Onshore Oil & Gas Order \# 1

An Overview of the Application For\
Permit To Drill Process

Posting and Processing

\>\> T. Spisak:

Thanks. Now Jim Burd is going to get into the details of posting and
process APDs. Let\'s roll that tape now.

\>\> J. Burd:

APD posting and processing describes what happens to your APD once you
file it. The goal of my presentation is to help you understand how we
analyze your APD. I\'ll briefly discuss how and why we post APDs and
then discuss in more detail how we process them, how you are involved
and when you can assist us. I\'ll also describe how the process fits the
time line and the energy policy act of 2005. I\'ll also explain our
process for posting and why we do it and in the way we do it. It\'s a
fairly straightforward process that doesn\'t require your input if
you\'re the operator. Normally it typically doesn\'t impact the
processing of your APD. Finally, I\'ll explain APD processing. You have
a role to play here. You\'ll be asked for information. The information
that you provide will be evaluated, and if necessary, you will be asked
to provide or correct any missing or deficient information. Posting is a
requirement of section 5102‑D of the 1987 reform act. This paragraph
requires that the public must be notified 30 days prior to approving and
APD or a federal oil and gas lease. Posting is not required for an APD
on an Indian lease. The notice is posted in offices of the federal land
managing agencies involved. This means the notice must be made in both
our BLM office and in the office of the appropriate surface managing
agency if it is not us. The agency must post the description and
location of the proposed action. Changes in the drilling location to
another quarter quarter require reposting. Location changes of over 660
feet where no public land survey is available will also require posting.
Reposting. The purpose of the public notice is just that. Give the
public notice that the agency is planning to make a decision on a
proposed action. The \'87 reform act adds this requirement in addition
to any other public notice. Some our offices provide public notice of
pending NEPA actions. This would be an additional public notice that is
separate from the \'84 act requirement. You should ask your local
office ‑‑ you should ask our local office if additional public notices
are used. People often confuse the 30‑day posting requirement with APD
processing requirements in order 1. Processing requirements are based on
the energy policy act and are not the same as the reform act posting.
The reform act posting requirement is absolute. Approval of an APD
cannot happen until the 30‑day posting period has ended. The 30‑day
processing period requirement of the energy policy act is not absolute
or a limiting factor. Decision on the APD may be made before these 30
days have elapsed if all of the requirements, such as NEPA, have been
met. I\'ll discuss the 30‑day processing step later. Section E describes
both the 30‑day posting I just explained and APD processing that I\'ll
explain next. APD processing is covered in section 366 of the energy
policy act. The processing applies to APDs for both Indian and federal
leases and to both single APDs and multiple APDs submitted as part of a
master development plan. It\'s important to note that the definition of
days changed in the revised order. Previously we mixed calendar and
working days depending on the action. We now use only calendar days to
make it easier to calculate and avoid confusion. When we wrote the draft
order in 2005, we dropped the old 7‑day letter based on work days and
replaced it with roughly equivalent 10 calendar days in that change
turned out to be consistent with a requirement in the energy policy act
for 10 daze\' notification after the APD is filed. There are two
important events in processing and APD that drive the schedule. They are
the date the APD is filed and the date that it is complete. First, we
are required to tell you 10 days after the APD is filed if the APD is
complete and we together with you must schedule an onsite inspection.
The onsite may occur at a later date but must be picked before the 10
days are up. Second, the APD complete date is important because we are
required to take an action that may include approving the APD within 30
days. Of course, we cannot approve and APD until we comply with all
other federal laws including NEPA. If these requirements are not met
after 30 days, we must notify you we are deferring action. I will
explain that later. When you choose the notice of staking or NOS option,
the process follows the section E schedule after your APD is filed. If
you use the NOS option, the major differences are that the onsite
inspection and the 30‑day posting will probably already have occurred
when your APD ‑‑ when you file your APD and neither should have any
further schedule impact. However, the 10‑day notification will still be
required, except in the rare case that all other requirements have been
met and the APD can be approved. Section E‑2 of the order describes APD
processing. This slide shows the critical decisions and the decision
points. I\'ll go into each of them in detail later, but in summary, they
include the 10‑day notification, often called the 10‑day letter, which I
have just mentioned. It is a notice that tells you if your APD is
complete. You have 45 days to respond to any deficiencies that is noted
in the 10‑day letter. I\'ve also mentioned that 30 days after your APD
is complete, we must take an action if we have not already approved the
APD. The action may be to approve, defer or deny the APD. We cannot
approve an APD until we have complied with all of the other applicable
laws. This is both our policy and plainly stated in section 366 of the
energy policy act. You may accept ‑‑ we may accept your help in meeting
these requirements. If action on the APD is deferred, we must notify you
of the reasons for the delay and provide you a schedule for taking final
action. You have two years to complete any actions that we may request
of you. Furthermore, 10 days after you provide the requested material or
otherwise complete the requested action, we must make a final decision
on the permit. If compliance with all other applicable law has been
accomplished. I\'ll now discuss these points in greater detail.
Understanding the 10‑day notification. I\'ll refer to it as the 10‑day
letter. Is critically important for both you and the agencies. The
10‑day letter tells you if your APD is complete or describes any
deficiencies. It should also note if the onsite inspection has been
held. Many APDs will not be complete because the onsite has not been
held. However, the onsite infection will in all likelihood have been
held prior to the 10‑day let for you use the NOS option. If you propose
significantly different actions in the APD than discussed at the NOS
onsite, another onsite may be required. If an onsite is needed, the date
for it must be agreed upon within 10 days of the receipt of your APD.
The onsite must be conducted as soon as possible based on availability
of all concerned and cooperating weather conditions. It should be noted
that it is our goal to conduct the onsite within 15 days of APD receipt.
You and the agency should note that it\'s the policy of the BLM and the
Forest Service to do a comprehensive review of the APD prior to the
10‑day letter and notify you of the deficiencies in the 10‑day letter.
However, it must be remembered by all that we cannot approve and APD
that contains critical errors or omissions regardless of when they were
discovered. To do so would risk legal a challenge and that may void the
approval. Therefore, you may be notified of additional deficiencies.
This is especially true of any deficiencies discovered at the onsite
inspection. We use ‑‑ used to determine if the APD was administrative
complete prior to preparing the old seven‑day letter. That is, we
checked to day if the APD contained all the parts prior to writing the
7‑day letter and they we would review the various parts comprehensively
and determine if they contained accurate and sufficient information to
make the APD technically complete. We dropped the old concept of
technically and administrative complete principally because we believe
the energy policy act has taken away that option and because technically
and administratively complete was not a clean process that could be
accomplished within a defer nut schedule. Deficiencies identified at the
onsite inspection may require some time to correct in your APD package.
While the energy policy act does not address your response, the revised
order retains the old practice that allows 45 days for you to respond to
deficiency notification. However, the order now gives us the option to
retain your APD even if you miss this deadline. We can if we believe you
still intend to provide the information retain your APD and continue to
work on it after the 45 days have elapsed. It\'s a good idea for you are
to convey your intentions us to if you are unable to timely respond. We
have 30 days to take action after your APD is determined to be complete.
We must either approve or deny your APD if we have complied with all
other laws. That is, all actions necessary for compliance with NEPA,
cultural and wildlife regulations. If they are, we will take final
action and either approve or deny your APD. We added the option to deny
at this time. It is not in the energy policy act. We added the option
because we recognize there may be rare cases in which there is no action
that you can take would that make your APD approvable. For example, you
may not be the authorized operator. This option allows you to appeal our
decision immediately rather than wait up to two years on deferred APDs.
This option is to be used only on rare occasions and our policy requires
that the State Director concur prior to denying any APD at this time.
The energy policy act requires that we provide you with notification
that a decision is being deferred if we cannot make a final decision. We
must tell you the reason for the delay and give you a schedule for
completing the needed actions. If your APD is deferred we must include
in the notification any actions that we must take to comply with
applicable law and any actions that you could take to would that enable
us to make a final decision. You have provided much needed assistance in
regulatory compliance in the past. We hope that this relationship
continues and we may continue to request additional information or your
assistance. If we do make such a request we must deny your APD adds
required by the energy policy act if you do not respond after two years.
As I\'ve stated, that while compliance with statutory requirements is
the responsibility of the agencies involved, you often provide
assistance in gathering information and even preparing documents. Order
1 has not changed this relationship. The agencies can still prepare the
environmental documents without your input but this adds significantly
to the schedule. You have generally been willing to provide assistance
and take a significant role in environmental reporting. Whether or not
we the agencies conduct the inventories and prepare the documentations,
we are ultimately responsible for the quality of the product. In every
case we must stand behind the documents and, therefore, we must review
all material that you prepare for us. There is no guarantee that
environmental documents that you prepare will be accepted without
revision. The energy policy act gives you two years to submit the
information requested. As I\'ve said, the APD must be denied if you fail
to make the deadline because this is a strict requirement of the act.
The final action occurs only after all information is received, the
definition is accurate and other regulatory compliance is achieved. 10
days after you provide any requested material and other regulatory
compliance is complete, we must make a final decision on your APD. We
all must remember that the two‑year limit does not apply to compliance
with other regulations. Your APD will not be denied after two years if
the reason that the decision cannot be made is compliance with other
regulations. However, if we are waiting for your input and two years
elapses, we must deny your APD. APDs are now valid for two years with a
possible extension of up to two years. We increased the valid period
because the ‑‑ because of the proliferation of seasonal provisions,
along can deeper wells, makes completing a well in a single season less
likely. We believe that environmental documents have a shelf life of at
least as long as the possible four years covered by the valid period and
extension. I\'ve talked about APD posting and shown that it is not the
same thing as processing. It starts when you submit your NOS or APD and
we, the agency, cannot take final action until the 30 day posting has
elapsed. I have described the steps in APD processing and how the
agencies and you work together to achieve a complete APD and then come
to the point that a final decision will be made.