Federal Register / Vol. 78, No. 59 / Wednesday, March 27, 2013 / Proposed Rules 18547 

respirators which have been granted a 

NIOSH certificate of approval. 

(c) Fees will not be charged for: 

(1) Technical assistance not related to 

processing an approval application; 

(2) Technical programs including 

development of new technology 

programs; 

(3) Participation in research; and 

(4) Regulatory review activities, 

including participation in the 

development of health and safety 

standards, regulations and legislation. 

§ 84.21 Fee calculation. 

(a) This section provides the direct 

and indirect costs of NIOSH’s services. 

(b) Upon completion of an initial 

administrative review of the 

application, NIOSH will calculate a fee 

estimate for each application, including 

the maximum cost of conducting 

additional tests under § 84.24 of this 

part, and will provide that estimate, 

with payment details, to the applicant. 

NIOSH will begin the technical 

evaluation once the applicant accepts 

the terms of the fee estimate and 

authorizes payment. The fee estimate 

will be derived using the current 

schedules of fees published by NIOSH 

in the Federal Register and on the 

NIOSH Web site at http://www.cdc.gov/ 

niosh/npptl/default.html. 

(c) If NIOSH determines that actual 

costs for application processing and 

related testing will exceed the fee 

estimate provided to the applicant, 

NIOSH will provide to the applicant a 

revised fee estimate for completing the 

application review. The applicant will 

have the option of either withdrawing 

the application and paying for NIOSH 

services already performed or 

authorizing payment of the revised 

estimate, in which case NIOSH will 

continue the application review and 

related testing. 

(d) If the actual cost of processing the 

application is less than the fee estimate 

NIOSH provided to the applicant, 

NIOSH will charge the actual cost. 

(e) If the applicant withdraws an 

application, the applicant shall pay for 

services already performed by NIOSH 

for the application review. Such 

services shall include any 

administrative work (including any 

administrative work to process the 

withdrawal), and any examinations, 

inspections, or tests performed pursuant 

to such application. Withdrawal of an 

application shall be effective on the first 

business day following the date NIOSH 

receives a withdrawal notice from the 

applicant in writing. Withdrawal 

notices shall be submitted to NIOSH 

only at the application address specified 

under § 84.10 of this part. 

§ 84.22 Fee administration. 

(a) Applicants will be billed for all 

application fees when processing of the 

application is completed or the 

application is withdrawn. Invoices will 

contain specific payment instructions, 

including the address to mail payments 

and authorized methods of payment. 

(b) Applicants who hold active 

certificates of approval will be billed by 

NIOSH annually or as appropriate for 

any applicable maintenance fees. Such 

maintenance fees, where applicable, are 

specified in the current schedule of fees 

published by NIOSH in the Federal 

Register and on the NIOSH Web site at 

http://www.cdc.gov/niosh/npptl/ 

default.html. 

(c) NIOSH reserves the right to impose 

sanctions for any missed payment, and 

will administer such penalties after 

assessing the circumstances of the 

manufacturer and the needs of other 

stakeholders. Sanctions may include but 

are not limited to: 

(1) Refusal to accept future 

applications for approval; 

(2) Stop-sale of all approved product; 

and 

(3) Engaging appropriate government 

authorities to initiate debt collection 

procedures for the unpaid fees. 

§ 84.23 Fee revision. 

(a) Each fee schedule shall remain in 

effect for at least 1 year and shall be 

revised at least once every 5 years. 

(b) Updated fee schedules shall be 

published in the Federal Register and 

posted on the NIOSH Web site at 

http://www.cdc.gov/niosh/npptl/ 

default.html. 

(c) The current fee schedules shall 

remain in effect until NIOSH publishes 

new fee schedules in the Federal 

Register as specified under paragraph 

(b) of this section. 

§ 84.24 Authorization for additional tests 

and fees. 

NIOSH shall conduct any 

examination, inspection, or test it deems 

necessary to determine the quality and 

effectiveness of any respirator submitted 

to NIOSH for the purposes of seeking a 

certificate of approval. The costs of such 

examinations, inspections, or tests shall 

be paid by the applicant prior to 

issuance of a certificate of approval for 

the subject respirator. 

Subpart G—General Construction and 

Performance Requirements 

■ 7. In § 84.66, revise paragraph (b) to 

read as follows: 

§ 84.66 Withdrawal of applications. 

* * * * * 

(b) Upon the receipt of a written 

request from the applicant for the 

withdrawal of an application, NIOSH 

shall bill the applicant based on the fee 

calculated, as specified under § 84.21(e) 

of this part. 

Subpart N—Special Use Respirators 

§ 84.258 [Removed] 

■ 8. Remove § 84.258. 

Subpart KK—Dust, Fume, and Mist; 

Pesticide; Paint Spray; Powered AirPurifying High Efficiency Respirators 

and Combination Gas Masks 

§ 84.1102 [Removed] 

■ 9. Remove § 84.1102. 

Dated: March 20, 2013. 

Kathleen Sebelius 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2013–06914 Filed 3–26–13; 8:45 am] 

BILLING CODE 4163–18–P 

DEPARTMENT OF THE INTERIOR 

Bureau of Land Management 

43 CFR Parts 3900, 3920, and 3930 

[LLWO–3200000 L13100000.PP0000 

L.X.EMOSHL000.241A] 

RIN 1004–AE28 

Oil Shale Management—General 

AGENCY: Bureau of Land Management, 

Interior. 

ACTION: Proposed rule. 

SUMMARY: The Bureau of Land 

Management (BLM) is proposing to 

amend the BLM’s commercial oil shale 

regulations by revising these regulations 

in order to address concerns about the 

royalty system in the existing 

regulations and to provide more detail 

to the environmental protection 

requirements. 

DATES: Send your comments to reach 

the BLM on or before May 28, 2013. The 

BLM will not necessarily consider any 

comments received after the above date 

in making its decision on the final rule. 

ADDRESSES: Mail: Director (630) Bureau 

of Land Management, U.S. Department 

of the Interior, Mail Stop 2143LM, 1849 

C St. NW., Washington, DC 20240, 

Attention: 1004–AE28. Personal or 

messenger delivery: U.S. Department of 

the Interior, Bureau of Land 

Management, 20 M Street SE., Room 

2134 LM, Attention: Regulatory Affairs, 

Washington, DC 20003. Federal 

eRulemaking Portal: http:// 


srobinson on DSK4SPTVN1PROD with PROPOSALS
18548 Federal Register / Vol. 78, No. 59 / Wednesday, March 27, 2013 / Proposed Rules 

www.regulations.gov. Follow the 

instructions at this Web site. 

FOR FURTHER INFORMATION CONTACT: 

Mitchell Leverette, Chief, Division of 

Solid Minerals, at (202) 912–7113 for 

issues related to the BLM’s commercial 

oil shale leasing program or Ian Senio, 

Chief, Division of Regulatory Affairs at 

(202) 912–7440 for regulatory process 

issues. Persons who use a 

telecommunications device for the deaf 

(TDD) may call the Federal Information 

Relay Service at 1–800–877–8339, 24 

hours a day, 7 days a week to contact 

the above individuals. 

SUPPLEMENTARY INFORMATION: 

I. Public Comment Procedures 

II. Background 

III. Discussion of the Proposed Rule 

IV. Procedural Matters 

I. Public Comment Procedures 

If you wish to comment, you may 

submit your comments by any one of 

several methods: You may mail 

comments to Director (630), Bureau of 

Land Management, U.S. Department of 

the Interior, Mail Stop 2143LM, 1849 C 

St. NW., Washington DC 20240, 

Attention: 1004–AE28. You may deliver 

comments to U.S. Department of the 

Interior, Bureau of Land Management, 

20 M Street SE., Room 2134LM, 

Attention: Regulatory Affairs, 

Washington, DC 20003; or you may 

access and comment on the proposed 

rule at the Federal eRulemaking Portal 

by following the instructions at that site 

(see ADDRESSES). Written comments on 

the proposed rule should be specific, 

should be confined to issues pertinent 

to the proposed rule, and should 

explain the reason for any 

recommended change. Where possible, 

comments should reference the specific 

section or paragraph of the proposed 

rule that the comment is addressing. 

The BLM need not consider or include 

in the Administrative Record for the 

proposed rule comments that it receives 

after the close of the comment period 

(see DATES) or comments delivered to an 

address other than those listed above 

(see ADDRESSES). Comments, including 

names and street addresses of 

respondents, will be available for public 

review at the U.S. Department of the 

Interior, Bureau of Land Management, 

20 M Street SE., Room 2134LM, 

Washington, DC 20003 during regular 

hours (7:45 a.m. to 4:15 p.m.) Monday 

through Friday, except holidays. They 

also will be available at the Federal 

eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions at this Web site. 

Before including your address, 

telephone number, email address, or 

other personal identifying information 

in your comment be advised that your 

entire comment—including your 

personal identifying information—may 

be made publicly available at any time. 

While you can ask us in your comment 

for the BLM to withhold your personal 

identifying information from public 

review, we cannot guarantee that we 

will be able to do so. 

II. Background 

Advance Notice of Proposed 

Rulemaking 

The BLM published in the Federal 

Register an advance notice of proposed 

rulemaking (ANPR) on August 25, 2006 

(71 FR 50378). The ANPR requested 

public comments on key components to 

be considered in the development of a 

commercial oil shale leasing and 

development program. On September 

26, 2006, the BLM published in the 

Federal Register a notice reopening and 

extending the comment period on the 

ANPR (71 FR 56085). The BLM received 

48 comment letters on the ANPR and 

considered those comments in 

developing the proposed and final rules. 

Proposed 2008 Rule 

On July 23, 2008, the BLM published 

in the Federal Register a proposed rule 

entitled Oil Shale Management— 

General (73 FR 42926). The comment 

period for the proposed rule closed on 

September 22, 2008. The BLM received 

over 75,000 comment letters on the 

proposed rule from individuals, Federal 

and state governments and agencies, 

interest groups, and industry 

representatives. The BLM considered 

those comments in developing the final 

rule. 

Final 2008 Rule and This Proposal 

On November 18, 2008, the BLM 

published in the Federal Register the 

final oil shale regulations (73 FR 69414). 

The regulations were required by 

Section 369 of the Energy Policy Act of 

2005 (42 U.S.C. 15927) (EPAct). Section 

369 addresses oil shale development 

and directs the Secretary of the Interior 

(Secretary) to establish regulations for a 

commercial leasing program. The 

Mineral Leasing Act of 1920 (30 U.S.C. 

241(a)) (MLA) also authorizes the BLM 

to lease oil shale resources on BLMmanaged public lands. Additional 

statutory authorities for the 2008 

regulations and for the amendments 

proposed in this notice are: 

(1) Section 32 of the Mineral Leasing 

Act of 1920 (30 U.S.C. 189); 

(2) Section 10 of the Mineral Leasing 

Act for Acquired Lands of 1947 (30 

U.S.C. 359); and 

(3) Section 310 of the Federal Land 

Policy and Management Act (FLPMA) of 

1976 (43 U.S.C. 1740). 

For additional information on the 

ANPR, the 2008 proposed rule, and the 

final rule, please see the abovereferenced Federal Register notices. 

After publication of the final rule in 

2008, the regulations were challenged in 

Federal court. As part of the settlement 

agreement, the BLM agreed to propose 

certain revisions to the regulations, as 

presented below, relating to the royalty 

rate and other environmental protection 

requirements applicable to commercial 

oil shale leasing, in addition to 

clarifying certain other regulatory 

provisions. This proposed rule would 

revise the BLM’s oil shale leasing 

regulations at 43 CFR parts 3900, 3920, 

and 3930. 

Programmatic Environmental Impact 

Statement 

On November 28, 2008, the BLM 

published in the Federal Register a 

Notice of Availability of the Approved 

Resource Management Plan 

Amendments/Record of Decision (ROD) 

for Oil Shale and Tar Sands Resources 

to Address Land use Allocations in 

Colorado, Utah, and Wyoming and the 

Final Programmatic Environmental 

Impact Statement (EIS) (73 FR 72519). 

The amendments and ROD expanded 

the acreage potentially available for 

commercial tar-sands leasing and 

amended 10 Resource Management 

Plans (RMP) in Utah, Colorado, and 

Wyoming to make approximately 1.9 

million acres of public lands potentially 

available for commercial oil shale 

development and 431,224 acres 

potentially available for tar sands 

leasing and development. The oil shale 

resources are found in the Piceance and 

Washakie Basins in Colorado, the 

Uintah Basin in Utah, and the Green 

River and Washakie Basins in Wyoming. 

The tar sands resources are found in 

certain sedimentary provinces in the 

Colorado Plateau in Utah. 

The Programmatic EIS summarized 

information on oil shale and tar sands 

technologies and their potential 

environmental and socio-economic 

impacts, along with potential mitigating 

measures that would be evaluated and 

applied when subsequent site-specific 

National Environmental Policy Act 

(NEPA) analysis is undertaken for lease 

issuance or project approval. 

Concurrently with its review of the 

2008 final oil shale regulations, the BLM 

has undertaken a new public planning 

process related to oil shale and tar 

sands. Specifically, on April 14, 2011, 

the BLM published in the Federal 

Register a Notice of Intent to Prepare a 


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Federal Register / Vol. 78, No. 59 / Wednesday, March 27, 2013 / Proposed Rules 18549 

Programmatic Environmental Impact 

Statement (EIS) and Possible Land Use 

Plan Amendments for Allocation of Oil 

Shale and Tar Sands Resources on 

Lands Administered by the BLM in 

Colorado, Utah, and Wyoming (76 FR 

21003). On February 6, 2012, the BLM 

published in the Federal Register a 

Notice of Availability of the Draft 

Programmatic Environmental Impact 

Statement for Allocation of Oil Shale 

and Tar Sands Resources on Lands 

Administered by the Bureau of Land 

Management in Colorado, Utah, and 

Wyoming (77 FR 5833). In addition to 

announcing the opening of the 90-day 

comment period, the notice provided 

background information on the Draft 

Programmatic EIS and stated that the 

BLM planned to hold public meetings to 

provide an overview of the Draft 

Programmatic EIS, respond to questions, 

and take written comments. 

The BLM held Open House meetings 

during March 2012 to provide 

additional information on the Draft 

PEIS. During the comment period that 

closed on May 4, 2012, approximately 

160,000 comment letters were received. 

Comments on the Draft PEIS received 

from the public and cooperating 

agencies, other federal agencies, as well 

as internal BLM review, were 

considered and incorporated, as 

appropriate, into the proposed plan 

amendments. The proposed plan 

amendments in the Final EIS would 

revise the current land use plans in the 

study area, which describe land 

allocations analyzed in the 2008 PEIS 

and approved in the subsequent Record 

of Decision. 

The BLM published the notice of 

availability of the Final PEIS on 

November 9, 2012. This began both the 

30-day protest period, which ended 

December 10, 2012, and the 60-day 

Governor’s Consistency Review, which 

ended January 9, 2013. 

The BLM received seventeen protest 

letters, including 1 from the State of 

Utah, 5 from county governments, 6 

from industry-affiliated groups or 

companies, and 5 from environmental 

groups. Major protest issues raised by 

government and industry interests relate 

to: the rationale and need for revising 

decisions of the 2008 PEIS; the 

proposed reduction in the amount of 

lands available for leasing; the proposed 

requirement for Research, Development, 

and Demonstration (R, D and D) before 

issuance of commercial leases; the 

consideration of lands with wilderness 

characteristics; the consideration of 

sage-grouse habitat inventories and 

related State policies; and the 

consideration of new oil shale 

technologies in the PEIS analysis. 

Major protest issues raised by 

environmental groups relate to the 

adequacy of the NEPA analysis, 

particularly impacts related to climate 

change, air quality, cultural resources, 

water resources, and cumulative 

impacts. 

The BLM answered the protests on 

March 23, 2013 and responded to the 

Governor’s Consistency Review letters 

on February 6, 2013. The Record of 

Decision (ROD) was signed on February 

22, 2013. 

Oil Shale Research, Development, and 

Demonstration (R, D and D) Program 

First Round 

The BLM’s Oil Shale R, D and D 

program began on June 9, 2005, with a 

call for nominations published in the 

Federal Register (70 FR 33753). The 

BLM received 20 nominations and after 

intense review, six tracts of 160 acres 

each were determined to be suitable for 

R, D and D. These six tracts were 

evaluated under NEPA. On January 1, 

2007, five R, D and D leases were issued 

in Colorado and on July 1, 2007, one 

lease was issued for BLM lands in Utah. 

These were the first R, D and D leases 

issued for public lands and the first 

Federal oil shale leases issued in 35 

years. Most of the six leases are 

currently in various stages of testing and 

research for the potential production of 

oil shale resources. 

Second Round 

On November 3, 2009, the BLM 

published a Notice in the Federal 

Register (74 FR 56867) calling for 

nominations for a second round of oil 

shale R, D and D leasing. The BLM 

received three nominations—two in 

Colorado and one in Utah. The three 

nominations were reviewed by an 

Interdisciplinary Review team to 

determine the: 

(1) Potential for the proposal to 

advance the knowledge of effective 

technology; 

(2) Economic viability of the 

applicant; and 

(3) Means of managing the 

environmental effects of the proposed 

oil shale technology. 

The Interdisciplinary Review Team 

found that all three nominations 

adequately addressed the evaluation 

criteria, and, on October 19, 2010, the 

proponents were notified that their 

nominations would be forwarded for 

NEPA review. The two Colorado tracts 

were evaluated under NEPA and leases 

were issued effective December 1, 2012. 

The Utah nomination was canceled and 

the case closed on December 7, 2012, 

because the proponent failed to initiate 

the NEPA process. 

III. Discussion of the Proposed Rule 

This proposed rule provides the BLM 

with an opportunity to reconsider 

certain portions of the 2008 regulations, 

which were challenged in Federal court. 

As part of the settlement agreement, the 

BLM agreed to propose specific 

revisions to the 2008 regulations, as 

presented below, to address the royalty 

rate and certain environmental 

protection requirements applicable to 

commercial oil shale leasing. 

In this rulemaking proceeding, the 

BLM will consider several options for 

amending the current royalty rates for 

commercial oil shale production. The 

BLM will particularly consider whether 

a single royalty rate or rate structure 

should be set in advance in regulation 

to provide greater certainty to potential 

lessees or whether some administrative 

flexibility may be retained to make 

adjustments to royalty terms after more 

is known about the costs and resource 

impacts associated with emerging oil 

shale technologies, whether future 

applications to lease should include 

specified resource-protection plans, and 

whether other aspects of the regulations 

should be clarified. 

The proposed revisions are intended 

to clarify specific provisions, to ensure 

that the royalty rate provides a fair 

return to the American taxpayer while 

encouraging the development of Federal 

oil shale resources, and that adequate 

measures are in place to protect the 

environment. 

Section 3903.52 Production royalties 

The Energy Policy Act of 2005 

(Section 369(o)) directs the agency to 

establish royalties and other payments 

for oil shale leases that ‘‘shall 

(1) Encourage development of the oil 

shale and tar sands resources; and 

(2) Ensure a fair return to the United 

States.’’ 

The BLM extensively discussed the 

issue of the royalty rates for commercial 

oil shale production in the preamble to 

the 2008 oil shale rules. See 73 FR at 

69419–69429. Those rules, which are 

currently in effect, set the royalty rate at 

5 percent for the first 5 years of 

commercial production and increases it 

by 1 percent each year starting with the 

sixth year of commercial production, 

reaching a maximum royalty rate of 12 

1⁄2 percent in the thirteenth year of 

commercial production. 

Notwithstanding the 2008 analysis, 

there are some concerns that cause the 

BLM to revisit the issue. On the one 

hand, the Federal lands open for oil 

shale leasing in Colorado, Utah, and 

Wyoming have, in many locations, vast 

quantities of oil shale per surface acre. 


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18550 Federal Register / Vol. 78, No. 59 / Wednesday, March 27, 2013 / Proposed Rules 

If the royalty rates were set too low and 

the industry were to develop a highly 

efficient technology, then there could be 

immense private profits from Federal oil 

shale leases without a fair return to the 

American people. 

On the other hand, as has been 

previously explained, oil shale is a class 

of rocks such as marlstone containing 

not oil, but kerogen. See 73 FR 69414. 

Oil shale is not like any of the shales or 

‘‘tight’’ formations found in many parts 

of the United States that contain oil or 

gas that can be produced by hydraulic 

fracturing. All known technologies to 

convert the kerogen to liquid 

hydrocarbons require significant 

amounts of energy. Thus, there is a 

reasonable likelihood that developers 

will continue to view commercial oil 

shale production as a more expensive 

prospect than competing conventional 

oil and gas projects. If the royalty rates 

are set too high, they could discourage 

development of the oil shale resources. 

None of the R, D and D leases issued 

in 2006 and 2007 have yet demonstrated 

a commercially viable technology. The 

recently issued R, D and D leases are 

probably years away from 

demonstrating technologies. Although 

there are entities conducting various 

types of activities on other oil shale 

lands in the United States, the BLM 

does not have data showing that oil 

shale development is commercially 

viable at this time. Thus, even though 

the existing royalty rates might be 

appropriate for the oil shale industry 

when it comes into being, at present the 

BLM is faced with uncertainty. 

Pursuant to the settlement agreement, 

the BLM is proposing to remove the 

royalty rates currently in section 

3903.52(b). Additionally, the BLM is 

proposing that the royalty rate will be 

set by the BLM in the notice of sale or, 

for R, D and D conversion, it will be 

established by the Secretary of the 

Interior. The BLM has not yet made a 

decision on what would replace the 

current rule’s royalty rates, but rather is 

seeking comment on several different 

options as set forth below. 

Option 1. Invite Comment on Proposed 

Lease Terms in a Proposed Notice of 

Lease Sale 

Under this option, the BLM would 

first publish a proposed notice of sale or 

conversion to a commercial lease for a 

period of not less than 30 days. That 

proposed notice would include all 

proposed lease terms and stipulations, 

including proposed royalty and rental 

rates. It also would include an 

explanation of how the BLM determined 

the proposed royalty rate. This would 

give interested parties and the public an 

opportunity to comment on all the 

proposed terms, including the proposed 

royalty rate. Under this option and so as 

to allow adequate time for both 

comment and consideration of the 

comments, the BLM would amend 

Section 3924.5 to require at least 60 

days between publication of the 

proposed notice of sale and the notice 

of sale. 

Option 2. Invite Public Comment Using 

Coal Lease Sale Process 

As an alternative to publishing a 

proposed notice of sale, the BLM 

specifically seeks comments on a 

possible alternative procedure that 

would be modeled after a provision in 

the Federal coal leasing regulations at 

43 CFR 3422.1. Instead of publishing a 

proposed notice of sale, the BLM would, 

at least 30 days before the notice of sale, 

solicit public comment on the fair 

market value of, and expected recovery 

from, the oil shale lands proposed to be 

offered for lease and on what royalty 

rate and other lease terms or 

stipulations commenters believe should 

be required. The authorized officer 

would prepare a report evaluating the 

comments and containing his or her 

recommendations for the minimum bid 

and for the royalty rate and other lease 

terms to be included in the leases 

offered. 

Option 3. Sliding Scale Royalty Based 

on the Market Prices of Oil and Gas 

In the 2008 proposed oil shale rule, 

the BLM considered and sought 

comment on a sliding scale royalty. That 

approach was not adopted in the final 

2008 rule, but in light of the need to 

reconsider the existing royalty rates 

under the terms of the settlement, we 

would like to reconsider this option and 

are seeking public comment on the best 

approach to implementing a sliding 

scale royalty structure. 

Although the BLM has expressed 

concerns in the past about the 

complexity of administering certain 

sliding scale royalty proposals, we 

recognize that a sliding scale royalty 

could prove useful in meeting the dual 

goals of encouraging production and 

ensuring a fair return to taxpayers from 

future oil shale development. 

One of the concerns that has been 

expressed regarding oil shale 

development is that potential oil shale 

developers may be reluctant to make the 

large upfront investments required for 

commercial operations if they believe 

there is a chance that crude oil prices 

might drop in the future below the point 

at which oil shale production would be 

profitable (i.e., competitive with 

conventional oil production). A sliding 

scale royalty system could allow the 

government to at least partially mitigate 

this development risk by providing for 

a lower royalty rate if crude oil prices 

fall below a certain price threshold. 

The basic concept is that in return for 

the government accepting a greater 

share of the price risk that an operator 

faces when prices are low (in the form 

of a lower royalty), the government 

would receive a greater share of the 

rewards (through a higher royalty) when 

prices are high. 

The BLM has not decided on the 

specific parameters of a sliding scale 

royalty system, but is considering a 

simplified two- or three-tiered system 

based on the current royalty rates 

already in effect for conventional fuel 

minerals. The applicable royalty rate 

would be determined based on market 

prices of competing products (e.g., 

crude oil and natural gas) over a certain 

time period. In a two-tiered system, if 

prices remain below a certain point 

during the applicable period, the royalty 

rate on oil shale products would be the 

lower of two options. If prices are above 

that range for the period, a higher 

royalty would be charged. In a threetiered system, a third royalty rate would 

apply if prices rise above a second price 

threshold during the applicable period. 

The BLM seeks comment on the 

specific parameters that could be 

applied to a sliding scale royalty system, 

should the BLM choose to adopt such a 

system in the final rule. More 

specifically, the BLM would like 

feedback on the following questions: 

1. Should a sliding scale system 

include two or three tiers? What would 

be appropriate royalty rates under a 

two-tiered system recognizing the dual 

goals of encouraging production and 

achieving a fair return to the 

government? What rates would be 

appropriate for a three-tier system? 

2. What are appropriate price 

thresholds to apply to each tier? Should 

the thresholds be fixed (in real dollar 

terms), or should they float relative to a 

published index? 

3. Should the sliding scale apply to all 

products, or should nonfuel products 

pay a traditional flat rate? 

4. Are there other ways to simplify a 

sliding scale royalty system so as to 

reduce the administrative costs for the 

BLM, the Office of Natural Resources 

Revenue, and producers while still 

providing a reasonable assurance that 

the public is receiving its fair share of 

revenue from production? 


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Federal Register / Vol. 78, No. 59 / Wednesday, March 27, 2013 / Proposed Rules 18551 

Option 4. Establish a Minimum Royalty 

of 12.5% in Regulation, With Secretarial 

Flexibility To Establish a Higher Rate 

Later 

Under this option, a minimum royalty 

of 12.5% would be established to 

address concerns about the existing rate 

and implement the terms of the 

settlement agreement. The minimum 

royalty rate at 12.5%, the same rate as 

currently applied in the BLM’s oil and 

gas program, is being considered as it is 

contemplated that the primary products 

produced from oil shale will compete 

directly with those from onshore oil and 

gas production. However, the Secretary 

would have the authority to establish a 

higher rate, if determined to be 

appropriate, without completing a new 

rulemaking. This option would provide 

flexibility for the Secretary to adapt and 

respond accordingly to new 

information, such as emerging oil shale 

technologies and future oil shale 

production cost information, and 

changes to the price of this commodity, 

in order to help assure a fair return to 

the United States. Establishing a 

minimum royalty would be consistent 

with how other conventional fuels (e.g., 

oil, gas, and coal) are treated under 

existing statutes and regulations. 

In order to promote transparency in 

connection with the proposed change to 

allow a higher royalty rate to be 

established at a later time, the BLM 

would add a requirement to first publish 

a proposed notice of sale. That proposed 

notice would include all proposed lease 

terms and stipulations, including 

proposed royalty and rental rates. It also 

would include an explanation of how 

the BLM determined the proposed 

royalty rate. 

The notice would invite comment on 

the proposed lease terms for a period of 

not less than 30 days. This would give 

interested parties and the public an 

opportunity to comment on all the 

proposed terms, including the proposed 

royalty rate. So as to allow adequate 

time for both comment and 

consideration of the comments, the BLM 

would require at least 60 days between 

publication of the proposed notice of 

sale and the notice of sale. 

The BLM also invites comments on 

variations of the aforementioned 

options, including setting a minimum 

royalty rate as part of options 1 and 2 

or not setting a minimum royalty rate, 

as well as any other royalty systems 

rates that would meet the dual 

requirements of the EPAct to encourage 

production and ensure a fair return to 

the public. Comments with technical 

economic data and analysis would be 

most useful. The final rule will include 

a royalty provision that will be informed 

by public comments the BLM receives 

as a result of this proposed rule. 

Section 3925.10 Award of Lease 

Section 3925.10(a) currently provides 

that a lease will be awarded to the 

qualified bidder submitting the highest 

bid that meets or exceeds the BLM’s 

estimate of fair market value (FMV). The 

section would be revised by substituting 

the word ‘‘may’’ for the word ‘‘will’’ in 

the first sentence to clarify that issuing 

a lease is a discretionary action on the 

part of the BLM, rather than mandatory. 

In the case of a competitive lease sale, 

the BLM may award a lease to the 

highest qualified bidder, but has no 

obligation to do so (see 30 U.S.C. 

241(a)(1). 

Paragraph (a) would also be revised to 

add that the BLM would not issue a 

commercial lease unless it determines 

that oil shale operations could occur 

without unacceptable environmental 

risk (UER). This proposal is one of those 

required by the settlement agreement. 

Conditioning the issuance of a 

commercial oil shale lease on the BLM’s 

determination that operations could 

occur without UER would add a new 

standard for lease issuance. The 

paragraph would also be revised to add 

the requirement that commercial oil 

shale leases would be issued only under 

the procedures in 43 CFR part 3900. 

In addition, the BLM proposes to 

employ the UER standard in the context 

of approval of a Plan of Development 

(POD), as described in section 

3931.10(e), as well as in the context of 

conversion of an R, D and D lease to 

commercial operations, as described in 

section 3926.10(c)(6). 

The MLA grants the Secretary, as the 

Federal land manager, wide latitude in 

decision making with regard to all 

leasable minerals. Under the MLA, the 

decision to withhold issuance of a 

minerals lease is discretionary, and 

need not be based upon any particular 

standard contained in the regulations. 

Under FLPMA section 302(b), the 

general environmental standard for 

managing the public lands is the 

prevention of unnecessary or undue 

degradation (UUD). The UER standard 

proposed in this rule would be one basis 

for exercising the Secretary’s statutory 

discretion under the MLA and would be 

in addition to the UUD standard. It 

would not, however, be the only 

possible basis for withholding lease 

issuance, because the Secretary 

continues to retain his statutory 

discretion in awarding new leases. 

The proposed UER standard should 

not be confused with assessment or 

regulation of environmental risk by any 

other agency, acting under any other 

statutory or regulatory authority. For 

instance, the public might be most 

familiar with the risk assessments that 

provide the framework for human 

health and ecosystem health evaluations 

developed by the Environmental 

Protection Agency (EPA) under laws 

that govern hazardous or toxic 

substances. Such risk assessments 

characterize the probability of adverse 

effects from exposure to environmental 

stressors and differ from the proposed 

UER standard in that they are 

quantitative characterizations derived 

from scientific processes that use 

statistical and biological models to 

calculate numerical estimates of 

ecological and health risks. See Office of 

Emergency and Remedial Response, 

U.S. EPA, Risk Assessment Guidance for 

Superfund Volume I Human Health 

Evaluation Manual (Part A) Interim 

Final (EPA/540/1–89/002) (1989). 

Available at http://www.epa.gov/oswer/ 

riskassessment/ragsa/index.htm. These 

types of risk assessments are required 

under environmental statutes such as 

the Resource Conservation and 

Recovery Act of 1976, as amended 

(RCRA), 42 U.S.C. 6901 et seq., and the 

Comprehensive Environmental 

Response Compensation and Liability 

Act/Superfund Amendments and 

Reauthorization Act (CERCLA/SARA), 

42 U.S.C. 9601 et seq., where they are 

used to characterize the current and 

potential threats to human health and 

the environment from potentially 

hazardous or toxic substances. See e.g., 

CERCLA/SARA Sections 104, 105(a)(2), 

121(b)–(d); 40 CFR 300; EPA, RCRA Risk 

Assessment. http://www.epa.gov/oswer/ 

riskassessment/risk_rcra.htm. Agencies 

such as the Agency for Toxic Substances 

and Disease Registry, within the 

Department of Health and Human 

Services, as well as the Occupational 

Safety and Health Administration 

employ a similar approach with respect 

to the potentially hazardous or toxic 

substances whose use and/or regulation 

is within their purview. 

The BLM’s implementation of the 

UER standard in the management of oil 

shale resources, if adopted, is likely to 

evolve with its application, but in no 

event does the BLM intend to impose 

upon itself the requirement to perform 

a quantitative risk assessment, as a 

threshold to exercising its discretion. A 

quantitative risk analysis under the 

proposed UER standard could be 

difficult in the context of decisions on 

leasing and development where 

pertinent data and information about 

potentially catastrophic events and/or 

the risk of occurrence would not likely 


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be reasonably available. Because of the 

nascent character of the oil shale 

industry and the diverse nature of 

possible environmental concerns 

associated with particular oil shale 

mining operations, risk assessments the 

BLM would prepare are likely to be 

qualitative, and involve uncertainty to a 

greater degree than those developed by 

EPA with respect to specific hazardous 

or toxic substances. To assist it in 

making its determination, the BLM 

intends that the proponent of a 

commercial lease demonstrate that 

future operations would likely occur 

without UER and that appropriate 

mitigation would be available to assure 

that the possible environmental risks 

remain low. 

As an alternative to the proposed UER 

standard, the BLM also specifically 

requests comments on whether 

‘‘unacceptable environmental 

consequences’’ (UEC) might be a more 

appropriate standard for issuance of 

commercial leases in proposed section 

3925.10(a), for conversion of R, D and D 

leases in section 3926.10, and for 

approval of plans of development in 

section 3931.10. The standard for 

conversion in the eight existing R, D and 

D leases is that commercial operations 

can occur without UEC. That language 

originates with a Federal Court of 

Appeals decision concerning NEPA. See 

Sierra Club v. Peterson, 717 F.2d 1409, 

1415 (D.C. Cir. 1983). However, while 

the BLM considers the environmental 

consequences of its proposed actions, 

UEC has not been defined or employed 

as a standard for decision-making by the 

BLM. It should be noted here that the 

UEC standard in R, D and D leases 

would not be interpreted to require the 

BLM, before it could deny a lease 

conversion or disapprove a Plan of 

Development (POD), or condition its 

approval, to prove that unacceptable 

consequences would ‘‘with certainty’’ 

occur. Rather than imposing a burden 

upon the BLM to establish a 

proposition, the alternative proposal 

would require the applicant for a lease 

conversion or POD approval to 

demonstrate that the proposed 

operations associated with the lease or 

plan would not likely result in UEC. 

To assist in our decision making, the 

BLM also invites comment on whether, 

if UEC were to be adopted as the 

regulatory standard in lieu of UER, 

‘‘environmental consequences’’ should 

be construed consistently with the 

regulations implementing NEPA and be 

limited to impacts which are reasonably 

foreseeable. In addition, we invite 

comment on whether, if UEC were to be 

the regulatory standard, ‘‘environmental 

consequences’’ should be construed 

consistently with the regulations 

implementing NEPA to include 

reasonably foreseeable impacts that 

‘‘have catastrophic consequences, even 

if their probability of occurrence is low, 

provided that the analysis of the 

impacts is supported by credible 

scientific evidence, is not based on pure 

conjecture, and is within the rule of 

reason.’’ (See 40 CFR 1502.22(b)). 

The BLM’s review under either UER 

or UEC could encompass a broad range 

of considerations appropriate for each 

particular proposal, which might 

include such issues as impacts to water 

resources, wildlife, post-abandonment 

land uses, air quality, or greenhouse gas 

emissions including relevant energy 

balance considerations. Note also that 

UER, UEC, or any other threshold used 

in the regulations would not be less 

protective of the public lands than the 

‘‘unnecessary or undue degradation’’ 

standard in Section 302(b) of FLPMA, 

43 U.S.C. 1732(b). 

In fact, in light of the existence of the 

FLPMA statutory standard, the BLM 

may determine that no additional 

substantive standard is necessary, either 

for determining whether or not to issue 

an R, D and D lease, or determining 

whether or not to approve a POD, or 

conversion from an R, D and D lease to 

a commercial lease. 

3926.10 Conversion of an R, D and D 

Lease to a Commercial Lease 

Section 3926.10 provides application 

procedures and requirements to convert 

R, D and D leases, including preference 

rights areas, into commercial leases. 

Paragraph (a) of this section would be 

expanded to clarify that the BLM may, 

in its discretion, deny an application to 

convert an R, D and D lease to a 

commercial lease based on 

environmental or other resource 

considerations. Similarly, paragraph (c) 

of this section would be expanded by 

adding a sentence to clarify that the 

BLM may, in its discretion, deny an 

application to convert an R, D and D 

lease based on environmental or other 

resource considerations. This reference 

to ‘‘other resource considerations’’ 

reflects the wide latitude afforded the 

Secretary’s discretion under the MLA 

and FLPMA, as discussed above. Those 

considerations are likely to depend, in 

large part, on the specifics pertaining to 

each project. Some examples of ‘‘other 

resource considerations’’ might include, 

but are not limited to requirements to: 

(1) Protect and conserve other mineral 

resources which may occur in the same 

lands, such as nahcolite and dawsonite 

in the ‘‘Multi-mineral zone’’ in the 

White River Field Office area, Colorado; 

(2) Honor pre-existing rights, such as 

oil-and-gas leases, mining claims, etc.; 

(3) Achieve the ultimate maximum 

recovery of the mineral resources; (4) 

Prove that commercial quantities of 

shale oil will be produced from the 

lease; (5) Consult with State, local, or 

tribal officials to develop a plan for 

mitigating the socioeconomic impacts of 

commercial development. 

Considering the various examples of 

what constitutes ‘‘other resource 

considerations,’’ it may be helpful to 

further define the term. One alternative 

is to state, ‘‘other resource 

considerations pursuant to the terms of 

that R, D and D lease.’’ The BLM seeks 

comment on this phrase or any other 

language that the public believes adds 

clarity to the term. 

The last sentence of paragraph (c) 

would also be revised by adding the 

words ‘‘in its discretion’’ and 

substituting the word ‘‘may’’ for the 

word ‘‘will.’’ These changes to 

paragraph (c) are intended to clarify that 

approval of conversion of an R, D and 

D lease to a commercial lease is a 

discretionary action on the part of the 

BLM and is, therefore, not mandatory. 

Nothing in EPAct’s provisions 

concerning R, D and D leases requires 

that such leases be converted to 

commercial leases (see 42 U.S.C. 

15927(c)). New paragraphs (c)(6) would 

require that commercial scale operations 

be conducted without UER. 

Section 3931.10 Exploration Plans and 

Plans of Development for Mining and In 

Situ Operations 

Section 3931.10 provides 

requirements for submission of 

exploration plans and PODs. This rule 

would revise paragraph (e) by adding a 

sentence stating that the BLM will not 

approve a POD unless it determines that 

operations under the POD can occur 

without UER. 

Additionally, we propose adding a 

new paragraph (g) to make it clear that 

the BLM may deny a POD based on 

environmental or other resource 

considerations or the BLM may require 

a modification of or condition a POD to 

protect the environment or other 

resources. As noted above, with respect 

to considerations pertaining to 

conversion of R, D and D leases, this 

reference to ‘‘other resource 

considerations’’ as well as, here, ‘‘other 

resources,’’ reflects the wide latitude 

afforded the Secretary’s discretion 

under the MLA and FLPMA, as 

discussed above. The reference is broad 

to reflect that these considerations are 

likely to depend, in large part, on the 

specifics pertaining to each project. 


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Section 3931.11 Content of Plan of 

Development 

Section 3931.11 lists the required 

contents of a POD. This section would 

be revised to include additional 

information that the BLM would require 

in a POD. For instance, in the surface 

management regulations at 43 CFR part 

3809 there is a similar list of specific 

information required; however in most 

program areas, the BLM requests 

detailed information from private 

proponents on a project specific basis in 

order to inform environmental analysis. 

The new requirements would include 

submission of a watershed and 

groundwater-protection plan under new 

paragraph (h); an airshed review under 

new paragraph (i); an integrated wastemanagement plan under new paragraph 

(j); and an environmental-protection 

plan under new paragraph (k). The new 

proposed requirements are intended to 

ensure that adequate measures are in 

place to protect the environment. 

A watershed and groundwaterprotection plan under paragraph (h) 

would require details on how operations 

would be conducted in a manner that 

protects surface and groundwater 

resources from adverse effects on the 

quality, quantity, timing, and 

distribution of water resulting from 

operations, and how monitoring, 

adaptive management, and mitigation of 

adverse impacts would be conducted, 

both during and after operations. 

An airshed review under paragraph (i) 

is a review of the scientific data and 

analyses currently available at a 

reasonable cost relevant to the potential 

effects of commercial oil shale 

operations on the air quality of the 

pertinent airshed. The review would 

require providing the BLM with useful 

information to assess the effects of 

operations on the airshed. 

An integrated waste-management plan 

under paragraph (j) would require 

information on conducting operations in 

a manner that would minimize the 

production of mine waste, and would 

provide for monitoring, adaptively 

managing, and mitigating the impacts of 

waste both during and after operations. 

An environmental protection plan 

under paragraph (k) would be a plan to 

conduct operations in a manner that 

would minimize the adverse effects of 

oil shale operations on the quality of the 

air and water; wildlife and native 

plants; and productivity of soils and to 

also monitor, adaptively manage, and 

mitigate such adverse effects both 

during and after operations. 

These plans and reviews are intended 

to facilitate both better decisions by the 

BLM in reviewing proposed PODs, and 

better environmental performance of 

operations under an approved POD. 

These plans and reviews are likely to be 

necessary to properly analyze a POD 

under NEPA, and thus would be 

required pursuant to 43 CFR 3931.11(k) 

in most if not all cases, even in the 

absence of the proposed amendments to 

section 3931.11. 

IV. Procedural Matters 

Executive Order 12866, Regulatory 

Planning and Review 

Executive Order 12866 requires 

agencies to assess the benefits and costs 

of regulatory actions, and for significant 

regulatory actions, submit a detailed 

report of their assessment to the Office 

of Management and Budget (OMB) for 

review. A rule may be significant under 

Executive Order 12866 if it meets any of 

four criteria. A significant regulatory 

action is any rule that may: 

• Have an annual effect on the 

economy of $100 million or more or 

adversely affect in a material way the 

economy, a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

state, local, or tribal governments or 

communities; 

• Create a serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency; 

• Materially alter the budgetary 

impact of entitlements, grants, user fees, 

or loan programs or the rights and 

obligations of recipients thereof; or 

• Raise novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in the Executive Order. 

The proposed regulation would 

modify the commercial oil shale leasing 

and management regulations that were 

promulgated in 2008. The main 

proposal provisions include changes in 

the royalty applied to production, 

changes in the information required 

prior to authorization, and changes in 

the standards applied to an 

authorization. 

Royalty payments are recurring 

income to the government and costs to 

the operator/lessee. As such, they are 

transfer payments that do not affect total 

resources available to society. Changes 

in the royalty rate have the potential to 

significantly alter the future 

distributional effects; however, they 

would not represent a cost or benefit to 

the economy. OMB defines ‘‘transfer 

payment’’ to include payments to the 

government in addition to the unearned 

payments from the government 

(Economic Analysis of Federal 

Regulations Under Executive Order 

12866, January 11, 1996, http:// 

www.whitehouse.gov/omb/ 

inforeg_riaguide). In addition, the 

definition OMB uses encompasses the 

revenue collected through a fee, 

surcharge, or tax (in excess of the cost 

of any service provided) as a transfer 

payment. Since a royalty is not a 

payment for service, this OMB transfer 

payment definition holds that a royalty 

is a transfer payment and is not to be 

included in the annual effect to the 

economy calculation. Thus, even though 

oil shale royalties may someday amount 

to billions of dollars of annual revenue, 

that revenue is excluded from the 

annual effect to the economy calculation 

because royalties are transfer payments 

for purposes of this analysis and as 

defined in OMB guidance. 

Royalty income is dependent on how 

much oil shale may be produced and 

the market price of the commodity. 

Currently, no oil shale product is being 

commercially produced. However, 

under the existing royalty provision, 

and using the production projections, 

production schedule, U.S. Energy 

Information Administration (EIA) 

reference oil price, and other 

assumptions discussed in the agency’s 

economic analysis, for the period of 

analysis, total royalty payments could 

have a net present value of $4.4 billion. 

This analysis depends on production 

estimates generated by the Task Force 

on Strategic Unconventional Fuels, 

called for in the Energy Policy Act of 

2005. To the extent that conditions 

differ from those assumed by the Task 

Force, actual royalty estimates could be 

significantly different. Given the range 

of uncertainties involved in whether or 

to what extent oil shale development 

may take place in the future, the BLM 

has not attempted to project the 

potential change in these transfer 

payments due to this rule. The amount 

of these transfer payments would also 

be impacted by which, if any, of the 

royalty options presented in the rule is 

ultimately selected for inclusion in the 

final rule. Thus, the BLM cannot at 

present state what the applicable rate 

will be to establish the distributional 

effects. 

In addition to the proposed royalty 

provision, there are a number of 

provisions addressing information and 

standards associated with lease issuance 

and approval of the POD. These changes 

primarily codify in regulation current 

BLM practices, procedures, and 

policies. Assuming compliance with 

existing practices, procedures, and 

policies, there should not be any 

increased costs associated with 

complying with these proposed 

changes. As proposed, the BLM will not 

approve a POD unless it determines that 


srobinson on DSK4SPTVN1PROD with PROPOSALS
18554 Federal Register / Vol. 78, No. 59 / Wednesday, March 27, 2013 / Proposed Rules 

operations under the plan can occur 

without UER. Also under consideration 

is an alternative standard of UEC. How 

either standard would be implemented 

may increase costs to both the BLM and 

the proponent; however, there is no 

practical way to make defensible 

estimates concerning the increased 

costs. 

Based on the available information, 

we estimate the annual effect on the 

economy of the regulatory changes will 

be less than $100 million and will not 

adversely affect in a material way the 

economy, a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

state, local or tribal governments or 

communities. This rule will not create 

inconsistencies or otherwise interfere 

with an action taken or planned by 

another agency. This rule would not 

change the relationships of the oil shale 

programs with other agencies’ actions. 

This rule does not materially affect the 

budgetary impact of entitlements, 

grants, loan programs, or the rights and 

obligations of their recipients. In 

addition, the proposed rules do not raise 

any novel legal or policy issues arising 

out of legal mandates, the President’s 

priorities, or the principles set forth in 

the Executive Order. 

Clarity of Regulations 

Executive Order 12866 requires each 

agency to write regulations that are 

simple and easy to understand. The 

BLM invites your comments on how to 

make these proposed regulations easier 

to understand, including answers to 

questions such as the following: 

1. Are the requirements in the 

proposed regulations clearly stated? 

2. Do the proposed regulations 

contain technical language or jargon that 

interferes with their clarity? 

3. Does the format of the proposed 

regulations (grouping and order of 

sections, use of headings, paragraphing, 

etc.) aid or reduce their clarity? 

4. Is the description of the proposed 

regulations in the SUPPLEMENTARY

INFORMATION section of this preamble 

helpful in understanding the proposed 

regulations? How could this description 

be more helpful in making the proposed 

regulations easier to understand? 

Please send any comments you have 

on the clarity of the regulations to the 

address specified in the ADDRESSES

section. 

Small Business Regulatory Enforcement 

Fairness Act 

For a major rule, as defined by the 

Small Business Regulatory Enforcement 

Fairness Act (SBREFA), the BLM must 

prepare an initial regulatory flexibility 

analysis. For SBREFA, a rule may be 

major if it meets any of three criteria: 

• Have an annual effect on the 

economy of $100 million or more; 

• Create a major increase in costs or 

prices for consumers, individual 

industries, Federal, state, or local 

government agencies, or geographic 

regions; or 

• Have significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or on the 

ability of United States-based 

enterprises to compete with foreignbased enterprises in domestic and 

export markets. 

If determined to be a major rule 

SBREFA requires an agency to prepare 

an analysis when issuing a proposed 

rule that will have a significant impact 

on a substantial number of small 

entities. 

The proposed regulation would 

modify the commercial oil shale leasing 

and management regulations that were 

promulgated in 2008. The main 

proposal provisions include changes in 

the royalty applied to production, 

changes in the information required 

prior to authorization, and changes in 

the standards applied to an 

authorization. 

In addition to the proposed royalty 

provision, there are several provisions 

addressing information and standards 

associated with lease issuance and 

approval of the POD. These changes 

primarily codify in regulation what are 

current BLM practices, procedures, and 

policies. Assuming compliance with 

existing practices, procedures, and 

policies, there should not be any 

increased cost associated with 

complying with these proposed 

changes. As proposed, the BLM will not 

approve a POD unless it determines that 

operations under the plan can occur 

without UER. Also under consideration 

is an UEC standard. How either 

standard would be implemented may 

increase costs to both the BLM and the 

proponent; however, there is no 

practical way to make defensible 

estimates concerning the increased 

costs. 

Based on the available information, 

the BLM estimates the annual effect on 

the economy of the regulatory changes 

will be less than $100 million. This rule 

will not create a major increase in costs 

or prices for consumers, individual 

industries, Federal, state, or local 

government agencies, or geographic 

regions. In addition, this proposed 

regulation will not have any significant 

adverse effects on competition, 

employment, investment, productivity, 

innovation, or on the ability of United 

States-based enterprises to compete 

with foreign-based enterprises in 

domestic and export markets. 

National Environmental Policy Act 

(NEPA) 

The proposed regulatory amendments 

are categorically excluded from the 

requirement to prepare an 

environmental assessment (EA) 

pursuant to the regulations at 43 CFR 

46.205 and 46.210. Nonetheless, the 

BLM has prepared an EA (DOI–BLM– 

WO–3900–2012–0001–EA) to inform the 

decision-maker and the public. The EA 

concludes that this proposed rule would 

not constitute a major Federal action 

significantly affecting the quality of the 

human environment under Section 

102(2)(C) of NEPA, 42 U.S.C. 4332(2)(C). 

A detailed statement under NEPA is not 

required. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

requires agencies to analyze the 

economic impact of proposed and final 

regulations to determine the extent to 

which there is a significant economic 

impact on a substantial number of small 

entities. Executive Order 13272 

reinforces executive intent that agencies 

give serious attention to impacts on 

small entities and develop regulatory 

alternatives to reduce the regulatory 

burden on small entities. When the 

proposed regulation will impose a 

significant economic impact on a 

substantial number of small entities, the 

agency must evaluate alternatives that 

would accomplish the objectives of the 

rule without unduly burdening small 

entities. Inherent in the RFA is a desire 

to remove barriers to competition and 

encourage agencies to consider ways of 

tailoring regulations to the size of the 

regulated entities. 

The Small Business Administration 

(SBA) has developed size standards to 

carry out the purposes of the Small 

Business Act; those size standards can 

be found in 13 CFR 121.201. The SBA 

defines small entities involved in the oil 

and gas industry, which includes oil 

shale, as individuals, limited 

partnerships, or small companies 

considered at ‘‘arm’s length’’ from the 

control of any parent companies, with 

fewer than 500 employees. For firms 

involved in oil and gas field exploration 

services and other field services SBA 

defines a small entity as having annual 

receipts of less than $5 million. 

There are currently no active 

commercial oil shale operations on 

Federal lands. Six firms hold R, D and 

D leases. Of those six companies, three 

are major oil companies, one is a multinational oil shale company, one is a 

small mining company, and one is a 


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small research and development firm. In 

addition to the current make up of those 

firms operating on Federal lands, past 

efforts primarily involved the Federal 

government or large corporations. 

Smaller firms were involved, but their 

involvement was primarily to support 

larger organizations. 

Entities that would be directly 

affected by this commercial oil shale 

leasing rule would include most, if not 

all, firms involved in the exploration 

and development of oil shale resources 

on Federal lands. Such firms are a 

subset of entities involved in the 

domestic oil shale industry. 

The U.S. Census data on firms 

involved in oil shale research, 

exploration, and development by 

number of employees is not available; or 

at least not available in a form that 

allows the BLM to separate those firms 

from the much larger oil and gas 

industry. Information on firms involved 

in the oil shale industry is included in 

the broader categories of Crude 

Petroleum and Natural Gas Extraction, 

Support Activities for Oil and Gas 

Operations, and Petroleum Refineries. 

Within the Crude Petroleum and 

Natural Gas Extraction category, over 98 

percent of the firms have fewer than 500 

employees (U.S. Department of 

Commerce, Economics and Statistics 

Administration, U.S. Census Bureau, 

Number of Firms, Number of 

Establishments, Employment, and 

Annual Payroll by Employment Size of 

the Enterprise for the United States). 

Seventy-five percent of all firms in the 

Petroleum Refineries category had fewer 

than 500 employees. Ninety-two percent 

of the firms involved in providing oil 

and gas field service support had 

average annual receipts of less than $5 

million. This data indicates that the 

preponderance of firms in the domestic 

oil and gas industry are small entities as 

defined by the SBA. 

With technological advances and 

favorable market conditions that will 

support oil shale development, the BLM 

anticipates an increase in the number of 

firms involved in oil shale development. 

However, the number of firms, large or 

small, involved in oil shale 

development on Federal lands will 

likely remain quite limited. Estimates 

for the size of the industry in the next 

30 years range from 3 to 17 operations 

involved in the extracting and retorting 

of shale oil. To put these numbers in 

perspective, in 2009 there were 

approximately 6,500 establishments 

directly involved in the extraction of 

crude oil and natural gas in the United 

States. This count does not include 

establishments primarily engaged in 

performing drilling and support 

activities for oil and gas operations, 

which adds an additional 10,000 more 

establishments to that count. 

The BLM expects that future oil shale 

development will involve both large and 

small firms. If past development efforts 

are an accurate indicator of the future, 

most leasing and development will be 

led by a large, well-capitalized 

organization, supported by smaller 

entities. Given the likely size of the 

industry that may eventually be 

involved in the leasing and 

development of Federal oil shale 

resources, it is our conclusion that this 

rule would not impact a substantial 

number of small entities. 

Oil shale development is 

characterized by high capital investment 

and long periods of time between 

expenditure of capital and the 

realization of production revenues and 

return on investment. Revenues are 

uncertain because future market prices 

for oil shale production and by-products 

are unknown. Therefore, a key 

economic barrier to private 

development is the inability to predict 

when profitable operations will begin. 

The economic risk associated with this 

uncertain outcome is magnified by the 

unusually large capital exposure, 

measured in billions of dollars per 

project, required for development. 

There are significant barriers to oil 

shale development, including 

technological unknowns and potentially 

significant environmental impacts. But 

the proposed regulatory changes, 

including proposed changes to 

production royalties, are not likely to 

impede development or have a 

significant economic impact on lessees 

or operators, regardless of the firm’s 

size. 

The BLM therefore does not anticipate 

the proposed rule to have a significant 

economic impact on a substantial 

number of small entities. 

Unfunded Mandates Reform Act 

In accordance with the Unfunded 

Mandates Reform Act (2 U.S.C. 1501 et 

seq.) the proposed rule would not 

impose an unfunded mandate on state, 

local, or tribal governments or the 

private sector, in the aggregate, of $100 

million or more per year; nor would this 

rule have a significant or unique effect 

on state, local, or tribal governments. 

The rule imposes no requirements on 

any of those entities. Therefore, the 

BLM is not required to prepare a 

statement containing the information 

required by the Unfunded Mandates 

Reform Act. 

Executive Order 12630, Governmental 

Actions and Interference With 

Constitutionally Protected Property 

Rights (Takings) 

This rule is a not a government action 

capable of interfering with 

constitutionally protected property 

rights. A takings implication assessment 

is not required. The rule would not 

authorize any specific activities that 

would result in any effects on private 

property. Therefore, the Department has 

determined that the rule would not 

cause a taking of private property or 

require further discussion of takings 

implications under this Executive 

Order. 

Executive Order 13132, Federalism 

The proposed rule will not have a 

substantial direct effect on the states, on 

the relationship between the national 

government and the states, or on the 

distribution of power and 

responsibilities among the levels of 

government. It would not apply to states 

or local governments or state or local 

governmental entities. The management 

of Federal oil shale leases is the 

responsibility of the Secretary of the 

Interior and the BLM. This rule does not 

alter any lease management or 

regulatory role of the states or the rules 

governing revenue sharing with the 

states. In addition, this rule does not 

impose any costs on the states. 

Therefore, in accordance with Executive 

Order 13132, the BLM has determined 

that this rule does not have sufficient 

Federalism implications to warrant 

preparation of a Federalism Assessment. 

Executive Order 12988, Civil Justice 

Reform 

Under Executive Order 12988, the 

BLM has determined that this proposed 

rule would not unduly burden the 

judicial system and that it would meet 

the requirements of sections 3(a) and 

3(b)(2) of the Order. 

Executive Order 13175, Consultation 

and Coordination With Indian Tribal 

Governments 

In accordance with Executive Order 

13175, the BLM has found that this rule 

may include policies that have tribal 

implications. The rule implements the 

Federal oil shale leasing and 

management program, which does not 

apply on tribal or allotted Indian lands. 

At present, there are no oil shale leases 

or agreements on tribal or allotted 

Indian lands. If tribes or allottees should 

ever enter into any leases or agreements 

with the approval of the Bureau of 

Indian Affairs, the BLM would then 

likely be responsible for the approval of 

any proposed operations on Indian oil 


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18556 Federal Register / Vol. 78, No. 59 / Wednesday, March 27, 2013 / Proposed Rules 

shale leases and agreements. In light of 

this possibility, and because tribal 

interests could be implicated in oil 

shale leasing on Federal lands, the BLM 

has begun consultation on this proposed 

rule with potentially affected tribes and 

will continue consulting during the 

comment period. 

Information Quality Act 

In developing this rule the BLM did 

not conduct or use experiments or 

surveys requiring peer review under the 

Information Quality Act (Section 515 of 

Pub. L. 106–554). 

Executive Order 13211, Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use 

In accordance with Executive Order 

13211, the BLM has determined that the 

proposed rule would not be likely to 

have a substantial direct effect on the 

supply, distribution, or use of energy. 

Executive Order 13211 requires an 

agency to prepare a Statement of Energy 

Effects for a rule that is a significant 

regulatory action under Executive Order 

12866, or any successor order, and is 

likely to have a significant adverse effect 

on the supply, distribution, or use of 

energy. 

As discussed earlier in this preamble, 

under the proposal on future leases, the 

Secretary is considering several options 

for replacing the royalty rate structure 

established by the 2008 final rule. 

Additional information about oil shale 

production may be available in the 

future that would inform the Secretary’s 

decision on royalty rates. The royalty 

rate and other proposed changes are not 

anticipated to have a significant 

negative effect on the economic viability 

of industry or on the nation’s supply, 

distribution, or use of energy. The BLM 

believes the proposed rules would not 

have an adverse effect on the supply, 

distribution, or use of energy, and 

therefore has determined that the 

preparation of a Statement of Energy is 

not required. 

Executive Order 13352, Facilitation of 

Cooperative Conservation 

In accordance with Executive Order 

13352, the BLM has determined that 

this rule would not impede facilitating 

cooperative conservation; takes 

appropriate account of and considers 

the interests of persons with ownership 

or other legally recognized interests in 

the land or other natural resources; 

properly accommodates local 

participation in the Federal decisionmaking process; and provides that the 

programs, projects, and activities are 

consistent with protecting public health 

and safety. The proposed revisions to 

the oil shale regulations are in 

accordance with the terms of settlement 

agreement to a lawsuit relating to the 

2008 final rule. Several of the proposed 

revisions are procedural in nature and 

provide clarification of existing 

provisions. The proposed rule also 

includes new environmental protection 

requirements for plans of development. 

The proposed rule will not affect 

opportunities under existing regulatory 

provisions for governors, state, local, 

and tribal governments to provide 

comments prior to the BLM offering the 

tracts for competitive oil shale leasing. 

Paperwork Reduction Act 

The proposed rule contains 

information collection requirements that 

are subject to review by OMB under the 

Paperwork Reduction Act (PRA) (44 

U.S.C. 3501–3520). The PRA provides 

that an agency may not conduct or 

sponsor, and no response is required 

for, a ‘‘collection of information’’ unless 

it displays a currently valid control 

number. Collections of information 

include any request or requirement that 

an individual, partnership, or 

corporation obtain information, and 

report it to a Federal agency (44 U.S.C. 

3502(3) and 5 CFR 1320.3(c)). OMB has 

approved existing information 

collection requirements associated with 

the 2008 Oil Shale Final Rule, and has 

assigned control number 1004–0201 to 

those requirements. 

In accordance with the PRA, the BLM 

is inviting public comment on proposed 

new information collection activity for 

which the BLM is requesting that OMB 

revise control number 1004–0201, Oil 

Shale Management (43 CFR parts 3900, 

3910, 3920, and 3930) (expiration date 

January 31, 2015; 1,795 burden hours; 

and $526,597 non-hour cost burdens). 

The collection of information under the 

existing and proposed regulations is 

required to obtain or retain a benefit in 

connection with oil shale operations. 

The BLM is requesting an expiration 

date of January 31, 2015, which is the 

same expiration date as the existing 

control number. 

The information collection request for 

this proposed rule has been submitted 

to OMB for review under 44 U.S.C. 

3504(h) of the PRA. A copy of the 

request can be obtained from the BLM 

by telephone request to Mary Linda 

Ponticelli at (202) 912–7115. 

The BLM requests comments to: 

• Evaluate whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the agency, including 

whether the information will have 

practical utility; 

• Evaluate the accuracy of the 

Agency’s estimate of the burden of the 

proposed collection of information, 

including the validity of the 

methodology and assumptions used; 

• Enhance the quality, utility, and 

clarity of the information to be 

collected; and 

• Minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology, 

e.g., permitting electronic submission of 

responses. 

If you wish to comment on the 

information collection aspects of this 

proposed rule, please send your 

comments directly to OMB via fax or 

electronic mail: 

Fax: Office of Management and 

Budget, Office of Information and 

Regulatory Affairs, Desk Officer for the 

Department of the Interior, fax (202) 

395–5806). 

Electronic mail: 

oira_docket@omb.eop.gov. Please 

indicate ‘‘Attention: OMB Control 

Number 1004–0201,’’ regardless of the 

method used to submit comments on 

the information collection burdens. If 

you submit comments on the 

information collection burdens, please 

provide the BLM with a copy of your 

comments by mail, fax, or electronic 

mail: 

Mail: U.S. Department of the Interior, 

Bureau of Land Management, 1849 C 

Street NW. Room 2134LM, Attention: 

Jean Sonneman, Washington, DC. 

20240. 

Fax to: Jean Sonneman at (202) 245– 

0050. 

Electronic mail: 

Jean_Sonneman@blm.gov. 

OMB is required to make a decision 

concerning the collection of information 

contained in this proposed rule between 

30 to 60 days after publication of this 

document in the Federal Register. 

Therefore, a comment to OMB is best 

assured of having its full effect if OMB 

receives it by April 26, 2013. 

The new collections of information in 

the proposed rule would be included in 

revisions to 43 CFR 3931.11, which lists 

the required contents of a plan of 

development. At present, control 

number 1004–0201 authorizes 308 

burden hours and no non-hour costs for 

each plan of development. 

The proposed rule would revise 

section 3931.11 to require the following 

additional information in a plan of 

development: 


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Federal Register / Vol. 78, No. 59 / Wednesday, March 27, 2013 / Proposed Rules 18557 

Proposed section 3931.11(h) would 

add a requirement for a watershed and 

groundwater protection plan: 

(1) To conduct operations in a manner 

that protects surface and groundwater 

resources from adverse effects on the 

quality, quantity, timing and 

distribution of water resulting from 

operations, and 

(2) To provide for monitoring, 

adaptive management, and mitigation of 

adverse impacts, both during and after 

operations. This plan would assist the 

BLM in assessing and managing 

potential impacts on an ongoing basis. 

Proposed section 3931.11(i) would 

add a requirement for a review of the 

scientific data and analyses currently 

available at a reasonable cost, relevant 

to the potential effects of commercial oil 

shale operations on the air quality of the 

pertinent airshed. 

Proposed section 3931.11(j) would 

require an integrated waste management 

plan: 

(1) To conduct operations in a manner 

that minimizes the production of mine 

waste, and 

(2) To provide for monitoring, 

adaptive management, and mitigation of 

adverse impacts, both during and after 

operations. 

Proposed section 3931.11(k) would 

require an environmental protection 

plan: 

(1) To conduct operations in a manner 

that minimizes adverse effects of oil 

shale operations on the: 

(a) Quality of the air and water; 

(b) Wildlife and native plants; and 

(c) Productivity of soils; and 

(2) To provide for monitoring, 

adaptive management, and mitigation of 

adverse impacts, both during and after 

operations. 

The BLM estimates that the watershed 

and groundwater protection plan, 

airshed review, integrated waste 

management plan, and environmental 

protection plan that would be required 

under proposed section 3931.11(h), (i), 

(j), and (k) would each require 10 hours 

to prepare/assemble. The proposed 

revisions to section 3911.11 would 

increase the burden hours associated 

with the plan of development from 308 

hours to 348 hours. 

Authors 

The principal authors of this 

proposed rule are Mitchell Leverette, 

Mary Linda Ponticelli, Larry Jackson, 

and Paul McNutt, Division of Solid 

Minerals (Washington Office) and the 

BLM’s Division of Regulatory Affairs 

(Washington Office). 

List of Subjects 

43 CFR Part 3900 

Administrative practice and 

procedure, Environmental protection, 

Intergovernmental relations, Mineral 

royalties, Oil shale reserves, Public 

lands-mineral resources, Reporting and 

recordkeeping requirements, Surety 

bonds. 

43 CFR Part 3920 

Administrative practice and 

procedure, Environmental protection, 

Intergovernmental relations, Oil shale 

reserves, Public lands-mineral 

resources, Reporting and recordkeeping 

requirements. 

43 CFR Part 3930 

Administrative practice and 

procedure, Environmental protection, 

Mineral royalties, Oil shale reserves, 

Public lands-mineral resources, 

Reporting and recordkeeping 

requirements, Surety bonds. 

Accordingly, for the reasons stated in 

the preamble and under the authorities 

stated below, the BLM proposes to 

amend 43 CFR parts 3900, 3920, and 

3930 as set forth below: 

PART 3900—OIL SHALE 

MANAGEMENT—GENERAL 

■ 1. The authority citation for part 3900 

continues to read as follows: 

Authority: 30 U.S.C. 189, 359, and 241(a), 

42 U.S.C. 15927, 43 U.S.C. 1732(b) and 1740. 

■ 2. Amend § 3903.52 by revising 

paragraph (b) to read as follows: 

Subpart 3903—Fees, Rentals, and 

Royalties 

§ 3903.52 Production royalties. 

* * * * * 

(b) The royalty rate will be set by the 

BLM in the notice of sale as provided in 

section 3924.5(b)(3) of this part or, for 

R, D and D conversion, will be 

established by the Secretary of the 

Interior. 

PART 3920—OIL SHALE LEASING 

■ 3. The authority citation for part 3920 

continues to read as follows: 

Authority: ; 30 U.S.C. 241(a), 42 U.S.C. 

15927, 43 U.S.C. 1732(b) and 1740. 

Subpart 3925—Award of Lease 

■ 4. Amend § 3925.10 by revising 

paragraph (a) to read as follows: 

§ 3925.10 Award of lease. 

(a) The lease may be awarded to the 

highest qualified bidder whose bid 

meets or exceeds the BLM’s estimate of 

FMV, except as provided in § 3924.10. 

The BLM will not issue a commercial 

lease unless it determines that oil shale 

operations can occur without 

unacceptable environmental risk. When 

the BLM determines that the lease 

should be issued, it will provide the 

successful bidder 3 copies of the oil 

shale lease form for execution. 

Commercial oil shale leases will be 

issued only under the procedures in this 

part. 

* * * * * 

Subpart 3926—Conversion of 

Preference Right for Research, 

Development, and Demonstration (R, D 

and D) Leases 

■ 5. Amend § 3926.10 by revising 

paragraph (a) by adding a sentence to 

the end of the paragraph, by revising the 

introductory text of paragraph (c), and 

by adding paragraph (c)(6) to read as 

follows: 

§ 3926.10 Conversion of an R, D and D 

lease to a commercial lease. 

(a) * * * The BLM may, in its 

discretion, deny an application to 

convert an R, D and D lease to a 

commercial lease based on 

environmental or other resource 

considerations. 

* * * * * 

(c) The lessee of an R, D and D lease 

has the exclusive right to acquire any 

and all portions of the preference right 

area designated in the R, D and D lease, 

up to a total of 5,120 acres in the lease. 

The BLM may, in its discretion, deny an 

application to convert an R, D and D 

lease to a commercial lease based on 

environmental or other resource 

considerations. The BLM may approve 

the conversion application, in whole or 

in part, if it determines that: 

* * * * * 

(6) Commercial scale operations can 

be conducted without unacceptable 

environmental risk. 

* * * * * 

PART 3930—MANAGEMENT OF OIL 

SHALE EXPLORATION AND LEASES 

■ 6. The authority citation for part 3930 

continues to read as follows: 

Authority: 25 U.S.C. 396d and 2107, 30 

U.S.C. 241(a), 42 U.S.C. 15927, 43 U.S.C. 

1732(b), 1733, and 1740. 

Subpart 3931—Plans of Development 

and Exploration Plans 

■ 7. Amend § 3931.10 by revising 

paragraph (e) and adding new paragraph 

(g) to read as follows: 


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18558 Federal Register / Vol. 78, No. 59 / Wednesday, March 27, 2013 / Proposed Rules 

§ 3931.10 Exploration plans and plans of 

development for mining and in situ 

operations. 

* * * * * 

(e) All development and exploration 

activities must comply with the BLMapproved POD or exploration plan. The 

BLM will not approve a POD unless it 

determines that operations under the 

POD can occur without unacceptable 

environmental risk. 

* * * * * 

(g) The BLM may deny a POD based 

on environmental or other resource 

considerations, or may require a 

modification of, or condition the POD to 

protect the environment or other 

resources. 

■ 8. Amend § 3931.11 by adding new 

paragraphs (h), (i), (j), and (k) and 

redesignating existing paragraphs (h) as 

(l); (i) as (m); (j) as (n); and (k) as (o). 

§ 3931.11 Content of plan of development. 

* * * * * 

(h) A watershed and groundwater 

protection plan, which is a plan to 

conduct operations in a manner that 

protects surface and groundwater 

resources from adverse effects on the 

quality, quantity, timing, and 

distribution of water resulting from 

operations, and to monitor, adaptively 

manage, and mitigate adverse impacts, 

both during and after operations; 

(i) An airshed review, which is a 

review of the scientific data and 

analyses currently available at a 

reasonable cost relevant to the potential 

effects of commercial oil shale 

operations on the air quality of the 

pertinent airshed. The review must 

provide the BLM with useful 

information to assess the effects of 

operations on the airshed; 

(j) An integrated waste management 

plan, which is a plan to conduct 

operations in a manner that minimizes 

the production of mine waste, and to 

monitor, adaptively manage, and 

mitigate the impacts of waste both 

during and after operations; 

(k) An environmental protection plan, 

which is a plan to: 

(1) Conduct operations in a manner 

that minimizes adverse effects of oil 

shale operations, on the: 

(i) Quality of the air and water; 

(ii) Wildlife and native plants; and 

(iii) Productivity of soils; and 

(2) Monitor, adaptively manage, and 

mitigate such adverse effects both 

during and after operations; 

* * * * * 

Dated: March 22, 2013. 

Tommy P. Beaudreau, 

Acting Assistant Secretary of the Interior, 

Land and Minerals Management. 

[FR Doc. 2013–07052 Filed 3–26–13; 8:45 am] 

BILLING CODE 4310–84–P 


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