UNITED STATES DEPARTMENT OF THE INTERIOR 

BUREAU OF LAND MANAGEMENT 

ENVIRONMENTAL ASSESSMENT 

for 

PROPOSED RULE TO REVISE 43 CFR PARTS 3000, 3400, 3430, 3470, and 3480 

Lease modifications, Lease and Logical Mining Unit (LMU) diligence, Advance royalty, 

Royalty rates, Bonds . 

EA Nw11ber: W0-320-3400-01 

RIN: 1004-AD93 

I. Introduction 

The Bureau of Land Management (BLM) of the United States Department of the Interior is 

proposing to revise the coal management regulations at 43 CFR Parts 3000, 3400, 3430, 3470, 

and 3480. This document examines the environmental impacts of the proposed rule to determine 

whether the proposed rule constitutes a major Federal action significantly affecting the quality of 

the human envirom11ent that would require the preparation of an Environmental Impact 

Statement under the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq. 

The BLM is responsible for managing Federal coal resources in accordance with Subchapter II 

of the Mineral Leasing Act (MLA) (30 U.S.C. 201- 209) and other statutory provisions. The 

surface estate associated with 1hese resources is controlled by the BLM, the United States Forest 

Service, private land owners, state land owners, or other Federal agencies. 

In 2005, Congress amended several provisions of the MLA that pertain to Federal coal leasing. 

See Title IV, SubtitleD of the Energy Policy Act of2005, Public Law 109-58, 119 Stat. 760-

763 (hereinafter EP Act). The proposed regulations would implement those EP Act amendments 

as follows: 

• Section 432 an1ended 30 U.S.C. 203 by increasing the maximum acreage for a coal lease 

modification from 160 acres to 960 acres; 

• Section 433 amended 30 U.S.C. 202a(2) by authorizing the Secretary to extend a logical 

mining unit (LMU) term beyond tl1e initial term of 40 years, upon determining that the 

longer period eitl1er will ensure the maximum economic recovery of a coal deposit; or is 

in the interest of the orderly, efficient, or economic develop1nent of a coal resonrce; 

• Section 434 an1ended 30 U.S.C. 207(b), providing for several changes in the processes 

for application, assessment, and collection of advance royalties for Federal coal leases; 

• Section 435 amended 30 U.S.C. 207(c) by removing the requirement to submit a resource 

recovery and protection plan (R2P2) wiiliin 3 years after issuance of a coal lease; and 

• Section 436 amended 30 U.S.C. 20l(a) with respect to financial assnrances associated 

with bonus bids. 

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The enactment of these statutory provisions presents an opportunity to update the coal 

management regulations. In view of that opportunity, the BLM has decided to consider a general 

overhaul of those regulations, and has identified the following actions that would meet the 

objective of updating the coal management regulations: 

• Eliminate conflicting BLM internal guidance; 

• ClarifY the royalty rate that is applicable for different mining systems used to extract 

Federal coal; 

• Correct several typographical errors in the regulations; and 

• Establish filing fees for processing applications for advance royalty, history of timely 

payment determinations, and extensions of the 40-year LMU period. 

II. Proposed Action and Alternatives 

A. The Preferred Proposed Action 

The preferred proposed action would revise 43 CFR Parts 3000, 3400, 3430, 3470, and 3480 for 

the reasons set out in Section II above. As previously noted, this action is undertalcen in part in 

response to new statutory requirements imposed by the EP Act. The BLM has determined that 

revising 43 CFR Parts 3000, 3400, 3430, 3470, and 3480 would implement the EPAct. The 

BLM would also correct conflicting guidance by revoking the 1985 LMU Guidelines and include 

those remaining relevant parts of the 1985 LMU Guidelines into regulation. Further, the 

proposed rule would clarify that continuous highwallmining is not considered underground 

mining for the purpose of paying Federal royalty. TheBLM would also correct several teclmical 

errors in the existing regulations and propose new processing fees for three actions that have 

been added or modified by the EP Act. 

B. The No Action Alternative 

The BLM has considered as the no-action altemative, that 43 CFR Parts 3000, 3400,3430, 3470, 

and 3480 be left as they cmrenfly exist. The no-action altemative would not: implemelirthe 

EP Act; revoke the LMU Guidelines that are no longer valid nor incorporate into regulations 

those parts of the LMU Guidelines that remain valid; clarify royalty rates for new mining 

methods; correct known technical errors in the existing regulations or implement any new filing 

fees. 

C. The Alternative Proposed Action 

Like the preferred action, the alternate action would revise 43 CFR Parts 3000, 3400, 3430, 

34 70, and 3480 for the reasons set out in Section II above. As previously noted, this action is 

undertalcen in part in response to new statutory requirements imposed by the EP Act. The BLM 

has determined that revising 43 CFR Parts 3000, 3400, 3430, 3470, and 3480 would implement 

the EPAct. However, in this alternative action, the BLM would not revoke the 1985 LMU 

Guidelines and would not include any part of 1l1e LMU Guidelines in regulation. The alternative 

proposed rule would clarify that continuous highwallmining is not considered underground 

mining for the pmpose of paying Federal royalty. The BLM would also correct several technical 

errors in the existing regulations and propose new processing fees for three actions that have 

been added or modified by the EP Act. 

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III. Affected Environment 

There were 299 active coal leases that encompass 464,380 acres of Federal coal at the end of 

fiscal year 2009 and the BLM was processing 32 applications for competitive lease sales. The 

number of coal leases and acreage under lease as of September 30, 2009, is as summarized by 

state as follows: 

State Number of coal Acreage leases 

Alabama 4 4,617 

Colorado 55 82,576 

Kentucky 7 6,841 

Montana 30 45,299 

New Mexico ]] 25,432 

North Dakota 1 5 11,061 

Oklahoma 9 16,684 

Utah 75 90,279 

Washington 2 521 

Wyoming 91 181,069 

Total 299 464,380 

Federal lessees and operators must diligently develop their leases or LMUs by producing at least 

commercial quantities of coal within the first 10 years, or else the lease or LMU will terminate 

(43 CFR 3483.2). "Commercial quantities" is defined by regulation as one percent of the 

recoverable coal reserve (43 CFR 3480.0-5(a)(6)). After the first 10 years, a lease or LMU must 

continue to produce at least commercial quantities of coal on an ammal basis ( 43 CFR 3483.1 ). 

This later requirement is known as the continued operation requirement of the lease or LMU. 

An LMU is commonly used when the geological characteristics of a coal deposit cross lease or 

ownership boundaries. A logical and efficient mine development plan in such cases may extend 

across lease or ownership boundaries. An LMU fosters maximum economic recovery and 

conservation of Federal coal reserves by facilitating a logical mining sequence in terms of the 

coal deposits or deposit as a whole, rather than within only a specific lease or property boundary. 

In areas where the coal ownership pattern is disjointed, such as the checkerboard land-ownership 

patterns in the Western United States, a mine operator may develop several contiguous tracts, 

which are owned by or leased from different entities, as a single mining operation. Without an 

LMU, a mine operator may be required to develop the oldest Federal coal lease first, regardless 

of the geology of the deposit or the most logical development plan, simply to comply with the 

diligent development requirements of the MLA. A mine development plan that functions to only 

satisfy the diligent development requirements of one lease may not foster, for a mine that 

consists of multiple Federal coal leases that are being simultaneously developed, the other MLA 

requirements such as maximum economic recovery of Federal coal reserves and conservation of 

coal and other resources. The LMU provides a mechanism for coal produced from non-Federal 

or Federal lands that are within the LMU to be credited toward the cumulative diligent 

development and continued operation requirements of all the Federal coal leases included in the 

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LMU. 

Each Federal coal lease and lease modification is subject to several levels of site-specific 

envirmm1ental analysis. Section 2(a)(3)(A) of the MLA, 30 U.S.C. 201(a)(3)(A), requires that a 

Federal coal lease, and similarly, lease modifications, may be issued only if the lands containing 

the coal deposit have been included in a comprehensive land use plan and are compatible with 

such plan. The comprehensive land use plan requires environmental analysis pursuant to NEP A 

requirements. For Federal lands to be classified as being suitable for coal leasing in a land use 

plan, the lands must be screened for 20 unsuitability criteria that are listed at 43 CFR 3461.5. As 

an example, the unsuitability criteria include screening to disallow coal leasing under cities or 

towns or on lands that are critical habitat for threatened or endangered species. Further, Section 

2(a)(3)(C) of the MLA, 30 U.S.C. 20l(a)(3)(C), requires that prior to lease issuance, the 

Secretary will consider the effects that mitring of the proposed lease might have on an affected 

conununity or area, including, but not limited to, impacts on the envirolllllent, on agricultural and 

other economic activities, and on public services. The MLA also requires a public hearing 

concerning the maximum economic recovery of the Federal coal and the determination of the fair 

market value for prospective Federal coal leases or lease modifications prior to the lease sale. 

Further, a NEP A analysis is required before the BLM decides to proceed to a competitive 

Federal coal lease sale or to issue a Federal coal lease modification. A NEPA analysis is also 

completed prior to consideration of an LMU to address site-specific and cumulative impacts on 

hUillan health and the envirmm1ent. 

Proposed and actual mining operations on all lands in an LMU are also subjected to site-specific 

environmental analysis prior to LMU approval. Environmental review and identification of 

appropriate mitigation measures is required before a mining permit may be issued under the 

Surface Mining Control and Reclamation Act (SMCRA) for the mining operations within a lease 

or LMU. These environmental reviews also address site-specific and cumulative impacts on 

humru1 health and the enviromnent. 

IV. Environmental Impacts 

A. The Preferred Proposed Action 

1. Direct and indirect f!:ffects 

a. Withdraw the LMU Guidelines. 

The BLM proposes to withdraw the Logical Mining Unit Application and Processing Guidelines 

(LMU Guidelines), which were promulgated after notice in the Federal Register and an 

opportunity for public comment. The LMU Guidelines were finalized on August 29, 1985 (50 

FR 35145). The LMU Guidelines provided detailed instruction to the public and BLM persollllel 

concerning the approval and management ofLMUs. 

The LMU Guidelines were divided into three categories for analysis. The first category requires 

no additional action beyond its withdrawal, because those parts of the LMU Guidelines are 

already in regulations. The second category consists of the parts of the LMU Guidelines that 

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now conflict with the MLA as amended by the EP Act. These parts of the LMU Guidelines need 

to be withdrawn and the regulations amended to be consistent with the new statute. The third 

category includes parts of the LMU Guidelines that do not conflict with authorizing statutes, bnt 

that are not currently included in or separately supported by the BLM coal management 

regulations. This group needs to be codified in regulation in order to lnaintain valid existing 

policies when the LMU Guidelines are withdrawn. As a general matter, the BLM could modify 

the LMU Guidelines instead of withdrawing them, but has determined that regulation of LMU s 

would be more effective if all the LMU guidance were included within the Code of Federal 

Regulations. 

Therefore, the BLM is proposing to include in regulations those elements of the LMU Guidelines 

that are not currently in regulations and that are not in conflict with statute. Analysis of the 

potential enviromnental effects of each new proposed regulation from the LMU Guidelines is 

included in the section-by-section analysis that follows. 

b. Processing fees 

Under the authority of the Federal Land Policy m1d Management Act (43 U.S.C. 1734), the BLM 

is proposing new fixed processing fees for: 

• Applications for a history of timely payment determination; 

• Applications to pay advance royalty; m1d 

• Applications to extend the 40-year LMU term. 

The BLM would incur unique costs while processing an application for a history of timely 

payment determination, as required by Section 436 of the EPAct and proposed at 43 CFR 

3474.10. A history of timely payment determination only affects the value of the bond that the 

lessee is required to provide to the BLM, which is an administrative action. This fee would 

compensate the BLM for anticipated costs in processing an application for a history of timely 

payment determination, and as such, would have no bearing on m1y decision the BLM would 

make concerning the application itself. The BLM has concluded that the imposition of a fee for 

applications for a history oftimely payment determination is solely administrative m1d would not 

have a significant direct or indirect environmental impact. 

The BLM would also incur unique costs while processing m1 application to pay advance royalty 

as provided by Section 434 of the EP Act. Processing an application to pay advm1ce royalty is 

time sensitive, therefore requiring personnel to be diverted from other assigned tasks and duties 

to process the application. This fee would compensate the BLM for anticipated costs in 

processing an application to pay advance royalty, m1d as such, would have no bearing on any 

decision the BLM would make concerning the application itself. The BLM has concluded that 

the collection of a processing fee to process a specific request to pay advance royalty would not 

have a significant direct or indirect enviro1m1ental impact. 

The BLM has determined that processing an application to extend the 40-year LMU term, as 

provided by Section 433 of the EPAct and proposed at 43 CFR 3487.10, would require unique 

processing by the BLM. For each application, the BLM would need to verify the land status of 

the LMU m1d complete an engineering analysis to determine if the extension would ensure the 

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greatest ultimate recovery of the coal resources within the LMU. This fee would compensate the 

BLM for anticipated costs in processing an application to extend the 40-year LMU term, and as 

such, would have no bearing on any decision the BLM would make concerning the application 

itself. T11e BLM has concluded that the collection of processing fees to process applications 

under Section 433 of the EPAct, 43 CFR 3487.10 of the proposed rule, would not have a 

significant direct or indirect environmental impact. 

c. Definition of an underground mine 

The proposed rule includes a definition of the term "underground mine" in 43 CFR 3400.0-5. 

The definition would provide that the term means, for purposes of establishing a royalty rate 

under the terms of a coal lease, an excavation in the earth for the purpose of severing coal in 

which persons routinely work in an envirmm1ent where undisturbed earth is directly overhead. It 

would further provide that as defined an underground mine has roof control and ventilation plans 

that are approved by the Mine Safety and Health Administration, Department of Labor, that 

expressly allow regular work by personnel where there is undisturbed earth directly overhead. 

The definition is proposed to clarify whether the statutory minimum royalty rate of 12 'h percent, 

or lower underground royalty rate of 8 percent, is applicable for payment of royalty on the sales 

value of severed Federal coal. This proposed definition is administrative in nature. 

The environmental impacts from the severance of Federal or non-Federal coal are analyzed and 

authorized under the SMCRA. The payment of royalty after the coal is severed from the earth is 

procedural and has no environment impact. Therefore, the BLM has concluded that the 

implementation of the definition of "underground mine" to clarify when the underground royalty 

rate is applicable does not have a direct or indfrecl environmental impact. 

d. Maximum lease modification acreage increased to 960 aces 

The proposed rule would an1end section 3432.1 to increase the maximum acreage that may be 

added to a coal lease through a lease modification. At present, section 3432.llimits lease 

modifications to 160 acres. The proposed rule would provide that the acreage added to a lease 

by modification must not exceed the lesser of 960 acres or the acreage of the lease when the 

lease was issued. 

A lease modification is a non-competitive process to lease tmdeveloped Federal coall:mds to the 

lessee of an adjoining coal lease such that all the Federal coal may be developed in an orderly 

manner. A coal lease modification is used when there are small parcels of Federal coal adjacent 

to a Federal coal lease that are not of sutlicient size to merit individual competitive lease sales. 

These parcels are typically not identified in the original lease configuration process due to a lack 

of detailed information or a lack of any competitive interest. As mining progresses, additional 

information is obtained concerning the character and extent of the coal seam or seams, and by 

inference, the m1leased Federal coal seam or seams in the adjoining areas. 

A lease modification is initiated by an expression of interest or application from an adjoining 

Federal coal lessee. To reach a decision on an application for a lease modification, the BLM 

must mal<e a determination that: 

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(1) A lease modification serves the interests of the United States; 

(2) There is no other competitive interest in the l;mds or deposits; and 

(3) The additional lands or deposits catmot be developed as pati of another potential or 

existing independent coal mining operation. 

An affirmative determination that the m·ea proposed for a lease modification complies with all 

three criteria is required to modify a lease. 

Each lease modification is subject to site-specific NEPA analysis similar to that required for a 

proposed new competitive Federal coal lease because a lease modification authorizes entry to 

Federal coal semns within areas that have not been previously leased for coal development. The 

proposed rule would not change the NEP A analysis requirement. Any commitment of resources 

or approval of development activities would be based on future decisions made in compliance 

with the BLM's land use planning and NEPA procedures. Further, a lease modification must 

also satisfy the three specific lease modification criteria described above. Subsequent to 

finalization of a lease modification, the lessee is also required to have the additional lands added 

to their various mining permits before entry is authorized. With no changes to the NEPA 

requirements for each lease modification or in the mining permit approval process or 

requirements, and no change to the three lease modification approval criteria, the BLM has 

concluded that there is no significant direct or indirect effects on the environment from this 

proposed regulation change. 

e. Environmental Impact Statement 

Section 3435.3-5 contains a reference to a "draft environmental assessment or environmental 

impact statement." Even though the word "draft" precedes the reference in section 3435.3-5 to 

an Environmental Assessment (EA) and an Enviromnental Impact Statement (EIS), the term 

"draft" was intended to apply exclusively to an EIS rather than to at1 EA. The BLM is proposing 

to change the regulations to correct this error. 

The proposed deletion of a reference to draft EAs would recognize that, when an EA is prepared, 

there will not necessarily be a public notice of availability. That change is consistent with BLM 

discretion to determine how at1d when to seek public involvement in the prepm·ation of an EA, in 

accordance with BLM's Janum·y 2008 NEPA Handbook H-1790-1, Section 8.2, at1d the 

regulations of the Council on Enviromnental Quality. The BLM has concluded that this 

proposed change, which is administrative in nature, would have no direct or indirect 

enviromnental impacts. 

f. Minimum Royalty Rate 

The BLM is proposing to at11end section 3473.3-2(a)(1) to provide that Federal coal leases must 

specify a royalty rate of not less that1 12 Yz percent for all coal recovered, except coal recovered 

from at1 underground mine, as provided by the MLA (30 U.S.C. 207(a)). As additional 

guidat1ce, the proposed rule would state that among other methods, the royalty rate established 

under proposed section 3473.3-2(a)(l) would apply to all coal recovered by smface mining, 

highwallmining systems, including auger mining, continuous highwallmining and other similar 

systems where personnel do not work in at1 underground mine. This would make clear that it is 

not relevat1t whether activities such as continuous highwall mining are considered surface 

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mining; what is relevant is that they are not considered underground mining. The 8 percent 

royalty rate for coal recovered from underground mines is contained in proposed section 3473.3-

2(a)(2). 

The application of the 12 Y, percent royalty rate for all Federal coal, except that which is mined 

by underground means, as provided in the proposed new definition of an underground mine, may 

have an adverse effect on the recovery of some coal. However, the BLM's experience to date is 

that the application of mining systems that bring the royalty rate into dispute is limited to when 

conventional surface mining is no longer economically viable and underground mining is not yet 

feasible. This is a very narrow and specific application that could be further limited by the 

unique geologic conditions of a lease. Further, of the eight mines that have used mining systems 

that could bring the royalty rate into dispute, seven have had significant coal recovery while 

paying royalty at the rate of 12 Y, percent. One mine opted to pay royalties at the lesser 

undergronnd royalty rate of 8 percent without appropriate prior BLM approval. Resolution of 

the appropriate royalty rate for mining systems with a disputed royalty rate would follow 

finalization of this proposed rule. If the application of a particular mining method is impeded by 

a 12 Y, percent royalty rate, the lessee continues to have the opportunity to request special 

consideration and request a lower royalty under Section 39 of the MLA (30 U.S.C. 209; 43 CFR 

3485.2(c)). Therefore, the BLM has concluded that the proposed rule would not have a 

significant impact on overall coal recovery. 

The royalty rate is an administrative condition of every Federal coal lease and does not by itself 

authorize any disturbance to the environment. However, the royalty rate may indirectly affect 

the extent of disturbance. This is because a higher royalty rate would require larger royalty 

payments for a given sales value, potentially indicating a decrease in the maximum economic 

recovery of the Federal coal and consequently disturb less of the environment. However, to 

encourage the greatest ultimate recovery of the coal resource, a lessee may apply for a lower 

royalty rate under Section 39 of the MLA (30 U.S.C. 209) if conditions are such that a lower 

royalty rate is necessary to promote development, or if in the judgment of the BLM, the lease 

cmmot be successfully operated under the terms of the lease. Therefore, a lessee has an 

established method to redress a high royalty rate a11d the BLM concludes that the changes in the 

royalty rate structure would have no significant direct or indirect impact on the environment. 

g. Bonds for deferred bonus payments 

When a new Federal coal lease is offered for competitive sale, the royalty rate and the annual 

rental fees are already established. The wil111ing bidder for the new coal lease is selected based 

on a bonus bid. The bonus bid is a payment to tl1e BLM that is in addition to annual rental fees 

or the royalty due on severed coal. By statute, at least half oftl1e Federal coal acreage offered 

for competitive sale in any year must be offered with an option to defer the bonus bid (30 U.S.C. 

201(a)(l)). Typically, all new coal leases that are oftered for competitive sale are offered with a 

deferred bonus option. The BLM, by regulation, has established that 20 percent of tl1e total bonus 

bid amount must be provided in cash with the sealed bid for the coal lease ( 43 CFR 3422.4( c)). 

The remaining balance of the bonus bid is payable in four equal mmual installments on the 

anniversm·y date of lease issum1ce for the four years following lease issuance. The BLM has 

historically included the remaining unpaid halm1ce of the bonus bid in an ammal review of the 

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bond amounts. However, this BLM policy has been revised to only require a bond for one 

deferred bonus payment. 

Section 436 of the EPAct arnends 30 U.S.C. 20l(a) with respect to bonds for unpaid bonus bids. 

The revised statute provides that the Secretary will not require a bond for deferred bonus 

payments for a Federal coal lease issued afier enactment of the EP Act if a prospective lessee has 

a history of timely payment ofnoncontested production royalties, advance royalties, and bonus 

payments. The Secretary may waive the requirement for a bond for unpaid deferred bonus 

payments for leases issued before enactment of the EP Act that still have deferred bonus 

payments pending. 

This section of the EPAct also amends the MLA at 30 U.S.C. 20l(a) by providing that if a lessee 

fails to make a deferred bonus payment within 1 0 days after written notification by the Secretary 

that a deferred bonus payment has not been made, the Federal lease for which the deferred bonus 

is due will terminate and all bonus payments received for the lease will not be returned to the 

lessee nor credited to other obligations of the lessee. 

The BLM is proposing to implement this section of the EP Act in a new subpart 43 CFR 34 74. In 

this subpart the BLM would establish: 

• What is timely payment; 

• The application procedures to obtain this new benefit; 

• The standards for maldng a decision that a lessee has a history of timely payment; 

• A framework to resolve disputed payment histories; and 

• Guidance for termination of a lease for failure to pay a deferred bonus payment. 

These policies and procedures all involve administration of a Federal coal lease and do not 

authorize a new disturbance of the environment nor modify an existing authorization to disturb 

the enviromnent on the Federal coal lease. 

It is theoretically possible that if a lease is terminated for failure to pay a deferred bonus 

payment, the lessee may have already entered the lands creating an environmental disturbance 

that would then be the responsibility of the BLM if the lessee failed to perform reclamation. 

However, if such termination were to occur, the Jessee would have already obtained a mining 

permit under the SMCRA and a bond for full performance of reclan1ation requirements. The 

reclamation bond would be used to remediate enviromnental disturbances on the Federal lease. 

This would mitigate any direct or indirect environment impacts. Further, since it talces about two 

years after a lease is issued to obtain a mining permit under the SMCRA, the lessee by this time 

will have made three out of the five required deferred bonus payments (one at the lease sale and 

then for two subsequent years after the lease is issued). As the lessee gains a greater economic 

interest in a lease through payment of the deferred bonus payments and obtaining a mining 

permit'under the SMCRA, the probability that the lessee will default on subsequent deferred 

bonus payments significantly decreases. Therefore, the BLM concludes that the proposed rule 

for implementation of Section 436 of the EPAct would not result in a significant direct or 

indirect impact to the environment. 

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h. Definition of continued operation 

Under 30 U.S. C. 207(a), a Federal coal lease must produce commercial quantities of coal within 

I 0 years after lease issuance, or the BLM will terminate the lease. "Conm1ercial quantities" is 

defined in the BLM regulations at 43 CFR 3480.0-5(a)(6) as one percent of the lease recoverable 

coal reserves or LMU recoverable coal reserves. After the date that commercial quantities of 

coal are initially produced, the lessee must thereafter annually maintain the lease in continued 

operation. See 30 U.S.C. 207(b)(1) and 43 CPR 3483.1. Under existing rules and this proposal, 

the ammal continued operation requirement may be satisfied by either producing at least 

commercial quantities of coal atmually, or by maintaining a cumulative production for a 3-year 

period, consisting of the current continued operation year and the previous 2 continued operation 

years, that meets or exceeds the combined atmual commercial quantities requirement for the 

satne 3-year period. The BLM's interpretation of this requirement was discussed at length and 

affirmed by the Interior Board of Land Appeals (IBLA) in Caballo Coal Company, 163 IBLA 

116 (2004). 

The BLM may suspend the condition of continued operation upon the payment of an advat1ce 

royalty, if such a payment is determined to be in the public interest. See 43 CPR 3483.4. When 

coal production resumes, the operator/lessee may recoup the advance royalty it paid against the 

actual production royalty obligation that accrues once the coal is produced at1d sold. 

The BLM's LMU Guidelines, which are being proposed for withdrawal as a part of this 

rulemaldng, provide supplemental guidance on how to implement the 3-year production average 

referred to in the current definition of continued operation. This proposed rule would chat1ge the 

regulatory definition of "continued operation" to be consistent with the supplemental guidat1ce 

from the LMU Guidelines. No additional environmental disturbance is authorized by this 

proposed regulation chat1ge. Therefore, the BLM has concluded that the proposed change to the 

definition of continued operation is administrative in nature and would not have a significm1t 

direct or indirect impact on the environment. 

i. Requirement for a Resource Recove1y and Protection Plat1 CR2P2) within 3 years after lease 

ISSUat1Ce 

Approval to enter and mine on a Federal coal lease requires multiple authorizations. Before the 

EPAct, the BLM required two submittals. The first was a requirement for a mining plan to be 

submitted to the BLM within 3 years oflease issuance. This "3-year mining plan" did not 

authorize entry or mining. A second authorization is an R2P2. The BLM recommends that the 

R2P2 be included as a part of a mining plan under the SMCRA. The R2P2 is included in at1d 

authorized in conjunction with the SMCRA mining permit. The SMCRA mining permit is the 

authorization that allows mining to begin. The R2P2 provides the BLM with sufficient 

information to determine if the proposed mining plan of the lessee will achieve the statutory 

requirement of maximum economic recovery of the Federal coal. The "3-year mining plan" is 

submitted only to comply with the MLA 's requirement for a plan within 3 years after lease 

issuance, and it does not provide sufficient detail to approve or authorize disturbat1ce. The level 

of detail to approve mining operations is always provided with the lessee's application for a 

mining permit under the SMCRA. 

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The EP Act eliminated the requirement to provide a mining plan to BLM within 3 years of lease 

issuance and retains the requirement for an operation and reclamation plan before taking any 

action on a lease, which might cause a significant disturbance of the environment. 

The proposed rule at 43 CFR 3482.1 (b) would eliminate the requirement for an operation and 

reclamation plan within 3 years after lease issuance for a lease. A similar provision for LMUs is 

proposed at 43 CFR 3487.4(a). The requirement to have an approved R2P2 and SMCRA permit 

before mining or reclamation begins remains unchanged. Therefore, since this change only 

serves to eliminate duplicate paperwork and does not authorize new, or modify any existing 

authorization that would disturb the environment, the BLM has concluded that this change does 

not pose a direct or indirect impact to the enviromnent. 

j. LMU maps requirements 

The BLM proposes to add a new paragraph in section 3482.3 that would cross-reference the 

LMU mapping requirements found at existing section 3487.l(i). Under this provision, coal 

produced from non-Federal lands that are included in an LMU would be subject to the same 

mapping requirements as coal produced from Federal lands. This provision could have an 

indirect enviromnental consequence in that the map of coal production from the non-Federal 

lands would be a Federal record that eventually would be available in the Abandoned Mine Map 

data base that is maintained by the Office of Surface Mining. This could have positive long-term 

consequences, since it would provide reliable information of areas of past mining to facilitate 

more effective future land use decisions by the public and the Federal government. The 

probability that coal production maps from non-Federal lands could result in a less informed 

future land use decisions is relatively small. However, not having access to such maps in the 

future increases the potential for less informed land use decisions and unpredictable 

environmental impacts. The magnitude or likelihood of any such positive consequence is 

impossible to predict. D1erefore, the BLM has concluded that this proposed change could have a 

small positive to neutral direct or indirect environmental impact. 

k. Advance royalty 

Section 434 of the EPAct amended 30 U.S.C. 207(b) relative to the payment of advance royalty 

in lieu of the continued operation requirement of a lease. Similar requirements have been 

established by regulation for LMUs. Each Federal coal lease or LMU must be diligently 

developed within 10 years of issuance and subsequently annually maintained in continued 

operation. However, after a Federal coal lease or LMU has achieved diligent development, a 

lessee may elect to pay advance royalty in lieu of producing coal to meet the continued operation 

requirement. See 30 U.S.C. 207. The EPAct extends from 10 years to 20 years the number of 

years that advance royalty may be paid in lieu of continued operation over the life of a lease. 

The EP Act amendment further establishes that the coal value for determining the amount of 

advance royalty would be based on the spot market price for the sale of comparable coal that is 

produced from the same coal production region during the last month of the one year period for 

which the advance royalty is due. The amendment also repealed the requirement that advance 

royalty paid in the first twenty years of the Federal coal lease could not be applied to production 

11 
that occurred after the twentieth year of the Federal coal lease. 

The BLM regulations require that a lessee must apply to the BLM to pay advance royalty. See 

43 CFR 3483.4. The processing of an application to pay advance royalty in lieu of continued 

operation requires a coordinated effort between the BLM and the Office of Natural Resources 

Revenue (ONRR) (formerly the Minerals Revenue Management Program of the Minerals 

Management Service. 1 The BLM reviews the application to pay advance royalty and determines, 

based on the production history of the Federal coal lease or LMU, if an advance royalty payment 

is required and the quantity of coal upon which the monetary value of advance royalty would be 

determined. Subsequent to the BLM decision whether an advance royalty payment is required, 

the ONRR determines an appropriate current market value of the coal upon which to determine 

the amount of advance royalty that is due, calculates the advance royalty payment, and bills the 

applicant for the advance royalty payment tluough a demand letter. The condition of continued 

operation is only suspended upon receipt of the advance royalty payment by the ONRR. 

The payment of advance royalty in lieu of continued operation helps a lessee maintain 

compliance with the minimum mmual production requirement of 30 U.S.C. 207(a) while mining 

operations on the lease are curtailed. The lessee continues to have beneficial use of the lease 

during the period for which advance royalty is paid. After the Federal coal lease or LMU begins 

to produce coal again, the advm1ce royalty may be used to offset the production royalty payments 

that are due once the coal is sold. 

The payment of advance royalty cannot occur until after a lease or LMU has achieved diligent 

development. "Diligent development" i~ defined by regulation a~ the produ<.;tion of <.;OJ11Jnerdal 

quantities of coal. See 43 CFR 3480.0-5(a)(l2). "Commercial quantities" of coal is further 

defined as one percent of the recoverable coal reserve. See 43 CFR 3480.0-5(a)(6). 

Failure to continue to annually produce at least commercial quantities of coal or pay advance 

royalty in lieu of the continued production requirement may result in the lessee being ineligible 

to receive additional Federal coal leases tluough either competitive sale or assignment m1d may 

subject the lease to cancellation. See 43 CFR 3472.1-2(e) and 43 CFR 3483.2. 

Proposed section 3483.4 would eliminate the description of how the advm1ce royalty value would 

be determined. The regulations concerning how to determine advance royalty value are 

proposed to be moved to the ONRR regulations. These new regulations would also clarify how 

1 The Secretary of the Interior delegated the responsibilities formerly held by the Minerals Management Service to 

the Bureau of Ocean Energy Management, Regulation and Enforcement. See Secretarial Order Nos. 3302 and 3299, 

Amendment No. 1. The Secretary also directed the Assistant Secretary for Land and Minerals Management and the 

Assistant Secretary for Policy, Management and Budget to develop a schedule for additional delegations, including 

the establishment of an Office ofNatural Resources Revenue (ONRR) to take responsibility for the onshore royalty 

and revenue management function of the Minerals Revenue Management Program of the former Minerals 

Management Service. On October 1, 2010, the royalty-management responsibilities that are pertinent to the 

Proposed Rule were delegated to the ONRR, which is under the supervision of the Assistant Secretary for Policy, 

Management and Budget. 

12 
advance royalty years would be credited against the maximum of number ofyems of advance 

royalty can be paid. The proposed regulation at 43 CFR 3483.4(e) would increase from 10 to 20 

the number of years that advance royalty may be paid in lieu of continued operation 

The payment of advance royalty has not, and under the proposed chm1ges would not, authorize 

m1y new disturba11ce to the environment. However, the payment of advance royalty may delay, 

but not eliminate, disturbance to the enviromnent with an authorized Federal coal lease that has 

previously produced coal. Therefore, the BLM concludes that modification of the rules to 

implement the changes to advance royalty authorized under the EP Act would not result in a 

significm1t direct or indirect effect on the environment. 

The BLM is also proposing several other related regulation changes. These chm1ges are due in 

pmt to the provisions of the EP Act m1d in part to the proposed withdrawal of the LMU 

Guidelines. The LMU Guidelines provide instructions concerning how compliance with a 

Federal coal lease or LMU continued operation requirement is determined and how coal 

production that is less than the continued operation requirement is used to calculate the mnount 

of advm1ce royalty that must be paid so that the continued operation requirement is suspended 

once advance royalty is paid. Determining compliance with the continued operation requirement 

and determining the mnount of coal for which advance royalty must be paid aTe closely related. 

Therefore, implementing this section of the EP Act requires proposing changes to the regulations 

in several other places. 

The general conditions for paying advance royalty would be contained in proposed section 

3483.4(a). Under proposed section3483.4(a)(l), the BLM could authorize the payment of 

advance royalty in lieu of continued operation for a lease or LMU if: 

(1) Coal has not been produced in sufficient qum1tity from the lease or LMU during a 

continued operation yem to satisfy the continued operation requirement of the lease or 

LMU; 

(2) The aggregate number of continued operation yeaTs for accepting advance royalties, as 

determined under paragraph (e), has not been exceeded; and 

(3) The BLM determines that payment of advance royalty in lieu of continued operation will 

serve the public interest. 

Under proposed section 3483.4(a)(2), the continued operation requirement for a Federal coal 

lease or an LMU for a continued operation yem could be met by a combination of coal 

production and payment of advance royalty. Also, proposed section3483.4(a)(3) would provide 

that the lessee is responsible for paying advance royalty for a lease that is not within an LMU, 

m1d the LMU lessee/operator is responsible for paying advance royalty for an LMU. 

Under the revised statute, after a lessee has achieved diligent development, there m·e no statutory 

restrictions as to when, during a continued operation year, the lessee may apply to pay advm1ce 

royalty in lieu of continued operation. Under existing 43 CFR 3483.4, applications to pay 

adva11cc royalty made later thm1 30 days after the beginning of a continued operation year me 

subject to late payment chm·ges. Because the provisions for calculation of the advance royalty 

13 
payment in Section 434 of the EPAct provide for coal values to be determined during the period 

running through to the end of a continued operation year, proposed section 3483 .4(b) would 

allow applications to pay advance royalty to be filed any time during the continued operation 

year. Failure to apply to pay advance royalty within the same continued operation year that the 

advance royalty would apply, may result in cancellation of the lease consistent with 43 CFR 

3483 .2(c) or the lessee may fail to qualify for a new Federal coal lease, or transfer of an existing 

Federal coal lease, as specified in 43 CFR 3472.1-2(e). 

Proposed section 3483.4(c) would specify that the value of coal for advance royalty purposes 

would be established in accordance with applicable ONRR regulations. Therefore, any 

environmental impacts due to the determination of the value of the advance royalty payment, and 

the actual payment of advance royalty, would be addressed by the ONRR rule. 

Proposed section 3483 .4( d) would address the royalty rate that would be used for calculating 

advance royalty. It would provide that the royalty rate specifi.ed in the lease document will be 

used to calculate the advance royalty for a lease. For LMUs, it would provide that the advm1ce 

royalty rate is 8 percent where the Federal LMU recoverable coal reserves contained in the LMU 

will be recovered only by underground mining operations m1d not less than 12 Yz percent where 

ti1e Federal LMU recoverable coal reserves contained in the LMU will be recovered by mining 

operations other than underground mining. For a11 LMU that contains Federal LMU recoverable 

coal reserves that would be recovered by a combination of underground a11d other mining 

meti10ds, the advmce royalty rate would be not less than 12 Yz percent. This is ti1e smne as the 

current regulations at 3483.4(c). Therefore the royalty rate at which the adva11ce royalty 

payment is calculated does not have a significant direct or indirect environment impact. 

Under the proposed rule, if the BLM authorized the payment of advance royalty for a lease or 

LMU, the BLM would determine at the end of a continued operation year the amount of coal, 

measured in tons, which the ONRR would use to calculate the value of the advm1ce royalty 

payment. A description of the calculation procedures for determining complimce with diligence 

md to determine if advmce royalty needs to be paid are currently only included in the BLM's 

LMU Guidelines. Incorporation of the diligence calculation procedures from the LMU 

Guidelines into regulation is discussed in greater detail below. 

I. Calculations for continued operation 

Under the proposed rule, if the BLM authorized the payment of advm1ce royalty for a Federal 

coal lease or LMU, the BLM would determine at the end of a continued operation year the 

mnount of coal, measured in tons, for the ONRR to use to calculate the value of the advance 

royalty payment. The BLM's LMU Guidelines describe in great detail how to determine ti1e 

a111ount of coal upon which the advance royalty is calculated (50 FR 35154 through 35156). 

There are no similm· provisions in the existing BLM coal regulations. Therefore, the BLM is 

proposing to incorporate into proposed 43 CFR 3483.4(h) the processes established in the LMU 

Guidelines for calculating the amount of coal for which advm1ce royalty is due. The proposed 

regulations explain the calculation processes for Federal coal leases and LMUs. 

14 
Under proposed 43 CFR 3483.4(g), the calculation of advance royalty tonnages would include 

both !-year and 3-year tests, based on the definition of the continued operations requirement. 

These are the same calculation methods provided in the LMU Guidelines which are proposed to 

be withdrawn. The tonnage derived from the calculation method that results in the lower 

tonnage would be the tonnage to be used in determining advance royalty. The maximum 

advance royalty tonnage for any continued operation year for a Federal coal lease would not 

exceed the commercial quantities amount for the lease. 

For LMUs, the calculation methods would recognize that an LMU may consist of both Federal 

and non-Federal coal and are based on the calculation methods described in the LMU 

Guidelines. In determining advance royalty tonnage for an LMU, a proportional reduction 

would be made to account for the percentage of the Federal recoverable coal reserve for Federal 

coal leases in the LMU to the overall recoverable coal reserves of the entire LMU. 

Compliance with the continued operation requirement or payment of advance royalty does not 

change the scope or extent of environmental disturbance. The calculation methods for 

determining the tonnage of coal upon which advance royalty is due have not changed. The 

payment of advance royalty in lieu of continued operation only extends the duration of 

disturbance and not the amount of disturbance. Therefore, the BLM concludes that guidance for 

calculation of the tmmage on which advance royalty is due is procedural and does not have a 

significant direct or indirect enviromnent impact. 

m. Special LMU rules 

The BLM proposes to add a sentence to section 3483.6(a) that pertains to the diligent 

development requirements for LMUs. This issue was addressed by the IBLA in Carbon Tech 

Fuels, Inc., 161 IBLA 147 (2004). In that case, the IBLA upheld the BLM's refusal to credit 

non-Federal coal production for LMU diligence purposes where such production occurred before 

the non-Federal coal resources were included in the LMU. The IBLA held that no statute or 

regulation obligated the BLM to credit production from private lands which pre-dated the LMU 

at issue in the case. 161 IBLA at 166 n.14. 

At present, the regulations do not expressly prohibit or authorize crediting of prior production of 

non-Federal coal. Section 3483.6(a) provides that production anywhere within an LMU will be 

applied toward satisfaction of the diligent development and continued operation requirements. 

The proposed amendment would clarify that production of non-Federal coal will be credited 

towal'd the diligent development requirement only if such production occurs after the BLM 

approves inclusion of the non-Federal resources within the LMU. 

The reasons for this proposed change are twofold. First, the BLM is llilable to verify the 

tmmages produced from non-Federal resources before they are included in an LMU. Second, the 

diligent development requirement is intended to encourage the diligent production of Federal 

coal that is yet to be mined. Allowing the crediting of production of non-Federal coal resources 

that may have occurred years earlier does not encourage diligent production of the Federal coal 

15 
that remains unmined. In fact, it may provide an avenue to allow the avoidance of coal 

production, as could have occurred in the Carbon Tech Fuels situation discussed above. 

This proposal is administrative in nature. The BLM has no control or authority concerning nonFederal coal resources unless they are included in an LMU. Further, the BLM's approval of an 

LMU does not authorize any entry into any of the lands or severance of coal from any of the 

lands included in the LMU. An LMU allows production from any of the lands that are included 

in the LMU to be administratively credited toward the diligence requirement of the LMU, and 

thereby, each Federal coal lease included in the LMU. Therefore, this change does not have a 

direct or indirect impact on the enviromnent. 

At present, section 3483.6(b) provides that the dates for submission ofR2P2s, and for 

achievement of diligent development, will not be changed by increasing or decreasing the size of 

the LMU. The proposed rule would remove the reference to the submission date for R2P2s. As 

amended by the proposed rule, the regulations pertinent to LMUs would require an operator to 

submit an R2P2 only when applying for the establishment of an LMU or a11 LMU modification. 

While Section 435 of the EP Act does not specifically remove the subsequent requirement for an 

R2P2 3 years after establishment of an LMU, the BLM has determined that this proposal would 

be consistent with Section 435 oftl1e EPAct. As discussed in the section concerning 

implementation of Section 435 of the EPAct, this administrative change would not have a 

significru1t direct or indirect environmental impact. 

A new paragraph (c) would be added to section 3483.6 addressing the relationship ofLMU 

continued operation requirements to lease-specific contiriued operation requirements. The 

proposed rule would provide that LMU continued operation requirement must be satisfied 

independently of whether the Federal coal leases within the LMU produce sufficient coal to meet 

the individual continued operations requirements that would apply if the leases are not in an 

LMU. The continued operation requirement for both Federal coal leases and LMU s is an 

administrative tool used to assure compliru1ce witl1 the production requirements of 30 U.S.C. 

207. Therefore, similar to other changes to the administrative processes concerning the 

continued operation requirement, this change would not have a significa11t direct or indirect 

impact on the environment. 

n. Subpart 3487 renumbered 

Subpali 3487- Logical Mining Unit, which currently consists of one long section, would be 

reorgallized into multiple sections. This is all administrative change to facilitate use of the 

regulations and therefore would not have any direct or indirect environmental effect. 

o. LMU Applications 

Proposed section3487.2(b) (currently section3487.l(c)(2)) would be amended to require that 

LMU applications include a complete description of all Federal, state, and private lal1ds that are 

to be included in an LMU. This is consistent with the current LMU Guidelines as described at 

50 FR 35148 alld 35149. The change would modify the application requirements for all LMU. 

An LMU is formed to serve as a tool through which coal production from non-Federal lands may 

16 
be used to meet the continued operation requirement of Federal lands and to promote a logical, 

efficient, and orderly development of the coal resource. As already established above, the 

continued operation requirement for a lease or LMU does not create a direct or indirect impact 

on the environment. Therefore, the BLM has concluded that this proposed change does not have 

a significant direct or indirect impact on the environment. 

Existing section 3487.l(c)(3) would be expanded in proposed 3487.2(c) by adding a list of 

. specific information that will demonstrate that the applicant for an LMU has effective control of 

all coal within the LMU boundary. This is consistent with the cmTent LMU Guidelines as 

described at 50 FR 35149. This requirement would ensure that, by cooperating with the LMU 

operator, the BLM would be able to verify production throughout the LMU. Since this is merely 

an application requirement that enables the BLM to make an informed decision concerning 

approval of an LMU application, there is no on-the-gronnd environmental impact. Therefore, the 

BLM has concluded that this proposed change to the regulations would not result in a significant 

direct or indirect impact on the environment. 

p. LMUR2P2 

The provisions in existing section 3487.l(e)(1) would be amended in proposed section 3487.4(a) 

to eliminate the requirement for submission of an R2P2 within 3 years after the effective date of 

the LMU approval. This is consistent with Section 435 of the EPAct, which eliminated this 

requirement. Instead, the proposal would provide that an LMU applicant must submit an R2P2 

containing the information required by section 3482.1 (c) for .all Federal and non-Federal lands 

within the LMU, before the LMU or LMU modification can be approved. The R2P2 for the 

LMU is proposed to become a requirement of the LMU application in proposed section 

3487.2(d). This earlier submittal of the R2P2 would provide a basis for the BLM to analyze 

whether the LMU should be approved. The R2P2 for an LMU is a hybrid mining plan that 

combines the R2P2 for all the Federal coal leases in the LMU and similar mining plans for all 

non-Federal lands proposed to be included in the LMU. The proposed rule would also-provide 

that the BLM will adjust the estimates of the Federal and non-Federal LMU recoverable coal 

reserves at the time of R2P2 approval. 

Regardless of when the BLM receives or approves the R2P2 for an LMU, authorization to begin 

mining requires a myriad of other specific permits and authorizations, of which the approved 

R2P2 is but one. There are other authorizations required fi·om the Mine Safety and Health 

Administration and other Federal and state agencies. The R2P2 in and of itself does not 

authorize any environmental disturbances. Therefore, this change does not pose a significant 

direct or indirect environmental impact. 

g. LMU Recoverable Coal Reserves 

The BLM is proposing to add a new section 3487.7(d) to specify when a change in the LMU 

recoverable coal reserves would be effective. However, because the date when the lessee must 

apply for advance royalty has changed from the beginning of a continued operation year to the 

end of the continued operation yeaT (see proposed rule changes for section 3483.4(b)), there is no 

need to maintain a constant continued operation requirement throughout the continued operation 

17 
year. Therefore, the BLM has proposed to allow any change in the LMU's recoverable coal 

reserve, and hence the continued operation requirement, to be effective upon the BLM's 

approval. This is a change from the current LMU Guidelines described at 50 FR 35154. 

Changes to the LMU recoverable coal reserves are a routine matter and do not determine when, 

where, or how coal is actually mined. Therefore, the BLM has concluded that this change does 

not have a significant direct or indirect impact on the environment. 

r. LMU Termination 

The BLM is proposing a new section 3487.9 to provide specific stm1dards m1d procedures for 

termination of m1 LMU. This paragraph would include the provisions previously found in the 

LMU Guidelines at 50 FR 35157. Proposed section 3487.9(a)(5) would be modified from the 

LMU Guidelines to reflect that an LMU may be extended beyond the LMU's initial40-year 

term, as provided by Section 433 of the EPAct. The BLM is also proposing a new provision that 

any Federal coal lease included in m1 LMU would continue under the terms and conditions of the 

lease when the LMU is terminated or relinquished. This is consistent with the LMU Guidelines 

at 50 FR 34157. An LMU does not authorize allY physical disturbance to the enviromnent. 

Similarly, the termination of an LMU does not authorize any additional disturballce to the 

environment. Reclamation after mining is completed continues to be reqnired under the 

SMCRA. The LMU only provides the administrative tool through which coal produced from 

non-Federal lands may be used to comply with the diligent development and continued operation 

requirements of Federal coal leases alld to promote a logical, efficient, m1d orderly development 

of the coal resource. Therefore, since all LMU is an administrative action without any impact to 

the environment, there is no significant direct or indirect impact on the enviromnent from this 

change. 

s. LMU Extension 

Section 433 of the EPAct alllended the MLA at 30 U.S.C. 202a(2) to authorize the BLM to. 

extend the term of an LMU if such m1 extension wonld ensure the maximum economic recovery 

of the coal deposit and the extended period is in the interest of the orderly, efficient, or economic 

development of a coal resource. The maximum initial term of all LMU remains no more thilll 40 

years. 

The BLM is proposing to add a new section 3487 .I 0 that would pertain to extending the term of 

all LMU. The regulation would require an LMU operator to submit an application describing 

how the requested LMU extension would ensure the maximun1 economic recovery of the coal 

deposit m1d how the extended period would be in the interest of the orderly, efficient, or 

economic development of a coal resource. The proposed regulation would authorize the BLM to 

require the operator to submit additional information as needed. The BLM would not be 

obligated to approve an application to extend an LMU, but upon approval, the term of an LMU 

could be extended by increments of not more thall 10 years. 

An LMU is all administrative device to allow coal production from anywhere within the LMU to 

be credited toward the diligent development and continued operation requirements of all Federal 

coal leases within the LMU. This will not change if the term of the LMU is extended by I 0 

18 
years. While an extension of an LMU would provide more time to mine the coal resource, it 

does not imply that any more coal than would have been mined under the mine plan for which a 

previous environmental analysis has been conducted. The quantity of the coal does not change, 

but the LMU extension promotes a logical, efficient, and orderly development of the coal 

resource. Therefore, the environmental effects would remain unchanged relative to approval of 

the initial LMU. Coal resources may be added to an LMU only by modification of the LMU, 

which is not at issue in this rulemaldng. Therefore, the BLM has concluded that the proposed 

rule does not have a significant direct or indirect impact on the environment. 

In addition to proposed section at 3487.10, implementation of Section 433 of the EPAct will 

require several other rule modifications to assure other sections of the coal management rule do 

not conflict as follows: 

• The BLM proposes to replace paragraph (h)(4) of existing section 3487.1, which states 

that the 40-year period for mining the reserves of an LMU will not be extended. This 

paragraph would be replaced because Section 433 ofti1e EPAct allows an LMU to be 

extended to a life in excess of 40 years. This proposed modification would simply 

modify current regulatory text that conflicts with Section 433 of the EPAct. Similar to 

extending ti1e life of an LMU, ti1is proposed change does not have a significant direct or 

indirect impact on the environment. This change would implement the provisions ofti1e 

EPAct by making the BLM's regulations consistent with the EPAct. The BLM's 

regulations cannot explicitly preclude what the EP Act would allow. 

• The BLM is also proposing to add anew section 3487.7(e) to cross-reference the 

proposed rule at section 3487.10, which would implement Section433 ofti1e EPAct by 

providing procedures for extending an LMU beyond the current maximum term of 40 

years. As previously established, regulatory changes related to implementation of 

Section 433 ofilie EPAct only extend the term of an LMU, and thereby when disturbance 

to the environment might occur, but do not change or extend the scope or geographic 

extent of any environmental impact from coal mining. Therefore, this proposed change 

does not have a significant direct or indirect impact on the environment. 

t. Authorized Officer 

In proposed sections 3487.5(c) and 3487.7(a), corresponding to existing sections 3487.1 (f)(3) 

and (h)( 1 ), the BLM proposes to correct an error ti1at appears in each of these paragraphs. The 

proposed rule would remove the reference in both paragraphs timt makes it appear that ti1e BLM 

consults with itself. This was an error that occmTed when the lease operation regulations were 

moved from the ONRR regulations to the BLM regulations in 1982. This is an administrative 

correction that has no direct or indirect impact on the environment. 

2. Cumulative effects 

As discussed above, the proposed regulations would not affect the environmental impact of 

current leasing and mining practices. Substantial portions of the proposed regulatory package 

would implement the statutory mandates and authorizations of the EPAct. The BLM's 

regulations need to be consistent with ti1e provisions of the EP Act. The proposed rule largely 

19 
affects the administrative process required for maintenance of Federal coal leases and LMUs. 

Any new environmental disturbance will be authorized under separate authority and in 

compliance with NEPA requirements for each action. The direct, indirect, and cumulative 

environmental impacts of each new enviromnental disturbance will not occur before such 

disturbance is authorized in full compliance with the BLM's land use planning and NEPA 

processes. The proposed rule, if finalized, would not change the processes for analyzing the 

environmental consequences of any new environmental disturbance. Therefore, since the 

proposed rule does not change the methods by which new disturbance is authorized, the 

cumulative envirmm1ental effects of the proposed rule on human health, safety, and the 

environment, would be negligible. 

Administratively, the BLM anticipates greater compliance with the regulations due to improved 

clarity in the regulations, and therefore improved enforcement of the Congressional intent of the 

EP Act and the MLA. Site-specific and cumulative effects of authorizations that might lead to 

new enviromnental disturbance would be fully evaluated when a new Federal coal lease or lease 

modification, or a SMCRA mining permit, is considered. 

3. Residual Effects 

This proposed action is expected to affect administration of Federal coal leases and LMUs. As 

discussed above, the BLM does not anticipate adverse environmental impacts from the proposed 

action. Established enviromnental protection requirements that are mandatory for development 

of the coal reserves covered by a Federal coal lease or LMU are not affected by the proposed 

action. Mitigation measures are indentified during the environmental analysis completed for 

approval for issuance of a lease and for starting actual mining operations. Therefore, we 

conclude that the proposed action does not require any new or unique mitigation measures m1d 

that there are no residual effects which require future analysis. 

We also conclude that there is no significant impact on any of the following elements of the 

human environment: 

o Air quality; 

o Areas of critical environmental concern (ACECs); 

o Climate change; 

o Flood plains; 

o Historic or cultural resources; 

o Hazardous or solid waste; 

o Migratory birds; 

o Nationalmonuments; 

o National natural landmarks; 

o Native American religions; 

o Park, recreation or refuge lands; 

o Prime farm] ands; 

o Riparian zones; 

o Sole or principal drinking water aquifers; 

20 
• Threatened or endangered species; 

• Water quality; 

• Wetlands; 

• Wild and scenic rivers; 

• Wilderness; and 

• Other ecologically significant or critical areas 

B. The No-Action Alternative 

The changes proposed in the preferred alternative are all administrative in nature and do not have 

significant direct environmental impacts. The no-action alternative would not promulgate new 

regulations and would leave 43 CFR Parts 3000, 3400, 3430, 3470, and 3480 as they currently 

exist, thereby not implementing the administrative changes mandated by 1he EP Act. It would 

likewise not impact the critical environ111ental elements described in the preferred alternative. 

The no-action alternative would not implement the provisions of tl1e EP Act and would not 

comply with the intent of the EP Act. The no-action alternative would not correct tl1e known 

deficiencies in the current regulations and inconsistencies between the current regulations and 

the statutory provisions of the EPA ct. The no-action alternative would continue tl1e risk that 

regulatory requirements may contradict the authorizing statute, thereby resulting in a greater risk 

of administrative errors or litigation. Therefore, the BLM finds that while the no-action 

alternative does threaten significanlundesirable administrative impacts, the no-action alternative 

does not pose a possibility of significant environmental impact. 

C. The Alternative Proposed Action 

The alternative proposed action would not withdraw the 1985 Logical Mining Unit Application 

and Processing Guidelines and would not include any part of the LMU Guidelines in the 

regulations, but would implement all oftl1e otl1er proposed regulatory changes as described in 

the preferred alternative. Therefore, all the environmental impacts from new or revised 

regulations under the alternative proposed action would be unchanged from the preferred 

alternative. 

However, retaining the LMU Guidelines could cause significant confusion for the BLM and tl1e 

public. Even though the LMU Guidelines were promulgated tln·ough a notice and public 

comment process, and were published in the Federal Register on August 29, 1985 (50 FR 35145 

to 35163), the public currently is generally unaware of them due to tl1eir age and because the 

LMU Guidelines do not appem in tl1e formal BLM regulatory system. The regulations 

governing LMUs were modified on August 20, 1997 (62 FR 44370) and as described in tl1e 

preferred alternative, me proposed to be modified yet again. These regulatory changes, in some 

cases, are significantly different from the LMU Guidelines. Conflicts between the LMU 

Guidelines and the regulations would most likely be resolved on a case-by-case basis which may, 

or may not, be elevated for national policy decisions. Any confusion or conflicting guidm1ce is 

anticipated to be detrimental to the coal management progrmn, as it will divert scarce resources 

to repeatedly interpret conflicts between the regulations and the guidelines. There is a risk that 

local policy interpretations could be different, thereby leading to different application of the rules 

21 
in various local jurisdictions. 

The LMU Guidelines are not part of the BLM's existing internal guidance system of Manuals 

and Handbooks. The LMU Guidelines provide requirements that are binding on both the BLM 

and lessees, whereas the BLM's internal guidance system is only binding on the BLM. 

Therefore, conversion of the LMU Guidelines into the BLM's internal manual and handbook 

system would not provide an equal level of regulatory control of the Federal coal lessees. The 

BLM considers this to be an unacceptable risk. 

Continued conflicts between the LMU Guidelines and the regulations could have a detrimental 

effect on the enviromnent. This is in part because time and resources may be lost in resolution of 

conflicts that otherwise could have been used to mitigate real enviromnental problems. The 

resolution of conflicts could cause delays in taking on-the-ground actions that would mitigate or 

resolve environmental impacts from previously authorized mining. Finally, the conflicts could 

lead to improper management of the coal resource by causing premature termination of an LMU. 

V. Tribes, Individuals, Organizations, or Agencies Consulted 

The author of the proposed rule and BLM personnel were consulted in the preparation of this 

Environmental Assessment. The BLM Colorado State Office in Denver and the BLM Wyoming 

State Office in Cheyem1e were also consulted. 

In accordance with E.O. 13175, we have found that a portion of this proposed rule may include 

policies that have Tribal implications. The proposed rule would make changes to the Coal 

Management regulations, 43 CPR parts 3000, 3400, 3430, 3470, and 3480. As noted below, 

some of the provisions of 43 CPR part 3480 are applicable to "India11lands." Under the 

regulations of the Bureau oflndian Affairs, the term "India11lill1ds" includes Tribal lands. See 

25 CFR 211.3, 212.3, and 225.l(c). 

The Bureau ofindian Affairs regulations, at 25 CFR 211.4, 212.4, a11d 225.l(c), incorporate, 

through an explicit cross-reference, the BLM regulations at 43 CPR part 3480 a11d thus, unless 

expressly exempted, the provisions contained in part 3480 apply to Indian lands. The BLM coal 

management regulations, at 43 CFR parts 3400 tln·ough 3470, are not similarly incorporated by 

cross reference, are not applicable to Indian la11ds, and thus, proposed amendments to regulations 

in parts 3000, 3400, 3430, and 3470 are not subject to Tribal consultation. 

The BLM regulations at 43 CFR 3480.0-4 further provide that the provisions of part 3480 

relating to adva11ce royalty, diligent development, continued operation, maximum economic 

recovery, a11d LMUs do not apply to Indiill1lands, leases, and permits. Thus, the proposed 

a1nendments contained in this rule to 43 CPR subpart 3483, Diligence Requirements, and subpa1i 

3487, Logical Mining Unit, are excluded from Tribal consultation. The proposed definitions of 

continued operation a11d diligent development period are similarly excluded from Tribal 

consultation. A proposed amendment to add a new paragraph (h) to section 3482.3 is not subject 

22 
to Tribal consultation, because the proposed paragraph would be specifically limited in its 

application to LMUs. 

As noted above, the BLM regulations at 43 CPR subpart 3482 would be generally applicable to 

Indian lands unless otherwise specifically exempted, as noted above for proposed section 3482.3. 

Since 43 CPR 3482.1 (b) is not similarly specifically exempted from applicability to Indian lands, 

proposed regulatory amendments, if adopted by the BLM, would be applicable to Indian lands. 

Accordingly, this portion of the proposed rule would be a policy that could have Tribal 

implications. 

Inasmuch as proposed amendments to 43 CPR 3482.1 (b) may have Tribal implications by 

reason of their potential applicability to Indian lands, the BLM will begin consultation with 

potentially affected Tribes upon publication of the proposed rule. Further, the BLM will 

continue to consult with Tribes during the comment period of the proposed rule. 

VI. Preparer 

This Environmental Assessment was prepared by William Radden-Lesage, Bureau of Land 

Management, Department of the Interior, 1849 C Street, NW, mail stop 510LS, Washington, 

D.C. 20240; telephone 202/91217116. 

VII. References 

Logical Mining Unit Application and Processing Guidelines (LMU Guidelines), August 29, 1985 

(50 FR 35145 to 35163). 

23 
U.S. DEPARTMENT OF THE INTERIOR 

BUREAU OF LAND MANAGEMENT 

FINDING OF NO SIGNIFICANT IMPACT 

for 

PROPOSED RULE to REVISE 43 CFR PARTS 3000, 3400, 3430, 3470, and 3480 

Lease modifications, Lease and Logical Mining Unit diligence, Advance royalty, Royalty 

rates, Bonds 

A. INTRODUCTION 

EA Number: W0-320-3400-01 

RIN 1004-AD93 

The Bureau of Land Management (BLM) of the United States Department of the Interior 

proposes to amend existing regulations pertaining to Coal Management at 43 CFR Parts 3000, 

3400, 3430,3470, and 3480 that pertain to formation and administration of Federal coal leases 

and logical mining units (LMUs). The amended rule would implement the provisions of Title 

IV, SubtitleD of the Energy Policy Act of2005 (Public Law 109-58) which include: (1) 

increasing the maximwn acreage for a lease modification from 160 acres to 960 acres; (2) new 

procedures for extending the life of an LMU beyond 40 years; (3) chm1ges in the procedures and 

standm·ds for payment of advm1ce royalty for leases m1d LMUs; ( 4) elimination of the 

requirement to submit a resource recovery and protection plan within 3 years after lease issuance 

or establishment of an LMU; and ( 5) changes in procedures and stm1dards for bonds that are used 

to assure payment of the remaining balance of deferred bonus bids. In addition, the BLM is 

proposing to clarify what royalty rate would apply to continuous highwallmining operations that 

are conducted on Federal coal leases. Finally; the Energy Policy Act of2005 has rendered the 

LMU Guidelines (published in the Federal Register on August 29, 1985) obsolete. The BLM is 

therefore proposing a formal withdrawal of the LMU Guidelines and incorporation of those parts 

of the guidelines that remain valid into the regulations. 

B. STATEMENT OF ENVIRONMENTAL SIGNIFICANCE OF THE PROPOSED 

ACTION 

For the reasons stated below, the undersigned person has determined that the above-nilllled 

proposed action would have no significant impact on tl1e quality of the human enviromnent 

under Section 102(2)(C) of the National Environmental Policy Act of 1969 (NEPA), 42 

U.S.C.4332(2)(C), m1d therefore an Environmental Impact Statement is not required. 

C. REASONS 

This finding of no significant impact is based on the attached Environmental Assessment, which 

identifies and discusses the enviromnental impacts of the proposed action. It is not anticipated 

that the proposed chm1ges to existing regulations would result in adverse environmental impacts. 

The BLM finds that the proposed action would have no significm1t impact of m1y kind on the 

environment. 

Date 
U.S. DEPARTMENT OF THE INTERIOR 

BUREAU OF LAND MANAGEMENT 

FINDING OF NO SIGNIFICANT IMPACT 

for 

PROPOSED RULE to REVISE 43 CFR PARTS 3000, 3400, 3430, 3470, and 3480 

Lease modifications, Lease and Logical Mining Unit diligence, Advance royalty, Royalty 

rates, Bonds 

A. INTRODUCTION 

EA Number: W0-320-3400-01 

RIN 1004-AD93 

The Bureau ofLm1d Management (BLM) of the United States Depm·hnent of the Interior 

proposes·to mnend existing regulations pertaining to Coal Management at 43 CPR Parts 3000, 

3400, 3430, 3470, and 3480 that pertain to formation m1d administration of Federal coal leases 

m1d logical mining units (LMUs). The amended rule would implement the provisions of Title 

IV, SubtitleD of the Energy Policy Act of2005 (Public Law I 09-58) which include: (I) 

increasing tl1e maximwn acreage for a lease modification from 1 60 acres to 960 acres; (2) new 

procedures for extending the life of m1 LMU beyond 40 yem·s; (3) chm1ges in the procedures m1d 

stm1dards for payment of advance royalty for leases and LMUs; (4) elimination of the 

requirement to submit a resource recovery and protection plan within 3 years after lease issum1ce 

or establishment of an LMU; and (5) changes in procedures m1d standards for bonds that are used 

to assure payment of the remaining balance of deferred bonus bids. In addition, the BLM is 

proposing to clarify what royalty rate would apply to continuous highwall mining operations that 

are conducted on Federal coal leases. Finally, the Energy Policy Act of2005 has rendered the 

LMU Guidelines (published in the Federal Register on August 29, 1985) obsolete. The BLM is 

therefore proposing a formal withdmwal of the LMU Guidelines and incorporation of those parts 

of the guidelines tl1at remain valid into the regulations. 

B. STATEMENT O.F ENVIRONMENTAL SIGNIFICANCE OF THE PROPOSED 

ACTION 

For the reasons stated below, the w1dersigned person has determined that the above-nmned 

proposed action would have no significant impact on the quality of the human environment 

under Section 1 02(2)(C) of the National Environmental Policy Act of 1969 (NEP A), 42 

U.S.C.4332(2)(C), and therefore m1 Environmental Impact Statement is not required. 

C. REASONS 

This finding of no significant impact is based on the attached Environmental Assessment, which 

identifies m1d discusses the environmental impacts of the proposed action. It is not anticipated 

that the proposed chm1ges to existing regulations would result in adverse environmental impacts. 

The BLM finds that the proposed action would have no significant impact of m1y kind on the 

environment. 

Date Michael 

/~ Nedd, A 1stant Director 
U.S. DEPARTMENT OF THE INTERIOR 

BUREAU OF LAND MANAGEMENT 

FINDING OF NO SIGNIFICANT IMPACT 

for 

PROPOSED RULE to REVISE 43 CFR PARTS 3000, 3400, 3430, 3470, and 3480 

Lease modifications, Lease and Logical Mining Unit diligence, Advance royalty, Royalty 

rates, Bonds 

A. INTRODUCTION 

EA Number: W0-320-3400-01 

RIN 1004-AD93 

The Bureau of Land Management (BLM) of the United States Department oftl1e Interior 

proposes to amend existing regulations pe1iaining to Coal Management at 43 CFR Parts 3000, 

3400, 3430, 3470, and 3480 tlmt pertain to formation and administration of Federal coal leases 

and logical mining units (LMUs). The amended rule would implement the provisions of Title 

IV, SubtitleD of the Energy Policy Act of2005 (Public Law 109-58) which include: (I) 

increasing the maximum acreage for a lease modification from 160 acres to 960 acres; (2) new 

procedures for extending the life of an LMU beyond 40 years; (3) changes in the procedures and 

standards for payment of advance royalty for leases and LMU s; ( 4) elimination of the 

requirement to submit a resource recovery and protection plan within 3 years after lease issuance 

or establishment of an LMU; and ( 5) changes in procedures and standards for bonds that are used 

to assure payment of tl1e remaining balance of deferred bonus bids. In addition, the BLM is 

proposing to clarify what royalty rate would apply to continuous highwall mining operations that 

are conducted on Federal coal leases. Finally, me Energy Policy Act of2005 has rendered the 

LMU Guidelines (published in the Federal Register on August 29, 1985) obsolete. The BLM is 

therefore proposing a formal witl1drawal of the LMU Guidelines and incorporation of those parts 

of the guidelines that remain valid into the regulations. 

B. STATEMENT OF ENVIRONMENTAL SIGNIFICANCE OF THE PROPOSED 

ACTION 

For me reasons stated below, the undersigned person has determined that the above-named 

proposed action would have no significant impact on tl1e quality of the human environment 

under Section 102(2)(C) of the National Environmental Policy Act of 1969 (NEPA), 42 

U.S.C.4332(2)(C), and therefore an Envir01m1ental Impact Statement is not required. 

C. REASONS 

This finding of no significant impact is based on tl1e attached Environmental Assessment, which 

identifies and discusses the environmental impacts of the proposed action. It is not anticipated 

that the proposed changes to existing regulations would result in adverse environmental impacts. 

The BLM finds tlmt the proposed action would have no significant impact of any kind on the 

enviromnent. 

Date