Announcer: the Bureau of Land Management Satellite Network Presents Live
from the BLM National Training Center in Phoenix, Arizona, the National
Oil & Gas Inspection and Enforcement Strategy Requirements‑‑ Preparing
the Fy‑98 Matrix. Today\'s Instructor Is Lonny Bagley. And Now the Host
of Your Program, Howard Lemm.

Lemm: Good Morning, Everyone. From Hot and Sunny Phoenix. Welcome to the
National Training Center. It\'s Our Pleasure to Bring You This Telecast.
Today We\'ll Discuss the National I&e Strategy Requirements along With a
Demonstration on How to Prepare the Matrixes. In Response to Last
Year\'s Telecast Is Program Is Being Presented Prior to the \'98
Inspection Year. The Objective of Our Telecast Is To Give You a Clear
Understanding of the \'98 Inspection Requirements and Training for the
Completion of Your Inspection Matrices. Inspection Requirements Have
Changed from Those in past Years. Today We\'ll Address Those Changes.
Lonny Bagley, Our Subject Mats You Are Specialist, Is with Us Today to
Discuss Some of Those Changes. In My Humble Opinion, He\'s Being Asked
to Assume an Unfamiliar Role in this Duo You\'ll Be Seeing on Our Show
Today. For Today Only, He Will Be the Brains of the Outfit. Welcome,
Lonny. And Are You unto the Challenge Today?

Bagley: Yes, I Am. I\'m Glad to Be Here.

Lemm: and Are You Enjoying That Area Manager Job You Have Been Acting
In?

Bagley: Yes, I Am. Enjoyed it a Lot.

Lemm: All Right. Today We Want You to Participate As Much as Possible.
You Can Contact Us by Phone or Fax. First, Let\'s Talk about Those Phone
Calls. You Can Call in Whenever You Like Using the Number Provided In
Your Viewer Packet. We Also Have Two Scheduled Question and Answer
Periods. I\'ll Give You Warning in Advance So You Will Have Plenty of
Time To Call In. You Can Also Send Us a Fax Any Time by Using the Form
in the Back of Your Viewer Packet. Be Sure to Print Your Questions
Legibly with a Dark Marker. Please Put Your Phone Number on The Fax So
We Can Get in Touch With You to Clarify Your Question If We Need To. As
You Know, the Inspection Requirements for \'98 Are Differ Than in the
past. One of the Main Changes Is That The Detailed Production
Accountability Inspection and The Independent Measurement and Handling
Inspection Have Been Combined. The New Process Will Now Be Referred to
Simply as a Production Inspection. All Existing Inspection Activities
Have Been Retained. This Major Change Gives the Inspector the Latitude
to Decide What Activities Are Necessary to Fulfill Our Mission. Minimum
Requirements for the New Inspection Will Be Discussed by Lonny Later in
the Show. Although These Procedures Have Changed, BLM\'s Role Has Not.
Our Responsibilities Continue to Be the Protection of Federal and Indian
Mineral Interests, Surface and Subsurface Environmental Protection,
Proper Accounting of Production, Protection of Public Health and Safety
and Conservation of Resources. Now I Am Going to Turn Things Over to
Lonny Who Will Get Us Started this Morning by Discussing Program
Implementation and the Federal Oil and Gas Royalty Management Act.
Lonny, Are You Ready?

Bagley: Yes, I Am, Howard. In this Segment I Would like to Talk about
the Changes We\'ve Made to the Program. And Also Emphasize Some of the
Areas That We Need to Pay More Attention to in the Process. What I Would
like to Do Now Is Present to You Some of the Program Implementation
Requirements I Think We Need to Emphasize. They Would Be the Federal Oil
And Gas Royalty Management Act Mandates and Also the Indian Trust
Responsibilities. The I&e Strategy Ensures Orderly And Consistent
Implementation of Specific Elements of the Secretary\'s Responsibility
for Proper Accountability of Oil and Gas Production Identified in the
Federal Oil and Gas Royalty Management Act of 1982, Specifically in
Sections 101(b) 1 and 2 and Sections 108, Which I Will Briefly Discuss
Here. Section 101(b) Requires the Secretary to Establish Procedures to
Ensure That Authorized and Properly Identified Representatives of The
Secretary Will Inspect at Least Annually Each Lease Site Producing or
Expected to Produce Significant Quantities of Oil or Gas in Any One Year
or Those Have That a History of Noncompliance with Applicable Provisions
of Law or Regulations. Also, Section 101(b)(2), the Secretary Is
Required to Establish and Maintain Adequate Programs Providing for the
Training of Some Authorized Representatives and Methods and Techniques
of Inspection and Accounting That Will Be Used in Implementation of the
Act. Also, Fogrma Requires That the Secretary in Section 108(b) Shall
Develop Guidelines Setting Forth the Coverage and Frequency Of Such
Inspections, and That Is Why We Are Here Today, to Talk About the
Inspection Strategy Requirements That Have Been Changed for in Fiscal
Year. Also I Would like to Touch upon The Final Item That Would Be the
Indian Trust Responsibilities. We Find this to Be a Very Important
Aspect of the Program In Dealing with Our Indian Constituents. The I&e
Program Will Continue to Ensure Production Accountability, Environmental
Protection, and Public Health And Safety on Indian Cases. Inspection
Offices Will Coordinate Yearly Inspection Goals with the Appropriate
Tribes Prior To, or During, Annual Matrix Preparation to Ensure That
Their Needs Are Fulfilled.

Lemm: I Would Just like to Add a Special Welcome to the Bia and Tribal
Members That May Be Watching Us Today and Especially With the Signing of
the Additional 638 and Co‑op Agreements. It\'s Real Good to Have Those
People Here as Well.

Bagley: Yes, Howard. Those Individuals Contracts in 638, Growing in
Number and We Are Getting a Lot More of That Activity. It\'s Good to
Have Those People Here. Thanks, Lonny. Next We\'re Going to Discuss the
Different Inspection Types Involved in the I&e Program. First, More
about Phone Calls. Don\'t Be Shy about Calling In. Today\'s Training
Will Be More Effective with Your Participation. If a Couple Goof Balls
like Lonny and I Can Sit in Front of Live Tv, You Can Pick up the Phone
and Give Us a Call. If We Run Short of Time, Phone Calls Will Take
Priority over Faxes. Please Follow along with the Viewer Packet You Have
Been Given. We Will Point out Specific Page Numbers as We Go. In Your
Packet There Is a Copy Of a Course Roster That Should Be Filled out by
All Viewers. Please Give the Roster Back to Your On‑site Coordinator Who
Will Fax it to Us after the Show. The Rosters Will Help Us to Verify the
Number of People Who Received Our Training and Assure Lonny and I That
Someone Was out There. Well, That Finishes up My Housekeeping Chores.
Now Let\'s Get Back to Lonny So He Can Tell Us about Inspection Types
for \'98. Lonny?

Bagley: Thank You, Howard. What I Would like to Do Now Is Cover the
Different Types Inform Spec Shuns That Are Covered in The Inspection
Strategy. We Know That There Are Also a Number of Activities Associated
With Those Types of Inspections. But We Won\'t Discuss Those in Much
Detail Today There Were Some New Inspection Activities Added, Although,
to the \'98 Inspection Requirements and When We Pass Through Those Types
‑‑ Or Those Activities, I Will Point Those out to You as to What Have
Been Changed or Are New. First of All, I Would like to Talk about the
Drilling Inspections. Drilling Operations Are Inspected to Ensure That
Equipment, Practices and Procedures Are in Accordance With the Minimum
Standards of Onshore Is Number 2, 6 and the Approved Application to
Drill.

Lemm: I Have You up in Front of Live Camera, and You Can\'t Lie, And You
Have to Admit at this Point That the Drilling Inspections Are the Most
Important, Right?

Bagley: Well, There\'s Debate About That, Howard. We Could Probably
Debate That For this Entire Whole Segment, But We Should Continue On,
and The Biggest Thing Is Though That If We Didn\'t Have Production, You
Wouldn\'t Be Drilling Today. That\'s Kind of it in a Nutshell. The next
Inspection Type Are Environmental Inspections. They\'re Typically
Performed by Our Environmental Scientists or Natural Resource
Specialists, or Another Resource Program Specialist. Environmental
Inspections Include Inspections of Reclamation, Topsoil Stockpiling,
Road Location, Pit Construction and Their Use, and Erosion Concerns.
Inspections of Water Disposal Methods, Tank Battery Dikes and Hazards
May Also Be Part of this Inspection. This Will Include Only Those
Inspections That Are Post Approval ‑‑ That Are in the Post Approval for
Specific Surface Environmental Impacts. The next Area I Would like to
Cover Are Workover Operations. Inspections of Workover Operations Ensure
That Equipment, Practices and Procedures Are in Accordance With the
Approved Permit ‑‑ Permit. These Inspections Are Currently Optional,
However, and Are Not Required as Part of the Strategy. Inspection of
Plugging Operations Ensure That Equipment, Practices and Procedures Are
in Accordance With the Minimum Standards of Onshore Order Number 2 and
the Approved Notice of Intent to Abandon. Another Inspection Type Is the
Undesirable Events. These Are Conducted in Accordance with Ntl‑3a. They
Include Such Items as Spills, Accidents or Fires. Record Verification
Inspections Are an Office Review of Specific Production Records Such as
Calibration, Proving or Run Ticket Reports Submitted by the Operator.
And These Are Also Reports That Are Submitted Outside of an Ongoing
Production Inspection. It Is Not a Complete Record Review, However, of
All the Production Records. The Last Item We\'re Going to Cover Is
Production Operations. They Are Inspected to Ensure That Equipment and
Practices and Procedures Are Followed in Accordance with the
Regulations, Minimum Standards of Onshore Orders Number 3, 4, 5 and 6
and Any Applicable Conditions of Approval. Given the Fact That We Have
Covered the Production Inspections Last Was Because That Was a Major
Change in Our Inspection Process. So, Therefore, What I Would like To Do
Is Cover Some of Those Minimum Standards Related to the Production
Inspection. First of All, Let\'s Cover the Purpose of the Production
Inspection. It Is to Ensure That Production Is Handled Properly,
Measured Accurately, and Reported Correctly. The Production Inspection
Will Include Observations to Verify That the Environment Is Protected
and to Ensure the Safety and Health of the Public. Now I Would like to
Cover Those Minimum Requirements, Those Are The Basics That I Just
Discussed The Purpose. The Inspector Conducting the Pi Will Determine
the Activities That must Be Performed at a Minimum this Will Be
Required. You must Sample All of the Methods and Types of Measurements
Occurring on the Case, Observations for Site Security, Also Inspection
for Environmental and Public Health And Safety Concerns, and Also
Include a Partial Records Review. There Are Two Areas We Need to Discuss
as Far as How the Production Inspection Is Applied. Those Cases Where
Production Is Occurring and Those Cases Where Production Is Not
Occurring. So, First of All, Let\'s Cover The Cases Where Production Is
Occurring. Measurement Activities must Include a Comparison of the
Corresponding Production Records Related to the Activity. Again, These
Are Minimum Requirements. Field Offices Will Inspect an Adequate Sample
of Wells and Facilities along with the Inspection of Each Type of
Measurement, Whether Oil and Gas, Each Type of Method of Measurement,
Such as Tank Gauging, Lact Meter Provings or Orifice Meters. The Witness
May Witness or Perform These Measurement Activities to Accomplishment
This Requirement. The Sample Is to Be Determined By Individuals
Conducting the Inspection. Factors You Need to Consider in Determining
Sample Size Are Dependent upon the Number of Wells, Facilities,
Measurement Equipment, Methods and Types.

Lemm: So this New Inspection Type Just Gives Those Guys the Flexibility
to Concentrate Where They Think They\'ll Get the Most Bang for Their
Buck and the Procedures in the Field to Accomplish That Are Basically
The Same?

Bagley: Yes, the Activities Did Not Change Within the Production
Inspection Between Detailed Production Accountability and The
Independent Measurement Handling Inspection. They Are the Same. Same
Activities Are Used. Only We\'ve Added a Couple More, And I\'ll Discuss
Those When We Come Across Those. Now I Would like to Discuss Similar to
What Howard and I Were Just Talking About, the Sample Size. The Sample
must Include Inspection Activities Associated With Environmental, Public
Health and Safety Concerns and Site Security. The Partial Records Review
Portion of this Inspection We Need to Expand a Little Further On It. It
Is Quoted Coded as a Pi‑rr Code. Some Offices Have Used it in the Past.
It must Include a Review of the Month Will He Report of Operation to
Analyze Trends in Production History and Identify Any Reporting Errors
That May Be Existing. This Will Include the Review of The Monthly Report
of Operations For the past Six Months. That Would Be the Total
Disposition and Then Also Production Average Report for The past Three
Years. The Reason That We Do this Is To, like I Said, Identify Any
Trends in Missed Reporting. We Had Several Discussions on The Length of
Time That We Should Be Looking at in Regards To the Disposition of
Production And the Number of Reports That Are Being Reviewed at the
Time.

Lemm: Lonny, How Did You Come up With That Time Frame?

Bagley: Well, We Looked at What Would Be Reasonable to Identify Any
Problems, and We Wanted to Make it Reasonable for the Sense Of the
Inspector Looking at It, But Yet Have Enough Information There to Ensure
That That Production Is Being Reported Correctly, and If You Have Too
Narrow of a Window, It\'s Going To Cause Problems in Identifying Any
Errors That May Exist. So You Need to Look at a Wide Range to Ensure
That You\'re Getting All That Information.

Lemm: Ok.

Bagley: the next Area That We Like to Also Talk about Are the Detailed
Production Records Reviews. Field Offices Are Encouraged to Conduct
Detailed Production Record Reviews. That\'s Coded as a Pr Activity. What
We Want to Do Is Emphasize That in That in the past We\'ve Identified
the Majority of Our Reporting Errors in the Detailed Production Records
Reviews. So We Want to Ensure That Offices Continue to Use this Method
to Determine Whether or Not Production Is Being Properly Reported. So
from That, Don\'t ‑‑ You Know, When We\'re Talking about the Partial
Records Review, That\'s Not the End. Also Include Such Detailed
Production Accountability Reviews. At the Discretion Also of the Field
Office, in Lieu of Completing or Conducting a Field Inspection, You Are
Allowed to Conduct a Detailed Records Review Pr on Low Fogrma or
Low‑producing Cases. These Would Be Your Ys or Zs. We Would like to
Emphasize Here Also That We Are Not Expecting You Use this as a
Continual or An Exclusive Type Inspection for Inspecting Those Ys and
Zs. We Want to Have a Mixture of These Inspections That Are Being
Conducted, Whether They Be Field Or Office Reviews. Also If a Case Is
Subject to a Variable Royalty Rate, the Inspector must Verify If the
Production Subjects Lease to Do A Higher Royalty Rate. If Production
Level Indicates a Higher Royalty Rate Is There, a Sample Check of the
Status of Wells must Be Made to Verify If They Are Countable Wells. If
the Sample Determines That The Operator Is Not Reporting The Wells
Correctly, Then the Sample must Be Enlarged to Include Additional Wells.
Now in the Area of Cases Without Production, These Cases, If Production
Is Not Occurring on The Case, Only a Partial Records Review and the
Appropriate Field Inspection Activities must Be Performed Such as Site
Security, A Well Status Check And, Again Here Is a New Code for the
Offices to Use, Is the Well Status Check in the Field. It Is Now Coded
as Pi‑ws. Also That Includes Environmental And If Applicable Health and
Safety Inspection Activities.

Lemm: Lonny, Could You Run Us Through an Example of How the
Representative Sampling Process Would Work?

Bagley: this Discussion Came up Also in Our Meeting in May with All the
I&e Coordinators in the Nation. We Got Together and Developed This
Inspection Process and the Best Way I Can Explain it Is That When
You\'re Raising Kids And You Have These Story Books And Things Kind of
Pop up out of These Stories Books, and It\'s Kind of a Simplistic View
of It, But Just Imagine If You Will, If You Open up a Book and this Was
On a Case That You Had with Several Wells and Facilities and You Open it
Up, and All the Wells and Facilities Kind of Just Popped up There in
Front of You. Well, You Know That We Have to Take Care of the
Environment. We Have to Look at Production Accountability and Public
Health And Safety. So with Those in Mind, We Can Then Look over That
Entire Inspection Item or Cases Now Being Referred to and Look out On
this Area and Say, Ok, I Have Erosion Concerns over Here, I Need to Look
over in this Location for That Purpose, and You May Not Have That over
Here, So You May Focus on That Area For Those Concerns and Also There\'s
Oil Measurement, There May Be Tank Gauging, Lact Meter Provings, Things
like That That Need to Be Considered in Your Sample. So What We\'re
Telling the People In the Policy Is That You Need To Look at All the
Types of Measurement. So If There Is Tank Gauging, You Need to Look at
the Tank Gauging Aspect to Make Sure That\'s Being Done Properly to
Ensure It\'s Being Accurately Measured. Same Way with Lact Meter
Measurement. Also with Gas Meters. There Are Several Different Types of
Measurement. You Have Diaphragm Meters, You Have Orifice Meters and
Turbine Meters and So On. You Have to Ensure That Those Measurements Are
Being Done Accurately and the Equipment That Is Installed to ‑‑ Is in
Stopped According to the Standards. Make Sure We Have Accurate
Measurement. And Also for Any Waste That May Be Occurring. So the Sample
May Include Maybe 25% of the Facilities. And Using That Example of
Everything That\'s Popped Up, You Look at the Different Types of
Production. You May Have Gas Production and Oil Production or Both
Separate In Different Wells. So You Have to Look at All Those Aspects.

Lemm: That\'s an Example Even an Engineer Can Understand with the Pop‑up
Book.

Bagley: We Wanted to Make it as Simple as Possible and We Were Thinking
of the Engineer When We Developed That.

Lemm: What Kind of Input and Buy‑in Did You Get into These Changes from
the Field Offices?

Bagley: We Went out to the Field With a Draft of These Proposals To Get
Comment on What We Thought Should Be a Good Production Inspection. Also
Entered into this Were the Results of Our Inspection Efforts since 1990
When the Current Strategy Was Developed. Through That Effort and Through
The Comments Received from the Field, it Was Evident That the Detailed
Production Accountability Inspection and The Independent Measurement and
Handling Inspection Were Quite Cumbersome to Use and Where Do You Apply
Each One. So We Developed What We ‑‑ We Said, Ok, Let\'s Put Them into
One. Our Results Show We Need to Have A Field Presence, but Our Main
Concern Was in That Production Reporting, and So We\'re Emphasizing We
Need to Go out And Look at the Field Activities, but Not in the Detailed
Sense of the Dpai or ‑‑

Lemm: Unless the Situation Bears That out or Warrants It.

Bagley: Unless Our Sample Determines We Need to Do More Stuff out There.

Lemm: I Understand You\'ve Retained Those Detailed Time‑keeping
Requirements. Can You Explain the Ongoing Need For That?

Bagley: Yes. One of the Things That We Talked About Was, and We\'ve
Stated in The past That Once We Get Enough Information and Time
Documentation We Can Probably Back Away from That Requirement, However,
this Year, We\'ve Changed Our Inspection Process To Where We Need to
Know How Much Time it Takes to Conduct an Inspection, and Particularly
in The Production Arena. Now, in My Experience, When I\'m Given the
Latitude to Track it For One Purpose and Not for Another, I Sometimes
Forget to Track it for the One We Need the Information for. So it Was
the Consensus of the Group That We Would Continue to Track Our Detailed
Inspection Times on All of the Inspections So That We Make Sure and Get
the Data We Need for the Production Inspection. And it Will Also Build
up Our Database as Far as Other Inspection Times Throughout for Other
Types of Inspections.

Lemm: and as Well, I Understand That Strategy Group That You Kind of
Provide the Washington Office Guidance for That You\'re Considering
Frequency of Inspection Changes and Maybe Volume Levels. Can You Go into
a Little Bit About That and ‑‑ You\'re Meeting In December, Is That
Right, to Discuss Those Things Further?

Bagley: We\'re Going to Meet in December and That\'s One of the Subject
Items for That Meeting. We\'re Considering Different Levels of
Production Maybe for Different Frequency of Inspections, but It\'s Not
at a Point Where We Can Say We\'re Going to Go for It. We Need to Also
Look at How That Would Affect Our Responsibility And the Mission of the
Bureau as Far as Providing Production Accountability, Our Environmental
Concerns We Need To Be Looking at and Also the Health and Safety of the
Public. So There\'s a Lot of Things Involved in the Inspection Frequency
That We Need to Be Considering Before We Step out And Change That
Frequency.

Lemm: Are You Guys Batting Around Any Volume Levels, 100 Barrels a Month
for Oil or Anything like That?

Bagley: That Has Been Discussed, But ‑‑ and it Ranges From, You Know,
500 Barrels a Month to 100 Barrels or Maybe Even 50 Barrels A Month.
What Is a Good Cutoff for Us to Use in That System and We\'re Still
Gathering That Data and Analyzing the Impacts to That, How it Would Be
on the Program. So, Yes, We Are.

Lemm: and Is That a Main Item You Guys Will Be Discussing at The next
Meeting? What\'s Some Other Topics?

Bagley: Well, We\'re Going to Be Looking at the Frequency of
Inspections, Also We\'re Going to Be Looking at the Areas of Health and
Safety of Our Own People out There, Hydrogen Sulfide Operations. There
Should Be Some Information Coming to the Field on That. Documentation
Requirements for Inspections Is Going to Be Another Major Area. That\'s
Just a Few I Can Think of Off the Top of My Head, Which Will Probably
Fill up Our Agenda For Three Days to Work on along With the Volume ‑‑ or
Production Levels for Frequency of Inspection.

Lemm: So this Would Be a Good Time, Too, for the Field People To Be
Given ‑‑ Giving Some Input To You Directly or to Their State
Representative to That?

Bagley: it Would Be an Excellent Time to Provide Any Comments or Any
Thoughts on How We Should Approach Inspection Frequencies. Also on ‑‑
There Will Be an Ib Or Im Coming Out, I\'m Not Sure What Stage That Is,
Asking for Comments to the Documentation Process. So They\'re Going to
Provide Some Valuable Input in That Regard Also at That Time.

Lemm: So You\'re Obviously Expecting That Will Be out Early This Fall in
Time for Your Meeting and for the Field to Have Input?

Bagley: We\'re Hoping That That Im on the Documentation Is Going To Be
out Here this Week or next Week. It\'s Sitting in the Washington Office
Right Now Waiting for Signature.

Lemm: Ok. Before We Continue, I\'d like to Mention in That a Few Minutes
We\'ll Be Going to Our First Question and Answer Period. So, If You Have
a Question or Comment about What We\'ve Been Discussing, this Would Be a
Good Time to Give Us a Call. Ok, Now We\'re Ready to Talk About the
Matrix. Please Turn to Page 9 of Your Viewer Packet. This Will Make it
Easier to Follow along with Lonny\'s Presentation on the Prioritization
Process. Lonny, Back to You.

Bagley: Thank You, Howard. What I Would like to Do Now Is Cover the
Prioritization of Inspections and Only Those Areas We Made Any Changes.
What We Are Doing, We\'ve Only Made One Area in the Prioritization
Criteria Change And That Deals with the Compliance Standard. That Reads
as a Case Shall Be Rated High If it Has Had at Least Two Major Violation
or a Total of Six Fogrma‑related Production Accountability Violations,
Which Include Site Security Within the Preceding Two Fiscal Years. The
Major Change Here Is in the Area of the Six Total. Previously We Said it
Was Six Minor Violations. So We Changed That to Make it as A Total of
Six. So That\'s One of the Areas We Need to Be Looking At. Also ‑‑ That
Concludes the Prioritization Ranking Part. The Rest of Them Will Be the
‑‑ Exactly the Same as They Were Last Year. So Refer to Your I&e
Strategy or On Page 9 of the Matrix Presents Those to You. But I Did
Want to Cover That Major Change in That Process. Now I Would like to
Discuss the Goals for Fy‑98.

Lemm: Lonny, I Would like to Interrupt You. We Have a Call from Our
Boss. Director Shea Is on the Line. So this Is a Great Opportunity.

Bagley: I Think We Should Interrupt Me for That Call, Yes.

Lemm: Director Shea, Are You On?

Shea: I Am, Indeed.

Lemm: Great. Welcome to Our Program.

Shea: I Want to Tell You Both of You Have a Better Opportunity in
Television than I Do.

Bagley: That\'s Questionable.

Lemm: You Have a Lot More Hair Than I Do.

Shea: a Number of People in Washington Have Been Volunteering to Give Me
a Haircut. I May Be Matching You Shortly. I Wanted to Take Time to Say
Hello and to Tell You That of The Three Projects I\'ve Undertaken, the
I&e Activities In Oil, Gas and Minerals Is Going to Be a Very High
Priority And I Am Sure There Are a Number Of Questions That Have Arisen
For Each of You Who Actually Do This Work in the Field. So I Wanted to
Describe Two Things. One Is a Process and the Other Is to Really Try to
Give Some Emphasis to What My Emphasis Will Mean and If I Could Address
That First. BLM Has an Opportunity to Enhance Our Production
Accountability. I Have Been Told of Results from Offices Where We Have
Done Records Reviews Looking at Production Volumes and Quality,
Comparing Tank Gauges with Run Tickets and Comparing Various Sources of
Production Data Working with Mms this Has Proven To Be Very Successful
as Recouping Required Payments Owed And I\'m Interested in Exploring
Opportunities in BLM to See If This Effort Can Be Expand to Do See What
the Results Might Be. I\'m Not Aware of Any Problems With Any Individual
Entity or Any Specific Area. It\'s Simply Good Business to Audit Our
Production Records as A Steward of the Federal and Indian Mineral
Estates. That\'s My Intention. Bob Anderson and Sherry and I Have Been
Talking and They Will Be Meeting with Bob Armstrong And Tom Fry to Come
One a More Detailed Process Suggestion, but Consistent with What the
Vice‑president and the Secretary Told Me Last Week, I Am Going to Be
Looking to Each of You to Make Your Own Suggestions Given Your
Experience. I Think When You Feel Empowered To Do What You Believe Is
the Right Thing in the Field as it Relates to I&e, Then We\'ll
Accomplish That. And I Want to Be Supportive of That, and If You Will,
Run Interference So That If You Find A Particular Blockage in the Road,
Either from the Lessee or From Some Other Private Party or Even from
Some Governmental Entity, Let Me Know and We Will Move Ahead. With Pete
Cope Coming on to Be The Assistant Director in this Area and with Bob\'s
Help, I\'m Very Excited about the Prospects Of Doing Some Things Here
That Will Really Bring Home the Important Message That We\'re Meaning to
Convey, and That Is, We Are Going to Fulfill the Statutory, Regulatory
Duties We Have and We Are Going to Do it Through Your Efforts. I Would
Be Happy to Take a Few Questions. I\'m Not Sure If We Can Do That ‑‑ We
Can, I\'m Told. Larry?

Lemm: You Know, this Is Great, And I Think That We All Really Welcome
That Kind of Support and We\'ve Got an Excellent Cadre of Field People
That We Feel Are Highly Trained. We Used to Get a Lot of Comments,
Negative Comments, That Our Field People Didn\'t Have Industry
Backgrounds, Didn\'t Have the Training That Was Needed, and We\'ve
Worked Real Hard over the Last 10 Years To Bring Our Field People to the
Level and to Go Hire Those Kind Of People That Are Second to None When
They Go out There. There\'s Some Concern, I Think, With ‑‑ Still with
the Potential Transfer of Parts of the Program To the States. Could You
Comment on That a Little Bit about Where You See That Going?

Shea: Yes, I Understand That There Are, out of All the States That Were
Given the Opportunity, Only One State, My Native State of Utah, Proposed
To Do It, and They Did Make a Serious Proposal That We Will Look At. By
Accident When I Was Last in Salt Lake I Ran into the State Director, Mr.
Carter, and We\'ve Been a Long‑time Friends and I Told Him That I
Certainly Would Look Seriously at Their Proposal, but We Had to Be Very
Clear That We Had Federal Standards That We Had to Apply, And They Had
to Be Applied Not Just for Three Months or Not Just Six Months or 12
Months, But They Had to Be Done on a Satisfactory Permanent Basis. And
So If I Feel That We Are Going to Be Able to Do That, and Each of You in
Your Areas of Responsibility Believe That That Will Happen, Then There
Might Be Some Cooperative State‑federal Approach. But with All the
States That Were Given the Opportunity to Only Have One State Respond
Doesn\'t, to My Mind, Bode Well That We\'re Going to Be Immediately
Turning over the I&e Function to the States. I Also Have to Say, Having
Been A Long‑time Resident in the West, I Think the State Governments
There Are Beginning To Feel the Budgetary Impact of All of the New
Responsibilities They\'re Assuming, and I\'m Not Convinced They\'re
Going to Have The Funding to Do It. I Also Want to Make Sure That
Everybody Understands That this Emphasis on My Part for the I&e Project,
as I\'m Calling It, Is Not a Ploy to Have it Turned Over to Mms. They
Have Their Responsibilities And We Certainly Want to Continue to Work
Close with Them, but We Are the Inspectors, We Are the Enforcers, and
That Will Continue under My Directorship.

Lemm: Great. You Know, Another State That\'s Talked Quite a Bit about
the Program Is North Dakota, and Our Dickenson Office, I Have a Lot Of
Respect ‑‑ They\'re Second to None with the Experience in the Way They
Conduct Themselves up There and I Think the Feeling in The Field in
Dickenson and Other Places Is, as Long as the States Want to Discuss
Taking over the Program at the Same Level We Perform it and with the
Same Prioritization, Then We All Feel Like, Sure, We Can Talk about
That. I Think a Lot of Us Have Been Concerned That the States Might Be
Allowed to Take it over in a Watered down Version. So I Sure like What
You\'re Indicating There.

Shea: and I Understand North Dakota Has Asked for an Extension but They
Have Not Actually Made a Proposal. So, You Know, for Each of You That
Are Watching this Broadcast And Listening to Me Now Who Think That the
State That You Work Primarily in Might Have Some Proposals, Encourage
Them To Put Them Forward, but I Think The Proof Is Going to Be in the
Performance, and So Far at Least, like I Said, Utah Is the Only One We
Have to Look at and We Will Very Carefully Explore That, and There May
Well Be Some Opportunities. Now, I Understand the Deadline Has Passed as
of August 1st, but That Doesn\'t Mean That We Can\'t Continue to Have a
Dialogue And, You Know, Even in Draft Form Have a Chance to Work on a
Cooperative Arrangement.

Bagley: Director Shea, Could You Give Us Your Feelings on the Positions
That Were Vacated in The past Couple of Years and Were Not Filled
Because of the Rigo 2 Aspect? Do You Have Any Thoughts on That Regard.

Shea: Again, We Need to Build Our I&e Program, and I Was With Bob Abvey
and Ann Morgan in Oregon Last Week When We Announced Ann Being the
Director There, and Previously We Announced Bob Being the State Director
in Nevada. Bob Said Something to Me Worth Repeating Here and That Is
That As Managers We Need to Re‑recruit Our People, That with The
Government Shutdown, the Statement That Some People Were Not Essential,
with Rifs, with Early Retirements, There Is a Level of Discouragement
That\'s Very Understandable. There Is Absolutely Every Reason To
Understand Why People Wouldn\'t Be Terribly Excited. But We Need to Be
Sure We Include as We Rebuild in this Specific Area a Strong Audit
Function. I Don\'t Think We Can Say We Are Fulfilling Our Statutory and
Regulatory Duties If We Don\'t Have That Function. So I Am Working with
Mat and the Budget People. In Fact, I Was Supposed to Be in Oregon this
Week but Felt I Had Not Gotten up to Speed Enough on The Budget, and I
Will Be Paying Particular Emphasis on That, But, Lonny, I Think That We
Will Be Emphasizing the Audit Function and it Will Reflect in Ow We\'re
Allocating Our Budget.

Bagley: Also in That Audit Function Is Basically to Work in Conjunction
with Mms Where We Would Audit the Production and Be More in Coordination
with Mms On the Royalty Side?

Shea: Well, I Understand That Budgetwise We Have Also Planned about
900,000 to a Million Dollars to Improve That, And Each State Will Be
Getting Some Increased Allocation There.

Bagley: Ok.

Shea: So Don\'t Let Me Interrupt Your Program. Like I Said, Maybe When
We Get Together Personally You Can Give Me Some Television Tips So I
Could Appear as Good as You Do On the Screen.

Bagley: They Have Really Good Make‑up Artists Here.

Lemm: Again, They Can\'t Do Hair, Though. I Checked on That. Director,
We Really Look Forward To Working with You, and on Behalf of All the Oil
and Gas Programs, We Sure Invite to You Come to the Field with Us and
See What We Do and How We Do It, And If Pete Cope Is Someone We\'re Sure
Familiar With, and Having Bob Anderson Back There, You Know, He\'s Been
a Friend and Around the Program a Long Time And Sherry, We\'re Excited
‑‑ About That Group and We\'re Sure That the next Few Years Are Going to
Be a Great Working Relationship and We\'re Going to Move Forward in this
Program. Lonny, You Got Any Follow‑up?

Bagley: I Would Totally Agree With That, and We Are Really Looking
Forward to Working with You Director Shea.

Shea: I Appreciate It. Bob and Sherry Are Here. If You Have Questions, I
Am Sure They Would Be Happy to Answer Them. I Have to Say, and I Want it
Clearly Understood, That Sherry, When She Was Tipped, Gave Me a Briefing
on This, Was the Origination Point of My Putting I&e on as a Priority.
We Can Hold Her Accountable.

Lemm: Great. We Will Do All We Can to Support Her in That, Too. Thank
You, Director Shea.

Bagley: Now I Would like to Go Back to Our Program and What I Will Do Is
Refresh Our Viewers On Where We Picked up At. We Do Think Director Shea
for Calling In. That Was Very Good Timing on His Part. What I Would like
to Do Now Is Go Back and Refresh Your Memory As Far as What We Were
Talking About Earlier, Which Was the Prioritization of Our Inspection
Work. And Also Review ‑‑ Referring Back to Your Viewer Packets on Page 9
Does List All of the Prioritization Requirements, and The Only Change
Was, Again, in The Compliance History Where We\'re Looking at Six Major
Violations ‑‑ Excuse Me, Two Major Violations for a Total of Six Overall
Violations, and Within a Two‑year Period and Those Looking at Only in
the Production Accountability Violations, Which Do Include Site
Security. Also I Would like to Mention at This Time We Would like to
Have Any More Calls from People. Our Lines Right Now Are All Open, and
If You Have a Question, Please Call in and We\'ll Take Care of it for
You. The next Area I Would like to Talk about Are the Production Goals
for Fy‑98, Actually the Inspection Goals. And for Fy‑98, All Cases Will
Be Inspected Within a Three‑year Cycle. We\'ll Be Going over That in
Detail Here in a Little Bit When We Get into the Matrix Preparation.
Also, All Fogrma High Cases Will Be Inspected Annually. That\'s a
Requirement of Fogrma. And All Cases or Wells Rated High Priority for
Drilling, Environmental, Plugging, Workover, Public Health and Safety,
Legal and Other Shall Be Inspected Each Year.

Lemm: I Would like to Stress the Necessity of Working Real Closely with
the Tribes and the Bia to Make Sure We\'re Taking Into Account the
Things That Are Real Important to Them in Doing Those Inspections and
Bringing That into the Process and Including Those Folks and Making That
a Team Approach.

Bagley: Definitely. We Need to Include Those People So That We Have
Their Concerns Outlined in Our Inspection Strategy So We Can Take Care
of Them During the Year. With That, Howard, That Pretty Much Completes
That Area. I Will Turn it Back over to You.

Lemm: We Have a Little Extra Time. Do You Want to Speak a Little Bit
about Conflicting Priorities And How to Mitigate Them or How To Work
That out and What Some Of the Experience You\'ve Seen And Some of the
Best Ideas from The States You\'ve Visited about How to Make That Work
So That We Still Get the Accomplishments And We Don\'t Necessarily
Forego A Real Important Inspection Because of That?

Bagley: That\'s a Very Important Aspect. It\'s Been an Issue Within the
Bureau for a Number of Years. When You Have a Conflicting Priority
Between Drilling and Abandonment and Production, We Should Always Go
Towards the Drilling Abandonment Operations. These Operations Only Occur
One Time, and We Need to Make an Emphasis to Go out and Inspect Those.
Production Inspections Can Be Rescheduled at Any Time Throughout Their
Life of the Production Cycle. Another Issue in Conjunction With That Is
Those Operations That Occur Outside Normal Work Hours. That Mainly
Resolves Around Drilling and Abandonment. We Need to Make Sure That Our
Inspection Efforts, Use of Overtime, That We Get out and Look at Those
High Priority Operations, Because If We Don\'t, It\'s Going to Be down
the Road We Will Be Looking at Problems Possibly with Environmental
Concerns Because We Weren\'t out There to Witness It. Proof of That Is
in Some Offices Where We\'ve Had Cases of Blowouts Have That Existed
Recently. The Inspection Personnel, They Were out of Time, as ‑‑ Had
They Been Able to Go out and Look at Operations, That Situation May Not
Have Occurred. So We Need to Make an Emphasis And Make Sure That Those
Operations Are Being Looked At.

Lemm: Ok. We Have a Phone Call. We Have Sherry Barnett from the
Washington Office. Great. Hi, Sherry, How Are You?

Caller: I\'m Doing Good, Howard. How about Yourself?

Lemm: Great. Great.

Caller: I Don\'t Have Anything to Say in Particular. I Just Wanted to
Make Sure You Know I\'m Available If You Have Any Questions.

Lemm: Ok. Maybe You Can Give Us a Few More Highlights from Today\'s
Meeting With the Director. Was There Anything Else Specifically, Whether
it Was Specific to I&e or Broader to Oil and Gasp You Might Want to
Share with Us? We Have a Few Minutes Right Now? Caller: We Talked about
the I&e Budget in General, I Mean, the Oil and Gas Budget in General,
And I&e Is, of Course, a Major Portion of That. Pat Is Very Excited
about Rebuilding the Inspection and Enforcement Program Back up and
Focusing a Lot of That Effort of Rebuilding into the Audits Program. And
as He Mentioned, We Do Intend to Focus Some Funds Particularly at the
Audits Portion of the I&e.

Lemm: and Specifically Budget‑wise, What Kind of Numbers Are You Hearing
for the Program in General and Was it 900,000 to a Million Specify Tyke
I&e.

Caller: We Have Initially Targeted 900,000. Of Course, We Don\'t Have
Final Numbers from Congress Yet. We Have Initial Targets for the Oil and
Gas Program That Look Like We\'re about \$3 Million Ahead of Last Year.
So the Oil and Gas Program Is Faring Pretty Well. I Am Hoping to See
That Reflected in Some of the Workload Accomplishments and the Staffing
Levels in the Various Field Offices.

Bagley: How about for You, Do You Have a Couple Special Items You Came
Back to Washington with That You Particularly Wanted to See Incorporated
or Generated From this Point Forward?

Caller: Now, Howard, You\'ll Be Seeing the Annual Work Plan Documents
Pretty Soon. You Can Wait Another Couple Weeks.

Bagley: Sherry, You Just Recently Moved Back to Washington, D.c. to Take
on Those Responsibilities as Group Manager. How Are You Liking Your Job
So Far?

Caller: I\'m Real Excited about The Opportunity to Work with a Group of
People Back Here in Washington and to Have More Access to a Lot of My
Friends Out in the Field. We\'ve Got a Very Important Job To Do and I\'m
Looking Forward to What We Can Do Together.

Lemm: Thanks, Sherry. We Appreciate It. I Know You\'re Following along.
If We Get Some Questions Specific, We Would Appreciate If Maybe You
Would Call Back, If You Had a Perspective to Offer To Them. Thanks for
the Call. We Have a Fax from Bo Brown. He Is Asking: What\'s the Status
Of the Order Number 8 Workovers? It Seems to Be ‑‑ He Seems to Be
Noticing Increased Environmental Violations Pertaining to Workover
Operations, and I Believe, You Know, this Question Is Really Saying
They\'re Anxious To Get Something out about How We\'re to Inspect the
Workover Operations. Do You Have Any Update on That?

Bagley: Currently What Has Happened to Onshore Order Number 8 along with
a Number of Onshore Orders, Onshore Order 5 and 4 Were Updated and Sent
Back to Washington for Final Rule Process Also. Those Have Been Put on
Hold and Have Been Incorporated into the New Regulation or the Rewrite
of The Regulations to Incorporate The Onshore Orders into the Regulation
Portion. Also You May Be Aware That We\'re Also Putting Those
Regulations Into Plain English and Using the Performance‑based Standard
Where Applicable. So in Response to Bo\'s Question, Onshore Order Number
8 We Are Hoping to Get out Soon in the Context of it Being in the
Regulations and Also with a Number of Other Regulations and Onshore
Order Changes That Have Been Made and We\'re Going to Be Actually I
Think There Is Some Of That Information Sent to the Field Already on the
‑‑ for Comment, and There\'s Going to Be A Telecast at the End of
October Discussing That Also on the Reg Changes. So Basically I Guess it
Would Be To Stay Tuned and If There Are Any Environmental Problems
Occurring, We Can Certainly Take Care of Those under Existing
Regulations or an ‑‑ or the Authorized Officer May Order Things to Be
Done Also.

Lemm: Ok. We Sure Would Be Willing and Would Welcome Additional Fax
Questions or Phone Calls at this Point. So If You\'ve Got Something You
Would Really like Us to Answer Or to Address, this Is a Great Time.
There Is a Follow‑up Question on The Fax Form. The Question Is Asking
the Status of the Proposed Regulations, and it Voices a Concern That the
New Regulations Seem to Have less Teeth than Our Current Onshore Orders,
and I Guess the Comment I\'d Have to That, and I\'m Sure Not on That
Group, I Participated and Sent In a Lot of Comments, Is That I Think
It\'s Maybe a Little Premature to Know Exactly Where They\'ll End Up. I
Know They\'re Meeting in September for a Couple Weeks to Consider the
Comments, and I\'m Sure after They Look at All of Our Comments, and I\'m
Hoping They\'re Going to Be Contacting Us out in the Field to Have Us
Clarify the Comments That We Submitted. From Everybody I\'ve Talked to
on That Group, I Know a Lot of Those People Pretty Well, and I Wouldn\'t
Tell You I Agree with Everything I\'ve Seen, but What I Think Is
Important Is They\'ve Sure Been Listening and Been Willing to Talk about
the Important Points That I Personally Have Had, and I\'ve Been Getting
That Same Response From Other People That Have Taken the Time to Contact
the Authors. Lonny, You Are Going to Be a Part of That Group. Do You
Have Some Follow‑up to That?

Bagley: Basically What I Would Say Is That We Hope to Have Those
Regulations out for People To Comment on ‑‑ Excuse Me ‑‑ We\'ll Review
the Comments and Have Them out Final and Also Include Their
Participation at The End of October. So Please Do Tune in at That Time
for Everyone Listening and Provide Any Comments or Suggestions.

Lemm: You Know, We Put a Lot of Time into Trying to Give Them Specifics,
Not Just Say \"We Don\'t like a Certain Aspect,\" But What We Thought
Would Work Better with Some Proposed Wording, and I Don\'t Know ‑‑ I
Hope That\'s the Kind of Thing They\'re Looking for. I Hope You Guys
Will Call Us Back up in the Field and Say, \"You Know, I\'m Reading Your
Comment but I\'m Still Not Sure I Understand,\" or \"Is There Some
Further Technical Understanding We Could Come To?\"

Bagley: That\'s a Very Good Point. We Don\'t Mind Criticism, but We
Would like it to Be Constructive Criticism. If There Is a Point Where We
Have Missed Something, Give Us An Option to Include it in the
Regulations. We Don\'t Want People to Just Call in and Say They Don\'t
like It. Give Us Some Alternatives.

Lemm: Ok. Bo, We Sure Appreciate That Fax And Hope We\'ve Addressed That
Question. I Think this Would Be a Good Time to Take a 15‑minute Break.
When We Come Back We\'ll Discuss The Matrix Preparation Instructions. If
Your Office Is Not Recording Our Entire Program Today, You May Want to
Consider Taping the Matrix Preparation Portion of Our Program in Our
Second Segment. This Break Would Be a Good Time To Get Your Vcr Loaded
and Ready. We\'ll Let You Know When You Should Start Recording. Don\'t
Go Too Far Away Because We\'ll Be Right Back. See You in a Few Minutes!

Lemm: Welcome Back. I Hope Had You a Good Break and That the Doughnuts
Were Good. Lonny Refused to Buy for Me. I Think it Had Something to Do
With My Crack about Him Being a Production Ham. We\'ll Go over the
Preparation of The 98 Matrix. If You Want a Tape of this Segment, You
Should Start Your Vcr Now. Lonny, Are You Ready to Get Started?

Bagley: Yes, I Am. First of All, I Would like to Let Everybody Know to
Follow Along in the Viewer Packet You\'ve Been Provided. Those Would Be
on Pages 15‑25 of Your Viewer Packet. Also, this Is the Point of the
Time of the Exercise Where It\'s Going to Seem Confusing at Times Before
Everything Fits into It. I Hope That I Can Provide the Information
Necessary for You to Complete Your Matrix. And First of All, What We
Need To Do Is Refer to Your Packet. Please Fill in the Blanks as We Go
along and We\'ll Provide a Sample Matrix for You to Complete So That You
Can See How This All Folds Together. So, with That, Let\'s Get Started.
The First Area on Your Matrix, As We Can See Here in the Overhead ‑‑ and
I\'m Going to Be Zooming in and out on Some of These Tables Because They
Don\'t Come up ‑‑ So They\'ll Come up Clearly. First Thing We\'ll Do Is
Basically Conduct an Inventory Of Our Work. First Aspect We\'ll Talk
about Are the Production Inspection Items. You Have to Excuse Us Here.
We Didn\'t Change Our Nomenclature Here. This Should Be Production Cases
Here ‑‑ Inspection Items Are No Longer the Nomenclature So These Are
Going to Be Cases. What We Need to Do Is to Fill in Each One of These
Categories and As You\'re All Pretty Much Aware That We Break Them down
by Either Producing or Nonproducing Inspection Items or Cases at This
Point. So, and That\'s Referred to in The Total Column. This Is the
Number of Cases That Are Producing and the Number That Are Nonproducing.
Just to Refresh Your Memory a Little Bit on the Overall Priority Ranking
of Inspection Items, as You\'re Aware They\'re Rated as a W, X, Y and Z.
Which Indicates the Ws Are Fogrma High ‑‑ Meet the Fogrma High Category
and Also Meet One Or More of the Categories on the Other Priority and
Ranking Systems. The Xs Refer to Fogrma High and They\'re Low to All the
Other Categories. A \"Y\" Overall Priority Is the Fogrma Criteria Is Low
and One Or More of the Areas in the Other Criteria Are High. And of
Course, with \"Z,\" the Fogrma Requirements or Categories Are Low and
the Other Categories Are Low. Now, to Obtain this Information, We Need
to Also Generate Some Information from the Year\'s Database or AFMSS
Depending on Which System You Have up and Running at this Time. So Some
of That Information Is Going to Be Contained Is Going To Be as Far as
the Number of Production Cases That We Have And It\'s Going to Be Broken
down By Federal and Indian. So You Should Be Generating the Report
Called Report 1 from Your Inspection Codes. This Would Be the Overall
Priority of Inspections. And These Are the Federal Inspection Items.
We\'ll Get out Here a Little Bit. This Indicates There Are No Indian
Agencies under the Federal So That\'s Going to Be Blank in That Area.
For Our Federal Inspection Items, We Have 26 Ws.

Lemm: Lonny, on This, They Won\'t Have this Report When AFMSS Comes
Online, Right?

Bagley: That Is Correct. What AFMSS Will Do Is Automatically Populate
Their Inspection Plan Matrix in That Regard.

Lemm: Ok. So There\'s Some Information in Their Packet about That Aspect
And How ‑‑

Bagley: Yes. That\'s Correct. I Probably Misstated That Earlier. AFMSS
Automatically Populates The Fuels for Them.

Lemm: Thanks.

Bagley: You\'re Welcome. We\'ll Get a Little Bit More into The Detail of
AFMSS as We Go Through this Process. Again, Going into the Year\'s
Database, it Will Show the Number of Inspection Items in Relationship to
the Overall Priorities. The 26 Ws, 30 Ys and 120 ‑‑ Excuse Me, 30 Xs,
120 Ys and 114 Zs, Giving Us a Total of 290 Federal Cases. Ok. Now, That
We\'ve Determined That, The Total Number of Those Cases, We Need Now to
Determine the Number of Indian Cases That We Have to Work Within Our
Inventory. And Also, it Will Generate the Report and List Those Indian
Agencies and the Number of Inspection Items Related to the Overall
Priority. As You Can See Here, for this Particular Indian Agency, We Had
23 Ws, 9 Ys, and 29 Zs with a Total of 61. And for this Particular
Indian Agency Here, We Had 19 Xs, 7 Ys And 23 Zs. Now, as We Indicated
Before, We Needed to Determine the Total Number of Those Inspection
Items Or Cases and Please Excuse Me If I Refer to Inspection Items
Because I Still Am Not Used to The New Terminology. But We Also Need to
Determine Those That Have Produced in the Last 12 Months and Those That
Have Not to Give Us Our Producing and Nonproducing Inspection Items or
Cases. To Do That, We Need to Refer to The Monthly Report of Operations.
And Generate the Zero Production Report. And What That Will Do Is Give
You, Based on Our Imaginary Office, the Number of Inspection Items or
Cases That Have Not Produced in the Last 12 Months. And That Has Come
out to Be That There Were 0 Ws, ‑‑ Zero Xs, Those Are Fogrma High but
There Were 30 That Did Not Produce in The Last 12 Months or Y and 20 Zs
That Did Not Produce in the Last 12 Months. Also, in Our Imaginary
Office, All of Our Indian Cases Did Produce in the Last 12 Months. So,
Therefore, That Information Would Remain Zero in the Nonproduce
Category. Now, Let Me Demonstrate to You How to Enter That Information
Into the Matrix Itself in Table Two. Entering this Data into Table 2 And
We\'ll Zoom Back in Here to Give You a Good Idea ‑‑ or Better See How
this Will Work. Ok, Now, for the Ws, We\'re Going To Fill in the Federal
Side Here First. As You Remember, We Didn\'t Have Any Ws That Fit the
Nonproducing Category. So on the Federal Side, There Are 26. And Then
this Would Be Zero. On the Nonproduced. With the Xs, There Were 30 Total
On the Federal Side and 0 of Those Also Were in the Nonproducing
Category. For the Y Category, under Federal, There Were 90 That Did
Produce and 30 in the Nonproducing Category. For the Z Overall Priority
Rating, There Were 94 That Had Produced and 20 That Did Not Produce in
the Last 12 Months. Now, Then, Going to the Indian Inspection Items,
this Is the Category Here, on the Ws, We Had 23 Ws, 0 Nonproducing. We
Had 19 Xs, 0 Nonproducing. Slide That over. For the Ys, We Had 16
Producing And 0 non. And 52 Zs and 0 Nonproducing Zs. As You\'ll See,
the Total ‑‑ I Didn\'t Fill in the Total Columns But the System Will
Automatically Populate Those for You. If You\'re Working with AFMSS,
Those Fields Are Going to Be Filled in Automatically Anyway. So That\'s
One Step You Won\'t Have to Worry about in the Nonproducing Categories
to Separate Those out. The next Area That We Need to Cover Is Still in
the Inventory Process and We Need to Look at Now the Number of Drilling
and Plugging and Workover Operations That We\'re Going to Be Having For
That Particular Year. As You Can See in Table Three on The Drilling
Side, and I\'ll Back In Here. We Categorize These Either by High
Priority or Low Priority. And Separate Them Again by Federal and Indian.
These Drilling Inspections, Along with Plugging Inspections, Are
Basically an Estimation of What You\'ve Done in the past. And from the
Information That Is In Your Airs Information, You Could Estimate What
Occurred in Any One Year.

Lemm: Who Gets Together and Does That and What\'s the Process They\'re
Using to Categorize That?

Bagley: for the Drilling Aspect, It Would Be the Communication With the
Engineering Staff and The Information You Already Have In Airs or AFMSS.
And AFMSS Also Gives You the Ability to Also Track Your Apds More
Closely and Determine the Number of Those That Have Been Submitted. As
We All Know, Not All Wells Are Drilled That Are Permitted So You Could
Have Differences in The Number That Have Been Permitted and the Number
Drilled. The Coordination, That\'s the Interdisciplinary Acts Where They
Need to Get with the Engineers and Discuss How Many Drilling Wells
They\'ll Have. The Engineer May Have Information from an Operator If
They\'re Going to Have a Big Influence in Drilling Operations. So They
Would Get Together, Those Folks and Then Sit down And Say Ok, this Is
the Number We Expect to Have Happen.

Lemm: Kind of a Followup Beyond Drilling, as You\'ve Gone to Different
States and Reviewed The Programs, What\'s Some of the More Successful
Ways That the Offices Are Getting Together to Establish Their
Strategies? Are They Doing it as a Group or Is Someone Taking the Lead
and Then Circulating it Through the Office?

Bagley: it Is Done Basically Both Ways, as a Group or Someone Just
Taking the Lead and Going Out and Visiting Each One of Those Particular
Individuals to Make Sure That We Have All of Their Concerns Met. And
Again, That Goes Back in Also with the Indian Trust Responsibility and
Make Sure That Those Folks Are Also Involved in That Aspect. So It\'s
Going to Take Coordination on at Least One Person to Make Sure Everybody
Has a Chance to Input into this Process Not Only Through the Engineers
but Also the Environmental Concerns from the Nrs and the Environmental
Scientists out There. Wildlife Concerns and Wildlife Biologists. You
Have Also Botany to Be Concerned with and Those Areas. We Need to Make
Sure That Everyone\'s Informed about Our Activities and All the
Considerations Are Being Taken Into Consideration.

Lemm: the Environmental Specialist Is Usually the Coordinator for the
Environmental Side of it to Make Sure That the Individual Disciplines or
Provides an Input Back to That Process.

Bagley: That\'s Right. They Should Be Very Responsible In Doing That. So
That We Have an Accurate Inspection Plan Matrix. We\'re Then Addressing
All of the Concerns in That Particular Office Then.

Lemm: Ok, Thanks.

Bagley: Thanks, Howard. Again, Back to the Drilling Inspections. Again,
It\'s a Forecast of What Those Activities Have Been in The past or Any
Activities That You May Be Aware of in the Upcoming Year. So, with That
Information, We Then Can Complete Our Table Here And in Our Particular
Office, Again, We\'re Going to Separate This by High Priority and Low
Priority. And as You Recall, When Looking At High Priority and Low
Priority Operations Is a Judgment upon the Engineer Proving That
Application. And That Engineer Provides That Input at the Time the Apds
Are Coming into the Field Office. And They\'ll Determine from Where They
Are If There\'s Any Concerns, They\'ll Rate it High To One Particular
Area or Another. So That Brings it into the High Category. If There Are
No Concerns Related To Such as Well Control, Surface Casings Set at the
Proper Depth For Water Aquifers, the Particular Well Would Be Rated As a
Low Priority. So, Again, You Go into the Database and Determine How Many
Applications Were Received and How Many Were Rated or Expected To Be
Rated High or How Many Expect the to Be Rated Low.

Lemm: Lonny, I Would like to Emphasize That We Sure Hope That The People
in the Field That Are New to this Process Are Going Along with You and
Filling in The Blanks as We Go So That Might as Well Trigger Questions
If They\'re Doing the Math to Make Sure They Understand How You\'re
Arriving at Some of Your Final Numbers.

Bagley: That\'s a Very Good Point, Howard. We Hope That Our New People
out There Are Taking a Bunch of Notes and We\'ll Get Them up to Speed
Now to Complete this Matrix. All Right, on to Our Office. In Our
Particular Office for Our Fiscal Year, We Have 21 High Priority Drilling
Wells That We\'re Expecting along with 18 Low‑priority Drilling Wells.
For Indian, We Have 12 High‑priority Drilling Wells Expected. And 10
Low‑priority Wells. Again, the Same Analogy Is Placed on the Plugging
Operations. This Can Be Based on the Number Of Notices of Intent to
Abandon Have Been Submitted Within the Past Year or past Years and Then
You Can Determine Also from Conversations with the Operators What Their
Plans Are as Far as Plugging of Wells. So, Again, We Go Back to the
Table. And We Can Fill in Our Data. And from Our Information We Have,
There Were Going to Be 32 High‑priority Drilling Wells for Federal and
10 Low‑priority Drilling Wells. We Have, for Indian, We Had 18
High‑priority Drilling Wells and 16 Low. Now, the next Area of Concern
For Us for Our Matrix in the Inventory Process Is the Workover
Inspections. This Is Going to Be Based on the Past Year or Years of Work
That\'s out There and Will Determine How Many Workover Operations Need
to Be Inspected. So, Going Back to Our Table, in Our Office, We Consider
There\'s Going to Be 15 High Priority Workover Operations and 0 Low. And
There Are Going to Be 7 High Priority Indian Workover Operations along
with 0 Low Priority.

Lemm: Let Me Throw a Question at You Here That Kind of Applies All
Through this Matrix Preparation. If You Lose an Inspector During The
Year after You\'ve Prepared Your Matrix, Does Washington Office Want an
Amended Plan Because Obviously It\'s Going to Really Change the Ability
to Complete Inspections. What\'s Washington Want to See?

Bagley: There\'s Two Options in Regard to What We Would like to See. You
Can Make the Change at Any Time During the Inspection Year. If You Were
to Lose Someone Shortly after the Beginning of The Year, You Could
Certainly Submit That Maybe on the next Quarter. But the Strategy
Requires a Submit on an Annual Basis and Also Midyear. So in Effect, You
Could Wait Until Your Midyear Time of Review and Submit it at That
Point. But it Doesn\'t Affect Them.

Lemm: They Come to You?

Bagley: They Come to Me at the Montana State Office and I Compile the
Information for the National Matrix and Provide That To the Washington
Office. That Concludes Our Area as Far As Inventorying the Information
For Drilling, Plugging and Workovers. And Also for the Production. The
next Area of Inventory We Need to Take Is the Environmental Concerns.
Your Table 4 Provides the Number Of ‑‑ Provides the Category to Our
Invent Orie in Your Environmental Inspections. And Again, We\'re Going
to Break This down by High Priority and Low Priority Inspections and
Also by Federal and Indian. And We\'ll Zoom in Here to Give You an Idea
of What We\'re Looking at First of All. The Area of Drilling. Both for
Federal and Indian. And These Areas Here. And Also I Would like to
Demonstrate That We Need to Refer Back to Other Inventory Information
That We\'ve Already Provided. So I\'m Going to Show You Back to Table
Three Where We Inventoried All of the Drilling Activities. Zoom out
Here. As You Can See, We Have an Inventory up Here of 21 Wells in The
High Category and 18 Low Which Gives Us a Total of 39 Drilling
Operations. Now, What Needs to Happen Here Is That the Number That You
Put In the Environmental Category For Drilling Needs to Balance With
Those That You Identified In Table Three. So, in this Instance, They
Won\'t Always Be the Same Number of High and Low Priority Because
You\'re Looking at Different Issues. In this Instance, in Our Particular
Office, We Had 20 of Those High ‑‑ 20 of Those Drilling Operations Were
Going To Be High to the Environmental Concern. And Then We Had 19 That
Are Going to Be in the Low‑priority Category. As You Can See, We Have 39
Here And We Have 39 up above. It\'s Very Important That These Balance
out Because You\'re Talking about the Same Particular Wells. Also, You
Do it the Same Way for The Indian Which Were 11 High‑priority
Environmental Inspections for Drilling and 11 Low Which Is a Total of
22. And it Also Is the Same Total up There for the Indian Inspections.

Lemm: So You\'re Saying for All Your Drilling Wells, You Have to Go Back
and Do a Review from an Environmental Aspect to See What Kind of
Inspection Type They\'re Going to Fall into from That Perspective.
That\'s Why They Have to Balance.

Bagley: That\'s Correct. Everything You Identified Earlier as Inventory
of Drilling Wells and You Accounted Those For Your High and Low
Priority, Those Are Your Inventories. Same Inventory Needs to Follow
Through on the Environmental Side. We\'ll Further Demonstrate That By
Looking at the Producing Inspection Items. Which Are in this Category
Here. And Allow Me to Change to Another Overhead Here. And this Time,
You\'re Referring Back to Table Two under the Drilling ‑‑ or Excuse Me,
under The Producing. We\'re Going to Be Working with The Total Numbers
Here of 240 And 50 Which Gives Us a Total of 290 Inspection Items. And
They Need to Come down into Our Category Here under Producing in the
Environmental Aspect, Either High or Low. This Information You Can Get
From AFMSS or the Database. It Should Be Ranked in There Because That\'s
One of the Priority Rankings for Your Producing Cases. So Federal for
this Particular Office, We Had 50 That Were High And 240 That Were Low.
Just the Same Numbers up above For ‑‑ as Coincidence There. Now, the
Same Thing for Indian, We Had 15 That Were High and 95 That Were Low.
Which, Again, Totals up to Be 110, the Same as 110 Here for The Indian.

Lemm: So, in That Production Inspection for Environmental, You Could Go
‑‑ How Could You Do A Double Check on That? By Going Back and Checking
Your Environmental Inspection Items And What You Came up with?

Bagley: Right. You Would Look at the Same Inspection Items That You
Pulled Out for the Production and it Generates Another Report to Say How
Many Were High to this Particular Category. It\'s a Separate High or Low
Ranking.

Lemm: That Gives.

Method to Check Your Math and Make Sure You Don\'t Have a Glitch.

Bagley: That\'s Correct. There Are Double Checks Occurring Through this
Whole Process When You\'re Look at Your Inventory, You Can Be Double
Checking Back and Making Sure Everything Is Balancing out. The next Area
I Would like to Cover Is an Inventory Is the Abandonment Reclamation.
These Are Wells That Are in an Abandoned State and They Get Filled in
the Environmental Category Here, in this Area. Zoom in There. Now, this
Information You\'re Going to Have to Get from Either AFMSS or Airs or
Another Tracking for Abandoned Wells. Prior to Afmis, I Know There Are A
Couple of Other Systems That Did Track These Type of Wells But it Should
Track All of Those For Us at this Time. So What You Need to Do Is Go to
The Database, Pull That Information up and Then Determine out of Those
Number of Abandoned Wells ‑‑ That Will Be Your High Priority Wells. It
Will Fall into the Category. So, Going Now to the Inventory Box for
Environmental ‑‑ to the Abandonment Inspections, for Our Particular
Office, We Had 30 Federal Wells That Were High to That Category and 0
Low. We Had 7 That Were High Priority Indian and Again, 0 Low. We Would
like to Point out Again That the System Automatically Will Provide You
the Totals for This Exercise. So I\'m Not Putting Those in at This Time.
So Your Environmental Inspections ‑‑

Lemm: but Being the Brains of The Outfit, You Easily Could Come up with
the Totals If You Needed To.

Bagley: I Could on the next Overhead Right Here. This Is a ‑‑ That
Completed Table. And it Provides You with the Total of All the High and
Low Priority Inspections That Need To Be Done for Environmental Concerns
Which Were 31 High on The Drilling and 30 Low on the Drilling.

Lemm: I Guess We\'ve Improved Your Handwriting. We Have Something Typed
in for You.

Bagley: I Take Care of Myself, Anticipating Your Questions.

Lemm: like I\'ve Been Telling You, I Can Make You Look Good But I Can\'t
Make You Good‑looking.

Bagley: That\'s a Problem for Everybody. Even the Make‑up Artist Had a
Problem with That. Anyway, Moving along into the Next Area, We\'ve
Completed the Inventory of Our Work That\'s out There Before Us. What We
Need to Now Do Is Identify the Resources We Have To Complete That Work.
So, Now, If You Turn to Table 5 In Your ‑‑ Let Me Get the Overhead
First. Turn to the Table ‑‑ this Identifies the Positions That Are Going
to Be ‑‑ Positions and Work Months Attributed to the Program. There\'s a
Lot of Information That Goes into this Particular Area. And We\'ll
Explain Those as We Go Along. First of All, We Want to Identify All of
Our Onboard Personnel. Now, We Have this Broken down Into Several
Categories and I\'ll Explain Those as We Go Through. First of All Is a
Pet/auditor Position. These Are the People out There Doing the Work in
the Audit Side And Also the Technical on the Ground Inspections. Then
the Supervisory Pets That Contribute to the Program in the Supervisory
Role. If You Have Any 638 or Cooperative Agreements, We Have Tribal
Pets. We Also Have an Area Here Called \"Other.\" That\'s Where We Have
Assistance From Engineers or Geologists and Completes Inspections. It
Gives Us a Total of Our on The Ground Technical Inspections. Also, It\'s
Going to Identify People That We\'re Going to Use In the Environmental
Category, Those Would Be the Nrs or Es‑type Positions. Again, I Would
like to Point out This Is Only for Post Approval Activity Only. It
Doesn\'t Include On‑sites for ‑‑ or Predrill Inspections, Things like
That. It Is for the Post‑approval. We Enter the People There. We Also
Have a Support Area. This Includes Any Administrative Type Positions
That May Be Helping Us out Such as Staff Assistant, Data Entry, Computer
People, So on and So Forth That Help out in Getting the Program
Completed. Other Includes the Managerial Type Aspects. Any Number of
People Could Be Charging to the Program. District Manager, Area Manager,
Assistant District Managers and So on and So Forth Would Be Included in
That Particular Area. That Will Give Us a Total on This Side of How Many
People We Have Contributing to the Program. Now Then, the Other Area\'s
Going To Be on Our Available Work Months for Completing Our Inspections.
We\'re Going to Divide That up Into Several Categories to Give You a
Breakdown of What Exactly All of That Time Is Being Attributed To. So,
Going to the Overhead, You Can See We Have Inspection or I&e
Inspections. That\'s Actual Inspection Work Months Contributed to the
Program, Performing Audits and So Forth. We Also Have Miscellaneous
Which Includes Training, Meetings and Things like That That the
Individuals Have to Go to to Maintain Possibly Certification Or Just Be
Updated on Activities Occurring. Then We Also Are Breaking it Down into
the Overtime Issue. How Much Overtime Is Going to Be Attributed to Each
One of These Type of Positions in Order to Get to Accomplish Our
Workload. Then Again down Here at the Bottom it Provides a Total. So,
What I Would like to Do Now Is We\'ll Fill this In. Now That We Know All
the Information We Need to Get. And Provide You How this All Falls
Together Here in the Resources. So, Going Back to the Table Again, I\'ll
Zoom in Here. And in Our Particular Office, We Have 4 Pets or Auditors.
We Have 1 Supervisory Pet. We Have Cooperative Agreements. We Have One
Tribal Inspector. And We Have 2 in the Other Category That Are Going to
Help Out in Completing Inspections. And Which this Gives You a Total Of
8 People. And Again, the System Will ‑‑ I\'ll Total this for You. I\'m
Just Putting in There for Consistency Here. And Our Nrs/es Positions, We
Have One Individual There. For the Clerical Support, We Have Five People
Contributing to The Program. And in the Managerial Type, You Know We
Always Have a Heavy Overhead Here. We Have Five Individuals There. And
That Concludes Then the Total Number of Individuals That We Have for the
Program. And What I Would like to Do Now Is Identify the Number of Work
Months That They\'re Going to Be Contributing to the Program. So Go down
to the Bottom Area or The next Row down on Inspection Work. And We Need
to Determine How Many Work Months Are Going to Be Contributed to the
Program by This Inspection Personnel Here. These Four People. To Get
That Information, You Can Obtain it from the Airs Database Where You
Track the Time of Individuals, You Can Go in and Query the Information
and Get a Total Number of Time Spent Conducting Inspections. That Would
Be Your Office, Travel and Inspection Times, Total Those Altogether and
it Will Come up with Your Work Mons That You\'ve Contributed to the
Program. We\'re Going to Use Basically on A National Average, We
Contributed Six Work Months per Person to the Program. That\'s What
We\'re Going to Use For this Example Is Six Work Months per Person.
We\'re Going to Put in Here 24 Work Months Contributed to Conducting
Inspections, Other Normal Work Hours. For the Supervisory Pet, Going To
Contribute to the Program 2 Work Months. And Remember, He\'s Got
Supervisory Responsibilities So His Time Is Limited in the Field. Tribal
Pet Is Going to Contribute 3 Work Months. The Two Other Individuals,
We\'re Going to Get 1 from Those People. From the Nrs/es Position,
We\'re Going to Get 5 Work Months Contributing to the Program. 7.5 Work
Months from Clerical Support, Computer Specialists, Staff Assistance,
Data Entry, So On and So Forth. And Also Our Managerial Support We\'re
Going to Attribute 17.5 Work Months for Those People. Now, as You See
These Shaded Areas down Below, Your Clerical And Your Managerial
Support, They Don\'t Enter into the Miscellaneous Category at All in
This Category Nor Do They Enter Into the Overtime Issue So Those Areas
Are Shaded In. Their Work Months Will Be Totaled on the Side There. Now,
Going Back to the Miscellaneous Category, for All The Individuals Here,
and this For the Pets Is Going to Be 16 Work Months. Miscellaneous Time
Again Will Be Spent Doing Meetings and Training and So Forth. And What I
Would like to Point Out Here Is That the Miscellaneous Particularly for
The Pet Auditors, the Miscellaneous and the Actual Inspection Work
Months Should Add up to 10 Work Months per Individual. We Want That to
Come up in That Fashion So We Can Determine Then Where They\'re Putting
Their Work Months Toward. Also, the Miscellaneous Could Include Time
Spent Doing Hazardous Material or Fighting Fires and So on and So Forth.
If You Have Other Duties Outside Of Their Normal Work. Then When We Talk
about the Miscellaneous Inspection or Time For the Supervisory Pet, this
We\'ll Identify Here 5 Work Months. And as You Can See Here, That
Doesn\'t Add up to 10 for That Supervisory Pet. So this Is Finally Going
to Balance Because the Remainder of Those Work Months, There\'s Three To
Add up to 10, Are Included Over Here in this Managerial Support‑type
Position Because That Individual Does Papers and Monitors Individuals.

Lemm: since You\'re a Manager at This Point, How Do You Come up With
Those Work Months That Are In That Management Category over There, the
Supervisory Category? What\'s the Input from ‑‑ Generally from
Management into That in Terms of the Work Months That Are Going to Be
Involved in The Program?

Bagley: it Certainly Will Vary On the Size of Your Program from Office
to Office Because If You Have an Office with a Very Light Workload and
I&e, the Manager\'s Probably Not Going to Spend a Lot of Time on Issues
Related to Enforcement. But If You Take an Office in Farmington Where a
Large Portion Of Their Work Is Related to Inspection Enforcement, or Oil
And Gas in General, They\'re Going to Be Contributing a Lot More Time to
it and it All Depends upon a Number of Issues That Are Before the
Manager, the Dos. Someone Will Be a Guess of How It Relates to the Other
Programs And the Significance of Those Other Programs to Come up with
Those Work Months. Very Good Point. Moving along Now into the Tribal
Pet, We Need to Identify Any Miscellaneous Work Months for That
Individual Also. In Our Particular Case, We\'ve Identified Two Work
Months of Miscellaneous. And Again Here, You\'ll See That That
Individual Does Not Add up To 10 Work Months. That\'s Due to the Fact
That this Particular Office Had a Small Workload on the Reservations.
So, There Were Only 5 Work Months Attributed to Conducting The
Inspection Work on That Particular Situation. So You Won\'t Always Have
That Add up to That Amount Either. So That Pretty Much Gives Us the
Miscellaneous Work Months for Those Categories. You\'ll Notice That
There Are No Miscellaneous for the Other Type Individuals. These Are
Just Individuals Who Are Going to Contribute to the Program and Give Us
Support. So We\'re Not Accounting for Their Miscellaneous. Now, into the
Overtime Category, We\'re Going to Allow 3 Work Months of Overtime for
the Pet Auditor Position for Conducting Inspections. And We\'re Going to
Attribute 1 Work Month of Overtime to the Supervisory Pet. The Remainder
Then Are Going to Be 0 Work Months for the Tribal And 0 Work Months for
Other. And Then We Need to Identify Any Overtime That\'s Going to Be
Needed for the Nrs Position Which We\'ve Determined in this Particular
Case, There Won\'t Be Any Overtime Necessary for That Person\'s Work.

Lemm: You Know, on That Business Of Overtime and That Can Be Kind Of
Controversial. We Can See If It\'s Managed Right, it Makes a Big
Difference. It Gives Us the Flexibility. If They\'re Already out in the
Field and They Have a Little Bit Of Work Left, They Can Take Care Of it
Rather than Head Back and Have to Head Back out to the Same Site the
next Day. I Guess What I Think We\'ve He\'s Seen in Montana as Well Is
That If It\'s Managed Right, When You Have That Fluctuating Drilling And
Abandonment Workload from Season to Season or Year to Year And Some of
it There\'s No Way You Can Plan for it and You Can\'t Always Get Your
Staff up And Trained up Even If You\'ve Had the Opportunity to Fill Some
Jobs. Without That Overtime, it Would Be Pretty Hard to Cover Your
Bases.

Bagley: Overtime Is a Great Tool Especially If You Don\'t Have Enough
Workload for Another Fte. Another Important Area of Overtime That Needs
to Be Considered Is When Those Hour ‑‑ Or When Those Operations Such as
Drilling and Plugging Occur Outside Normal Work Hours. We\'re Mandated
Through Policy to Make Sure and Go out and Get the High‑priority
Operations. So Offices Should Be Placing Emphasis on Getting Those
Operations Completed Either Through Overtime or the Work Hour Tools. And
in Some Cases, the Other Work Hour Tools Such as First 40, Flex, Don\'t
Always Work as Well So There Should Be Overtime Given to Consider for
Placing Emphasis on Completing the Inspections.

Lemm: I Suppose That There\'s Times When Overtime Could Be Used for the
Other Types of Inspections but it Seems to Me It Would Be a More Rare
Case.

Bagley: it Would Be Limited but I Can See Some Definite Advantages, Even
on Production Operations or Environmental Concerns. If We\'re out in the
Field Already, Why Not Spend a Little More Time in the Field and Provide
Overtime to Complete Further Inspections. It Does Save on Vehicle Usage
And Saves on per Diem in Some Cases That We Allow That to Occur. But
Other Work Hour Tools Do Fit Into That Category Pretty Well. That Pretty
Much Completes Our Determining What Resources We Have Available to
Complete All Of Our Inspections. So What I Would like to Do Now Is Move
into the next Category And Briefly Discuss Now How this All Relates to
How We\'re Going To Get All of this Work Done That\'s Required by the
Strategy And the Goals We Have to Meet. So Looking at Table Six of the
Matrix, this Provides an Overview and Let Me Zoom out Here. This
Provides an Overview of What That Workload and the Comparison of
Resources That We Have ‑‑ it Will Do That Comparison for Us. And What it
Has Is a Listing of Production Inspections Here. And We\'ll Zoom in a
Little More. Production Inspections, What\'s Required. Inspections Will
Be What the Goals Are and Strategy for Production, Drilling, Plugging
And Environmental over Here. And it Will Give Us That View Then of If We
Don\'t Have Enough Work Months to Cover Our Needs Or If We Have More
Work Months Than What We Need to Cover the Required Inspections, We Can
Then Determine How to Best Place Our Resources. So, What We Need to Do
Now Is Go To Page 2 of the Matrix and We\'ll Need to Fill in the
Information That Will Then Automatically Populate Table 6 Of the First
Page of the Matrix. If You Turn to Page 2, There Are Several ‑‑ Again,
this Is a Lot Of Information That Appears on The Sheet. But Once We Go
Through It, it Becomes Pretty Much Self‑explanatory. And on Page 2,
It\'s Broken down By Individual Inspection Types. Such as Production,
Drilling and Plugging, as You See There on Your Screen. The First Area
That We Need to Address Though Before We Can Determine What Our
Resources Can Achieve for Us Is the Average Inspection Time. And That\'s
the First Block Here On Page 2 Is the Average Inspection Hours for Each
Individual Inspection. This Is Going to Need to Be Determined from Airs
and AFMSS, Bringing up this Information, it Will Bring up the Total
Number Of Inspections and Hours it Took To Complete All of Those
Inspections. So, First of All, Let\'s Go to The Reports That Are
Generated. The Instructions Are in the Strategy for Determining These
Reports. And Our Report Here ‑‑ Report 2‑a Is Generated. Here We Provide
an Example of The Report and Again, You\'re Going to Have to Put in Your
Beginning of the Year Fiscal Year \'97, Put in That Date at The
Beginning and at the End of It. It Will Cover the Inspections That
Occurred During That Period Of Time and Give Us the Total Time for Each
Type of Inspection.

Lemm: this Is an Airs Generated Report.

Bagley: That\'s Correct. Now, Continuing on with this Report and How to
Deal with the Information, Again, We Have the Total Number of Hours That
it Took to Complete Our Inspection Types and We\'ve Included Here The Pa
and the Ph. Just an Example of That Information. Now, We Know the Number
of Hours It Took to Complete It. There\'s Another Report That Is
Generated. It Is Report 2‑b Which Then Gives You the Total Number of
Inspections That Occurred for Each Type of Inspection. Photo in Here a
Little Bit. There Were 69 Pas and 164 Phs With a Total of 233 down
below. Now What We Can Do Is Take this Information Now and Determine The
Average Hours it Takes to Complete Our Inspections. So There Were 2125
Hours to Complete These 69 Inspections. Which Gives Us an Average of
30.8 Hours to Complete a Detailed Production Accountability Inspection.
The Same Process Would Also Apply to the Remaining Inspection Types
Which Is Environmental, Workover, Drilling and So On. Now We Had 1266
Hours Attributed To 164 Imis Being Completed Which Is 7.7 Hours per
Inspection. We\'re Still Using These Types of Inspections, That\'s What
You Would Enter into the Inspection Plan Matrix. However, We\'ve Changed
That Process and Are No Longer Using The Detailed Production
Accountability or Independent Measurement in Handling Inspection. So
We\'ve Devised a System for You to Use. You May Have a System Already
Developed to Get the Average Hours for Production Inspection, At Least
to Start Us out Planning for Fy‑98. The Process That We Came up with Is
We Took the Average Hours That it Took to Complete the Pa Which Is Here
Being Illustrated. Need to Get out on this One a Little Bit. We Took the
Average Hours of 30.8 for the Detailed Production Accountability
Inspection. And for the Ph Inspection, We Took the 7.7 and Just Round
Them Up to the next Highest Hour, Basically and to Come up with The
Average Hours to Complete The Production Inspection, We Had 31 plus the
8 Gave Us 39 Divided by 2 and this Is the Method We\'re Going to Use of
19.5 Hours for Our Production Inspection. Now, this Is Going to Change
Throughout the Year Probably and You\'re Going to Gain More Data As
You\'re Going Through Your Inspection Process. So, Possibly at Midyear,
You Can Look at the Production Inspection Times and Developing More
Accurate Reflection of How Much Time Is it Actually Taking To Complete
Those Inspections. Which May Ultimately Have an Effect on Your Total
Number of Inspections That You Can Complete During the Year. Either More
or less. Now with That Information, We Can Go to Page 2 of the Matrix
Again and Put in Our Average Hours for the Production Inspection. Which
Were 19.5 ‑‑ Enter Those There. And Enter 19.5 for the Indian. Then We
Can Continue on down the Row or the Column. And Get Those for Drilling
Which Were an Average of 12 Hours For Drilling, 16 Hours for Plugging
Operations. Fill Those In. For Workover Operations, We Had An Average of
8 Hours per Inspection There.

Lemm: Sometimes Do You Have a Variation in the Average Hours Between the
Federal and the Indian?

Bagley: Yes, There Can Be a Variation Between the Two. Offices Have an
Option of Looking Strictly at the Average Time for Indian and Then the
Average Time for Production. So, There Is an Option There That You Can
Do this.

Lemm: What Would Be Some of the Reasons for Those Differences?

Bagley: Travel Time Is a Big Issue and the Amount of Inspection Time it
Takes to Complete Those Inspections. So, That Would Be the Major
Contributing Factor to That Would Be the Travel Time Which The
Reservation Could Be Either Closer or Further Away.

Lemm: but Otherwise, Unless We\'ve Gotten Special Emphasis From the
Tribe or the Bia, We\'re Inspecting Them Exactly the Same?

Bagley: Yes. We\'re Using the Same Process. And Again, That Goes Back to
the Negotiation Phase with the Tribes and the Bia of What Is Needed in
Their Opinion for the Inspection Processes.

Lemm: You Know, I Know We\'ve Gone past it at this Point but On That
Same Issue of the Tribal Inspections and That, I Guess If Some of the
Districts and Some Of the Offices Are Working with 638 Contracts Now,
the Work Months That Are Allocated Sometimes Reflect a Full‑time
Position and in Other Cases, Reflect the Terms of the 638 or The Co‑op
Agreement in Terms of The Amount of Workload That\'s Been Negotiated to
Cover. So I Guess There\'s Another Case Where That Work Month Figure Is
Something That\'s Going to Have To Be Carried from the Agreement Or from
the Understanding.

Bagley: That\'s Correct. Those Could Either Increase or Decrease over
Time with the Emphasis Being Placed on the Program. Again, That\'s Going
to Be Emphasized as Coordination with Those States. And the Tribes to
Make Sure They\'re Getting What They Need Out There.

Lemm: Thanks.

Bagley: You Bet. Then We Can Follow on down along On the Rest of the
Inspections And Provide the Average Inspection Times like for Record
Verifications. It Takes an Average of Three Hours to Complete Those
Inspections. The Environmental Inspections, It Takes an Average of Four
Hours to Complete Those. And Undesirable Events Takes Six Hours to
Complete Those Inspections. Now, with Our Time Documentation Provided
for Us and We Know the Average Time it Takes to Complete These
Inspections, We Can Now Work on the Goals of the Strategy to Enter into
the Page 2 of the Matrix on What Our Required Inspections Will Be. If
You Refer Back to the Inspection Plan Matrix, We Have The Hours Put in
Here. We\'re Going to Be Looking at the Required Inspections for All of
The Inspection Types. So, for Instance, in Production, You\'re Going to
Have to Have All Of the Fogrma High Related Inspection Items and Then
the Others of Which Are the Non‑fogrma for Both Federal and Indian. Once
We Get into the Other Categories, They Change from Fogrma and Other from
High to Low Categories. So, What We\'ve Also Provided in Your Viewer
Packet and Also in The Instructions Sent to the Field under the Most
Current Im Is an Inspection Work Sheet to Work on Your Plan Matrix. So,
with That, the Top Part of The Work Sheet Looks like this. What it Does
Is Provide an Accounting. Take the Inventory from the First Page ‑‑ from
the Matrix And Fill in the Blanks Here and These Have a Nomenclature of
What They Mean Here in the Total Number of Those Categories. So the
First One We\'re Going to Be Talking About, We Need to Find out Is a
Number ‑‑ Total Number of Federal Cases Assigned For a Particular Fy and
That\'s Going to Be the Current One. For this Particular One, We Had 290
Federal. And We Had 110 Total for Indian. And That Includes Both
Producing And Nonproducing Cases. Now, Also We Had a Number of High
Fogrma High Ids So We Fill That Information in Also. Where There Were 56
High Due to Fogrma on the Federal and There Were 42 High for Indian ‑‑

Lemm: Would You Reiterate Where The Totals Came from Again?

Bagley: You Refer Back to Page 1 Of Your Matrix. And What it Will Do Is
Provide You the Total Number of Those Categories Such as the Total
Number of Federal Cases. It\'s in Table Two of the Matrix. So You\'re
Going to Put the Total Number in There. It Was 50 and 240. For the
Federal. Then There Were 110 Identified For Indian. That\'s What Comes
over to the Worksheet. Then the Overall Priority Rankings, You Add Those
up by Criteria from High Fogrma.

Lemm: Thanks.

Bagley: Which Needs Us into the Next Category. We Need to Then Go into
Those Cases That Have Been Prioritized As Non‑fogrma and Determine How
Many of Those Need to Be Inspected for That Particular Year. So, Step
Two, We\'ve Already Completed Step One Which Was to Enter All Your High
Fogrma ‑‑ Get it out Here a Little Bit ‑‑ Step One, Enter All the High
Fogrma Cases. We\'ve Completed That Already. Step Two Then Was to
Determine a Number of Non‑fogrma Cases to Be Inspected to Meet the
3‑year Inspection Frequency. To Do That, What We Need to Do Is We Need
to Know the Total Number of Federal Cases. We\'ll Take Federal First.
That Was the Tf from up above Which Was 290. And Then We Subtract Away
from That the Total Number of Fogrma Cases for Federal. Which Is Your Ff
Which Was 56. 56 Cases There. Now, We Multiply That Times 33.33% to Get
Our 3‑year Inspection Frequency. In this Case, That Would Equal 78.
Non‑fogrma Federal Cases That Need to Be Inspected, 78. We Do the Same
Thing for the Indian Cases. We Know the Total Number Was 110. And We Had
42 That Were High Due To the Fogrma Criteria. And Which Leaves Them ‑‑
Multiply it by 33.33% Which Leaves 23 of the Non‑fogrma Indian Cases to
Be Inspected. Now, Every Year, You\'re Going to Be Looking at More than
33.3% of All Your Cases. But That\'s Because of All Your High Fogrmas
must Be Done an an Annual Basis Then You\'ll Be Looking at Those Every
Year and Then You\'ll Be Picking up the Other Third to Look at on the
Non‑fogrma to Be Completed in The Three‑year Cycle.

Lemm: What Happens If You Fall Behind? Do You Try to Make it up next
Year by Increasing Whatever Percentage ‑‑ Assuming You\'ve Gained the
Ability to Do Some Additional Work? Is That What Field Offices Are Doing
Is Making up That Percent The next Year?

Bagley: I Haven\'t Seen That Happen in Any One Field Office Because of
the Shortage of People We Have Right Now but That Would Be an Option in
That Three‑year Cycle, You Could Ultimately Complete Your Inspections or
Visit Every One Of Your I.d.s or Cases in That Three‑year Period If You
Increase Personnel So You Could Still Meet That Goal.

Lemm: and It\'s Part of Your Job, Washington Office, I&e Person, Do You
Review Those Year‑end Reports and Is There Dialogue Back to the States
That Haven\'t Met It?

Bagley: What We Want the States To Do I Believe it Is Covered in The
Strategy. I Would Have to Look Again to Make Sure but If You\'re Unable
To Meet the Strategy, First of All, You Identify at the Beginning of the
Year. At the End of the Year, We\'ll Determine How Well You Met Your
Plan Inspections. If You Haven\'t Met the Plan Inspections, Then Offices
Need To Provide Some Explanations Why They Didn\'t. And Sometimes It\'s
Because We Lost Personnel. Sometimes It\'s Because We Estimated
Incorrectly. And So On. So It\'s Going to Vary. We Do Have That Dialogue
Back And Forth to the States More in A Personal Basis on the Reports
Submitted to the Washington Office Why We Did Not Meet Our Goals.

Lemm: You and I Are Only about Six Desks Apart So It\'s Easy for Us to
Have That Dialogue but I Wasn\'t Sure What You Were Doing With the Other
States.

Bagley: It\'s Good with the State Coordinators to Look at Their Reports
and Try to Catch That Before the End of the Year Actually. I Can Monitor
That Particularly In the Third Quarter and Say, Ok, Doesn\'t Look like
They\'re Going to Meet the Goals Here. Are You Running into Problems or
What May Be the Reason. Sometimes We Can Shift People From Office to
Office. To Help Them out in Another Area To Complete That in One Office
Completes It. We Haven\'t That Had That Luxury Here in the near past but
Further Back in History, We\'ve Had the Luxury to Move People From One
State to Another and Help Them out.

Lemm: If it Comes down to Crunch Time, like this Time of Year Where You
Can See You\'re Not Going to Be Able to Meet Your Entire Strategy ‑‑
Maybe You Had A Person Leave or Had Some Illness or Unscheduled Leave or
Something like That ‑‑ I Know by the Strategy of the Drilling and
Abandonment Have Priority over the Production Because of Course
Production Theoretically Can Be Made Back Up at Some Future Point. But
Beyond That, Where Do You See the Prioritization at Crunch Time If
You\'re Falling Behind? Is There Guidance, for Example, To Put First
Emphasis on Indian Inspection Items? Or Does it Go Back to Straight
Review of Whatever Your High Priorities Were? Can You Touch on That a
Little Bit? How You Do That Balancing Act?

Bagley: If You\'re Coming down to The End of the Year and it Shouldn\'t
Happen at this Late Point Either, Is Offices Need to Be Monitoring That
Through the Year. The Washington Office Requires a Quarterly Report. But
it Would Be Really Good for Those Offices Especially in the Last Six
Months of the Year to Be Monitoring Monthly to See Where They\'re Coming
out. If it Looks like We Won\'t Meet Our Goals, the First Thing You Need
to Consider, What Are My High Priority Inspections I Need To Complete?
And Those Fall into a Couple of Categories. Of Course, a Fogrma Is One
Area That Needs to Be Looked at Because Those Inspections Are Required
by Law. So We Need to Meet the Criteria. Our Indian Trust
Responsibilities Are of a Great Concern to Us and We Want to Also Catch
Those Inspections If We Can. And in Particularly with the Fogrma High
Cases on Tribal Lands or Allotted Lands, for That Matter. Also, Your
High Environmental Concerns Should Be Looked At. That Is We\'re out
There to Protect the Public. We\'re Providing Some Sense of Protecting
Water Aquifers. Maybe Contamination of Streams And So on and So Forth
That Need To Be Looked At. We Need to Be Looking at Those Things. So
It\'s More on a Common Sense Basis of Setting Back and Saying If I\'m
Not Going to Be Able to Complete It, Which Ones Will I Have to Do to
Meet My Requirements. About the Only Leeway You Have From Strategy in
Required Inspections Is the Inspection of Those Non‑fogrma Producing Ids
Probably Falling out First Being Completed Just from a Sense of Looking
at Your Strategy Because The Strategy Does Require Your Other
Inspections to Be Looked At If They Were Rated High.

Lemm: If it Was Happening Now, It Would Be a Little Late. But Let\'s Say
at Midyear, If a State Office Could See That They Were Kind of in
Trouble in a Particular Office and They Didn\'t Have the Ability Within
Their State to Provide Much Relief, Are You Certain It\'s Kind of an
Informal Clearinghouse of Where They Could Go to See If There\'s Another
State ‑‑ I Don\'t Know How Many People Have That Luxury ‑‑ but If There
Is Another State That Might Be Able to Provide Temporary Manpower.

Bagley: That Would Certainly Be An Initial Contact for Them to Get Back
to Me as Far as Whether Or Not They\'ll Be Able to Meet Their Strategy
Because of One Reason or Another. I Can Start Working a Network And Say
Can You Provide Any One Particular Office, Provide Personnel for a Week
or Two Weeks, Just to Help an Office Complete Their Inspection
Requirements. However, We Do Have a Network of Our Inspectors. Excuse
Me, Our State Coordinators. And They Do Talk to Each Other. If They\'re
Having Problems Achieving it and We\'re Getting Better at this. We\'re
Talking to Other Coordinators. Hey, Can You Help Me out Here? I\'ve Got
a Situation Where I\'ve Got a Large Number of Drilling Wells That Need
Expertise. Could You Give Me Two Weeks of a Person or Something like
That. That\'s One of the Good Things in This Program Is We\'re Starting
To Really Talk to Each Other and Setting up Those Networks and We Have
People out There That Are Willing to Do That.

Lemm: I Know We\'ve Called upon Our State I&e Coordinator to Help the
Districts out with Inspections and Just Had to Forego Some ‑‑ What He
Would Otherwise Be Working On. Sometimes That\'s a Good Source Of
Support There.

Bagley: it Gets Back to Setting Priorities and What Do We Really Need to
Get Done. If There\'s Another Individual Such as the State Coordinator
That Can Help Out, Then Let\'s Tap That Resource and Weigh out Those
Priorities.

Lemm: Where Do You Think We\'re At from the Reports You\'ve Seen As a
National Group? How Well Are We Meeting the Strategy in the Whole Sense?
Are Half the States Meeting It? 90% of the States Meeting the High
Priorities? Where Do We Sit in this?

Bagley: Basically, We\'ll Probably Be Looking at Because Of Rio 2 and
the Effects That\'s Had, We\'re Not Going to Have a Very Good Year of
Completing Our Inspections. That Gets Back to Director Shea Putting
Emphasis on Getting People Rehired into These Positions and Meeting Our
Strategy Requirements. Actually the Mandate by Law We Have to Conduct
the Inspections. So for the Most Part this Year, I Don\'t Think We\'re
Going to Do A Very Good Year for Inspection Work. I Hate to Say That but
That\'s a Reality of Our Situation. And as Far as Percentagewise,
There\'s Only Probably a Couple States That Are Going to Be Able To Meet
the Matrix this Year or The Strategy Requirements.

Lemm: I Guess We Are Getting Some Relief Though. We\'re Bringing on Some
Tribal Inspectors as Well. Taking on Quite a Workload.

Bagley: Working in the Area of 638 Contracts and Cooperative Agreements.
Tribal Inspectors Are in the Process and They\'ve Helped out a Lot. The
Downside of That Is There\'s Less Workload on the Federal Inspectors and
Pets Now and in Some Cases They\'re Being Replaced If They Leave Due to
The Fact We Have Them in Place. It\'s Somewhat of a Domino Effect But in
Other Cases We\'ve Increased Our Work Hour Tools to Meet More Work
Requirements.

Lemm: While We\'re Kicking this Around a Little Bit, What\'s Different
That\'s Happening in The Certification Process of Our People?

Bagley: We\'re Looking at Reviewing the Certification Process to Where
it Becomes More Meaningful for One Thing. Allowing for More Sequential
Type of Events to Happen. When You Come on Board and in The
Certification Process, Ojt That\'s Required Prior to Attending Formal
Training. We\'re Also Looking at Additional Ojt in the Back Side of
Formal Training to Ensure That People Are Knowledgeable of Their Work
Out There and That We Have a Reputation Now Being Built That We Have
Good Qualified People And We Don\'t Want to Tear That Down. The
Inspection Process or Certification Process Does Involve a Review by a
Technical Reviewer. That Would Be Someone That\'s Already Certified and
Designated By That State To Go out and Review That Individual\'s
Credentials, Basically. And Run Through a Series of Tests,
Demonstrations on the Part of the Trainee. That They Can Do the Work.
And it Has Been Very Successful. We\'ve Gained a Lot of Good P.r. From
the Industry in Saying We Now Have People out There That Know What
They\'re Doing. They Can Talk about Operations Coherently with the
Operator and It\'s Working out Very Well. We Want to Continue That. We
Have the Two Formal Trainings Set up Through the Training Center Here
for Production and For Drilling. And We\'ve Had Good Participation In
That and Most of the Pets We Have on Board Right Now Are Certified with
the Inspection Maybe of Three or Four Nationwide.

Lemm: We Need to Get Back to the Matrix. I Guess One Final Question on
That Formal Training, I Know That\'s Got to Be a Tough Juggling Act for
the National Training Center and for Washington in Terms of Funding To
Try to Figure out How Often The Courses Need to Be Held. But Are We
Meeting the Need, Are We Being Able to Offer the Courses as Often as We
Need to For the New Inspectors That We Have and the New 638 Inspectors?

Bagley: to this Day, We Have. There\'s a Lot less People Leaving the
Organization and Nobody Coming in Because of Rigo 2 So the Courses for
Fy‑98 Have Been Put on Hold Unless We Get a Large Number of People Who
Need The Training Basically. But We\'re Going to Hold the Production
Course in Kasper Coming up I Think the Second Week in September. The
Drilling School Was Held in Hobs, New Mexico. We\'re Able to Get the
Schools Held Once a Year So Far. But with the People Leaving and The
People Needing That Training Has Come to a Point Where It\'s Not Really
Needed at this Point Until We Get More People Onboard.

Lemm: I\'ve Pulled You Away off The Matrix. I Guess It\'s Time for You
to Get Back to It.

Bagley: I Needed a Break from All of My Figuring Here. All Right. Now
That We\'ve Determined the Number of Inspection Items That We Have to Do
for Non‑fogrma Cases and Again, Excuse Me for Saying Inspection Items.
They Should Be Cases. We Then Go to Our Matrix and Fill out That
Information. On the Number of Inspections That Are Going to Be Required
For Production. You Can Follow along with Me Here. For the Federal Cases
on the Fogrma High, We Have a Total of 56 Fogrmas to Be Conducted ‑‑
Inspections. And 78 on the Non‑fogrma Side. We Have a Total of 42 High
Priority Indian Fogrma Highs and 23 Low Priority. Now, That Takes the
Information From Step Two of the Matrix ‑‑ Or Your Worksheet ‑‑ and Puts
it Into the Matrix Itself. Now, the next Area We Want to Cover Are the
Requirements for Drilling Operations. And Again, That Information Is
Then Found on the First Page of The Matrix in Your Summary Side. And You
Go to Table Three and it Will Provide You All the Number Of High
Priority Drilling Operations. Get out of Here. Gives You the Number of
High Priority Drilling Operations That We Expect to Occur During The
Year. You Put That in the High Column. For Plugging Operations, Do the
Same Thing. From Box Three, Use the Number Of High Priority Plugging
Operations That Are Expected to Occur During That Fiscal Year. To
Demonstrate That to You, Here\'s Table 3. Move it up Here a Little Bit
Better. And You Can See That Those Numbers Then from Table 3, the High
Priority Drilling Will Be 21 Federal and 12 Indian. For Plugging, it
Will Be 32 Federal High and 18 Indian High. To Demonstrate How That
Enters Into Page 2 of the Matrix, We Have Indicated the Number of Our
Production Inspections. Here at the Top. And on Our Drilling, We\'re
Going To Enter in 21 High for Drilling. For Federal and Then 12 High for
Indian. Then Your Plugging Operations, We Have 32 That Are High for
Federal and 18 High for Indian. The next Areas of Concern We Want to
Address Are Workover Operations Which, Again, Are Optional. Take the
Workover Operations Accomplished at the Discretion Of Each Field Office
and Based On Available Time, Records Verifications, We Enter The Number
of Records Verifications in Your Plan to Be Conducted under the Planned
Low. That Leads Us to the next Area Of Concern for Page Two Is the
Environmental Inspections. And We Have to Do Some Manipulation of
Information Here From Page One of Your Matrix Again. And We Refer to
Your Environmental Category under Table Two. We Need to Identify All the
High Priority Drilling, Producing and Abandonment Reclamation for the
Environmental Concerns for Each One of Those Categories. So, Referring
to Table Four, There Were 20 High for Federal And Drilling Side, 50 on
the Producing Side, and There Were 30 High on the Abandonment
Reclamation Which Gives Us a Total of 100. Ok. We Do the Same Thing for
Indian. There Were 11 High for Drilling. 15 High for Production. And 7
High for Abandonment. Which Gives Us a Total of 33. Now We Can Take That
Information And Transfer it over to Your Inspection Plan Matrix on Page
2. This Is for Your Environmental Inspections Again. For Federal, We\'re
Going to Have 100 High. And 33 High for Indian. And as You Can See,
We\'ve Shaded Out the Low Priority Column Because None of That Is
Required For Low Priority. Ok, Now, the next Area That We Need to Be
Looking at ‑‑ Excuse Me ‑‑ Once We\'ve Entered this Information into the
System, Then it Will Automatically Calculate the Number of Work Months
Needed to Complete All of Our Required Inspections. And What this System
Does Is Also Populate the Fields under Table 6 on Your Inspection
Accomplishments on Page One of The Matrix. So Demonstrate That, after
Our Calculations Were Made, Here\'s Table 6. As You Can See, this Is the
Required Inspections Here. And Then the Required Work Months for Those
Inspections Also. So We\'ll Zoom in Here. And Our Totals Came out to
Required Inspections for Production Were 199. Drilling, There Were 33
Required. For Plugging, There Were 50 Required. Which Gave Us a Total of
282 and The Environmental Inspections Were 133. Excuse Me, 282 on the
Technical Total. Which Then Automatically Calculates the Number of Work
Months Needed to Complete Those Required Inspections. Which Are
Identified Here in the Required Work Months Column. Which Are 22.4 for
the Production, 2.3 for the Drilling, 4.6 for the Plugging Operations.
And Then it Took a Total of 23.33 Work Months to Complete Those
Inspections for the Technical Side. Excuse Me. I\'m Getting this Mixed
Up. It\'s 29.33. And Then Took 3.07 to Complete Your Environmental
Inspections. Now, with this Information, We Can Then Go to the Resources
That We Have Available to Complete These Inspections and Identify If We
Can Meet Our Inspection Strategy or Not. If You Refer Back to Table 5
and Make a Comparison Back to Table 6, You\'ll See That the Total Number
of Work Months Available For Completing Inspections ‑‑ Get this into
Focus Here ‑‑ for Here, We\'re 30 Work Months Total. We\'ll Zoom in a
Little Bit. So You Had 30 Work Months Available for Conducting
Inspections. As You See down Here in Table 6, To Complete the Required
Inspections Is Only Going to Take 29.33 to Complete Those Inspections.
So We\'re Pretty Close to Working Out All the Required Inspections
We\'re Going to Have to Complete For this Particular Office. Also, If
You Look at the Number Of Work Months Available Conducting Environmental
Inspections Was 5 Here. And it Only Took 3.07 to Complete the Required
Inspections. So We Have a Little Bit of Leeway in That Category Also. In
this Process, this Is Where You Can Go in to Determine Now, Using Page 2
of the Matrix Again, You Can Go in and Determine How Many Inspections
You\'re Planning to Do with Resources Available. So, We\'ll Go Back to
Page 2 Again on the Matrix and We\'ll Identify Whether or Not We\'re
Able to Complete Additional Inspections or If We Can Complete the
Inspections That Are Required by the Strategy. And We Know We Can
Complete the Required Inspections So We\'ve Pretty Much Left the
Required Column or Entered Our Planning Column the Same as Our Required.
If You Look Here on the Production Side, 56 Fogrmas Need To Be Inspected
and 78 Others Need to Be Inspected. Those Numbers Were Transferred Into
the Planned Column for Fogrma High and Then the Other. That Was the Same
for the Indian Inspection ‑‑ or Cases. Moving on into the Drilling Side,
the Drilling Also Were Left the Same. We Had 21 High. We\'re Going to
Inspect 21 of the Highs in the Plan and We Plan to Conduct No Other
Inspections for Drilling under the Low Priority. And the Same for Indian
or ‑‑ Excuse Me ‑‑ 21 High for Federal And 12 for Indian. Plugging
Operations Were Left The Same as Those Required Also. And So We Won\'t
Go into Those. They\'re the Same Here. 32 and 32, 18 and 18. Now, for
the Workover Operations, Being That They\'re Optional, We\'re Going to
Plan to Look at All of Our High Priorities. So from Page One of the
Workover Inspections, the Inventory Should Have Transferred to 15
Inspections There over to Page Two. For Federal and Then the 7 for
Indian. Moving into the Other Inspection Categories, We Said on the
Record Verifications, We Were Going to Conduct 12 on Federal And 12 on
Indian. For the Environmental Side, We Knew That We Had 100 Federal to
Look At. So Those Had to Be Planned plus We Planned an Additional 25 to
Be Inspected under the Planned Column of the Low Priority. We Had 33
High Priority Indian And We Plan to Do Another 30 Low Priority Indian.
Undesirable Events, We Had Two Planned ‑‑ We\'re Planning to Have Two
High‑priority Ones and Five Low‑priority for Both Federal and Indian.

Lemm: as You\'re Kind of Running Through Those in Our Example, of Course
Things Are Balancing out And We\'re Assuming We Can Plan This it That
Close but the Practical Side Is the Undesirable Events, No Way You Can
Plan That.

Bagley: That\'s Right.

Lemm: to a Certain Degree, Your Drilling, You Could Get a Company Coming
into an Area and Have No Idea That They\'re Going To Do That and All of
a Sudden, Propose a Big Drilling Program. And of Course, That Can Affect
Your Plugging Situation and in Fact, We\'ve Had Some People Come In and
All of a Sudden, Plug out A Bunch of Ta Wells That We Really Didn\'t
Know They Were Going to Do That as Well. So, this Is a Planning Tool, I
Understand That. But I Guess It\'s Got to Be Dynamic.

Bagley: Yes, it Does.

Lemm: What Do You Think, on a Quarterly Basis, You Have to Get It Back
up to Date on What the Reality Is or on a Month Basis?

Bagley: on the Washington Offices a Peck, We Want to See It Submitted at
the Beginning of The Year. This Telecast Is Timely in Getting this
Information to the Washington Office. Also in the Washington Office
Level, We Want to See a Midyear Review. Midyear, You Do Your Check and
Say I\'m on Target or Not. What Things Have Come into Play That I
Didn\'t Expect at the Beginning of the Year. You Need to Take Those into
Consideration. However, an Inspection Office Could Update That
Inspection Plan Matrix as They\'re Going Through the Year on a Quarterly
Basis or Even Monthly. I Don\'t Know of Any Inspection Office in the
Field Today That Has the Time to Do That Though. There Is a Lot of
Information That Needs to Be Input into this Particular Exercise. So,
It\'s Time‑consuming for Them To Do it on a Monthly Basis, Even
Quarterly. We Don\'t See That Happening Often Unless They Get a Huge
Influence of Drilling or Plugging Operations That Weren\'t Expected or
They Have a Number Of People Leave the Office for Some Reason or
Another. Mainly It\'s on the Annual Submission and the Midyear Review.

Lemm: on the Midyear, Are You Getting Much Written Dialogue That
Explains What\'s Going on or Are You in Close Enough Contact Where Those
Offices That Are Kind of Keeping You Appraised of What\'s Going on
There? Are They Submitting That with That Report?

Bagley: I Have a Very Good Dialogue with the I&e Coordinators for the
State. They Contact Me If There\'s a Problem in Any One Office Achieving
Their Goals and It\'s Usually Right Away Once They Find out. They\'re
Going to Be Calling Me. And They\'ll Either ‑‑ Once We Determine What
Areas Need to Be Considered and We\'ll Talk it out Between All of Us and
Then Find Out the Best Way to Pursue and How to Complete the Inspections
If We Can Maybe Transfer People In for a Certain Period of Time Or Just
Revise a Matrix and Say Ok, We\'re Just Not Going to Be Able to Make It.
Mainly When the Problems Arise That You\'re Not Going to Be Able To Make
Your Strategy. If We\'re Going to Be Over, That\'s Fine. We Can Pat
Ourselves on the Back And Say \"Good Job Done. Requests \"But on
Submitting Them When We\'re Not Going to Make It, That Becomes the Big
Issue.

Lemm: If We See New Money Come Into the Program ‑‑ I\'m Kind of
Interested in What Your Input Is. It\'s a Sensitive Issue That Just
Because Someone Didn\'t Get Their Work Done Doesn\'t Mean They Didn\'t
Have the Staff to Do it But on the Other Hand, You\'re in A Position to
Gauge the Overall Workload and Where We Can Make a Good Program Better
or Bring a Program That\'s Been Crippled by Loss of People up to Par. Do
You Have a Chance to Have Much Input on the Budget Standpoint of What
Offices Are Getting it Done but Could Use a Boost or What Offices Are
Having A Real Struggle?

Bagley: Yes, I Do. From the Matrix Standpoint, I Can Then Gauge If That
Midyear ‑‑ We\'re Getting an Influence of Dollars Coming into the
Program. The Washington Office with Sherry Being the New Group Manager,
Would Contact Me. We Would Talk out Where the Money Needs to Go. Also,
Based on My Information of How Well the Offices Are Working, I Can Say
Whether or Not It\'s a Purely a Problem of Not Having the Resources or
That We Have a Problem Maybe in Actually Getting the Work Done. And
That\'s Not the Case Anymore. Our People Are Doing a Great Job Out
There. If They Can\'t Get it Done, It\'s Because of Resources, Not Being
Able to Do It. Even in the Preliminary Work Plan, I Get Involved in
Developing the Inspection Plan Directives. They Go out to Each Office
Each Year. So, Those ‑‑ I\'m Heavily Involved in the Budget Process In
That Regard or the Person in My Position Would Be.

Lemm: We Touched on Overtime a Little Bit Earlier. Do You See Washington
Maybe Coming out with Anything More Specific about the Use of Overtime
or If There\'s Some New Dollars Coming In, Would There Be Any Kind of
Specific Allocation to Some Offices That Are Seeing a Big Influx of
Drilling? Generally It\'s Hard to Get That Specific.

Bagley: It\'s Hard to Really Nail It down at this Point on Whether To Go
to Overtime or Go to Additional People. The Strategy Is Very Explicit on
The Fact That You Use the Tools Available to You in the Work Hour Tool
Arena. That Includes Overtime. So, We Would Want Those Offices To
Realize That That Is a Great Tool to Be Using and Utilize it Basically.

Lemm: I Know like in Our Great Falls Office, They\'ve Been Experiencing
Kind of a Big Mini Drilling Boom There. They\'re Using Their Engineers
to Do Inspections There. Having Them Help out and Fill In. That\'s
Another Resource. Of Course There\'s Give and Take When You Have to Do
That.

Bagley: Again, That Goes Back to Weighing the Priorities and Logically
Looking at What Do We Need to Get Done. What Is Our Main Purpose out
There? Is it to Silt Back in the Office And Push Paper or Is it to
Actually Get out There and Do The Work.

Lemm: You Can Tell You\'ve Been Work as an Area Manager a While.

Bagley: Any Other Questions There, Howard?

Lemm: That Will Handle it for a Minute or Two until I Dream up Something
Else to Test You. I\'ll Come Back with You.

Bagley: Thanks, Howard. After We\'ve Went Through and Determined All of
Our Plan Inspections, Then What the System Will Automatically Do for Us
So Populate the Rest of the Fields in Our Table 6 and Referring to That,
Table 6 Again, Here\'s a Completed Version of It. I Am Having a
Difficult Time With the Focus Here. As You Can See Here, the Information
That Came over from Planned Inspections ‑‑ There Were 199. We\'re
Planning to Do the Same 199 on the Production. I\'m Trying to Focus in a
Little Bit to Get a Better Idea Here. There Were 199 Inspections
Required and We\'re Going to Do 199. It Gives the Work Months All the
Way Across the Inspections. Then this Number Enters in for The Workover
Inspections of 22 Work Months Needed There and 24 For the Records
Verifications. Which, If You Look at Again, Now Back up into Table 5,
You See That We Had These 30 Work Months Available Here for Work and We
Also Had These 4 Work Months of Overtime. Again, We Shouldn\'t Get into
the Overtime Usage When You\'re Planning Inspections Too Much. Although
Some of the Drilling And Plugging Operations Will Occur in the Overtime
Issue. But That Overtime\'s Basically For Completing the Work Outside
Normal Work Hours. So, You Won\'t Always Get it to Balance out. We
Don\'t Want it to Necessarily Balance out with the Number of Work Months
Available. What You See down Here in the Planned Work Months Versus the
Required, If We Go Across Here, If You Remember from Last Time, We Had
29.33 Work Months Needed For the Required Inspections. And the Plan
Inspections Are Only Going to Take Us 30.76 Work Months to Complete. So,
We Are Pretty Much Completed Here Now in Getting Our Inspections Planned
out and Meeting Our Required Amount Versus the 30 That We Have Available
and the 4 Work Months Of Overtime Available. So We Are Setting Pretty
Good in This Particular Office. This Will Take Manipulation on Your Part
in Coming up with a Good Number That You People Are Experienced with.
You Know Where to Start in the Plan Column. But the Nice Thing about the
System Is it Automatically Calculates it for You and Once You Change It,
it Will Calculate New Totals and Let You See Where You\'re Sitting at
with the Numbers You Have Planned There. The next Area Where We Have the
Last Final Part of the Matrix Is Page Three. Which Involves the Remarks
Section. The Remarks Section and Also Any Special Considerations. This
Is a Very Important Aspect And as Howard and I Have Been Talking about
Today Is Looking At How We Can Plan to Do Inspections, How to Account
for Different Things Going On, this Is the Place to Do It. It Provides
an Opportunity for The Inspection Office to Explain Why They\'re Doing
Certain Things. That Would Be in the Remarks Session. In the Special
Considerations, That\'s Where You Would List Certain Things That Need to
Be Taken Care of Such as Health and Safety Inspections That You\'re
Going to Be Doing. Something That You Considered Like for Plugging an
Abandonment Operations. How You ‑‑ Conversations with Operators and So
on and So Forth Should Go in the Special Considerations. Howard, That
Pretty Much Takes Care of the Completion of the Matrix. Is There
Anything Else We Need?

Lemm: Well, on the Last Slide You Had There, I\'ve Asked a Lot Of
Questions about What You Need In Washington and What Kind of Input.
Certainly That Form Can Help Provide That. But I See That Valuable for
the State Office. I Know from the Perspective in The State Office,
Anything That We Can Learn That on a Quarterly Basis as Well as Yearly
and at Mid‑year, That Keeps Us Informed, Offices and How They\'re
Tracking with Inspections and What Their Needs Are and What Their
Equipment Needs May Be as Well, That Helps Us a Bunch Because We Can Be
Looking at What We Can Do to Help out.

Bagley: That Is Valuable.

Lemm: That Page Is Valuable for The State Office as Well as Washington.

Lemm: We\'ll Be Opening up the Phones Again for Our Final Question and
Answer Segment. If You Have a Question about Preparing the Matrix or
Anything Else We\'ve Covered Today, this Is Your Last Chance to Give Us
a Call or Send Us a Fax. And I Would like to Say That This Is Going to
Be Your Chance To Stump the Master over Here. We Do Have a Number of
Faxes to Answer. We Haven\'t Forgotten Those and Will Be Taking Those
after this Final Presentation by Lonny. But Again, We Would like to
Encourage Any Phone Calls You Have or Comments about What We\'ve Been
Going over So Far. Or in General. And with That, Lonny?

Bagley: I Would like to Say Final Words about the Inspection Process,
Howard. The Inspection Process That We Developed for Production I
Believe Is Going to Be a More Efficient Use of Our Time. It Is Going to
Be a Better Inspection Process. It Will Make Our Field Offices
Accountable for What They Do but Also Giving Them Latitude for What They
Think Needs to Be Done. The Criticism Was the Dpi Was Too Restrictive
and Didn\'t Allow For Pursuing Problems That Arose During the Inspection
Process. And We Think That Through the Results of Our Inspection Work
That We\'ve Done in the past That This Process Is Going to Be a Lot
Better to Use and Creates More Efficiency. Also, I Would like to Remind
Everybody That We Have Some Ims Coming out for Documentation. It Is
Either Going to Be in an Im Format or an Ib Requesting Comments to Our
Documentation Process So Please Look Forward To That. My Understanding
Is It\'s in the Washington Office Now Awaiting Signature. And Then Sent
out to the Field. We Also Have Some Areas That We\'ve Been Working on
this past Year as Far as the Hs Environment. Many of You Are Aware of
That. That Will Be Coming up for Comment as to How We Should Be Working
in That Kind of Environment and What Procedures We Need to Follow to
Make Sure Our Employees Are Safe out There. Howard, That Pretty Much
Covers The Items I Want to the Summarize.

Lemm: We\'re Going to Start with Carol in Mile City. Hi, Carol. How Are
You Doing? Call Call You Guys Are Doing a Great Job. I Think I\'m Going
to Take Stock In Covergirl Make‑up Though.

Lemm: I Was Going to Pay You for The First Comment. But I\'ll Have to
Take Away for The Second. What\'s Your Question?

Caller: I Would like to Have an Answer on Which Matrix That People Are
Supposed to Use this Year? I Assume That You Would Want Everyone to
Continue with the Airs Matrix since Not Everyone Is up and Running on
AFMSS.

Bagley: to Answer That, I Think You\'re Correct. I\'m Not Sure How Does
AFMSS Create That Matrix? Can You Fill Us in There, Carol?

Caller: AFMSS Does a Wonderful Job. The Programmer Should Be Commended
for Creating That Matrix for AFMSS However, for This Year, It\'s Going
to Require A History. It Requires That the System Have Everything Filled
in for the Prior Year So That it Can Take That Information
Automatically. And Because of Conversion Problems That I\'ve Seen in Our
Data and I Assume Most People Have Seen Who Have Been Converted over
like Colorado and California and Wyoming, They Will Probably See That a
Lot of Their Data Needs to Have Serious Clean‑up Done on it Before it
Would Be Accurate Data They Could Use to Create the Matrix. By That, a
Lot ‑‑ the Drilling And Abandonment Have Been Left Unlinked. Until the
Link Is Made, I Don\'t Know That the System Can Accurately Pull in a Lot
of the Inspection Information Because It Can\'t Accurately Count the
Number of Inspections and Hours That Were Completed for \'97. So, I
Would Just Wonder How It\'s Going to Affect like California And
Colorado, I Know They\'ve Stopped Doing Entry into Airs From a Certain
Point on and I Don\'t Know How They\'re Going to Combine Both
Information ‑‑ it Might Be Better to Do a Manual Matrix for Them this
Year, Trying to Get Information from Both Systems So They Can Get an
Accurate Count.

Bagley: That\'s a Good Point, Carol. More Clarification, Also Related To
the Inspection Hours, Being Able to Generate That Information. Or Can We
Manipulate That in the Airs Matrix.

Caller: I Think That Might Be Able to Be Manipulate in the the Airs
Matrix Using That Wordperfect Matrix. I Think That We Can Probably Go
Ahead and Get Information from AFMSS as Long as People Have Been
Consistent with the Way They\'ve Entered Their Hours, Should Be Able to
Use Both Systems to Get an Accurate Average for the Hours.

Bagley: If People Are Experiencing a Problem with the Matrix from AFMSS,
I Would Suggest They Need to Go Back to The Word Perfect One That Was
Developed and I Can\'t Remember What the Number Is Right Now but If
Somebody Doesn\'t Have It, We Can Get it out to Them in Short Order.

Caller: Ok. That\'s What I Was Kind of Wondering Because I Think It\'s
Going to Be Very Difficult to Have Some Matrices Come in on The AFMSS
Format and Word Perfect. I Don\'t Know If That Will Be Easy to Combine
That Information.

Bagley: in the Conversion Year, It Will Be Difficult Being That Some
Offices Aren\'t on AFMSS and Some Are. It Will Be Difficult to Compile
That Information.

Caller: I Have a Second Question Dealing with Documentation a Little
Bit. In the New Way That You\'re Going To Be Doing the Production
Inspections and Having One Instead of a Two like the Dpai And the Imhi,
They Talked about Intensifying a Pi Inspection Meaning If They Go out
and Do an Inspection Then Later on Maybe Decide That They Need to Do
More Activities to Intensify That, I Was Kind of Wondering How the
Documentation Would Follow with That If They Would Consider Opening
Another P.i. Inspection Or If They Would Say They Did Well Status Checks
and They Did A Bunch of Them in a Month Then Several Months Later They
Went Out and Did More, Would They Open Another P.i. Inspection or O
Would They Consider it to Be Another Activity under the P.i. Inspection
They Did at the Beginning of the Year, Say.

Bagley: If it Resulted from the Initial Inspection Effort, it Would Be
Another Activity under That Initial Inspection. They Need to Reopen the
Inspection and Change the Close Dates.

Caller: They Could Have Two Well Status Checks That Had Completely
Different Open and Close Dates and Maybe Even Sps And Hss, Something
like That. They Could Have More than One Per Type of Inspection.

Bagley: under That Situation, Yes.

Caller: That Clears up That Question for Me Then. Thank You.

Lemm: Carol, We Appreciate Your Call.

Caller: Thank You.

Lemm: We\'ve Got John on Line Two. We\'re Going to Hear from John. Hi,
John, Are You There?

Caller: Yeah, I Am. Can You Hear Me Ok?

Lemm: How\'s That Lame Golf Swing You Have?

Caller: Pretty Lame. It Doesn\'t Hasn\'t Gotten Better. In Fact it
Hasn\'t Been Swung Much this Summer. I Guess What I\'m Calling about At
this Time ‑‑ I\'m Hoping That Director Shea or Sherry Is Still Listening
and at this Time Might Be Able to Address My Question Or Concerns Here.
First of All, I Would like to Say That Wyoming Is Extremely Happy to
Hear That the Program Is Going to Receive Renewed Attention and
Emphasis. I Hope I Can Say on Behalf of Our Program That Director
Shea\'s Comments Is a Breath of Fresh Air and It\'s Very Welcomed. My
Concern Revolves Around I Guess the Balance Between the Production
Accountability and Audit Aspects Versus Our Drilling and Abandonment
Responsibilities. I Know Our Legal Mandate under Fogrma Is for
Conducting the Production Inspections. But in My Opinion, a More
Important Aspect for the Long‑term and Sometime Irreversible
Consequences and Liabilities Is Our Drilling and Abandonment Activities
That Are Conducted on Public Lands. It\'s Been Our Experience and I
Believe Probably for the Bureau As Well, If the Drilling and Abandonment
Inspections Are Not Pursued Aggressively, These Activities Will Not Be
Conducted To Our Requirements to Protect The Resources. I for Wyoming,
We Have Numerous Cases Where We\'re Finding Where We Were Unable to Be
out on Inspections Involving Abandonments, We Had Many Plugs That
Weren\'t Plugged Properly. Plugs Weren\'t Set Where They Were Supposed
to Be to Protect Fresh Water and Bad Cement May Have Been Used. We Had a
Study out of the Rock Springs District That Also Showed That Basically
on 99% on The Bop Tests, They Showed Some Type of Failure Touring That
Test of the Equipment That Had To Be Repaired. That\'s Not to Say That
the Bop Systems Are Completely Failing But There\'s Almost, Without
Exception, When We\'re out There, Conducting These Inspections, There\'s
Some Type of Problem That\'s Discovered During the Inspection. We Don\'t
Have Any Idea of How Many Things We\'ve Prevented by Doing These Types
of Inspections. I Guess It\'s My Hope and I Hope The Bureau\'s That
We\'ll Maintain A Balanced Program Between Drilling and Abandonment and
the Production Accountability and Audit Aspects. I Really Think We Need
to Ensure The Protection of the Environment in Our Resources Like the
Fresh Water Formations. They Should Receive an Equal or Greater Priority
Possibly than Our Production Responsibilities. I Would Just like to Know
If Director Shea or Sherry or Even Lonny or Yourself, Whoever, Would
like to Comment on this. What Your Thoughts Might Be in Regards to this
Issue. Basically, That\'s What I Have For Now. Thank You Very Much.

Lemm: You\'re Making Some Great Points There. And I Think That There\'s
No Question That Public Health and Safety and the Environmental
Protection Are Aspects That We Can Never Place Second in What We Do.
Think with the New Money and the Emphasis Will Do Is Help Us to Still
Obtain and Accomplish Some Of Those Auditing Functions That Some People
Are Especially Concerned We Would Be Able to Meet and We Work with Them
to Accomplish. I\'m Sure the Answer out of Washington Would Clearly Be
That Certainly We Have to Maintain Our Emphasis on Protection Aquifers
and Public Health and Safety and Environmental Protection. But I Think
We\'re Going to Be Able to Keep That Mixed but There\'s Going to Be ‑‑ I
Think The Good News Is There\'s Going To Be More Dollars That Helps Us
Do That it Sounds like. So, I\'m Real Optimistic with It. And I Think I
Know Those Folks In Washington Well Enough to Know That They Would Want
That High Priority Still Placed on The Environmental Protection Without
Question but this Would Be Some Money into Assist Us While We Accomplish
That, Being Able to Put Some New Emphasis on This Auditing Aspect. And
I\'m Sure That the Ims That Come out Just like the Strategy Indicates,
That You Forego Your Production Inspection in Favor Of Your Drilling
Inspection. And Lonny?

Bagley: I Think Also Where Director Shea\'s Coming from Is Additional
People to Conduct the Inspections Such as for Production Accountability
or Auditing‑type Positions. So, It\'s Going to Be Additional Folks over
and above What We Currently Have. And the Emphasis They Placed on
Getting Our Staff Back up to the Levels They Were a Couple of Years Ago
Prior to Rigo 2. Think That\'s a Big Emphasis He\'s Placing on the
Program. We Need to Get Back to Business Is His Message, I Think, from
What I Heard. So, I Think We\'re Going to Be Able to Cover Those Areas,
John. And Provide the Necessary Inspection Resources That We Need to
Accomplish.

Lemm: I Guess I Would Assume That That\'s Going to Be Some of The
Discussion You Guys Will Be Having in December at Your Strategy Meeting
and I Think That\'s a Voice That Needs to Come out of That. Maybe We\'ll
Still Hear Something From Sherry If She Wants to Clarify That or
Somebody in Washington. John, Anything Else?

Caller: One Last Thing, Howard. Sometime in the Future, Maybe in One of
These Telecasts, I Know You\'re an Accomplished Poet from What I\'ve
Heard, I Think You Ought to Share That with Us If You Have an
Opportunity Sometime.

Bagley: We\'ve All Been Trying to Talk Him into Reciting One of The
Poems for Us, John but Haven\'t Quite Talked Him into It. I like Dan and
Barnyard Missile The Best.

Caller: I Think That Would Be Good If He Would Do That Some Time.

Lemm: My Mic\'s Fading out. I Can\'t Hear You Anymore. Thanks a Lot for
Your Phone Call.

Caller: Bye‑bye.

Lemm: We Have a Bunch of Fax Questions, Lonny. I Guess We\'ll Start
Going Through Those and We\'ll Keep an Eye for Any Other Phone Calls
That Will Come In. Question from Joe in Albuquerque Is How Should BLM
Handle Unleased Tribal Operations Where A Tribe Refuses to Have a Lease
Or an Agreement but BLM Has the Trust Responsibility. I Could Start out
on this One Because We\'ve Got Experience in Montana on this and Then
Have You Jump In, Too, as Well.

Bagley: Ok.

Lemm: We\'ve Kind of Done an Historical Research of Guidance On Pretty
Much this Exact Issue, Joel. I Guess Where it Led Us, as You May Already
Know and by Your Statement, You Seem to Indicate You Do, That Regardless
of ‑‑ We Do Have a Trust Responsibility Even ‑‑ Well, Regardless to
Whatever it Is They Agreed to or Not Agreed to in Terms of How They
Operate on Their Lands. Like I Say, We Checked past Guidance on That and
Policy and Went Through Kind of an Historical Record on That to Make
Sure That We Were Going to Be Ok with Where We\'re Headed. Long and
Short of it I Kind of Came up with Is We Need to Be in Communication and
Contact with Those Tribes and Find out Exactly What it Is That We Can
Assist Them and Whatever Way They Want to Go about Having Development
Occur. And I Suggest That There Well Be Some Written Correspondence to
Spell That out. So That You Can Document That You\'ve Wholeheartedly
Tried to Participate in the Trust Responsibility and You Made Yourself
Available to Offer Them Whatever Assistance You Can Even Though They
Don\'t Want to Go With a Formal Lease or Imda. Do You Have Anything to
Add on That?

Bagley: That Covers It. Good Job. The More of Those You Can Answer, the
Better.

Lemm: I See a Phone Call from Washington Here Coming In. From Bob
Anderson. And We\'ll Take That Now. Hey, Bob, How Are You Doing?

Caller: Howard, You Guys Are Doing a Super Job.

Lemm: Thanks.

Caller: I Just Wanted to Address John\'s Call There from Cheyenne.

Lemm: Sure.

Caller: as Howard and Lonny Said, There Has to Be a Good Balance That
John ‑‑ We\'re Going To Make Sure That That Happens. Lonny Is Correct.
Right Now, We\'re Planning to Put Some Money in the Audit Program And
That Will Mean New Staff, Hopefully for You All. Right Now, We Put about
\$900 Thousand into That Program. That Means Several People from Your
State, for Example, One in California. So, That\'s Going to Be for the
Audit. That Should Allow You to Continue to Do the Good Job You\'re
Doing on the Drilling Part of it to Make Sure That the Abandonments Are
Done Properly. And That We Don\'t Have Any of The Failures That You\'re
Fearful Of. So, I Think What Lonny and Howard Just Stressed There Is
Accurate. And I Just Wanted to Call in to Kind of Acknowledge That.

Lemm: Thanks, Bob. We Appreciate That. And We Appreciate You
Participating. Did You Have Any Other Comments? Kind of as You\'re
Taking on That New Job Back There?

Caller: Howard, You Know What, It\'s Feeling Real Good Right Now. I Just
Moved the Family. Just Got Back Here Last Week and Just Getting Really
Settled In. With Director Shea Leading the Way, You Know, He\'s Really a
Sharp Guy. And He Picks up on this Stuff Real Quick. This Morning, When
He Answered Those Questions, You Know, He Was Doing So Without Briefing
Papers or Anything Else. He\'s Really Got a Good Handle on The Minerals
Program and Especially the Oil and Gas Program Already. I Think You\'re
Going to See Some Real Positive Things Come out of His Directorship.

Lemm: You Know, Actions Are What Speak the Loudest. Having Him
Participate, I Think It Was Super. It Really Sent a Message as Far As
I\'m Concerned.

Caller: Keep up the Good Work, You Guys. We\'ll See You in the Future.

Lemm: Ok. We Have Another Fax Here from Mr. Hutchinson in Buffalo.
What\'s the Status of the H2s Policy?

Bagley: as I Alluded To, We Have A Policy in the Washington Office Now.
Being Put Together. Will Be Sent out to the Field For Comment. We Did
Put it out to the State Coordinators for Comment. Hopefully We Can Get
That Im out To the Field and Provide Some Health and Safety Concerns for
All out There Doing Your Work.

Lemm: I Think There\'s a Lot of Us Hoping it Will Be a Priority To Get
That out So We Can Get Going with That. Jim Had a Second
Comment/question. He\'s Saying If There\'s Going to Be More Cooperation
with Mms in The Area of Production Audits, Can a Better System of
Developing Audits Be Arranged. Contacting a Real Person at Mms Has
Proved to Be Difficult. I\'ve Heard That Comment Before, Too. And I
Think That If Paul Rogenberger\'s Listening, Maybe He Can Give Us a
Call. Sherry Can Put it on Her Platter Of Many Things She Has to Line
Out and See If it Can Be Approved.

Bagley: That\'s an Issue of My Own, Howard, Trying to Set up Better
Communication Lines with Mms and Being Able to Have a Contact List for
Field Offices To Call for Their Particular Area of Concern. That They
May Have Questions Related to Any Royalties That May or May Not Have
Been Paid on A Particular Case out There. That Is Going to Be Priority a
For Us in this Process. It Is Going to Be an Important One to Go into
this Accountability Phase to Improve That More So. Thanks for That
Comment, Jim.

Lemm: Thanks, Jim. Now from Stu. What Is BLM\'s Responsibility Policy
for Conducting Environmental Inspections on Indian ‑‑ Keep in Mind the
Bia Is the Surface Management Agency And this Applies to Abandonments
Also.

Bagley: Want Me to Take That?

Lemm: Sure.

Bagley: When a Management Agency Is Involved in the Inspection Process,
There Are Sometimes ‑‑ Our Role Is Minimized at That Point Because the
Bia Is Conducting the Inspections Already. But If the Bia Does Get with
Us And Say Ok, Well, We Want to Look at These Particular Cases For
Inspection in Relationship To Environmental Concerns, We Can Certainly
Enter into an Agreement with Them and Use Our Resources to Do If
They\'re Available. But for the Most Part, When Another Service
Management Agency Is Involved, Coordination With Them Is Very Important.
But They\'re Responsible Basically for the Surface. Again, it Gets Back
to the Surface or the Coordination with The Other Agencies and Iron That
Out at the Time That Your Matrices Is Being Developed.

Lemm: I\'ll Take a Stab at this. I Think Maybe Where Stu\'s Going To
Come from Is We Have Bia Offices That Are Real Understaffed and Haven\'t
Been Able to Meet That Responsibility To Us. It Seems like We\'ve Had to
Step Back in Where They Were Unable To. Because it Seems to Kind of Come
Back on Our Shoulders If it Isn\'t Done Right.

Bagley: it Gets Back to Talking To Those Folks and Making Sure The Bases
Are Covered and Do What Needs to Be Done.

Lemm: Ok. Thanks, Stu: from Steve Witter. On AFMSS, Where Is it Counting
The Indian Versus Federal. On Errors, I Know it Was Counting on the
Indian Agency. We\'re Just Converting and We Need to Make Sure the Cases
Are Identified as Federal or Indian. I\'ll Let You Take a Stab at this
In a Second. My Answer Is ‑‑ I\'m Not the Right AFMSS Expert to Talk To.
I\'m a Real Rookie on That. We May Have to Get Back to You On That
Unless You\'ve ‑‑

Bagley: Yeah. Probably What Needs to Be Done. I\'m in the Same Boat You
Are. I\'m Not That Familiar with the Process Being That It\'s Pretty
Well New. I Would Suggest to Give Patty Ramsteader a Calm and Maybe She
Can Explain That for You.

Lemm: Patty\'s Here Listening. We\'ll Get the Question to Her to Make
Sure You Get an Answer on That. Thanks, Steve. From Tim. Of Course
Offices Need to Strive To Complete Required Inspections. Do You Have
Advice on How Far Offices Should Go with Planned Inspections If They
Have Excess Inspection Capacity. The Question Was Directed to the Pudgy
Guy. I Assume That\'s the Smaller Pudgy Guy Rather than the Taller Pudgy
Guy.

Bagley: Television Adds 10 Pounds. Sometimes Even More. When You\'re
Look at Your Inspection Needs and You Have Extra Months to Work With,
You Have a Latitude to Say How Far To Go with That. I Wouldn\'t Make it
Real Tight For Yourself Though, Tim. And Planning Right up to the Exact
Number of Work Months You Have Available. Give Yourself Some Cushion.
It\'s Dynamic. It\'s Only a Plan. At Midyear, You Can Look at the Plan
Again and Revise it If Necessary If You\'re Offtrack or Even If You\'re
Not, Just Leave It as Is. So That\'s Pretty Much up to You How Far You
Want to Go with That But I Wouldn\'t Put Yourself Too Tight in There.

Lemm: the Other Part of it Is That\'s the Planned Inspections. If
You\'re Able to Exceed That And Do Additional Inspections, The More the
Better for That Year.

Bagley: That\'s Correct.

Lemm: Ok. Thanks, Tim. Hope We Answered That. This Is from Jim
Hutchinson in Buffalo. What\'s the Status of the Pet Refresher Advanced
Training. I Guess Just Besides What the Status Is ‑‑ We\'ve Got Time
Here. If You Could Run Through What The Training Center and I Know
Wyoming\'s Taken a Real Lead on That. Kind of Where the Whole Effort\'s
Headed and the Thinking Behind It.

Bagley: Several Years Ago, Approximately Five or Six Years Ago, the
Training Center Did Develop Some Courses Related to Oil Measurement and
Gas Measurement. And We Put Instructors out There Under Training and
Those Packages Were Meant to Go to the Field and Provide Additional
Training to Our Inspection Personnel. Those Have Not Received Much
Attention from the Field. There Are Courses out There Sitting on the
Shelf ‑‑ Instructors Are Available for Providing That Information to The
Field. And We Would Encourage Field Offices to Do That. There\'s
Probably Some Refinement That Needs to Be Made to Those Now Because They
Are a Few Years Old. Also There Are Refresher Training Courses Provided
by Industry. Joe Goodwin, Last I Heard, He Was Still with Mobil Oil,
Puts On an Excellent Presentation on Cementing, Plugging Abandonment
Operations and What We Need to Be Looking for out There in the Field.
We\'re Also Looking at ‑‑ Howard Suggested in Wyoming Taking the Lead ‑‑
Now Developing a Course Through the National Training Center That Will
Provide Training to Folks to Refresh Them on Policies, New Technology
And Things like That. Not Only for Production but Also In the Area of
Drilling. One of the Things Being Considered for Recertification Or for
the Certification Process Is a Recertification Issue to Where after
Every Five Years, The Person Has to Go Back Through Another Testing to
Make Sure They\'re Still up on Issues And Technology to Make Sure That
We Can Provide the Best Possible Inspection for Us out There to Address
Issues for Industry and Also to Maintain the Fact That We Need to
Account for All the Production That Is Coming off Our Leases or Cases,
in this Point. We\'re Working on a Number of Areas. We\'re Trying to Get
into the Distance Learning Aspect. We\'ve Had Preliminary Discussions
with the NTC on That. To Provide More Multimedia Type Training and Are
Exploring Those Issues. Also. Basically That\'s the Rundown of That.

Lemm: and That Training That Wyoming and the Training Center And I
Believe You\'ve Been Involved in Putting Together, as I Understand it
Though, It\'s a Refresher but It\'s Also to Help Our Guys Who Have
Experience to Have Something at the next Level Up Technologywise and
Maybe Also A Chance to Focus on Some Things That Weren\'t That Big a
Deal When a Lot of People Went Through Training. I Mean, I\'m Thinking
of Horizontal Drilling, for Example. We\'re Having a Lot of Horizontal
Drilling Going on in the Bureau. And in Some Places It\'s Happened So
Quick and It\'s New and Different That There Really Wasn\'t Any
Opportunity for Any Training. So, You Guys Are Going to Try to Pick Some
of Those Topics?

Bagley: Yes, We Are.

Lemm: and What Kind of Scheduling Are You on for That? Or Where Does the
Charter for That?

Bagley: I\'m Not Sure Where the Schedule Is. I Know John in Wyoming Has
Been Working Extensively on That and So Is Fred in Casper. They Might Be
More in Tune on The Schedule as Far as the Refresher Course They\'re
Building Related to Drilling. I Know They Wanted to Have One School Yet
this Year and I\'m Not Sure If They\'re Going to Be Able To Achieve That
or Not. I\'m Sure Jim Has Been in Touch With John Being That He\'s in
the Wyoming Buffalo Resource Area. He Probably Has Additional
Information on That Also. But You Know, We Want to Develop These Courses
to Provide More Training for Our People, Keep Them up to Speed on the
Technology Both Drilling and Producing Operations. And the More We Can
Do That, the Better Inspection Personnel We\'ll Have and the Better
Credibility with Industry, Too.

Lemm: Maybe as a Suggestion, the Report You Guys Come out of at Your
next Strategy Meeting Though It\'s a Separate Effort, Maybe There Could
Be an Update In That about Where That Stands Because Certainly Our
Training And Our Strategy Would Have to Go Hand in Hand.

Bagley: That\'s Correct.

Lemm: Maybe Something Can Come Out of That as Well. Ok. Next Question,
in Your Particular Example of the Matrix, Your Office Had the Available
Work Months to Perform The Required Inspections. If in Your Example You
Were Four Work Months Short of Performing The Required Inspections, How
Do You Determine Which Would Be Performed? We Touched on That a Little
Bit.

Bagley: We Did. Again, it Goes Back to What Our Mission Is and We Want
to Look At Both Production Accountability Issues. We Want to Look at
Ensuring the Public Is Being Protected and Environmental Concerns Are
Being Protected. So It\'s a Process You Need to Go Through to Look at
All of Your Inspection Workload and Say \"Well, Where Am I Going to Be
Able to Cut First.\" Where it Most Usually Comes into Effect Is Your
Non‑fogrma Cases For Production Inspections. Even Though We Gain a Lot
from Doing Production Records Reviews, That Is about the Only Area That
You Can More or less Cut down If You\'re Not Going to Have the Resources
to Complete It. And If You\'re Starting to Cut Into the Drilling and the
Abandonment, Those Are High Priority Issues and by Policy, We Want Those
Inspected First. That\'s Where I Would Start My Trimming down.

Lemm: Ok. I\'ve Got More Questions Here but I Would like to Remind
Everybody Here That Though There\'s Telecast Time Left, We Are Running
Ahead of Schedule. So If You\'ve Got Some Calls or Questions You Would
Still like Answered, We Would Sure Appreciate it If You Get Them Right
In. We\'ll Obviously Only Go as Long As We Have the Questions. Don\'t
Wait until What You Think Is the Last Minute. We Would Appreciate
Hearing from You. Which Have a Question Here. Could You Discuss, Lonny,
the Environmental Prioritization a Little More. It Seems in Some Offices
They Rate Everything as High Priority. If it Meets the Broad Gade Line
As Outlined or in the past it Was Rated High for Some Reason And Has
Never Changed since Then. Can You Provide Additional Guidance on this
Issue?

Bagley: That Has Come up Before, Howard. In the Drilling Stage of
Prioritization for Plugging an Abandonment or for Drilling Phase, the
Issue Surrounding Environmental Concerns May Have Been High for One
Particular Reason under the Drilling Criteria. Some Offices in the past
Have Transferred That High Priority Rating over to the Production Side
When in Fact it May Not Be High Any Longer Because the Surface
Disturbance Is Being Minimized. It\'s Been Approved. Access Road Has
Shrunk to Where It\'s Just Access into the Facilities. In Those Areas,
You Need to Look Back and See If the Environmental Criteria Still Fits.
On the Other Side, We Have Offices That Say, Well, Nothing Is Going to
Be High Priority to The Environment Which May Be the Case. But I\'m Sure
That in Every Office, There Are Areas Where There Are Some High Priority
Issues Related to the Environment. So, Make Sure Instead of ‑‑ When You
Do Your Prioritization Once That You Keep Reviewing the Criteria to Make
Sure They Still Fit into That System.

Lemm: Ok. And Do Cases Rated High under The Fogrma Criteria Have to Have
A Production Related Criteria Performed on Them or Will Any Inspection
Activity Meet the Needs of the Inspection Required?

Bagley: as We\'ve Stated Earlier Under the Fogrma Criteria, it Requires
That an Inspection Be Conducted on Those Cases. And That Means That
We\'ve Interpreted That to Mean There Has to Be a Field Visit Conducted.
And We Have Given Latitude to Where Non‑fogrma Cases Can Have A
Production Records Review Conducted on Them Without a Field Visit. But
We Need to Ensure We\'re out There Looking at Those Areas Related to
Production Accountability. If You\'re Going to Be High to Production, of
Course You Want To Look at the Measurement Aspect, Make Sure That
Everything Is Being Measured Accurately, Handled Properly and Actually
Reported Also Correctly. When You Get into the Area of Compliance, You
Could Focus Your Attention to the Areas of Where Those Compliance
Problems Were. And That Might Be Only under the Site Security Aspect. So
There\'s the Two Criteria Under Fogrma That Need to Be Addressed When
You\'re out There Doing the Inspections but it Will Require You to Go to
the Field to Look at the Situations.

Lemm: for Kind of a \"What If\" Question. If You Had an Item That You
Intended to Inspect and You Gave It a High Priority and for Some Reason,
Say it Was a Production Item and They Lost the Whole ‑‑ And They
Couldn\'t Repair it and They Abandoned It. Certainly We\'re Not Asking
the Offices to Still Make a Trip out There in Any Case, Are We?

Bagley: it Would Depend upon the Situation. If We Were to Lose
Production in A High Fogrma Criteria Case, Then What We Need to Do Is
Determine What Is this Situation? Do We Still Have O Oil on Hand Out
There? Might Be Site Security Issues. But Howard, You Bring up a Very
Good Point Is That at Some Point, We\'re Going to Say Does It Require
Field Inspection? And It\'s Going to Fall out of The High‑priority
Ranking of a Fogrma Criteria. But Still, Maybe We Need to Get Out There
and Do the Field Visit To Make Sure That What Is on Location Is Still
There and We\'re Accounting for All That Production. So It\'s Going to
Vary. I Would Say the Common Sense Factor Enters in Here to to Really
Address That Issue. You Need to Look at What the Situation Is.

Lemm: Ok. And Something That We\'ve Touched On a Little Bit Before.
Maybe You Can Hit it One More Time. This Person Noticed That We Have New
Inspection Codes for Production. When Will We Receive Guidance on How to
Use the New Codes?

Bagley: We\'re Currently Going Through ‑‑ That Gets Back into The
Documentation Memo Again. And That Document Is Planned to Be out
Shortly. When the Washington Office Signs Off on it for Comment. And We
Can Then Provide That From a Final Review of Our Meeting in December in
Salt Lake City When the Group Gets Back Together and Reviews the
Comments.

Lemm: Ok.

Bagley: Maybe First of the Year We\'ll Have Something out on That.

Lemm: Ok. We Have Another Phone Call. We\'ll Take That at this Time.
Hey, John. How Are You Doing?

Caller: Same as I Was Last Time.

Bagley: Hello Again, John.

Caller: You Guys Are Doing a Good Job. This Question Is for You, Lonny.
It Was a Question Raised by Someone in the Field to Me. I Guess I
Didn\'t Feel Completely Comfortable in How to Address it Either. And I
Thought Maybe You Would Be A Good Person to Elaborate on This. It Had to
Do with the Sampling Aspect of Our Production Inspection. Basically the
Question Was If a Review Is Done of a Field Office By the Washington
Office or State Office, What Level of Sampling Is Expected by Them? Are
They Going to Be Held to in A Review? There Was Some Concern That You
Know, If They Use Their Discretion, They May Get Criticized That They
Didn\'t Do Enough or Too Much. I Was Wondering If You Could Kind of
Elaborate on That Aspect.

Bagley: Certainly When the Oversight Issue Comes into it This, it Will
Mean a Lot More For People Conducting the Oversight Function to Look at
What Inspections Were Conducted And Then What Were the Results Of Those
Inspections. It\'s Going to Be a Judgment Call. And It\'s Going to Be
Coming Back On Each Individual to Be Able to Explain Exactly What They
Did on The Inspection and to Then More Or less Paint a Picture That
Yeah, We Did Do the Right Thing. But it Will Also Put More Ownership and
Responsibility on The Inspector to Think the Process Through. Not
Necessarily in That What Somebody\'s Going to Find If They Come out and
Do a Review but in Their Thought Process, They Need To Ensure That
They\'ve Considered All Aspects of That Inspection. Production
Accountability, Protection of the Environment, And Public Health and
Safety. If They\'ve Addressed That, Then That\'s Going to Be Adequate
Documentation to Demonstrate That They\'ve Conducted the Appropriate
Inspection. Now, for Instance, If They Go Out and Identify Some Problems
And They Don\'t Follow Through on Those, They Need to Realize That
They\'re Going to Have to Answer To Why They Didn\'t Follow Through on
Those Issues. So, Again, it Gets Back to Making Sure That When You\'re
Doing the Inspection, You\'re Putting Your Best Food Forward And Look at
All Aspects of It. All the Consideration, Different Types of Production,
Oil and Gas. The Types of Measurement That Are Occurring out There. That
You\'ve Addressed All Those Issues. If You Have, Then There Shouldn\'t
Be Any Problem. It Will Be More Thought on Their Part, Too. It Will
Basically Be in My Opinion, Some Advice Back to an Office on Maybe
Improving Their System Unless There\'s Something Drastic Wrong with
Their Inspection Process. Does That Pretty Much Answer it For You, John?

Caller: I Think in General Terms, Yeah. I Guess the Thing I Draw from it
Is If it Seems like You\'re Way Off Base on What You\'re Doing in
Sampling, You Probably Better Have Some Reasonable Justification for Why
You\'re Approaching it That Way. And to Make Sure You\'ve Covered All
Those Aspects That You Need To for Production Accountability, Site
Security, Et Cetera.

Bagley: I Believe it Will Give More Latitude to the Inspectors To Do
What They Feel Is Right Out There and Provide the Best Possible
Inspection That We Can. Because They\'re in the Field. They Know What\'s
Going On. They\'re the Best Judge of That. We Need to Give the Ownership
Back to Them.

Caller: Thank You Very Much.

Lemm: Thanks a Lot, John. Appreciate the Questions. That Was John
Shuffleberger in Cheyenne. I Believe We Have a Call from Washington.

Caller: Howard, You Look Nice From Here. Lonny, this Is a Question for
You. As You Recall, Last Year, We Answer Oigs Recommendations by Saying
We Would Address the Concern on the I&e Program. Somehow They\'ve Been
Unbalanced Between Inspection and Protections. And Our Response Back to
Oig, We Say We Would Address That in Our Upcoming Strategic Plan. The
I&e Strategy. So I Just Want to Make Sure That You Are Taking Care of
That.

Bagley: Thanks for Following up On That for Me. But I Believe We Covered
the Bases in the Fact We Went Through a New Inspection Process. We\'ve
Addressed Their Concerns. We\'ve Went Back Through the I&e Strategy and
it Is Still in Effect under 94‑17. We\'re Going to Put That into a Final
Handbook Hopefully by mid 1998 So That We Have this Process down in a
Handbook Form. But it Is Explicit Within the I&e Document How We Will
Treat Plugging, Drilling and Production Inspections in the
Prioritization on That Balance Issue. And I Know That There Was a
Balance Issue with Them or Process Issue on Dpis and Imhis And I Think
We\'ve Taken Care of That Now with the Inspection Process We\'ve
Developed for Production at this Time. So, I Think We\'re Covered. I\'ll
Need to Review Back Through That but Maybe We Need to Be in Contact with
Ig a Little Bit More, Too.

Caller: next Annual Report, We Can Say We\'ve Addressed the Question and
the Recommendation Should Be Closed, Right?

Bagley: to My Knowledge, Yes.

Caller: That\'s What I Need to Know. Thank You Very Much.

Lemm: We Appreciate Your Question. Well, We Don\'t Have Anymore Phone
Calls. We\'ve Got a Quick One Here We Could Hand it Will but Maybe I\'ll
Throw it Back to You for Any Closing Thoughts or Comments You Have at
this Point.

Bagley: I Think this Has Been a Real Good Telecast. We\'ve Had a Lot of
Input into The Process We\'ve Developed with The New Production
Inspection. We\'ve Had a Number of Faxes Come In as Far as Concerns and
Questions Related to Performing Inspections. How We\'ll Handle
Oversight. It\'s Going to Be an Exciting Time, I Think for Us Moving
into This Area. It\'s Going to Give Us More Ownership Back to the Field.
I Know I\'ve Said That Before. But It\'s Going to Be a Lot Better
Process in What We\'re Doing and Handling the I&e Program. Other than
That, I Think We\'re Headed down the Right Track Here.

Lemm: and You\'re at What? Midpoint of Your Detail to ‑‑

Bagley: Yes. Two Months into My Four Month Detail to the Big Dry
Resource Area as the Acting Area Manager. I\'m Enjoying That. It\'s Been
Very Interesting and The Issues That Come about as Being an Area Manager
and Things You Have to Address. And I Would like to Say Hi to Everybody
in the Big Dry Resource Area If You\'re Listening. I\'ll Be Back on
Monday, by the Way. So Be Careful.

Lemm: Thanks, Lonny. I Guess She\'ll Kill Me for Doing This but I Need
to Thank Patty, The Producer of this Show. She\'s the One That Put a
Whole Lot of this Together. She Is the Real Brains of this Outfit. I
Think Lonny and I Both Would Like to Thank Her for All of Her Work and I
Don\'t Think Many People Know the Level of Involvement That She Has in
This. So, Thanks, Patty. We Would Also like to Thank Director Shea for
Taking Time Out of His Busy Schedule and Visiting with Us this Morning.
I Think That Was Just Super. And It\'s Great to Have Him Excited about
Our Program and Interested in it and Willing to Jump into It. Thanks to
Our New Director for That. That Concludes Our Show. We Hope You\'ve All
Enjoyed It. And We Hope What Was Presented Today Will Prove Useful
During Your Inspection Efforts in \'98. We\'ve Enjoyed Presenting this
Course and Appreciate All of the Behind‑the‑scene Folks Who Made This
Broadcast a Reality. I Would Especially like to Thank My Partner, Lonny,
for Being With Us. And I Would Also like to Thank Everyone Who Faxed
Questions and Comments to Us. We Appreciate Your Participation. I Would
like to Remind Our Downlink Coordinators to Have All Viewers Sign the
Attendance Roster and Fax it to the NTC Immediately after Today\'s Show.
This Telecast Is One in a Series Of Distance Learning Programs by The
BLM National Training Center. We Value Your Comments and Suggestions.
Please Mail Your Evaluation Form To Paul at NTC as Soon as Possible. I
Would Also like to Mention Upcoming Satellite Events. Next Month on
Thursday, September 11th, an Irm and Almrs Forum Will Be Telecast to
Provide Everyone an Update on Our Modernization Efforts. A Two Day
Course on Mining Claim Use and Occupancy Management Will Be Broadcast on
September 17th and 18th. A Telecast on October 30th Will Discuss Changes
in Oil and Gas Policy. This May Be of Particular Interest to Those of
You Who Work in Fluid Minerals. On November 19th, the NTC Will Broadcast
a Seminar as Part of The Second International Conference on National
Resources And Cultural Heritage. This Interactive Telecast Which Will
Also Be Transmitted to Central and South America, Will Be Simulcast in
Spanish. To Help Your Office Participate In Future NTC Broadcasts, See
The BLM Satellite Downlink Guide Or Visit the NTC Home Page on The World
Wide Web. NTC\'s Internet Address Is www.ntc.blm.gov. Transcripts of
this Program and Other NTC Broadcasts Are Available on the Home Page.
For Information on Upcoming NTC Distance Learning Telecasts as Well as
Traditional Courses Call The Training Center at 602‑906‑5500. Or Visit
the NTC Home Page. Finally, If You Have Any Questions for Lonny or
Myself, Our Phone Numbers Are in the Viewer Packet. Give Us a Call If We
Can Help. Thanks for Tuning In.