**ENVIRONMENTAL ASSESSMENT**
**DOI -**  **BLM -**  **WO -**  **3900 -**  **201 2**  **- 0001**  **- EA** 

**PROPOSED RULE OIL SHALE MANAGEMENT**  **TITLE 43 CODE OF FEDERAL REGULATIONS (CFR)**

**PARTS 3900, 3920 ,**  **and 3930**
**PREPARED BY: Department of**  **the Interior**  **Bureau of Land Management Washington Office,**  **WO -**  **320 20 M Street, SE**  **Washington, DC 20003 March**  **201 3** 2

**INTRODUCTION** On November 18, 2008, the Bureau of Land Management ( BLM ) published in the Federal Register the F inal O il S hale C ommercial L easing regulations (73 FR 69414). Those regulations were required b y the Energy Policy Act of 2005 (EPAct) (42 U.S.C. 15927), which became law on August 8, 2005. On January

16, 2009, a lawsuit , Colorado Environmental Coalition v. Salaza r , challenging parts of the F inal O il S hale Commercial Leasing regulations , was filed in the United States District Court for the District of Colorado. A settlement agreement was signed on February 15, 2011. As part of the settlement agreement, the Secretary of the Interior agreed to propose revisions to parts of the 2008 commercial oil shale regulations addressing the ro yalty rate and certain environmental protection requirements. The proposed rule provides the BLM with an opportunity

to consider the 2008 regulations in light of the emerging technology necessary

to economicall y develop oil shale resources. Per 43 CFR 46.210(i), F ederal actions involving rulemaking that are of an administrative, financial, legal, technical, or procedural nature; o r whose environmental effects are too broad, speculative, or conjectural to lend themselves to meaningful anal ys is and w ill later be subject to the National Environmental Policy Act (NEPA ) process, either collectivel y or case - by
- case , are categorically

exc luded from the NEPA process under 43 CFR 46.205(b), unless any of the extraordinary

circumstances under 43 CFR 46.215 apply
. This rule itself arguabl y does not trigger an y of the extraordinary circumstances. However, the BLM is electing to prepare an E nv ironmental A ssessment (EA) for this rulemaking in order to aid its decision
- making process. This EA anal yz es the effects on the human environment of the proposed revised commercial oil shale regulations and alternatives. In the future, at the time that a proposed commercial oil shale project is submitted to the BLM for review, site
- specific NEPA anal ys is will be conducted to determ ine if approval of that project is a major F ederal action significantl y affecting the quality of the human environment and whether that project would require the preparation of an E nvironmental Impact S tatement (EIS).
**PURPOSE AND NEED FOR PROPOSED ACTION** The BLM is proposing to revise parts of the 2008 commercial oil shale regulations by revising 43 CFR Parts 3900, 3920 , and 3930 in order to add flexibility to the royalty

sy stem and to increase the effectiveness of the environmental protection requirements. The settlement agreement in Colorado Environmental Coalition v. Salazar requires the BLM to publish the proposed am endments , but it does not determine the final outcome of the rulemaking process.
**BLM DECISION TO BE MADE** The EPAct require s the Secretary of the Interior to establish a regulatory framework for an oil shale and tar sands commercial leasing program to i ncrease domestic energy production from strategic unconventional fuels. In 2008 , f inal c ommercial o il s hale regulations at 43 CFR Parts 3900 to 3930 were adopted. Several of these regulations were challenged in F ederal c ourt and3

the Colorado Environmental Coalition v. Salazar settlement agreement stipulated that the BLM propose revisions to the 2008 commercial oil shale regulations by addressing the ro ya lty

rate and certain environmental protection requirements. The decision to be mad e is whether to adopt the proposed revised commercial oil shale regulations at 43 CFR Parts 3900, 3920 , and 3930 , which include changes to the royalty rate and certain environmental requirements, keep the current regulations, or adopt alternative regulatory language.
**SCOPING** The BLM oil shale regulatory team , with members from the BLM Washington Office (WO) and the BLM Colorado State Office, conducted the i nternal scoping
. The team r eviewed the Colorado Environmental Coalition v. Salazar settlement agreement and proposed revised regulatory

language for the commercial oil shale regulations. Thi s group met numerous times thro ughout the development of the proposed and alternative regulatory language and discussed potential issues.
**DESCRIPTION OF THE P ROPOSED ACTION AND ALTERNATIVES**  The BLM is proposing to revise the 2008 commercial oil shale regulations to remove the ro yalty rate from the regulations, and give the Secretary of the Interior or the BLM authority to set royalty rates prior to or at the ti me of conversion from a research, development and demonstration ( R, D and D ) lease or in a notice of lease sale , respectively
. The proposed revisions would also clarify the provision that the BLM will consider issuing a commercial oil shale lease onl y (1) upon application of an R , D and D lessee to convert its lease to a commercial lease, or (2) after the BLM issues a call for expression of leasing interest (See Section 3925.10(a))
. The proposed revisions would further specify the kinds of information regarding potential environmental and other consequences of development the BLM would require potential lessees to provide. The proposed revision would impose requirements that operations be co nducted in a manner that would reduce certain potential enviro nmental impacts. The proposed revisi on to the regulation would impose a minimum standard that commercial leases (including those resulting from conversion o f R, D and D leases ) and Plan of Development ( POD ) applications would have to meet for approval.
**ALTERNATIVE A: NO CHANGE TO THE EXISTING 2008 COMMERCIAL OIL**  **SHALE REGULATIONS (NO ACTION ALTERNATIVE)** Under this alternative , the 2008 F inal O il S hale C ommercial L easing regulations would remain unchanged.4

**ALTERNATIVE B**  **: REVISE THE**  **2008 COMMERCIAL OIL SHALE REGULATIONS**  **(PROPOSED ACTION)** Pursuant to the Colorado Environmental Coalition v. Salazar settlement agreement , the BLM is proposing to remove the royalty rates in section 3903.52 (b) o f the 2008 commercial oil shale regulations and proposes to set the royalty rate in the notice of sale as provided in section 3924.5(b)(3) or for R, D and D conversion, the royalty terms will be established by the Secretary of the Interior
. Additionally , the BLM is seeking public comment on different ro yalty sy stems as outlined below: Option 1: Invite Public Comment on Proposed L ease Terms in a Proposed Notice of Lease Sale Option 2: Invite Public Comment Using the Coal Lease Sale Process as Outlined in 43 CFR 3422.1 Option 3: Sliding Scale Royalty Based on th e Market Prices of Oil and Gas Option 4: Esta

blish a Minimum Royalty of 12.5 Percent in Regulation, with Secretarial Flexibility

to Establish a Higher Rate Later The BLM is also inviting the public to propose any other royalty s ys tem that would meet the du al requirements of the EPAct to encourage production and ensure a fair return to the public. The proposed revisions would also clarify that the BLM w ould consider issuing a commercial oil shale lease onl y (1) upon application of an R , D and D lessee to convert its R , D and D lease to a commercial lease , (2) or after the BLM issue s a call for expression of leasing interest (See Section 3925.10(a))
. The revised commercial oil shale regulations would add more specificity to the environmental information and requirements that w ould be included in the content of the POD (43 CFR 3931.11). The revised commercial oil shale regulations would specify the standard that would need to be met before an y commercial leases would be issued (b y conversion or otherwise ) and PODs approved
. The BLM proposes in this alternative that no commercial leases (whether b y conversion or otherwise) be issued or PODs approved unless commercial
- scale operations could be conducted without “unacceptable environmental risk.” As an alter

native to the proposed “unacceptable environmental risk” (UER) standard, the BLM specificall y requests comments on whether “unacceptable environmental consequences” (UEC) might be a more appropriate standard for issuance of commercial leases in proposed se ction 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. This proposed rule would revise the regulations at 43 CFR Parts 3900, 3920, and 3930. The following changes, identified i n **bold** , are being proposed. 1) § 3903.52 Production royalties.5

(a) The lessee must pay

royalties on all products of oil shale that are sold from or transported off of the lease. (b) The ro ya lty

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.** 2) § 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 fair market value ( FMV ) , except as provided in §3924.10. The BLM will **not issue**  **a commercial lease unless it determines that oil shale operations can occur withou t**  **unaccep table 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.**  (b) Within 60 calendar day s after receipt of the lease forms, the successful bidder must sign all copies and return them to the proper BLM office. The successful bidder must also submit the necessary lease bond (see subpart 3904 of this chapte r), the first year's rental, any unpaid cost recovery fees, including costs associated with the NEPA anal ys is, and the bidder's proportionate share of the cost of publication of the sale notice. The BLM may , upon written request, grant an extension of tim e to submit the items under this paragraph. (c) If the successful bidder does not compl y with this section, the BLM will not issue the lease and the bidder forfeits the one
- fifth bonus pay ment submitted with the bid. (d) If the lease cannot be awarded fo r reasons determined by the BLM to be beyond the control of the successful bidder, the BLM will refund the deposit submitted with the bid. (e) If the successful bidder was not an applicant under §3922.20, the successful bidder must submit an application and the BLM may require additional NEPA analy sis of the successful bidder's proposed operations. 3) § 3926.10 Conversion of an R, D and D lease to a commercial lease.6

(a) Applications to convert R, D and D leases, including preference right areas, into commercial leases, are subject to the regulations at parts 3900 and 3910, this part, and part 3930, except for lease sale procedures at subparts 3921 and 3924 and §3922.40. **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.** (b) A l essee of an R, D and D lease must appl y for the conversion of the R, D and D lease to a commercial lease no later than 90 calendar days after the commencement of produc tion in commercial quantities. No specific form of application is required. The application for conversion must be filed in the BLM state office that issued the R, D and D lease. The conversion application must include: (1) Documentation that there hav e been commercial quantities of oil shale produced from the lease, including the narrative required b y the R, D and D leases; (2) Documentation that the lessee consulted with state and local officials to develop a plan for mitigating the socioeconomic imp acts of commercial development on communities and infrastructure; (3) A bid pay

ment no less than specified in §3923.10 and equal to the FMV of the lease; and (4) Bonding as required by §3904.14 of this chapter. (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, d e ny an application to convert an R, D and D lease to a commerci al lease based on environmental or other resource considerations. The BLM **may** approve the conversion application, in whole or in part, if it determines that: (1) There have been commercial quantities of shale oil produced from the lease; (2) The bid pay

ment for the lease met FMV;7

(3) The lessee consulted with state and local officials to develop a plan for mitigating the socioeconomic impacts of commercial development on communities and infrastructure; (4) The bond is consistent with §3904.14 of thi s chapter; (5) Commercial scale operations can be conducted, subject to mitigation measures to be specified in stipulations or regulations, in a manner that complies with applicable law and regulation; **and (**  **6 )**  **Commercial scale operations can be conducted**  **without unacceptable environmental risk.**  (d) The commercial lease must contain terms consistent with the regulations in parts 3900 and 3910 of this chapter, this part, and part 3930 of this chapter, this part , and stipulations developed through appropriate NEPA anal ys is. 4) § 3931.10 Exploration plans and plans of development for mining and in situ operations. (a) The POD must provide for reasonable protection and reclamation of the environment and the protection and diligent development of the oil sh ale resources in the lease. (b) The operator must submit to the proper BLM office an exploration plan or POD describing in detail the proposed exploration, testing, development, or mining operations to be conducted. Exploration plans or PODs must be cons istent with the requirements of the lease or exploration license and protect nonmineral resources and provide for the reclamation of the lands affected b y the operations on Federal lease(s) or exploration license(s). All PODs and exploration plans must be submitted to the proper BLM office. (c) The lessee or operator must submit 3 copies of the POD to the proper BLM office or submit it in an acceptable electronic format. Contact the proper BLM office for detailed information on submitting copies electron ically (see §3931.40 for submission of exploration plans). (d) The BLM will consult with any other Federal, state, or local agencies involved and review the plan. The BLM may

require additional information or changes in the plan before approving it. I f the BLM denies the plan, it will set forth why it was denied.8

(e) All development and exploration activities must comply with the BLM
- approved 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.** (f) Activities under §§3931.11 and 3931.40, other than casual use, may not begin until appropriate NEPA anal ys is is completed and the BLM approves an exploration plan or POD. **(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 resource**  **s .**  5) § 3931.11 Content of plan of development. The POD must contain, at a m inimum, the following: (a) Names, addresses, and telephone numbers of those responsible for operations to be conducted under the approved plan and to whom notices and orders are to be delivered, names and addresses of Federal oil shale lessees and corresp onding Federal lease serial numbers, and names and addresses of surface and mineral owners of record, if other than the United States; (b) A general description of geologic conditions and mineral resources within the area where mining is to be conducted, including appropriate maps; (c) A cop y of a suitable map or aerial photograph showing the topograph y, the area covered b y each lease, the name and location of major topographic and cultural features; (d) A statement of proposed methods of operation and d evelopment, including the following items as appropriate: (1) A description detailing the extraction technology to be used; (2) The equipment to be used in development and extraction;9

(3) The proposed access roads; (4) The size, location, and schematic s of all structures, facilities, and lined or unlined pits to be built; (5) The stripping ratios, development sequence, and schedule; (6) The number of acres in the Federal lease(s) or license(s) to be affected; (7) Comprehensive well design and procedure for drilling, casing, cementing, testing, stimulation, clean
- up, completion, and production, for all drilled well types, including those used for heating, freezing, and disposal; (8) A description of the methods and means to protect and monitor all aquifers; (9) Surveyed well location plats or project
- wide well location plats; (10) A description of the measurement and handling of produced fluids, including the anticipated production rates and estimated recovery factors; (11) A description of the m ethods used to dispose of and control mining waste; and (12) A description/discussion of the controls that the operator will use to protect the public, including identification of: (i) Essential operations, personnel, and health and safety precautions; (ii) Programs and plans for noxious gas control (hydrogen sulfide, ammonia, etc.);10

(iii) Well control procedures; (iv) Temporary

abandonment procedures; and (v) Plans to address spills, leaks, venting, and flaring; (e) An estimate of the quantity and quality

of the oil shale resources; (f) An explanation of how maximum economic recovery ( MER) of the resource will be achieved for each Federal lease; (g) Appropriate maps and cross sections showing: (1) Federal lease boundaries and serial numbers; (2) Surface ownership and boundaries; (3) Locations of an y existing and abandoned mines and existing oil and gas well (including well bore trajectories) and water well locations, including well bore trajectories; (4) T ypical geological structure cross sectio ns; (5) Location of shafts or mining entries, strip pits, waste dumps, retort facilities, and surface facilities; (6) T ypical mining or in situ development sequence, with appropriate time
- frames; (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** 11

**monitor, adaptively manage, and mitigate adverse im pacts, 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 p ertinent 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 min e 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 oper ations,**  **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;**  (l) [ renumbered (h) ] A narrative addressing the environmental aspects of the proposed mine or in situ operation, including at a minimum, the following: (1) An estimate of the quantity of water to be used and pollutants that may enter an y receiving waters;12

(2) A design for the necessary impoundment, treatment, control, or injection of all produced water, runoff water, and drainage from workings; and (3) A description of measures to be taken to prevent or control fire, soil erosion, subsidence, pollution of surface and ground water, pollution of air, damage to fish or wildlife or other natural resources, and hazards to public health and safety; (m) [ renumbered (i) ] A reclamation plan and schedule for all Federal lease(s) or exploration license(s) that details all reclamation a ctivities necessary to fulfill the requirements of §3931.20; (n) [ renumbered (j) ] The method of abandonment of operations on Federal lease(s) and exploration license(s) proposed to protect the unmined recoverable reserves and other resources, including: (1) The method proposed to fill in, fence, or close all surface openings that are hazardous to people or animals; and (2) For in situ operations, a description of the method and materials to be used to plug all abandoned development or production wells; and ( o ) [ renumbered (k) ] Any additional information that the BLM determines is necessary for anal ys is or approval of the POD.
**ALTERNATIVE C: RETAIN ALL**  **OF THE PROVISIONS OF THE PROPO**  **SED ACTION ALTERNATIVE B EXCEPT**  **REPLACE THE TERM UNACCEPTABLE ENVIRONMENT**  **AL RISK WITH THE TERM UNACCEPTABLE ENVIRONMENTAL CONSEQUENCES**  In the proposed revised regulations at 43 CFR 3925.10 (a), 3926.10(c ) ( 6 ) and 3931.10 (e) , this alternative would replace the term “unacceptable environmental risk” with the term “unacceptable environmental consequences.”
**OTHER ACTIONS** Concurrentl y , with the updating of the 2008 F inal C ommercial O il S hale rules, the BLM has begun a new public planning process related to programmatic oil shale and tar sands management. The BLM is taking a fres h look at whether it is appropriate for ap proximately13

2,000,000 acres of F ederal mineral estate to remain available for potential oil shale development, and approximately

431,000 acres of public land to remain available for pote ntial development of tar san ds. The BLM initiated the resource management plan amendment process as the result of the February

15, 2011, Colorado Environmental Coalition v. Salazar settlement agreement in the United States District Court for the District of Colorado, C ivil Action No. 09
- cv - 00085
- JKL
. Th e BLM designed the planning initiative to provide the BLM and the public an opportunity to consider the 2008 allocation decision s in light of later information and policies concerning natural resources and other uses of the areas, i ncluding wilderness values
. Development is a secondary action following leasing, and leasing is a discretionary action on the part of the Federal Government. Land availability for development does not mean that any of those lands will ultimately

be lease d, much less developed. On April 14, 2011, the BLM published in the Federal Register a Notice of Intent to Prepare a Programmatic E IS and Possible L and Use Plan Amendments for Allocation of Oil Shale and Tar Sands Resources on Land Administered by the BLM in Colorado, Utah, and Wyoming. In February 2012, the BLM issued the Draft Programmatic Environmental Statement for Allocation of Oil Shale and Tar Sands Resources on Lands Administered by the Bureau of Land Management in Colorado, Utah, and Wyoming for a 90
- day public comment period
. The Notice of Availability

for the Final PEI S, and Proposed Plan Amendments was published in the Federal Register o n 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. Under the proposed plan amendments, approximately 67 9 ,000 acres would remain open for application for comm ercial oil shale leasing and devel opment and approximately 132,137 acres would be open for potential tar sands leasing and development.
**AFFECTED ENVIRONMENT** The BLM administers approximately 245 million acres of public lands and 700 million acres of sub
- surface mineral estate in the United States. This administrative responsibility includes address ing stewardship, conservation, resource use, and the development of energy resources in an environmentall y sound manner. Management of these public lands mus t be conducted in accordance with the multiple use principles of FLPMA ( 43 U.S.C. 1701 et seq .). The enactment of S ection 369 of the EPAct, and the issuing of six R, D and D leases in 2006 and 2007, ( five in Colorado and one in Utah) demonstrate an interest in developing oil shale resources located on the public lands . A second round of R, D and D lease nominations took place in November 2009. The BLM received three nominations (two in Colorado, one in Utah); the two Colorado propos ed parcels completed NEPA analy sis in September 2012 and the BLM approved the parcels in November 2012, effective December 1, 2012. The BLM cancelled the nomination in Utah on December 7, 2012, because the applicant failed to comply with requirements in the request for nominations to commence analy sis under NEPA. The United States holds the world’s largest known concentration of oil shale , comprising a surface area of approximately 16,000 square miles. This domestic resource is located in the Green River Formation in Colorado, Utah, and Wyoming. Estimates of the oil resource found within the Green River Formation is 4.29 trillion barrels , based on the latest United States Geological Service (USGS) oil shale resource assessment
. However, not all res ources are14

recoverable. A moderate estimate of recoverable oil from oil shale in the Green River Formations is approximately 800 billion barrels. More than 70 percent of the total oil shale acreage in the Green River Formation, including much of the rich est and thickest oil shale deposits, is under federally owned and managed lands. A large portion of the oil sh ale deposit is located under the BLM’s jurisdiction and coincides with the field offices and adm inistrative units presented in T able 1.
Table 1. BLM Field Offices and Administrative Units which coincide with oil shale resources. State Field Office Administrative Unit Colorado Colorado River

Valley Field Office Colorado River Valley Field Office RMP (BLM 1988, as amended b y the Roan Plateau Plan Amendment [BLM 2006a, 2007, 2008 d ]) Grand Junction Grand Junction RMP (BLM 1987) White River White River RMP (BLM 1997 a , as amended b y the Roan

Plateau Plan Amendment [BLM 2006a, 2007, 2008 d ]) Utah Price Price Resource Area RMP (BLM 2008 f ) Monticello Monticello Field Office RMP (2008 e ) Richfield Richfield Field Office RMP (2008 g ) Vernal Vernal Resource Area RMP (BLM 2008 h ) Wyoming Kemmerer Kemmerer RMP (BLM 2010 )

Rawlins Rawlins RMP (BLM 2008i ) Rock Springs Green River RMP (BLM 1997 b , as amended b y the Jack

Morrow Hills Coordinated Activity Plan [BLM 2006b]) The BLM manages the public lands for a variety of land uses, including recreation, mining, oil and gas leasing, livestock grazing, and rights
- of
- way . Land use plans provide the framework that guides the decision for every action and approved use. Each of th e land use plans identified in T able 1 contain s a detailed description of the phy sical, biological, and socio economic environment within the boundaries of the plan. The description of the affected environment includes the resources present, resources uses and special designations, and socioeconomic setting. These land use plans also note specific lands that are closed to mineral development. These include areas designated as Wilderness Areas, Wilderness Study Areas, as well as other areas that are part of the National Landscape Conservation System administered by the BLM (e.g., National Monuments, National Con servation Areas, Wild and Scenic Rivers, and National Historic and Scenic Trails), and existing Areas of Critical Environmental Concern that are currentl y closed to mineral development.15

As part of the EPAct, Congress required the Secretary of the Interi or to focus analy sis of commercial oil shale leasing on the most geologically prospective lands in Colorado, Utah, and Wyoming. The BLM has determined that the most geologicall y prospective resources of the Green River Formation are located in the Green River, Piceance, Uinta, and Washakie Basins. These areas were identified based on the grade and thickness of the deposits. The BLM determined that the most g eologically prospective oil shale resources in Colorado and Utah are those deposits that yield 25 gallons of shale oil per ton of rock (gal lons /ton) or more and are 25 feet thick or greater. In Wyoming, where the oil shale resource is not of as high a quality as it is in Colorado and Utah, the BLM determined that the most geologicall y prospective oil shale resources are those deposits that yield 15 gal lons per ton or more shale oil and are 15 feet thick or greater. A detailed description of the geologic setting of and phy sical, biological, and socioeconomic resources within the Green River, Piceance, Uinta, and Washakie Basins as well as areas which are excluded based on a special designation is presented in Chapter 3 of the Final Oil Shale and Tar Sands P rogrammatic EI S (BLM 20 13 , pp. 3
- 1

– 3
- 334 ) and is hereb y incorporated b y reference. In addition, Chapter 3 of the Final 20 13 P rogrammatic EI S presents the condition of the soils, water, air ecological, cultural, paleontological, visual resources, recreation, grazing , and other mineral resource uses and socioeconomic situations associated with these geologically prospective areas.
**ENVIRONMENTAL EFFECTS Introduction**  This EA anal yz es three alternatives. The purpose of this environmental effects anal ys is is to predict the degree to which the quality of the human environment is likely to be affected if a particular alternative is implemented. The proposed action and alternatives are very limited in scope ; they

set forth the procedural requirements and broad standards that must be met. For the most part, they

do not bear on the site
- specific impacts associated with oil shale exploration, development, and production activities once the oil shale is leased
. To the extent that they may bear on these impacts, it is not possible to meaningfully evaluate the effects of these standards. Regardless, under the proposed action or an y of the alternatives, those impacts will be assessed in the future in project
- specif ic NEPA anal ys es associated with oil shale leasing and PODs that will be completed b y BLM state or field offices, as required b y NEPA.
**Alternative A: No Change to the Existing 2008 Commercial Oil Shale Regulations (No**  **Action Alternative).** A predetermined ro yalty rate provides an element of predictability to entities contemplating oil shale leasing and development
. The actual extent to which oil shale development might be encouraged b y an operator’s ability to make more informed business de cisions is likely overshadowed b y the numerous other unknowns associated with oil shale development , particularl y while the industry is in its infancy
. It is no t practical to quantify the environmental effects of the ro yalty rate due to the emerging nature of oil shale technology and economics
.16

The existing 2008 regulations in some sections are not as specific in regards to the environmental requirements as the proposed action. Under the existing regulations at 43 CFR 39 31 .11 , the BLM would require comprehensive well designs and procedures and a description of the following: methods and means to p rotect and monitor all aquifers; measurement and handling of produced fluids; methods used to disp ose of and control mining waste; co ntrols that the operator will use to protect the public; measures to be taken to prevent or control fire, soil erosion, subsidence, pollution of surface and ground water, pollution of air, damage to fish or wild life or other natural resources; a plan for reclamation for all Federal leases or exploration l icenses ; and a method to fill in , fence , or close all surface openings that are hazardous to people or animals. Before a lease, exploration license , or POD is issued , the BLM , in consultation with the appropriate affected parties , will conduct site
- specific NEPA anal ys es , which may take the form of either an EI S or EA
. **Alternative B: Revise 2008 Commercial Oil Shal**  **e Regulations (Proposed Action)** In the proposed action , the oil shale applicant would n ot have information on a ro yalty rate until the time of publication of a notice of sale or at the time of conversion of an R, D and D lease. The effect of this change would be to allow ro yalty rates to reflect current market conditions ; however, it would also introduce uncertainty . The intent of the proposed removal of the royalty rates from the regulations is to allow rates to be set in the future when more information may be known about the costs and revenues of oil shale operations. Uncertainty in royalty rates , however, might discourage commercial oil shale development by requiring entities to make business decisions with less information
. If , however , a more economically favorab le royalty rate than currentl y required was set by the BLM and the Secre tary of Interior, oil shale development might be encouraged. The EPAct, Section 369(o) , directs the agency to establish royalties and other pay

ment for oil shale leases that: (1) e ncourage development of the oil shale and tar sands r esources ; and (2) e nsure a fair return to the United States. Other than being one factor for a business entity to consider in deciding whether to seek or develop a commercial oil shale lease, ro yalties are merel y transfer payments, with no environmental impact that can be anal yz ed for this rulemaking. In the proposed action, a commercial lease would be awarded , an R, D and D lease would be converted to a commercial lease, and a POD would be approved if operations could proceed without unacceptable environmental risk. This rulemaking does not itself require the BLM to conduct a quantitative risk assessment . T he rulemaking does require that the proponent show that unacc eptable risk would not occur before the BLM would approve a proposal and that the BLM may impos e stipulations or conditions to mitigate adverse risk s to an acceptable level. The proposed action would require PODs to include a watershed and groundwater protection plan, an airshed review, an integrated waste management plan, and an environmental prot ection plan. The additional information and planning would augment the disclosure and performance standards in the existing regulations , and potentially benefit their effect on these resources, both natural and cultural
. Furthermore, even in the absence of the amendments proposed in Alternative B, in most if not all cases , the additional information would be necessary for preparation of an anal ys is required b y NEPA, and thus would be demanded from the operator17

pursuant to 43 CFR 3931.11(k). The explicit requirements for additional information in Alternative B would thus have no significant impact on the quality of the human environment.
**Alternative C: In the proposed revised regulations at 43 CFR 3925.10 (a), 3926.10(c)(7),**  **and 3931.10(e), replace the t erm “unacceptable environmental risk” with the term**  **“unacceptable environmental consequences .**  **”** T his alternative would substitute the standard of “unacceptable environmental consequences” for “unacceptable environmental risk.” While there are numerous definitions for the word “ risk , ” they all, in one way

or another, incorporate a focus upon uncertainty . One definition of risk states that it is the potential that a chosen action or activity

will lead to an undesirable outcome. Another definition is that risk is the effect of uncertainty on objectives. Uncertainties include events which may or may not happen. Uncertainties may be caused by

a lack of information or ambiguity . Since risk carries so many different meanings, there are man y methods used to attempt to assess or to measure risk. These methods include statistical theory and lead naturally

to statistical estimates, but others are more subjective
. E nvironmental risk is not easily or reliabl y quantifi ed or qualified in the context of a complex operation to develop natural resources, such as oil shale
. T he actual or potential risk posed by

oil shale operations at a specific location requires interpretation by both the field scientists and by the Federal agency

decision
- m aker. With no history of commercial oil shale operations on BLM
- administered land , even a qualitative risk assessment would be an exercise of the BLM’s judgment. The “consequences” standard would not be construed to require a detailed or quantitative risk anal ys is
. Rather , it would provide a standard based on the environmental consequences of the leasing or POD proposal. A consequence can be defined as a result or outcome. Environmental consequences , environmental effects, and environmental impacts are sy nony mous terms when used to describe environmental outcomes in the NEPA process, and , at least in the context of NEPA, refer to that which is either directl y or indirectl y caused b y a proposed action, and is reasonabl y foreseeable from the standpoint of the Federal agency decision
- maker faced with a decision to be made about a proposed action. An understanding of the environmental consequences of a proposed action assists the public officials that make decisions regarding the proposed Federal actions. F ederal agencies, including the BLM , have used the NEPA process to evaluate and disclose environmental consequences in terms of reasonable foreseeability for over 40 years and a well
- established regulatory framework guides the process. The BLM has both a f ormal NEPA policy

and a NEPA handbook ( H
- 1790
- 1 ) , outlining the procedures necessary to evaluate the environmental consequences of a project . NEPA, however, is procedural. It requires anal ys is and disclosure of environmental impacts, but it does not set a standard for either environmental risk or consequences for Federal decision
- making. In contrast, either the “unacceptable environmental risk” or the “unacceptable environmental consequences” standard would be a substantive standard that would appl y t o th e BLM’s decision making for oil shale leases and PODs. If the BLM were to adopt the “unacceptable environmental consequences” standard, it might also interpret “environmental consequences” consistent with the way this term is used in the NEPA18

process, to include effects that are reasonabl y foreseeable. Neither “unacceptable environmental risk” nor “unacceptable environmental consequences” could be any less exacting a standard than that enunciated in the Federal Land Policy and Management Act (FLPMA) of 1 976, as amended: “In managing the public lands the Secretary shall, by regulation or otherwise, take any action necessary to prevent unnecessary

or undue degradation of the lands” (43 U.S.C. 1732(b)). Although “unacceptable environmental risk” might be c ons idered to be more protective of the public lands than “unacceptable environmental consequences,” it is not possible to compare the effects of those standards for the following reasons: a quantitative risk analy sis is unlikely to be feasible or meaningf

ul in the oil shale context; and if the “environmental consequences” is interpreted to include reasonab ly foreseeable effects, it should lead to qualitative consideration of the same ty

pes of potential impacts as an “environmental risk” standard. **DIRECT, INDIRECT ,**  **AND CUMULATIVE EFFECTS** The rulemaking neither makes leasing and development of oil shale on public lands possible, nor does it foreclose the Secretary of the Interior ’ s discretion to decide whether, when , or where to issue oil shale lease s. The proposal to set royalty rates at future times, though on its face environmentally

neutral, might be a factor that encourages or discourages development. It is not possible, however, to analy ze its direct, indirect, or cumulative effects. The proposals to set an environmental standard for issuing leases and approving POD s and to require additional environmental information and mitigation planning are anticipated to be beneficial to the environment, but it is not possible to analyze their direct , indirect , or cumulative effects. For the same reasons, it is also not possible to analy ze the direct, indirect , or cumulative effects of the alternatives to the proposal. This EA does not anal yz e future oil shale leasing or development proposals. All s uch proposals will be anal yz ed in compliance with NEPA , including appropriate anal ys is of direct, indirect , and cumulative effects based on the information available at that time.
**AGENCIES CONSULTED** The authors of this EA consulted with the Washington Of fice BLM staff, the Colorado State Office BLM staff, and the Office of the Solicitor.
**LIST OF PREPARERS** Larry P. Jackson, Division of Solid Minerals, Washington Office, BLM. Paul McNutt, Division of Solid Minerals, Washington Office, BLM.19

**BIBLIOGRAPHY** Cohen, Joshua, Ph.D., Acceptable Risk in the Context of Managing Environmental Hazards, Harvard Center for Risk Analy sis , Harvard School of Public Health , April 2001. U.S. Army

Corps of Engineers Institute for Water Resources, Moser, David A., Ph.D., The U se of Risk Analysis by the U.S. Army Corps of Engineers , 2003. U.S. Department of the Interior, Bureau of Land Management , Approved Resource Management Plan Amendments/Record of Decision (ROD) for Oil Shale and Tar Sands Resources to Address Land Use Alloc ations in Colorado, Utah, and W yoming and Final Programmatic Environmental Impact Statement , November 2008. U.S. Department of the Interior, Bureau of Land Management , Proposed Land Use Plan Amendments for Allocation of Oil Shale and Tar Sands Resources on Lands Administered by the Bureau of Land Management in Colorado, Utah, and Wyoming and Final Programmatic Environmental Impact Statement , November 2012
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- Water Nexus, A Better and Coordinated Understanding of W

ater Resources Could Help Mitigate the Impacts of Potential Oil Shale Development

, October 2010. U.S. Government Accountability Office, Environmental Information, EPA Needs Better Information to Manage Risks and Measure Results , October 3, 2000. USGS, 2010a, Oil Shale and Nahcolite Resources of the Piceance Basin, Colorado, National Oil and Gas Assessment Project, Digital Data Series DDS

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–Y, U.S. Geological Survey Oil Shale Assessment Team. USGS 2010b , Oil Shale Resources of the Uinta Basin, Uta h and Colorado, National Oil and Gas Assessment Project , Digital Data Series DDS

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–BB, U.S. Geological Survey Oil Shale Assessment Team. USGS, 2011, Oil Shale Resources of the Eocene Green River Formation, Greater Green River Basin, Wyoming, Colorado, and Utah, National Oil and Gas Assessment Project , Digital Data Series DDS

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–DD, U.S. Geological Survey Oil Shale Assessment Team. Voorhe e s, John, Woellner, Robert A., International Environmental Risk Management, ISO 14000 and the Systems Approach , 1998.