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APPENDIX G 

Oil and Gas Lease Issuing Process and Stipulations 

In many places in the Unites States, National Forests lie over geological formations, which do, or 

may, contain oil or natural gas. Private firms purchase “leases” on many of these lands to search 

for oil or gas, to drill exploratory wells, and to extract any oil or gas located below them. 

Lease 

Individuals, associations of citizens, and corporations organized under the laws of the United 

States or any state, are entitled to lease Federal lands for these purposes under authority of the 

Mineral Leasing Act of 1920, as amended, and by the Mineral Leasing Act for Acquired Lands 

of 1947 unless the lands have been specifically withdrawn by the Department of the Interior. 

Leases also may be issued to a legal guardian or trustee on behalf of a minor. Aliens, whose 

country of origin does not deny similar privileges to United States citizens, may hold interest in 

leases, but only through stock ownership of United States corporations that hold leases. Aliens 

may not hold interest in Federal oil and gas leases through units in publicly traded limited 

partnerships. 

The issuance of a lease grants to the lessee the exclusive right to use so much of the leased lands 

as is necessary to explore for, drill for, mine, extract, remove, and dispose of all the oil and gas 

(except helium) in the leasehold subject to stipulations attached to the lease; restrictions deriving 

from specific, nondiscretionary statutes; and such reasonable measures as may be required by the 

authorized officer to minimize adverse impacts to other resource values, land uses or users not 

addressed in the lease stipulations at the time operations are proposed. To the extent consistent 

with lease rights granted, such reasonable measures may include, but are not limited to, 

modification to siting or design or facilities, timing of operations, and specifications of interim 

and final reclamation measures. At a minimum, measures shall be deemed consistent with the 

lease rights granted provided that they do not require relocation of proposed operations by more 

than 200 meters, require that operations be sited off the leasehold, or prohibit new surface 

disturbing operations for a period in excess of 60 days in an lease year (43 CFR 3102.1-2). 

Competitive and Noncompetitive Leases 

Competitive and noncompetitive leases may be obtained for oil and gas exploration and 

development on lands owned or controlled by the Federal government. The Leasing Reform Act 

of 1987 requires all public lands available for oil and gas leasing to be offered first by 

competitive leasing at an oral auction. Noncompetitive leases may be issued only if the 

competitive process results in no bids. Competitive and noncompetitive leases are issued for a 

ten-year period. Both are extended for the duration that they are producing oil and gas in paying 

quantities. The maximum competitive lease size is 2,560 acres in the “lower” 48 state and 5,760 

in Alaska. The maximum noncompetitive lease size is 10, x0 acres in all states. 
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Competitive Leases 

The Bureau of Land Management (BLM) conducts oral auctions for oil and gas leases on at least 

a quarterly basis, when there are available parcels of land. A Notice of Competitive Lease Sale 

lists lease parcels to be offered at auction. The Sale Notice is published at least 45 days before 

the date of the auction. The Sale Notice identifies any lease stipulations to uses or restrictions on 

surface occupancy. There are three sources for Federal lands available for lease: 

(1) existing leases that have expired, and leases that have been terminated, canceled, or 

relinquished, 

(2) parcels identified by informal expressions of interest from either the public or BLM 

for management reasons, and 

(3) lands included in offers filed for noncompetitive leases (effective January 3, 1989). 

On the day of the auction, successful bidders must submit a properly executed lease bid form and 

make a payment consisting of an administrative fee ($75 per parcel), one-year advance rental 

($1.50 per acre), and not less than the $2.00 per acre minimum bonus. The balance of the bonus 

bid must be received within ten working days of the auction. The bid form constitutes the legally 

binding lease offer. 

Noncompetitive Leases 

Noncompetitive leases may be issued only for parcels that have been offered competitively and 

failed to receive a bid. Lands in expired, terminated, cancelled, or relinquished leases are not 

available for noncompetitive leasing until they have been offered competitively. After an 

auction, all lands that were offered competitively without receiving a bid are available for filing 

of noncompetitive offers for a period of two years. 

Noncompetitive offers must be submitted on a BLM-approved form, and they must include a $75 

filing fee, and one-year advance rental ($1.50 per acre). 

Noncompetitive lease offers filed on the first business day following the auction are considered 

as having been filed simultaneously. The priority among multiple offers received on the first 

business day for the same parcel are determined by drawings open to the public. 

Lease Restrictions 

A lease does not convey an unlimited right to explore or an unlimited right to develop any oil or 

gas resources found under the land. Leases are subject to terms and conditions. These are 

restrictions derived from legal statutes and measures to minimize adverse impacts to other 

resources and are generally characterized in a lease as stipulations. Stipulations modify the 

rights the government grants to a lessee. The stipulations are known by potential lessees prior to 

any sale and must be applied at the time of Application for Permit to Drill (APD). 
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Standard Lease Terms

The Standard Lease Terms are contained in Form 3100-11, Offer to Lease and Lease for Oil and 

Gas, United States Department of the Interior, BLM, June 1988 or later addition (see Appendix 

B). The Standard Lease Terms provide the lessee the right to use the leased land as needed to 

explore for, drill for, extract, remove and dispose of oil and gas deposits located under the leased 

lands. Operations must be conducted in a manner that minimizes adverse impacts to the land, 

air, water, cultural, biological, and visual elements of the environment, as well as other land uses 

or users. Federal environmental protection laws such as the Clean Water Act, Endangered 

Species Act, and Historic Preservation Act, will be applied to all lands and are included in the 

standard lease stipulations. If threatened or endangered species, objects of historic, cultural, or 

scientific value, or substantial unanticipated environmental effects are encountered during 

construction, all work affecting the resource will stop and the land management agency will be 

contacted. Surface-disturbing operations that would destroy or harm these species or objects are 

prohibited. 

Standard Lease Terms provide for reasonable measures to minimize adverse impacts to surface 

resources. These include, but are not limited to, modifications to the siting or design of facilities, 

timing of operations, and specifications of interim and final reclamation measures. Standard 

Lease Terms may not require the lessee to relocate drilling rigs or supporting facilities by more 

than 200 meters, require that operations be sited off the leasehold, or prohibit new surfacedisturbing operation for more that 60 days each year (43 CFR part 3101.I-2). 

The lease requires that the lessee meet stipulation conditions or avoid activities within all, or an 

identified part, of the leasehold. All leases on National Forest System lands contain the 

“Stipulation for Lands of the National Forest System Under Jurisdiction of Department of 

Agriculture,” requiring the lessee to comply with the rules and regulations of the Department of 

Agriculture. All leases are subject to regulations and formal orders of the Secretaries of the 

Interior and Agriculture in effect at the time of issuance. 

Supplemental Stipulations

The Standard Lease Terms can be modified by special or supplemental stipulations attached to 

the lease (43 CFR 3101.I-2 through 3101.I4). Additional special stipulations can be developed 

specifically to meet resource concerns that cannot be mitigated by existing stipulations. The 

following supplemental stipulations have been developed for the Wasatch-Cache National 

Forest. Applicable stipulations will be applied as shown on the leasing alternative maps. 

Section A shows the list of stipulations that apply to identified resources within the Appeal 

Settlement Zone and the area of the 1994 Leasing Decision. Section B shows the stipulations that 

apply to the Appeal Settlement Zone. Section C shows the stipulations that apply to the area of 

1994 Leasing Decision

 
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SECTION A: 

Stipulations that apply to identified resources within the Appeal Settlement Zone and the 

area of the 1994 Leasing Decision 

RESOURCE: Elk Calving Areas 

Stipulation: Timing Limitation 

Objective: To preclude the commencement of surface disturbing activities within the elk 

calving area that could cause increased stress and/or displacement of animals 

during the critical time period (May 1 to June 30). 

RESOURCE: Elk Winter Range 

Stipulation: Timing Limitation 

Objective: To preclude the commencement of surface disturbing activities within the elk 

winter range that could cause increased stress and/or displacement of animals 

during the critical time period (November 15 to April 30). 

RESOURCE: Elk Spring Use Area 

Stipulation: Timing Limitation 

Objective: To preclude the commencement of surface disturbing activities within the elk 

Spring use area that could cause increased stress and/or displacement during the 

critical time period (May 1 to June 30). 

RESOURCE: Moose Winter Range 

Stipulation: Timing Limitation 

Objective: To preclude the commencement of surface disturbing activities within the moose 

Winter range that could cause increased stress and/or displacement of animals 

during the critical time period (November 15 to April 30). 

RESOURCE: Bighorn Sheep Lambing Area 

Stipulation: Timing Limitation 

Objective: To preclude the commencement of surface disturbing activities within the bighorn 

sheep lambing area that could cause increased stress and/or displacement of 

animals during the critical time period (May 1 to June 30). 

RSOURCE: Sensitive Wildlife Species 

Stipulation: Controlled Surface Use – a survey would be required prior to surface disturbing 

activities to determine the possible presence of any sensitive wildlife species and 

operations be designed and/or located so as to not adversely affect the viability of 

the species. (A Controlled Surface Use stipulation requiring surveys for sensitive 

wildlife species will be included in all leases because the extent of these species 

has not yet been mapped.) 

Objective: To ensure that proposed activities do not adversely affect the viability of a 

wildlife species. 

RESOURCE: Sensitive Plants 
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Stipulation: Controlled Surface Use – a survey would be required prior to surface disturbing 

activities to determine the possible presence of any sensitive plant species and 

operations be designed or located so as to not adversely affect the viability of the 

plant species. (A Controlled Surface Use stipulation requiring surveys for 

sensitive plant species will be included in all leases because the extent of these 

species has not yet been mapped.) 

Objective: To ensure that proposed activities do not adversely affect the viability of a plant 

species. 

RESOURCE: Geologic Hazards and Unstable Soils 

Stipulation: Controlled surface Use 

Objective: To require that activities be located and or designed to avoid or minimize the 

potential for adverse effects to unstable areas and to ensure that the area can be 

reclaimed. 

RESOURCE: Slopes >40% 

Stipulation: No Surface Occupancy 

Objective: To preclude construction of well sites and related facilities such as tank batteries 

on slopes over 40% that would involve relatively large cut and fill slopes and 

would be difficult to rehabilitate. 

RESOURCE: Riparian Areas >40 acres 

Stipulation: No Surface Occupancy 

Objective: To preclude surface disturbing activities and protect riparian areas. 

RESOURCE: Wetland Areas >40 acres 

Stipulation: No Surface Occupancy 

Objective: To preclude surface disturbing activities and protect jurisdictional wetlands 

relative to Executive Order 11990. 

SECTION B: 

The following stipulations apply to the Appeal Settlement Zone 

RESOURCE: Backcountry Recreation (Management Prescription 4.1 in areas of high quality 

backcountry recreation values) 

Stipulation: No Surface Occupancy 

Objective: To maintain backcountry non-motorized recreation opportunities in remote and 

isolated settings with the environment in a near-natural state. 

RESOURCE: Backcountry Recreation (Management Prescription 4.1 and 4.2) 

Stipulation: Controlled Surface Use – This stipulation would be required in areas where there 

is a desire to provide nonmotorized recreation opportunities yet allow industry 

more flexibility in developing oil and gas reserves. Proposed activities would be 

required to be located and/or screened away from dispersed use camping areas 

and trails and important viewpoints. Restoration of any site-disturbing activities is 

required after operations have ceased. 
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Objective: To maintain nonmotorized recreation opportunities in remote settings. 

RESOURCE: Undeveloped Lands (Management Prescription 2.6) 

Stipulation: No Surface Occupancy 

Objective: To protect undeveloped landscapes and assure that the unique qualities associated 

with these areas are recognized and preserved. 

RESOURCE: Scenery Management System 

Stipulation: Controlled Surface Use – proposed activities would be required to be located 

and/or designed to meet Naturally Appearing landscape character theme and high 

scenic integrity objective. 

Objective: To maintain the highly valued scenic quality of the area. 

RESOURCE: Scenery Management System 

Stipulation: Controlled Surface Use – proposed activities would be required to be located 

and/or designed to meet Naturally Appearing landscape character theme and 

moderate scenic integrity objective. 

Objective: To maintain the highly valued scenic quality of the area. 

RESOURCE: Eligible Wild and Scenic River Corridor 

Stipulation: Controlled Surface Use – proposed activities would be required to protect 

identified outstandingly remarkable value(s) until such time the Suitability is 

determined. 

Objective: To maintain identified outstandingly remarkable value(s) 

SECTION C: 

The following stipulations apply to the area of the 1994 Leasing Decision. In the case of 

Visual Quality Objectives, they will be replaced with Scenery Management System 

stipulations. 

RESOURCE: Retention Visual Quality Objectives 

Stipulation: Controlled Surface Use – proposed activities would be required to be located 

and/or designed to meet the visual quality objective of retention within one year 

of commencing operations. 

Objective: To ensure that the visual quality of the area is maintained. 

RESOURCE: Partial Retention Visual Quality Objective 

Stipulation: Controlled Surface Use – proposed activities would be required to be located 

and/or designed to meet the visual quality objective of partial retention within one 

year of commencing operations. 

Objective: To maintain the highly valued scenic quality of the area. 

RESOURCE: Developed Campgrounds and Trailheads 

Stipulation: No Surface Occupancy 

Objective: To precludes surface occupancy and new surface disturbing activities within 

developed recreation sites. 
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Wasatch-Cache National Forest G - 7 

RESOURCE: Administrative Sites 

Stipulation: No Surface Occupancy 

Objective: To preclude surface occupancy and new surface disturbing activities within 

administrative areas. 

 

The Staged Decision Process 

The legally required, staged-decision process is designed to accommodate the tentative nature of 

oil and gas exploration and development. Exploration for oil and gas resources is costly and 

speculative. Firms must commit costly equipment, purchase a variety of land rights and use 

expensive environmental protection technologies to begin exploration for oil and gas. Driven by 

pressures to be efficient and minimize risk, the nature of the enterprise has evolved over decades 

into a form in which exploration and development requires long-term planning by many loosely 

associated, mutually dependent industries. There is no guarantee that the expensive commitment 

of exploratory resources will result in a discovery of oil or gas as only about 15 percent of 

exploratory wells drilled in the United States result in a paying discovery of oil or gas. 

Consequently, companies or individuals pursuing oil and gas must be able to plan in advance to 

most efficiently use their exploratory resources. One tactic they rely on to stage commitments of 

their own resources is the purchase of public land leases. Developers want to know what lands 

are available for exploration and development and they want to be assured of continued future 

opportunities. Leasing of public lands is a way to do this. 

However, those purchasing leases do not automatically or immediately drill exploratory wells on 

these leaseholds. In any given time period, exploration firms must match geologic 

characteristics with the commitment of technology, capital, available equipment, and market 

conditions in a decision to risk a drilling operation. As a result, Federal land leases are bought, 

relinquished, expire, and may be bought and sold again many times without ever being drilled 

upon. This demonstrates a major distinction between oil and gas leasing and other activities that 

are authorized by the Forest Service. Most activities are reasonably certain to proceed to 

development after the permit or contract is issued. Even though there is great uncertainty at the 

time of lease authorization as to whether a well will be drilled and, if so, when and where, the 

effects of a typical well in a given location can be estimated reliably on the basis of past 

experience. 

The Federal government wants to respond to industry concerns, but must ensure that future 

activities will neither unduly harm the environment nor unduly interfere with other uses of these 

public lands. A regulatory framework has been created to meet industry’s needs while protecting 

other resources. The regulations include staged permitting of oil and gas exploration and 

development. Those stages include public disclosure at the following decision points: (1) the 

determination of lands available for leasing, (2) the leasing specific lands decision, (3) 

Application for Permit to Drill, and (4) analysis of field development if production is established. 

The staged process is designed to minimize the risk of making a decision that could lead to 

undisclosed irreversible or irrevocable environmental impacts. Each decision is based on 
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Wasatch-Cache National Forest G - 8 

environmental analysis and disclosure of the probable effects in accord with NEPA. Each 

decision is appealable to the responsible Federal agency. 

The United State Supreme Court in Robertson v. Methow Valley Citizens Council, 104 L.Ed.2d 

351 (1989), upheld the use of more than one stage of NEPA Compliance after a Forest Plan is 

issued. In the Methow Valley situation, there was a permit stage (which allowed no grounddisturbing activities) and a faster development plan stage that involved another NEPA process 

and decision by the Government before environmental effects would be experienced. This is 

very similar to the situation that is involved here. 

Stage One – Lands Available for Leasing

The decision regarding lands available for leasing is based on disclosure and analysis provided in 

a “Leasing Analysis.” No rights are granted by the government to other parties when the 

Leasing Analysis is completed and the decision described in 36 CFR 228.102(d) is made. This 

EIS was prepared to satisfy the requirements of NEPA for the Leasing Analysis. 

The decision will identify which, if any, lands will be available for leasing. The Forest Plans 

will be amended, if necessary, at the time so that the decisions made on the basis of this EIS will 

be consistent with the Forest Plans. 

State Two – Leasing Decisions for Specific Lands

The Leasing Reform Act also provides for consent by the Forest Service for the issuance of oil 

and gas leases for specific lands. The regulations implementing the Leasing Reform Act require 

the following before consent can be given for one or more leases to by issued by the BLM: 

• verifying that oil and gas leasing on the specific lands has been adequately addressed in a 

NEPA document, and is consistent with the Forest Plans 

• ensuring that conditions of surface occupancy identified in section 228.102(c)(1) are 

properly included as stipulations in resulting leases 

• determining that operations and development could be allowed somewhere on each 

proposed lease, except where stipulations would prohibit all surface occupancy 

Stage Three – Application for Permit to Drill

This document, and its Record of Decision, do not authorize any ground-disturbing activities. 

Subsequent to lease award, the activities will be proposed through an APD and SUPO submitted 

to the Forest Service for approval. The Forest Service will analyze environmental effects of the 

proposed operations and issue a decision document. The Forest Service decision to approve or 

not approve the SUPO is forwarded to the BLM for incorporation into their decision of whether 

of not to approve the APD. 
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If modification or changes in the APD are needed, based on drilling conditions encountered or 

some other unforeseen circumstance, the operator submits a Sundry Notice to the BLM for 

review and approval. If the change involves surfaced disturbance or potential affects on surface 

resources, a copy is forwarded to the Forest Service for approval or comment. Depending on the 

extent and nature of the change additional NEPA analysis may be necessary. 

Stage Four – Field Development Plan

If economically recoverable quantities of oil and gas resources are found through exploratory 

drilling, industry may submit a field development plan after evaluation of the discovery well and 

available geologic information. The Forest Service in cooperation with the BLM would analyze 

the environmental effects associated with the proposed field development and identify 

reasonable and necessary mitigation measures. Specific well sites and access routes may not be 

known at the time the field development plan is analyzed in which case additional NEPA 

analysis tiered to the field development plan may be necessary once a specific well is proposed.