility

on leased Federal lands.

Stipulation means additional conditions BLM attaches to a lease or

permit.

Sublease means the lessee's conveyance of its interests in a lease

to an operating rights owner. A sublessee is responsible for complying

with all terms, conditions and stipulations of the lease.

Subsequent well operations are those operations done to a well

after it has been drilled. Examples of subsequent well operations

include: cleaning the well out, surveying it, performing well tests,

chemical stimulation, running a liner or another casing string,

repairing existing casing, or converting the well from a producer to an

injector or vice versa.

Sundry notice is your written request to perform work not covered

by another type of permit, or to change operations in your previously

approved permit.

Surface management agency means any Federal agency, other than BLM,

which is responsible for managing the surface overlying Federally-owned

minerals.

Temperature gradient well means a well authorized under a

geothermal exploration permit drilled in order to obtain information on

the change in temperature over the depth of the well.

Transfer means any conveyance of an interest in a lease by

assignment, sublease or otherwise.

Unit agreement means an agreement to explore for, produce and

utilize separately owned interests in geothermal resources as a single

consolidated unit. A unit agreement defines how costs and benefits will

be allocated among the holders of interest in the unit area.

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

Unit operator means the person who has stated in writing to BLM

that the interest owners of the committed leases have designated it as

operator of the unit area.

Unitized substances means geothermal resources recovered from lands

committed to a unit agreement.

Utilization Plan, or plan of utilization, means a plan which fully

describes the utilization facility, including measures for

environmental protection and mitigation.

Waste means:

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

(2) Improper use or unnecessary dissipation of geothermal resources

through inefficient drilling, production, transmission, or utilization.

Sec. 3200.2 Information collection.

(a) The Office of Management and Budget approved the information

collection contained in this part under 44 U.S.C. 3501 et seq., and

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

0160. BLM will use this information 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 3210.14. 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.

Sec. 3200.3 Changes in agency duties.

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. Those references must

now be read to mean either the Bureau of Land Management or the

Minerals Management Service, as appropriate. In addition, many leases

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

section of that part. Effective December 3, 1982, references in such

leases and agreements to 30 CFR part 270 should be read as references

to this part 3200, which is the successor regulation to 30 CFR part

270.

Sec. 3200.4 What requirements must I comply with when taking any

actions or conducting any operations under this part?

When you are taking any actions or conducting any operations under

this part, you must comply with:

(a) The Act and the regulations of this part;

(b) Geothermal resource operational orders;

(c) Notices to lessees;

(d) Lease terms and stipulations;

(e) Approved plans and permits;

(f) Conditions of approval;

(g) Verbal orders from BLM which will be confirmed in writing;

(h) Other instructions from BLM; and

(i) Any other applicable laws and regulations.

Sec. 3200.5 What are my rights of appeal?

(a) If you are adversely affected by a BLM decision under this

part, you may appeal that decision under parts 4 and 1840 of this

title.

(b) All BLM decisions or approvals under this part are immediately

effective and remain in effect while appeals are pending unless a stay

is granted in accordance with 43 CFR 4.21(b).

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 52369]]

(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) If your activities under your lease or permit might adversely

affect a significant thermal feature of a National Park System unit,

BLM will include stipulations to protect this thermal feature in your

lease or permit. This includes when your lease or permit is issued,

extended, renewed or modified.

Sec. 3201.11 What lands are not available for geothermal leasing?

BLM will not issue leases for:

(a) Lands where the Secretary has determined that issuing the lease

would cause unnecessary or undue degradation to public lands and

resources;

(b) Lands 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 after notice and comment

that geothermal operations, including exploration, development or

utilization of lands, 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 outside 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 geothermal leasing, including:

(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 the statute designating the study area specifically allows

leasing to continue; and

(3) Lands within areas allocated for wilderness or further planning

in Executive Communication 1504, Ninety-Sixth Congress (House Document

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 may hold a geothermal lease?

You may hold a geothermal lease if you are:

(a) A United States citizen who is at least 18 years old;

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

partnership;

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

any state or the District of Columbia; or

(d) A domestic governmental unit.

Sec. 3202.11 Must I prove I am qualified to hold a lease when filing

an offer to lease?

You do not need to submit proof that you are qualified to hold a

lease under 43 CFR 3202.10 at the same time you submit an offer to

lease, but BLM may ask you for information about your qualifications at

any time. If BLM requests additional information, you have 30 days from

when you receive the request to submit the information.

Sec. 3202.12 Are other persons allowed to act on my behalf to file an

offer to lease?

Another person may act on your behalf to file an offer to lease.

The person acting for you must be qualified to hold a lease under 43

CFR 3202.10, and must do the following:

(a) Sign the document;

(b) State his or her title;

(c) Identify you as the person he or she is acting for; and

(d) Provide written proof of his or her qualifications and

authority to take such action, if BLM requests it.

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 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?

(a) If the lands are located in a known geothermal resource area

(KGRA), BLM leases those lands through a competitive sale. To obtain a

lease, follow the procedures for submitting a bid set out in subpart

3205 of this part. BLM will issue a competitive lease to the person who

submits the highest qualified bid.

(b) If the lands are located outside a KGRA, you may obtain a

noncompetitive lease. Follow the procedures in subpart 3204 of this

part. BLM issues noncompetitive leases to the first qualified offeror.

BLM may issue a lease for a fractional interest if it serves the public

interest.

Sec. 3203.11 How is a KGRA determined?

BLM determines the boundaries of a KGRA based on:

(a) Geologic and technical evidence. BLM will designate a KGRA if

this evidence would cause a person who understands geothermal resource

development to spend money developing the area;

(b) Proximity to wells capable of production in commercial

quantities. BLM will designate a KGRA if the lands are:

(1) Within 5 miles of a well which is capable of producing steam in

commercial quantities, or

(2) In the same geologic structure as a well capable of producing

steam in commercial quantities; and

(c) Existence of competitive interest. A competitive interest

exists where two or more people apply to lease some or all of the same

lands for geothermal resources. BLM will not designate a KGRA based on

competitive interest alone; we will also review the other factors

discussed in this section to decide whether a KGRA designation is

warranted.

Subpart 3204--Noncompetitive Leasing

Sec. 3204.10 How do I file a lease offer?

Submit two (2) executed copies of 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. You must accurately describe the

lands covered by your offer on the form or BLM may reject of all or

part of your offer. To obtain this form (and other BLM forms), contact

the nearest BLM Office.

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

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) For unsurveyed lands in Louisiana and Alaska that have water

boundaries,

[[Page 52370]]

discuss the description with BLM before submission; and

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

mineral ownership by percentage.

Sec. 3204.12 What fees must I pay with my lease offer?

Submit a non-refundable filing fee of $75 for each lease offer, and

an advance rent in the amount of $1 per acre (or fraction of an acre).

BLM will refund the advance rent if we reject the lease offer, or if

you withdraw the lease offer before BLM accepts it. If the advance

rental payment you send is more than 10 percent below the correct

amount, BLM will reject the lease offer.

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

same lease offer?

Yes, you may combine acquired and public domain lands on the same

lease offer if you clearly identify both the acquired lands and the

public domain lands.

Sec. 3204.14 What is the largest and smallest lease I can apply for?

Lease offers must cover all lands available for leasing in a

section. The smallest lease you can apply for is 640 acres, or all

lands available for leasing in the section, whichever is less. You may

not apply for a lease which is larger than 2,560 acres, although BLM

will make an exception to this requirement when your lease offer

includes an irregular subdivision. Leases must not extend outside a 6

square mile area. If your offer does not meet these requirements, we

will reject it.

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

noncompetitive lease for the same land?

BLM begins processing offers as soon as we receive them. If more

than one person makes a lease offer for the same lands, BLM will give

priority to the qualified offer which we received first. Once BLM

approves a noncompetitive lease offer, we will reject any later offers

received for the same land. However, if BLM receives additional offers

for the same land while the original offer is still pending, BLM must

determine if the overlapping offers warrant converting the land at

issue to a KGRA:

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

then we reject all noncompetitive offers, and offerors must follow the

competitive bidding procedures to lease the lands.

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

multiple offers, then we will award the lease to the first qualified

offeror.

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

BLM determines the first qualified offeror based on when we

received the offer and whether the offeror is qualified to hold a

lease. We will issue a noncompetitive lease to the offeror who is first

to file a lease offer that meets all the requirements.

Sec. 3204.17 May I withdraw my lease offer?

You may withdraw your lease offer in whole or in part before we

issue you a lease. If you withdraw only part of your offer, the lands

remaining must meet the acreage requirements of 43 CFR 3204.14. If a

partial withdrawal causes your lease offer to contain less than the

minimum acreage required under 43 CFR 3204.14, we will reject the lease

offer.

Sec. 3204.18 May I amend my lease offer?

You may amend your lease offer before we issue the lease, provided

your amended lease offer meets all the lease offer requirements in this

subpart. BLM will determine your priority based on the date we receive

your amended lease offer, not the date of the original lease offer.

Subpart 3205--Competitive Leasing

Sec. 3205.10 How does BLM lease lands competitively?

(a) We lease some Federal lands through competitive sales using

sealed bids. Those lands which we lease competitively include lands

from terminated, expired, or relinquished leases, and lands within a

KGRA (see 43 CFR 3203.11). BLM may also use a competitive lease sale if

there is public interest.

(b) BLM lists these parcels, with any stipulations, in a sale

notice. This sale notice will tell you where and when to submit your

bids. We will post the sale notice in appropriate BLM offices, and may

take other measures such as:

(1) Publishing news releases;

(2) Notifying interested parties of the lease sale;

(3) Publishing the notice in newspapers; or

(4) Posting the list on the Internet.

Sec. 3205.11 How do I get information about competitive lease terms

and conditions?

See our notice posted in the BLM office conducting the sale, and

otherwise publicized as described in 43 CFR 3205.10. This notice will

include the terms and conditions of the lease(s), including the rental

and royalty rates, and 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?

(a) Submit your bid during the time period and to the BLM office

specified in the sale notice;

(b) Submit your bid on Form 3000-2 (or exact copy on one two-sided

page);

(c) Submit your 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 bid amount, payable to the

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

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

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

(f) Be aware that unlawful combination or intimidation of bidders

is prohibited by 18 U.S.C. 1860.

Sec. 3205.13 What is the minimum acceptable bid?

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

market value, which BLM determines using 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?

We will open, announce and record bids on the date, and at the

place and time set out in the sale notice. We will not accept or reject

any bid at that time. You do not need to attend the sale in order to

bid.

Sec. 3205.15 To whom does BLM issue the lease?

We will issue the lease to the highest bidder who qualifies for a

lease. All other bids are rejected. If we determine that the highest

bid is too low, we will also reject that bid. BLM reserves the right to

reject any and all bids.

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

(a) If BLM accepts your bid, we will send you a notice informing

you of our decision within 30 days after the sale. We will also include

3 copies of the lease. When you receive the notice and lease forms, you

have 15 days in which to send BLM:

(1) Signed lease forms;

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

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

(4) Signed stipulations, if applicable.

(b) If you do not meet the requirements of this section after we

have accepted your bid, BLM will then revoke acceptance of your bid and

keep one-fifth of your bonus bid.

(c) If BLM rejects your bid, we will send you a notice informing

you of our

[[Page 52371]]

decision. At that time, we will return the one-fifth of the bonus bid

that you sent with your bid offer.

Subpart 3206--Lease Issuance

Sec. 3206.10 What must I do for BLM to issue my lease?

Before BLM issues you a lease, you must:

(a) Accept all lease stipulations;

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

(c) Not exceed the maximum limit on acreage holdings (see 43 CFR

3206.12).

Sec. 3206.11 What must BLM do before issuing my lease?

BLM must:

(a) Determine that the land is available; and

(b) Determine that your lease development will not significantly

impact any significant thermal feature within any of the following

units of the National Park System:

(1) Mount Rainier National Park;

(2) Crater Lake National Park;

(3) Yellowstone National Park;

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

(5) Bering Land Bridge National Preserve;

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

(7) Katmai National Park;

(8) Aniakchak National Monument and Preserve;

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

(10) Lake Clark National Park and Preserve;

(11) Hot Springs National Park;

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

Grande National Wild Scenic River within the boundaries of Big Bend

National Park);

(13) Lassen Volcanic National Park;

(14) Hawaii Volcanoes National Park;

(15) Haleakala National Park;

(16) Lake Mead National Recreation Area; and

(17) Any other significant thermal features within National Park

System Units which the Secretary may add to the list of these features,

in accordance with 30 U.S.C. 1026(a)(3).

Sec. 3206.12 What is the maximum acreage I may hold?

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

any one state. This includes any leases you acquire under sections

4(a)-4(f) of the Act. You also may not convert mineral leases, permits,

applications for permits, or mining claims acquired under the Act into

geothermal leases totaling more than 10,240 acres.

Sec. 3206.13 How does BLM compute acreage holdings?

BLM will compute acreage holdings as follows:

(a) If you own an undivided lease interest, your acreage holdings

will include 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 acreage holdings

will include your proportionate part of the corporation's or

association's share of the total lease acreage. This paragraph applies

only if you own more than 10 percent of the corporate stock or

beneficial interest of the association.

(c) If you own a lease interest, you will be charged with the

proportionate share of the total lease acreage based on your share of

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

where you own both record title and operating rights for the lease. For

example, if you own 50% record title interest in a 640 acre lease and

25% operating rights, you are charged with 320 acres.

Sec. 3206.14 How will BLM charge acreage holdings if the United States

owns only a fractional interest in the geothermal resources?

Where the United States owns only a fractional interest in the

geothermal resources of the lands, BLM will only charge you with the

part owned by the United States as acreage holdings. For example, if

you own 100 percent of record title in a 100 acre lease, and the United

States owns 50 percent of the mineral estate, you are charged with 50

acres.

Sec. 3206.15 Is there any acreage which is not chargeable?

BLM does not count leased acreage included in any approved unit or

cooperative agreement or development contract as part of your total

acreage holdings.

Sec. 3206.16 What will BLM do if my holdings exceed the maximum

acreage limits?

BLM will notify you in writing if your acreage holdings exceed the

limit in 43 CFR 3206.12. You have 90 days from the date you receive the

notice to reduce your holdings to within the limit. If you do not

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

recently issued, until your holdings are within the limit.

Sec. 3206.17 What is the primary term of my lease?

Leases have a primary term of 10 years.

Sec. 3206.18 When will BLM issue my lease?

BLM issues your lease the day we sign it. Your lease goes into

effect the first day of the next month after the issue date.

Subpart 3207--Additional Lease Term

Sec. 3207.10 When may I get an additional lease term beyond the

primary term?

(a) If you produce or use geothermal resources in commercial

quantities during the primary term, your lease will continue in

additional term for as long as you produce or use geothermal resources

in commercial quantities for up to forty years beyond the primary term.

Section 3207.11 explains how to continue your lease beyond the

additional term.

(b) If, before the primary or extended term ends, you have a well

capable of producing geothermal resources in commercial quantities, BLM

may continue your lease for up to forty years beyond the primary term.

To continue your lease in an additional term, we must determine that

you are diligently trying to begin production. We may ask you to

describe in writing your efforts to begin production during the lease

term, and the efforts you plan for future lease years. You should also

describe negotiations for sales contracts, marketing arrangements, and

electrical generating and transmission agreements, and any other

information you believe shows diligent efforts.

Sec. 3207.11 May I renew my lease at the end of its additional term?

If BLM does not need the lands for another purpose at the end of

the forty-year additional term, and if you are producing geothermal

resources in commercial quantities, you will have a preferential right

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

conditions BLM determines. If your lease is located on lands

administered by the Department of Agriculture, they must concur with

the use of the surface and any terms and conditions before we may grant

your renewal. If another Federal agency manages the surface, we will

consult with them before granting your renewal.

Subpart 3208--Extending the Primary Lease Term

Sec. 3208.10 When may I extend my lease beyond the primary term?

(a) You have four opportunities to extend your lease beyond the

primary term: by drilling, diligent efforts, production of byproducts,

and unit commitment.

(1) For a drilling extension, we will extend your lease for five

years if you:

[[Page 52372]]

(i) Are drilling when the primary term ends; and

(ii) Diligently drill to a reasonable target, based on the local

geology and type of development you propose. BLM will determine if your

target is adequate to extend the lease.

(2) For a diligent efforts extension, if you have not produced

geothermal resources in commercial quantities before the primary or

extended term ends, or before your lease is eliminated from a unit

agreement, BLM may still approve up to two successive five-year

extensions for your lease. You must have made a good faith effort to

produce. To obtain a diligent efforts extension, follow the procedures

at 43 CFR 3208.11(a)(2).

(3) For a byproducts extension, if your lease is in an additional

term, and we determine that it can no longer produce commercial

quantities, we may still extend your lease for five years. However, we

will only do so 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 geothermal lease to a mineral lease for the byproduct.

(4) For a unit commitment extension, if your lease is committed to

a unit agreement and its term would expire before the unit term would,

BLM may extend your lease to match the term of the unit. We will do

this if you have diligently pursued unit development while your lease

is committed to the unit.

(b) During any extension period, if you use or produce geothermal

resources in commercial quantities, or if you complete a well capable

of producing geothermal resources in commercial quantities on the

lease, BLM will place the lease into an additional term.

Sec. 3208.11 What must I do to have my lease extended?

(a) You must take the following steps:

(1) For a drilling extension, notify BLM prior to the end of the

primary term of your drilling activities so we may determine that you

are diligently drilling beyond the end of the primary term and have met

your well completion requirements.

(2) For a diligent efforts extension:

(i) Send BLM a written extension request at least 60 days before

the primary or first extended term ends, or 60 days before your lease

is eliminated from a unit agreement;

(ii) Include a report showing that you have made a good faith

effort to produce or use geothermal resources in commercial quantities

given the current economic conditions for marketing geothermal

resources; and

(iii) Say whether you choose to pay instead of produce in

commercial quantities under 43 CFR 3208.13 or to make significant

expenditures under 43 CFR 3208.14 during the period of extension.

(3) For a byproducts extension, send us a request justifying an

extension.

(4) For a unit commitment extension, send us a request at least 60

days before your lease ends which shows that you have diligently

pursued unit development.

(b) Within 30 days after receiving your extension request, BLM will

notify you whether we approve. BLM may request additional information

from you.

Sec. 3208.12 What information must I give BLM to show that I have made

bona fide efforts to produce or utilize geothermal resources in

commercial quantities?

Send us a report which describes:

(a) Your efforts to identify and define the geothermal resource on

your lease which you are making now or which you made during the

primary term of the lease;

(b) The results of your efforts to identify and define the

geothermal resource;

(c) Other actions taken to support your efforts, such as obtaining

permits, conducting environmental studies, and meeting permit

requirements;

(d) Your efforts during the primary term and ongoing efforts 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 your lease.

Sec. 3208.13 Will BLM extend my lease if I choose to pay instead of

produce in commercial quantities?

If you choose to pay instead of produce in commercial quantities

under 43 CFR 3208.11(a)(2) and BLM approves the extension, we will

modify the lease to require you to make an annual payment. We will

specify the amount, which will not be 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, we will tell you the rate before you

submit your petition for extension. You must make these payments to MMS

at the same time you pay the lease rent. BLM may cancel your lease if

you do not make these payments.

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

expenditures?

(a) If you choose to make significant expenditures under 43 CFR

3208.11(a)(2), and BLM approves the lease extension, we will modify

your 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

your first extension. You must make expenditures of $18.00 per acre or

fraction of an acre during any subsequent extension. If you spend more

than the minimum required in a year, you may apply the excess toward

the significant expenditures requirement in subsequent years of the

same extension period.

(b) To give you credit for your significant expenditures, we must

receive your report no later than 60 days after the end of the lease

year in which you made the expenditures. Describe your operations by

type, location, date(s) conducted, and amount spent on those

operations. Include all geologic information obtained from your

operations in your report.

(c) After we review your report, we will notify you in writing

whether you have met the diligent expenditure requirement. We must

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

report before we can credit them toward your diligent exploration

requirements.

(d) We will cancel your lease if you fail to make the significant

expenditures under a modified lease.

Sec. 3208.15 What actions may I take which will count as significant

expenditures?

Significant expenditures only include:

(a) Actual drilling operations on the lease;

(b) Geochemical or geophysical surveys for exploratory or

development wells;

(c) Road or generating facility construction on the lease;

(d) Architectural or engineering services procured for the design

of generating facilities located on the lease; and

(e) Environmental studies required by State or Federal law.

Sec. 3208.16 During the extension, may I switch my choice to either

pay instead of produce in commercial quantities or make significant

expenditures?

No, you may not make this change during an extension period. If you

request a second extension, you may change your election for the second

five year period when you submit your request.

[[Page 52373]]

Sec. 3208.17 If I begin production, do I get a credit for payments

made instead of production in commercial quantities or significant

expenditures?

No, if you begin production, you will not get a credit against

royalties for either payments instead of production or significant

expenditures made for that year.

Subpart 3209--Conversion of Lease Producing Byproducts

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

You may convert your geothermal lease to a mineral lease, effective

the first day of the month following the date BLM determines you have

met the terms of conversion, if:

(a) Your lease is in an extended term;

(b) The byproducts you are producing in commercial quantities are

leasable under the Mineral Leasing Act (30 U.S.C. 181 et seq.), or

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

and

(c) The lease is primarily valuable for the production of just that

mineral.

Sec. 3209.11 May I convert my geothermal lease to a mining claim?

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 mining claim location

within 90 days after the geothermal lease terminates. Also, there must

have been no intervening location and the lands must be open to entry

under the mining laws.

Sec. 3209.12 May BLM include additional terms and conditions to my

converted lease?

If leases converted under either 43 CFR 3209.10 or 3209.11 affect

lands withdrawn or acquired to aid some purpose of a Federal department

or agency, including the Department of the Interior, BLM may include

additional terms and conditions in your lease as prescribed by the

appropriate agency.

Sec. 3209.13 How do I convert my geothermal lease to a mineral lease

or a mining claim?

Just send us a request.

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 while

other portions are 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 would be eliminated from the unit agreement and

segregated as of the effective date of the unit contraction.

(b) BLM will assign the original lease serial number to the portion

within the plan or agreement. We will give the lease portion outside

the plan or agreement a new serial number with the same lease terms as

the original lease.

Sec. 3210.11 Does a lease segregated from an agreement or plan receive

any benefits from unitization of the committed portion of the original

lease?

The new segregated lease stands alone and does not receive any of

the benefits provided to the portion committed to the unit. We will not

give you an extension for the eliminated portion of the lease based on

status of the lands committed to the unit, including production in

commercial quantities or the existence of a producible well.

Sec. 3210.12 May I consolidate leases?

BLM may approve your consolidation of two or more adjacent leases

that have the same ownership and same lease terms, including expiration

dates, if the combined leases do not exceed 2,560 acres in size. We may

consolidate leases that have different stipulations if all other lease

terms are the same.

Sec. 3210.13 What is the diligent exploration requirement?

(a) During your lease's primary period, you must perform diligent

exploration activities to yield new geologic information about the

lease or related lands, until either:

(1) Your approved expenditures on your lease total at least $40 per

acre, or

(2) BLM places your lease in an additional term.

(b) You must begin diligent exploration by the sixth year of the

primary term and continue until there is a well capable of production

in commercial quantities. Some examples of activities that would

qualify as diligent exploration are geochemical surveys, heat flow

measurement, core drilling or drilling of test wells.

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

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

to pay your rents. If you make efforts during these first five years

that would qualify as diligent exploration expenditures, and we approve

them as such during those five years, we will count them toward the

requirements of future years.

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

six through ten, you must make expenditures equal to the minimum

amounts listed in the following table. We will apply approved

expenditures which exceed the minimum in any one year to subsequent

years.

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

Expenditure

Lease year per acre

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

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

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

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

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

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

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

(c) To give you credit for your expenditures, we must receive your

report 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.

Sec. 3210.15 Can I do something instead of performing diligent

exploration?

If you choose not to conduct diligent exploration, or if your total

expenditures do not fully meet the requirement for any lease year, you

may still meet the diligent exploration requirement for that year by

paying an additional rent of $3 per acre or fraction of an acre. If you

choose this option, you must send your payment to MMS before the end of

the lease year.

Sec. 3210.16 What happens if I do not meet the diligent exploration

requirement or pay the additional rent?

BLM will cancel your lease.

Sec. 3210.17 Can someone lease or locate other minerals on the same

lands as my geothermal lease?

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, BLM allows mineral

leasing or location 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 your geothermal

operations.

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

Yes, we may readjust the terms and conditions of your lease

regarding

[[Page 52374]]

stipulations and surface disturbance requirements. We may do this 10

years after you begin production from your lease, and at not less than

10-year intervals thereafter. If another Federal agency manages the

lands' surface, we will ask that agency to review the related terms and

conditions and propose any readjustments. Once BLM and the surface

managing agency reach agreement, we will apply the readjustments to

your lease.

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

lease?

(a) We will give you a written proposal to adjust the terms and

conditions of your lease. You will have 30 days after you receive the

proposal to object in writing to the new terms or relinquish your

lease. If you do not do this, these new terms will become part of your

lease. If you do object in writing, we will issue a final decision on

the new terms and conditions.

(b) BLM will set the date that your new terms and conditions become

effective.

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

lease?

(a) We may readjust your lease rental and royalty rates at not less

than 20-year intervals beginning 35 years after we determine that your

lease is producing in commercial quantities. We will not increase your

rental and royalty rates by more than 50 percent of what you paid

before BLM adjusted the rate. Also, we will not raise the royalty rate

above 22.5 percent.

(b) BLM will notify you in writing of the proposed adjustments. You

have 30 days after the date you receive the notice to object to the new

rate. If we do not receive your written objection within 30 days, the

new rate will become a part of your lease. If you do object in writing,

we will issue a final decision on the new rental and royalty rate.

(c) We will set the date that your new terms and conditions become

effective.

Sec. 3210.21 What if I appeal BLM's decision to adjust my lease terms?

If you appeal our decision to adjust your lease terms and

conditions, rental or royalty rate, the decision is effective during

the appeal. If you win your appeal and we must change our decision, you

will receive a refund or credit for any overpaid rents or royalties.

Sec. 3210.22 Must I prevent drainage of geothermal resources from my

lease?

Yes, you must prevent the drainage of geothermal resources from

your lease by diligently drilling and producing wells which will

protect the Federal geothermal resource from loss caused by production

from other properties.

Sec. 3210.23 What will BLM do if I do not protect my lease from

drainage?

We will determine the amount of geothermal resources drained from

your lease. MMS will bill you for a compensatory royalty based on our

findings. This royalty will equal the amount you would have paid for

producing those resources. All interest owners in a lease are jointly

and severally liable for drainage protection and any compensatory

royalties.

Subpart 3211--Fees, Rent, and Royalties

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

leases?

(a) BLM calculates rents and minimum royalties based on the amount

of acreage covered by your lease. First, round up any partial acreage

to the next whole acre. For example, rent on a 2,456.39 acre lease is

calculated based on 2,457 acres. Then multiply the total number of

acres covered by your lease by the appropriate amount set out in the

chart in paragraph (b) of this section to determine the amount you owe.

(b) Use the following table to determine the filing fees, rents and

minimum royalties owed for your lease.

Filing Fees, Rent, and Royalties

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

Type Competitive leases Non-competitive leases

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

(1) Lease Filing Fee.................... N/A............................ $75.00.

(2) Lease Rent.......................... $2.00 per acre................. $1.00 per acre.

(3) Lease Assignment Filing Fee......... $50.00......................... $50.00.

(4) Steam, heat, or energy royalties.... Between 10% and 15............. Between 10% and 15%.

(5) Demineralized water royalties....... 5%............................. 5%.

(6) Byproduct royalties................. 5%............................. 5%.

(7) Minimum royalty..................... $2.00 per acre................. $2.00 per acre.

(8) Additional rent/Instead of diligent $3.00 per acre in addition to $3.00 per acre in addition to regular lease rent.

exploration. regular lease rent.

(9) Additional rent/Instead of $3.00/year, first 5 years...... $3.00/year, first 5 years

commercial quantities production. $6.00/year, second 5 yrs....... $6.00/year, second 5 years.

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

Note the exception stated in 43 CFR 3211.16(b).

Sec. 3211.11 When is my annual rental payment due?

MMS must receive your annual rental payment by the anniversary date

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

the rent for your lease is not paid on time, the lease will

automatically terminate by operation of law, unless you meet the

conditions of 43 CFR 3213.15. See the MMS regulations in 30 CFR part

218 which explain when MMS considers a payment as received. If less

than a full year remains on a lease, you still must pay a full year's

rent by the anniversary date of the lease.

Sec. 3211.12 How and where do I pay my rent?

(a) Pay BLM the first year's advance rent according to the

instructions at 43 CFR 3204.12 or 3205.16. You may use a personal or

cashier's check or money order made payable to the Department of the

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

credit card or electronic funds transfer with our prior approval.

(b) For all subsequent years make your rental payments to MMS. See

MMS regulations at 30 CFR part 218.

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

a fractional interest lease?

Yes, BLM will prorate rents and minimum royalties payable under

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

mineral interest. For example, if the United States owns 50% of a 640

acre lease, you pay rent based on 320 acres.

[[Page 52375]]

Sec. 3211.14 Will I always pay rent on my lease?

You are required to pay rent only until you achieve production in

commercial quantities. At that time you begin paying royalties instead.

Sec. 3211.15 Must I pay rent if my lease is committed to an approved

cooperative or unit plan?

(a) Before you begin production, if your lease is committed to an

approved cooperative or unit plan, you must pay rent in accordance with

43 CFR 3211.10.

(b) Once you begin production, you do not have to pay rent if the

lands included in an approved cooperative or unit plan are within the

participating area. These lands are subject to royalties instead, under

43 CFR 3211.16. The only exception is for unitized lands outside the

participating area, which remain subject to rent under 43 CFR 3211.10.

Sec. 3211.16 What is the royalty rate for production from or

attributable to my lease?

The royalty rate for production from or attributable to your lease

is prescribed in your lease form. The chart at 43 CFR 3211.10 shows the

minimum royalty rates. We will determine the royalty rate to include in

your lease form based on the following:

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

production may range from 10 to 15 percent of the heat or energy value;

(b) Except for minerals discussed in paragraph (c) of this section,

the royalty rate for the value of byproducts may not exceed five

percent:

(1) If derived from production under the lease; and

(2) If sold or utilized or reasonably susceptible to sale or

utilization.

(c) The royalty rate for minerals listed in section 1 of the

Mineral Leasing Act will be the same as the royalty rate for those

minerals provided under BLM regulations in this Title.

(d) The royalty rate for commercially demineralized water produced

on a lease may not exceed 5 percent, except that BLM will not charge a

royalty for water used in the operations of a utilization facility.

Sec. 3211.17 When do I owe minimum royalty?

You owe minimum royalty when BLM determines you have a well capable

of commercial production but you have not begun actual production. You

also owe minimum royalty when the value of actual production is so low

that royalty you would pay under the scheduled rate is less than $2.00

per acre. You should make your minimum royalty payment to MMS under the

regulations in 30 CFR part 218.

Subpart 3212--Lease Suspensions and Royalty Rate Reductions

Sec. 3212.10 What is the difference between a suspension of operations

and production and a suspension of operations?

A suspension of operations and production is a temporary relief

from production obligations which you may request from BLM because

economic conditions make it unjustifiable for you to continue

operating. A suspension of operations is when we order you, on our own

initiative, to temporarily stop production in order to protect the

resource.

Sec. 3212.11 How do I obtain a suspension of operations or operations

and production on my lease?

(a) If you are the operator, you may request in writing that BLM

suspend your operations and production for a producing lease. Your

request must fully describe why you need the suspension. We will

determine if your suspension is approved.

(b) We may act on our own and suspend your operations on any lease

in the interest of conservation.

(c) A suspension under this section may include leases committed to

an approved unit agreement. Even if leases committed to the unit are

suspended, the unit operator must still meet unit obligations.

Sec. 3212.12 How long does a suspension of operations or operations

and production last?

(a) BLM will state in your suspension notice how long your

suspension of operations or operations and production is effective.

(b) During a suspension, you may ask BLM in writing to terminate

your suspension. The suspension will terminate when you resume

production or drilling operations. If we terminate the suspension, you

must resume paying rents and minimum royalty. See 43 CFR 3212.14.

(c) If we get information showing that you must resume operations

to protect the interests of the United States, we will terminate your

suspension and order you to resume production.

Sec. 3212.13 How does a suspension affect my lease terms?

If BLM approves your suspension of operations and production,

(a) Your lease term is extended by the length of time the

suspension is in effect.

(b) You do not have to drill, produce geothermal resources, or pay

rents or royalties during the suspension. We will suspend your

obligation to pay lease rents or royalties beginning with the first day

of the month following the date the suspension is effective. For a

suspension of operations, we will not suspend your lease rental or

royalty obligations.

Sec. 3212.14 What happens when the suspension ends?

You must resume rental or minimum royalty payments beginning on the

first day of the lease month after BLM terminates the suspension. You

must pay the full rental or minimum royalty amount due on or before the

next lease anniversary date. If you do not, we will refund your balance

and cancel the lease.

Sec. 3212.15 May BLM reduce or suspend the royalty or rental rate of

my lease?

Yes. If you apply for a waiver, suspension or reduction of your

rent or royalty, BLM may grant your request if we determine that:

(a) It promotes conservation;

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

resources;

(c) It is necessary to promote development; or

(d) You cannot successfully operate the lease under its current

terms.

Sec. 3212.16 What information must I submit when I request that BLM

suspend, reduce or waive my royalty or rental rate?

(a) Your request for suspension, reduction or waiver of the royalty

or rental rate must include all information BLM needs to determine if

the lease can be operated under its current terms. We may ask you for:

(1) The type of reduction you seek;

(2) The serial number of your lease;

(3) The names of the lessee and operator;

(4) The location and status of wells;

(5) A summary of monthly production from your lease; and

(6) A detailed statement of expenses and costs.

(b) If you are applying for a royalty reduction, suspension or

waiver, you must also give us 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. We will not approve a royalty

reduction, suspension or waiver unless other royalty interest owners

accept a similar reduction, suspension or waiver.

[[Page 52376]]

Subpart 3213--Relinquishment, Termination, Cancellation, and

Expiration

Sec. 3213.10 Who may relinquish a lease?

The record title owner may relinquish a lease in full or in part.

If there is more than one record title owner for a lease, all record

title owners must sign the relinquishment.

Sec. 3213.11 What must I do to relinquish a lease?

Send BLM a written request 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 May BLM accept a partial relinquishment if it will reduce

my lease to less than 640 acres?

Your lease must remain at least 640 acres, or all of your leased

lands in a section, whichever is less. Otherwise, we will not accept

your partial relinquishment. We may only allow an exception if it will

further development of the resource.

Sec. 3213.13 When does my relinquishment take effect?

If BLM determines you have submitted a complete relinquishment

request which meets the requirements of 43 CFR 3213.11 and 3213.12,

your relinquishment is effective the day we receive it. However, you

and your surety must still:

(a) Pay all rents and royalties due before relinquishment;

(b) Plug and abandon all wells on the relinquished land;

(c) Restore the surface and other resources; and,

(d) Comply with the requirements of 43 CFR 3200.4.

Sec. 3213.14 How can my lease automatically terminate?

If you do not pay the rent on or before the anniversary date, your

lease automatically terminates by operation of law.

Sec. 3213.15 Will my lease automatically terminate if my rental

payment is on time but for the wrong amount?

(a) If MMS receives your rental payment on time, but it is

deficient by a nominal amount, your lease will not automatically

terminate. A nominal amount is not more than $100 or five percent of

the total payment due, whichever is less. MMS will notify you if your

payment is deficient, and will set a date by which a further payment

must be made. If you do not send this further payment in the time

allowed, we will terminate your lease as of the anniversary date of the

lease.

(b) If your rental payment is deficient by more than a nominal

amount, your lease will automatically terminate on the anniversary date

of the lease.

Sec. 3213.16 Will BLM notify me if my lease terminates?

Yes, we will send you a notice of the termination by certified

mail, return receipt requested.

Sec. 3213.17 May BLM reinstate my lease?

Yes, if your lease was terminated for failure to pay your rents on

time. You have 30 days from when you receive the termination notice to

petition us for reinstatement.

Sec. 3213.18 Who may petition to reinstate a lease?

All record title owners must sign the petition, though any one

record owner can submit it.

Sec. 3213.19 What must I do to have my lease reinstated?

Send BLM a petition requesting reinstatement. Your petition must

include the serial number for each lease and an explanation of why the

delay in payment was justifiable, rather than due to a lack of

diligence. In addition to your petition, you must also include any past

rent owed and any rent which has accrued from the termination date.

Sec. 3213.20 Are there reasons why BLM would not reinstate my lease?

We will not reinstate your lease if:

(a) You do not prove that your failure to pay rent on time was

justifiable or was not due to your lack of diligence;

(b) We issued a valid lease for any of the lands before you filed

your petition for reinstatement; or

(c) The land is no longer available for leasing.

Sec. 3213.21 When will my lease expire?

Your lease expires at the end of its primary term or extended term

if you do not either begin production before the primary term ends or

extend your lease under subpart 3208. 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's extended term expires?

No, if you have extended your lease term, we will not notify you

when your lease expires at the end of that extended term.

Sec. 3213.23 May BLM cancel my lease?

(a) Yes, we may cancel your lease, after giving you 30 days notice,

if we determine that you violated the requirements of 43 CFR 3200.4. We

will also cancel your lease if it was issued in error.

(b) See the following Subparts for information related to

Inspection and Enforcement procedures:

(1) Subpart 3254--Exploration operations;

(2) Subpart 3266--Drilling operations; and

(3) Subpart 3277--Utilization operations.

Sec. 3213.24 When is a cancellation effective?

(a) If BLM cancels your lease because it was issued in error, the

cancellation is effective when you receive it.

(b) If BLM cancels your lease because you violated the requirements

of 43 CFR 3200.4, the cancellation takes effect 30 days from the date

you receive notice of the violation.

Sec. 3213.25 What can I do if BLM notifies me that my lease is being

canceled due to violations of the laws, regulations or lease terms?

(a) You can prevent us from canceling your lease following this

notice if:

(1) You correct the violation within 30 days; or

(2) You show us that you cannot correct the violation during the

30-day period but that you are making a good faith attempt to timely

correct the violation.

(b) You may request a hearing on the record about the violation or

proposed lease cancellation. You have 30 days from the date you receive

the violation notice to request a hearing. See 43 CFR parts 4 and 1840.

We will suspend canceling your lease while your appeal is pending. If a

hearing occurs and the administrative law judge decides you committed a

violation, you will have 30 days from receiving the decision to correct

the violation under paragraph (a) of this section.

Subpart 3214--Personal and Surety Bonds

Sec. 3214.10 Who must post a geothermal bond?

The lessee or operator must post a bond with BLM before

exploration, drilling or utilization operations begin. Before we

approve a lease transfer or recognize a new designated operator, the

lessee or operator must file a new bond or a rider to the existing

bond, unless all previous operations on the land have already been

reclaimed.

Sec. 3214.11 Who must my bond cover?

Your bond must cover all record title owners, operating rights

owners, operators and any person who conducts operations on your lease.

[[Page 52377]]

Sec. 3214.12 What activities must my bond cover?

Your bond must cover:

(a) Any activities related to exploration, drilling, utilization or

associated operations on a Federal lease;

(b) Reclamation of the surface and other resources;

(c) Royalty payments; and,

(d) Compliance with the requirements of 43 CFR 3200.4.

Sec. 3214.13 What is the minimum dollar amount required for a bond?

The minimum bond amount differs depending on the type of activity

you are proposing and whether your bond will cover individual,

statewide or nationwide activities. The minimum dollar amounts and

bonding options for each type of activity are found in the following

regulations:

(a) Exploration operations--see 43 CFR 3251.15;

(b) Drilling operations--see 43 CFR 3261.18; and,

(c) Utilization operations--see 43 CFR 3271.12 and 43 CFR 3273.19.

Sec. 3214.14 May BLM increase the bond amount above the minimum?

(a) We may increase the bond amount beyond the minimums referenced

in 43 CFR 3214.13 when:

(1) We determine the operator has a history of noncompliance;

(2) We previously had to make a claim against a surety because any

one person who is covered by the new bond failed to timely plug and

abandon a well and reclaim the surface;

(3) MMS has notified BLM that a person covered by the bond owes

uncollected royalties; or

(4) Our inspection of the property determines that the bond amount

is too low to cover the estimated reclamation cost.

(b) We may increase bond amounts to any level, but we will not set

that amount higher than the total estimated costs of plugging wells,

removing structures, and reclaiming the surface, plus any uncollected

royalties due MMS or monies owed to BLM due to previous violations.

Sec. 3214.15 What kind of financial guarantee will BLM accept to back

my bond?

We will not accept cash to back a bond. We will only 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 secured by a cashier's check,

certified check, certificate of deposit, negotiable securities such as

Treasury notes, or an irrevocable letter of credit (see 43 CFR 3214.21

and 3214.22).

Sec. 3214.16 Is there a special bond form I must use?

Use a BLM-approved bond form (Form 3000-4, or Form 3000-4a, June

1988 or later editions) for either a corporate surety bond or a

personal bond.

Sec. 3214.17 Where must I submit my bond?

File personal or corporate surety bonds and statewide bonds in the

BLM State Office which oversees your lease or operations. You may file

nationwide bonds in any BLM State Office. File bond riders in the BLM

State Office where your underlying bond is located. For personal or

corporate surety bonds, file one originally signed copy of the bond.

Sec. 3214.18 Who will BLM hold liable under the bond and what are they

liable for?

We will hold all interest owners in a lease jointly and severally

liable for compliance with the requirements of 43 CFR 3200.4 for

obligations that accrue while they hold their interest. Among other

things, all interest owners are jointly and severally liable for:

(a) Plugging and abandoning wells;

(b) Reclaiming the surface;

(c) Paying compensatory royalties assessed for drainage; and

(d) Paying rent.

Sec. 3214.19 What are my bonding requirements when a lease interest is

transferred to me?

(a) Except as otherwise provided in this section, if the lands

transferred to you contain a well or any other surface disturbance

which the original lessee did not reclaim, you must post a bond under

this subpart.

(b) If the original lessee does not transfer all interest in the

lease to you, you may become a co-principal on the original bond,

rather than posting a new bond.

(c) You do not need to post an additional bond if:

(1) You previously furnished a statewide or nationwide bond; or

(2) The operator provided the original bond, and the operator does

not change.

Sec. 3214.20 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. 3214.21 What must I do 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

authorized to do business in the United States;

(b) Include on its face the statement, ``[t]he Secretary of the

Interior or his delegatee must approve redemption of this certificate

by any party;'' and

(c) Be payable to the Department of the Interior, Bureau of Land

Management.

Sec. 3214.22 What must I do 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, Bureau of Land

Management;

(c) Be irrevocable during its term and have an initial expiration

date of no sooner than one year after the date we receive it;

(d) Be automatically renewable for a period of at least one year,

unless the issuing financial institution gives us written notice, at

least 90 days before the letter of credit expires, that it will no

longer renew the letter of credit; and

(e) Include a clause that authorizes the Secretary of the Interior

to demand immediate payment, in part or in full, if you do not meet

your obligations under the requirements of 43 CFR 3200.4 or provide

substitute security for a letter of credit which the issuer has stated

it will not renew before the letter of credit expires.

Subpart 3215--Bond Collection After Default

Sec. 3215.10 When may BLM collect against my bond?

Unless you comply with the requirements listed at 43 CFR 3200.4, we

may collect money from the bond to correct your noncompliance. This

amount can be as large as the face amount of the bond. Some examples of

when we will collect against your bond are when you do not:

(a) Properly plug and abandon a well;

(b) Reclaim the lease area;

(c) Pay outstanding royalties; or

(d) Pay assessed royalties to compensate for drainage.

Sec. 3215.11 Must I replace my bond after BLM collects against it?

Yes. If we collect against your bond, before you conduct any

further operations you must either:

(a) Post a new bond equal to the value of the original bond; or

(b) Restore your existing bond to the original amount.

[[Page 52378]]

Sec. 3215.12 What will BLM do if I do not restore the face amount or

file a new bond?

If we collect against your bond and you do not restore it to the

original amount, we may shut-in any well(s) or utilization facilities

and begin canceling all of your leases covered by that bond.

Sec. 3215.13 Will BLM cancel or terminate my bond?

No, we do not cancel or terminate bonds. However, we may:

(a) Terminate the period of liability of a surety or other bond

provider at any time. The bond provider must give you and BLM 30 days

notice when they terminate your bond. Once your bond is terminated, do

not conduct any operations until you provide a new bond which meets our

requirements. We will also release an old bond once you file a new bond

with a rider covering existing liabilities and we accept it; or

(b) Release your bond after a reasonable period of time, if we

determine that you have paid all royalties, rents, penalties, and

assessments, satisfied all permit or lease obligations and reclaimed

the site according to your operations plan.

Sec. 3215.14 When BLM releases my bond, does that end my

responsibilities?

No, when we release your bond, we relinquish the security but we

continue to hold the lessee or operator responsible for noncompliance.

Specifically, we do not waive any legal claim we may have against any

person under the Comprehensive Environmental Response, Compensation and

Liability Act of 1980 (42 U.S.C. 9601 et seq.), or other laws and

regulations.

Subpart 3216--Transfers

Sec. 3216.10 What types of lease interests may I transfer?

You may transfer record title or operating rights, but you need our

approval before your transfer is effective. See 43 CFR 3216.21.

Sec. 3216.11 Where must I file a transfer request?

File your transfer in the BLM State Office that handles your lease.

Sec. 3216.12 When does a transferee take responsibility for lease

obligations?

Once we approve your transfer, the transferee becomes responsible

for performing all lease obligations accrued after the date of the

transfer, and for plugging and abandoning wells which exist and are not

plugged at the time of the transfer.

Sec. 3216.13 What are my responsibilities after I transfer my

interest?

You will still be responsible for rents, royalties, compensatory

royalties and other obligations accrued before your transfer became

effective. You must also plug and abandon any wells drilled or existing

on the lease while you held your interest.

Sec. 3216.14 What filing fees and forms does a transfer require?

With each transfer request you must send us the correct form and

pay the transfer fee. When you calculate your fee, make sure it covers

the full amount. For example, if you are transferring record title for

three leases, submit $150 with the application. Use the following chart

to determine forms and fees:

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

Filing

transfer

Type of form Required? Form No. Number of copies fee (per

lease)

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

(a) Record Title................. Yes............................ 3000-3......................... 2 executed copies..................... $50.00

(b) Operating Rights............. Yes............................ 3000-3(a)...................... 2 executed copies..................... $50.00

(c) Estate Transfers............. No............................. N/A............................ 1 List of Leases...................... None

(d) Corporate Mergers............ No............................. N/A............................ 1 List of Leases...................... None

(e) Name Changes................. No............................. N/A............................ 1 List of Leases...................... None

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

Sec. 3216.15 When must I file my transfer request?

(a) File a transfer request to transfer record title or operating

rights within 90 days after you sign an agreement with the transferee.

If we receive your request more than 90 days after signing, we may

require you to re-certify that you still intend to complete the

transfer.

(b) There is no specific time deadline for filing estate transfers,

corporate mergers, and name changes. Just file them within a reasonable

time.

Sec. 3216.16 Must I file separate transfer requests for each lease?

File two copies of separate requests for each lease for which you

are transferring record title or operating rights. The only exception

is, if you are transferring more than one lease to the same transferee,

just file two copies of one transfer application.

Sec. 3216.17 Where must I file estate transfers, corporate mergers and

name changes?

(a) If you have posted a bond for any Federal lease, file estate

transfers, corporate mergers, and name changes in the BLM State Office

that maintains your bond.

(b) If you have not posted a bond, file estate transfer, corporate

merger and name change documents in each State Office having

jurisdiction over the lease(s).

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

(a) If you are transferring an interest in your entire lease, you

do not need to give BLM a legal description of the land.

(b) If you are transferring an interest in a portion of your lease,

describe the lands the same way they are described in the lease.

Sec. 3216.19 May I transfer record title interest for less than 640

acres?

Only when your transfer includes an irregular subdivision or all

your lease in a section. We may make an exception to the minimum

acreage requirements if needed to conserve the resource.

Sec. 3216.20 When does a transfer segregate a lease?

If you transfer 100 percent of the record title interest in a

portion of your lease, BLM will segregate the transferred portion from

the original lease and give it a new serial number with the same terms

and conditions as those in the original lease.

Sec. 3216.21 When is my transfer effective?

Your transfer is effective the first day of the month after we

approve it.

Sec. 3216.22 Does BLM grant all transfer requests?

No, we will not approve a transfer if

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