[Federal Register Volume 72, Number 44 (Wednesday, March 7, 2007)]
[Rules and Regulations]
[Pages 10308-10338]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-934]



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Part II





Department of Agriculture





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Forest Service



36 CFR Part 228



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Department of the Interior





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Bureau of Land Management

43 CFR Part 3160



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Onshore Oil and Gas Operations; Federal and Indian Oil and Gas Leases; 
Onshore Oil and Gas Order Number 1, Approval of Operations; Final Rule

Federal Register / Vol. 72, No. 44 / Wednesday, March 7, 2007 / Rules 
and Regulations

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DEPARTMENT OF AGRICULTURE

Forest Service

36 CFR Part 228

RIN 0596-AC20

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3160

[W0-610-411H12-24 1A]
RIN 1004-AD59


Onshore Oil and Gas Operations; Federal and Indian Oil and Gas 
Leases; Onshore Oil and Gas Order Number 1, Approval of Operations

AGENCIES: U.S. Forest Service, Agriculture; Bureau of Land Management, 
Interior.

ACTION: Joint final rule.

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SUMMARY: This final rule revises existing Onshore Oil and Gas Order 
Number 1 which was published in the October 21, 1983, edition of the 
Federal Register. The Order provides the requirements necessary for the 
approval of all proposed oil and gas exploratory, development, or 
service wells on all Federal and Indian (other than those of the Osage 
Tribe) onshore oil and gas leases, including leases where the surface 
is managed by the U.S. Forest Service (FS). It also covers most 
approvals necessary for subsequent well operations, including 
abandonment. The revision is necessary due to provisions of the 1987 
Federal Onshore Oil and Gas Leasing Reform Act (Reform Act), the Energy 
Policy Act of 2005 (Act), legal opinions, court cases since the Order 
was issued, and other policy and procedural changes. The revised Order 
addresses the submittal of a complete Application for Permit to Drill 
or Reenter package (APD), including a Drilling Plan, Surface Use Plan 
of Operations, evidence of bond coverage and Operator Certification. 
The final rule ensures that the processing of APDs is consistent with 
the Act and clarifies the regulations and procedures that are to be 
used when operating in split estates, including those lands within 
Indian country. The final rule addresses using Master Development Plans 
(which address two or more APDs) to approve multiple well development 
proposals and encourages the voluntary use of Best Management Practices 
as a part of APD processing. Finally, the rule requires additional 
bonding on certain off-lease facilities and clarifies the BLM's 
authority to require this additional bond.

DATES: This final rule is effective April 6, 2007.

FOR FURTHER INFORMATION CONTACT: James Burd at (202) 452-5017 or Ian 
Senio at (202) 452-5049 at the BLM or Barry Burkhardt at (801) 625-5157 
at the Forest Service. Persons who use a telecommunications device for 
the deaf (TDD) may contact these persons through the Federal 
Information Relay Service (FIRS) at 1-800-877-8339, 24 hours a day, 7 
days a week.

SUPPLEMENTARY INFORMATION:

I. Background
II. Discussion of the Final Rule and Comments
III. Procedural Matters

I. Background

    The regulations at 43 Code of Federal Regulations (CFR) part 3160, 
Onshore Oil and Gas Operations, in section 3164.1 provide for the 
issuance of onshore oil and gas orders to ``implement and supplement'' 
the regulations in part 3160. Also, 36 CFR 228.105 provides for the 
issuance of FS Onshore Orders or for the co-signing of orders with the 
BLM. Although they are not codified in the CFR, all onshore orders are 
issued using notice and comment rulemaking and, when issued in final 
form, apply nationwide to all Federal and Indian (other than those of 
the Osage Tribe) onshore oil and gas leases. The table in 43 CFR 
3164.1(b) lists existing Orders. This rule revises existing Onshore Oil 
and Gas Order Number 1 (the Order) which supplements primarily 43 CFR 
3162.3 and 3162.5. Section 43 CFR 3162.3 covers conduct of operations, 
applications to drill on a lease, subsequent well operations, other 
miscellaneous lease operations, and abandonment. Section 3162.5 covers 
environmental and safety obligations. In this rule the FS adopts the 
Order which would supplement 36 CFR 228 subpart E. The existing Order 
has been in effect since November 21, 1983. For further information, 
see the October 21, 1983 Federal Register at 48 FR 48916.
    The BLM and the FS published the proposed rule in the Federal 
Register on July 27, 2005 (70 FR 43349), for a 30-day comment period 
and on August 26, 2005 (70 FR 50262) extended the comment period for 60 
days. On August 8, 2005, the President signed the Energy Policy Act of 
2005 (Act). Provisions in the Act impacted the timing of APD approval 
provisions in the original proposed rule. Therefore, on March 13, 2006, 
the BLM and the FS published a further proposed rule to make the 
provisions in the originally published proposed rule consistent with 
the Act. The further proposed rule also modified a provision in the 
proposal regarding proposed operations on lands with Indian surface and 
Federal minerals.

II. Discussion of the Final Rule and Comments

    There are four primary reasons the Order is being revised:
    1. The 1987 Reform Act, which amended the Mineral leasing Act, 30 
U.S.C. 181 et seq., included two significant changes affecting APD 
processing on Federal leases. The first important change is the 
addition of a provision for public notification of a proposed action 
before APD approval or substantial modification of the terms of a 
Federal lease.
    The second important change the Reform Act made is the assignment 
of authority to the Secretary of Agriculture to approve and regulate 
the surface disturbing activity associated with oil and gas wells on 
National Forest System (NFS) lands. Where NFS lands are involved, a 
Surface Use Plan of Operations, included in an APD, is now approved by 
the FS. The FS also approves surface disturbing aspects of related and 
subsequent operations. The FS has actively participated in this 
revision, and is a cosigner of this Order. The Order would apply to FS 
review of oil and gas surface operations.
    Section 366 of the Energy Policy Act of 2005 sets steps and time 
requirements for processing APDs. The Order has been revised to be 
consistent with section 366 requirements.
    2. In response to protests to two Resource Management Plans in 
April 1988, the Office of the Solicitor of the Department of the 
Interior issued two memorandums related to oil and gas issues. The 
first and most far-reaching (issued by the Associate Solicitor, Energy 
and Resources on April 1, 1988, titled ``Legal Responsibilities of BLM 
for Oil and Gas Leasing and Operations on Split Estate Lands''), 
concerned BLM responsibilities on Federal leases overlain by private 
surface (split estate). In this memorandum the Solicitor's Office 
opined that the National Environmental Policy Act (NEPA), the 
Endangered Species Act (ESA), and the National Historic Preservation 
Act (NHPA) require the BLM to regulate exploration, development, and 
abandonment on Federal leases on split estate lands in essentially the 
same manner as a lease overlain by Federal surface. The memorandum also 
stated that while a private owner's wishes should be considered in 
decisions, they do not overrule requirements of these

[[Page 10309]]

statutes and their implementing regulations.
    The second memorandum (issued by the Assistant Solicitor, Onshore 
Minerals, Division of Energy and Resources on April 4, 1988, titled 
``Legal Responsibilities of BLM for Oil and Gas Leasing and Operations 
under the National Historic Preservation Act'') lays out in more detail 
the BLM's responsibilities under NHPA, elucidating further the 
discussion on cultural resources in the first opinion.
    The pertinent requirements of the existing Order do not fully 
conform to the memorandums issued by the Solicitor's Office in 1988.
    3. The existing Order does not adequately address the BLM Rights-
of-Way or FS Special Use Authorizations which are often required for 
ancillary facilities or those activities outside of lands committed to 
a unitized area. This has led to confusion and delays on the part of 
both the agencies and industry. Under the existing Order, APD approval 
is often delayed pending completion and approval of a Right-of-Way or 
Special Use Authorization. We intend for the proposal to eliminate or 
reduce this delay. The rule provides for early identification of any 
needed Right-of-Way or Special Use Authorization, allows for conducting 
a single environmental analysis for the APD and Right-of-Way or Special 
Use Authorization, and permits concurrent approval of the Right-of-Way 
or Special Use Authorization with the APD. On NFS lands, the FS will 
approve activities directly related to the drilling and production of 
the well consistent with 36 CFR Subpart E.
    4. Existing Order Number 1 is over 20 years old. Conditions, 
regulations, policies, procedures, and requirements have been altered, 
added, and eliminated since the Order was issued. The BLM is in the 
process of reviewing Field Office practices and the preliminary 
findings from that review were considered in the proposed revisions to 
the Order. The BLM has reorganized the Order to follow the review and 
approval process and the processing timeframes for each step are now in 
one section. Also, operations on split estate are discussed in more 
detail.
    The BLM encourages operators to employ Best Management Practices 
when they develop their APDs. Best Management Practices are innovative, 
dynamic, and economically feasible mitigation measures applied on a 
site-specific basis to reduce, prevent, or avoid adverse environmental 
or social impacts. The BLM Field Offices incorporate appropriate Best 
Management Practices into proposed APDs and associated on-lease and 
off-lease Rights-of-Way approvals after required NEPA evaluation. They 
can then be included in approved APDs as Conditions of Approval. 
Typical Best Management Practices can currently be found on the BLM's 
Web site at http://www.blm.gov/bmp/.

Discussion of Major Changes

Definition of ``Complete APD''
    The term ``Technically and Administratively Complete APD'' has been 
replaced with a clear definition of ``Complete APD.'' This new 
definition reflects what is already a common practice in many Field 
Offices and would require all Field Offices to adopt the same 
convention. The new definition makes the approval process more 
consistent. The BLM considered defining the terms ``Administratively 
complete'' and ``Technically complete'' separately, but abandoned this 
idea because it is difficult to separate the two concepts and because 
potential delays might be caused when processing APDs in certain 
circumstances. This final rule requires that an onsite inspection 
conducted jointly by the BLM (and the FS if appropriate) and the 
operator be completed prior to the BLM designating the APD package as 
complete. The BLM (and the FS if appropriate) currently conducts onsite 
inspections to determine if the material submitted in the APD package 
is accurate and to determine if Conditions of Approval are necessary. 
Examining existing on-the-ground circumstances is the only way to 
ensure that the information in the APD package is consistent with 
conditions at the proposed drill site and along the proposed access 
route. The final rule codifies the current BLM practice of onsite 
inspections as part of the APD approval process.
APD Processing
    Section 366 of the Act amends the Mineral Leasing Act (30 U.S.C. 
226(p)(1)) and adds the statutory requirement that the Secretary shall 
notify an applicant within 10 days of receiving an APD and state that 
either the APD is complete or specify what additional information is 
required to make the application complete.
    The Act requires that the Secretary (the BLM is the delegated 
authority) approve an APD within 30 days after its completion or notify 
the applicant of: (1) Any actions that the operator can take to get 
approval; and (2) What steps, such as National Environmental Policy Act 
(NEPA) or other regulatory compliance, remain to be completed and the 
schedule for completion of these requirements. This provision of the 
Act is made a part of the final rule.
    In those situations where the BLM defers the decision, the Act and 
the final rule give the applicant 2 years to take whatever actions are 
identified in the 30-day notice. The Act amends 30 U.S.C. 226 by adding 
a new paragraph (p)(3)(B), and the final rule also adds a new 
requirement that the BLM must make a final decision on the application 
within 10 days of the applicant's completion of these requirements, if 
all other regulatory requirements are complete. The timeframes 
established in this section apply to both individual APDs and to the 
multiple APDs included in Master Development Plans. Even though the 
time limits established in Section 366 of the Act are amendments to the 
Mineral Leasing Act and, therefore, do not apply to Indian leases, the 
final rule states that the same time limit will apply to both Federal 
and Indian leases.
    The BLM does not approve Surface Use Plans of Operations for 
National Forest Service (NFS) lands. The FS notifies the BLM of its 
Surface Use Plan of Operations approval and the BLM proceeds with its 
APD review. For APDs on NFS lands, the decision to approve a Surface 
Use Plan of Operations or Master Development Plan are subject to 
existing FS appeal procedures, which may take up to 105 days from the 
date of the decision. Pursuant to the Mineral Leasing Act (30 U.S.C. 
226(g)), as amended by the Reform Act, the final rule in Section 
III.E.2.b. provides that the BLM may not approve an APD until the FS 
has approved the Surface Use Plan of Operations. This condition is 
consistent with the addition to Section 17 of the Mineral Leasing Act 
(30 U.S.C. 226(p)(2)) adopted in Section 366 of the Energy Policy Act, 
which provides that the Secretary shall issue a permit within 30 days 
only if requirements of other applicable law have been completed within 
that timeframe. Therefore, in situations where the Surface Use Plan of 
Operations is not approved, the BLM will provide notice within the 30-
day period that action on the APD will be deferred until the FS 
completes action on the Surface Use Plan of Operations.
Operating on Split Estate Lands With Indian Surface Ownership
    The final rule makes it clear that split estate lands include those 
having Indian surface and Federal minerals. It also explains that the 
operator is required to address surface use issues with the Bureau of 
Indian Affairs (BIA) when Indian trust lands are involved.
    The final rule addresses the responsibility of the operator to 
confer

[[Page 10310]]

with surface owners in the case of privately owned surface and Federal/
Indian leases, as well as Indian oil and gas leases where the surface 
is in different Indian ownership. The final rule applies to privately 
owned surface and to all Indian surface and Federal oil and gas lease 
situations. The final rule requires a good faith effort to reach a 
Surface Access Agreement, and provides for the posting of a bond to 
protect against covered damages in the absence of an agreement. This 
final rule codifies existing policy with the exception that surface 
owner compensation is based on the terms of the statute that reserved 
the mineral estate. Under the previous rules, this compensation was 
based on the terms of the Stockraising Homestead Act.
Drilling and Surface Use Plans
    The final rule makes specific changes to the drilling and surface 
use plans as follows:
    The former 8-point Drilling Program (also referred to as the 
Subsurface Use Plan) is replaced with a 9-point Drilling Plan. The new 
requirement in the final rule requires the operator to address the type 
and amount of cement to be used in setting each casing string.
    The final rule replaces the former 13-point Surface Use Program (or 
Plan) with a 12-point Surface Use Plan of Operations. ``Operator 
Certification'' is a separate component of the APD in the final rule. 
The final rule makes it clear that the Operator Certification covers 
the entire APD package and not just the Surface Use Plan of Operations. 
Under the final rule, the operator is required to certify that they 
have made a good faith effort to provide the surface owner with a copy 
of the Surface Use Plan of Operations and any Conditions of Approval 
that are attached to the APD.
Master Development Plans
    The final rule establishes a new approval process for Master 
Development Plans. An operator uses this process to submit plans for 
field development of a multiple well program. A Master Development Plan 
proposal can be addressed in a single NEPA analysis and approval. This 
facilitates the consideration of cumulative effects early in the 
process and enables broad application of identified mitigation 
measures, and minimizes the overall timeframe for approval. Because the 
process allows for better planning of field development, adverse 
environmental impacts are minimized.
Use of Best Management Practices
    The final rule encourages operators to use Best Management 
Practices when developing their APDs. Using Best Management Practices 
is the BLM's current policy. Best Management Practices are innovative, 
dynamic, and economically feasible mitigation measures applied on a 
site-specific basis that reduce, prevent, and avoid adverse 
environmental or social impacts of oil and gas activities. The BLM 
Field Offices currently incorporate Best Management Practices into 
proposed APDs and associated on-lease and off-lease Rights-of-Way 
approvals if they are carried forward as part of the NEPA required 
evaluation or environmental review. This final rule clarifies the 
existing policy that Best Management Practices may be included as 
Conditions of Approval. The BLM started using Best Management Practices 
in 2004 and encourages the voluntary use of these practices.
Bonding Authority
    The final rule clarifies the BLM's authority under 43 CFR 3104.5 to 
require an additional bond to be applied to off-lease facilities that 
are required to develop a lease, such as the large impoundments being 
created in Wyoming for water produced from Federal and non-Federal 
coalbed natural gas wells. The BLM is directed by the Reform Act to 
require sufficient bond to insure ``the restoration of any lands or 
surface waters adversely affected by lease operations after the 
abandonment or cessation of oil and gas operations on the lease'' 30 
U.S.C. 226(g). An Assistant Solicitor's Opinion of July 19, 2004, 
concluded that the BLM has the authority under existing regulations to 
require an additional bond for such facilities and that the current 
regulation does not limit the BLM to increasing the required amount of 
an existing bond. Accordingly, the final rule does not represent a 
change in the regulatory scheme.
Response to Comments
    The BLM received 81 comments on the proposed and further proposed 
rules. In the following discussion we categorize the comments according 
to the sections of the text or preamble to which the comments were 
directed. Some comments were general in nature and did not relate to a 
particular section in the text or preamble. These are grouped in a 
general category and addressed accordingly. Other comments are grouped 
by the section of the Order to which they pertain. If a section of the 
Order is not discussed in this preamble, that means that we received no 
public comment on that section. Note that, when used in conjunction 
with Section 106 of the National Historic Preservation Act and the 
Endangered Species Act, ``inventory'' and ``survey'' are equivalent 
terms and are used interchangeably.
    Although we received no substantive comments on the proposed 
changes to 36 CFR 228.105(a)(1) (FS regulations), we amended that 
section in the final rule to make it consistent with the final Order.

General Comments

    Several commenters asked that the five statutory categorical 
exclusions that are in Section 390 of the Energy Policy Act of 2005 be 
included in the Order. The Order does not address the statutory 
categorical exclusions because they are already a legal requirement and 
we believe they would best be addressed in subsequent manual and 
handbook updates. Some commenters were concerned that we would apply 
acreage limits for categorical exclusions to Master Development Plans 
rather than leases. These comments exemplify the problems that would be 
inherent in addressing categorical exclusions in the Order.
    One commenter asserted that revising the Order was premature until 
the BLM has the data from the pilot project under Section 365 of the 
Energy Policy Act of 2005. We disagree. The BLM is looking forward to 
obtaining useful information from the pilot projects, but there is no 
reason to delay revisions to the Order.
    A few commenters believed that we should use stronger language than 
saying that ``BLM will comply with other applicable laws'' before 
approving an APD as stated in Section III. and in numerous other places 
in the Order. We disagree. The language in the rule is similar to that 
in the Energy Policy Act of 2005 (Act). The Order is clear and requires 
that the BLM comply with applicable law naming NEPA, the National 
Historic Preservation Act, and the Endangered Species Act, which are 
the principal laws impacting Federal actions related to approval of 
APDs. We do not believe that a description of the requirements of other 
applicable law is needed or appropriate because those requirements are 
adequately addressed in other rules and policy specific to 
implementation of those laws.
    One commenter said the rule should address conducting cultural 
inventories prior to approving geophysical operations. We disagree. 
Geophysical operations are outside the scope of this rule and are 
generally approved under

[[Page 10311]]

43 CFR subpart 3150 (or FSM 2860 on National Forest System (NFS) 
lands).
    One commenter asked that we delay publishing a final rule until the 
split estate report to Congress required by Section 1835 of the Act was 
complete. We believe that it is not necessary to wait for completion of 
the report because the rule must be consistent with existing law and we 
cannot speculate on potential changes to law that may occur as a result 
of the split estate report. However, the rule has been written in 
consultation with those involved in drafting the split estate report 
and is consistent with their findings and existing law.
    One commenter asked that we describe in the Order how we would 
revise existing leases and modify them with a stronger emphasis on 
monitoring and public involvement that result from new or updated land 
use plans. The BLM involves stakeholders in land use plans when they 
are written and this becomes the basis for subsequent leasing 
decisions. However, revision of existing leases is beyond the scope of 
this Order. We are required by the Reform Act to post for public 
notification each pending APD and we evaluate each APD and attach 
appropriate Conditions of Approval depending on the proposed action. 
While this may not change previously approved APDs, the duration of the 
approved APD and subsequent drilling activity is sufficiently short 
that we do not anticipate that they will need to be updated. We are 
required by the Reform Act to conduct a certain level of monitoring 
regardless of Conditions of Approval or even the vintage of the APD so 
that existing productive wells are similarly not likely to present a 
problem relevant to decisions based on old land use plans.
    Several commenters suggested that the BLM and the FS adopt certain 
state procedures that the commenter said would greatly reduce the 
amount of time required to process an application. The BLM and the FS 
have other regulatory requirements that exceed the states' 
responsibilities. The additional requirements may lengthen the 
application and approval process. The BLM and the FS must comply with 
various legal mandates such as NEPA and the National Historic 
Preservation Act that do not apply to states, but must be addressed in 
the Order. These Federal mandates make the process for approving oil 
and gas operations different than the process for State governments 
and, therefore, we did not modify the final Order as a result of this 
comment.
    A few commenters stated that as proposed, the Order will not 
streamline the APD process. The Order cannot eliminate any steps 
required by various environmental laws, but can provide clarification, 
for both industry and the involved agencies. We believe that the Order 
will facilitate and encourage up-front planning, application of Best 
Management Practices, submission of geospatial data, etc., which may 
shorten the time needed to approve an APD. Also, the use of Master 
Development Plans will facilitate early project design and analysis and 
help to streamline subsequent permitting.
    Many commenters believe that the Order nullifies or preempts the 
various state laws related to drilling operations and private surface 
owner negotiations. We disagree. The Order only addresses Federal 
obligations for operations on Federal lands which may be distinct from 
state obligations or private surface owner agreements. The Order would 
only impact state law or private agreements to the extent that they 
conflict with Federal obligations. In addition, the Order does not 
negate or preempt other Federal, state, or local laws and/or 
ordinances.
    Two commenters challenged our purpose for the proposed Order and 
said that our purpose was really to elevate the legal standing of the 
existing Order and to limit the ability of surface owners to negotiate 
damages with operators as may be provided in certain state laws. We 
disagree. The proposed Order will have the same level of importance as 
the existing Order. As a regulation the Order does not change or negate 
other Federal or state statutes. State laws are limited in their 
application to Federal leases by the terms of Federal law, such as 
those that are the source of the titles of the surface owners, i.e., 
Federal land patenting statutes, and not because of this regulation.
    Several commenters challenged our inclusion of the April 1, 1988 
solicitor's memorandum that defines the BLM's responsibilities 
regarding compliance with various laws without input from the current 
solicitor. The Office of the Solicitor was fully involved in review and 
drafting of the proposed rule, the further proposed rule, and this 
final rule. Contrary to what the commenters imply, the Solicitor's 
memorandum cited in the proposed rule still reflects the state of the 
law.
    Several commenters suggested that the BLM and the FS honor state 
statutes which outline a procedure whereby private landowners negotiate 
with oil and gas lessees toward damages presumably caused by oil and 
gas development. Some commenters contended that the proposed rule would 
put new limits on compensation that are based in the original surface 
patents. The BLM and the FS do not enforce state law; however, we do 
not object to negotiations between the surface owner and operators. In 
fact, Federal law and our policy require that the operator make a good 
faith effort to enter into an agreement with the surface owner. How 
that negotiation takes place and the nature of any agreement reached is 
beyond our authority to direct. We do not determine the amount of 
compensation unless a bond is filed when the operator and surface owner 
are unable to reach an agreement. In those cases we must determine 
what, if any, limitations on compensation were contained in the 
original patent and then determine the amount of bond necessary under 
Federal law for the damages it addresses. We will assure that the bond 
amount is maintained throughout the life of the oil and gas operation 
by requiring replenishment of the bond if it is drawn upon for 
compensation. Whether states require, or can require, additional 
bonding is outside the scope of this rule.
    Several commenters stated that the Surface Use Plan of Operations 
does not require the operator to identify the location of the proposed 
well and that the draft Order should require restoration, not 
reclamation. A listing of the proposed well location is a required part 
of a complete APD. A well plat is required as is a map in the Surface 
Use Plan of Operations that shows all proposed surface disturbance. 
Reclamation is described in the Order as returning the disturbed land 
to as near its predisturbed condition as is reasonably possible. 
Section XII.B. of the Order requires that the surface owner be notified 
and involved in determining reclamation requirements.
    Several commenters stated that the rule removes the rights of 
private landowners granted by various state statutes pertaining to 
planning and damage compensation. We disagree. The final rule does not 
affect rights of private landowners; it is based on long established 
law.
    Several commenters stated that the rule was contrary to the 
provisions of Executive Order 13352 on the facilitation of cooperative 
conservation. We disagree with the commenters. The same commenters 
believe that the Order eliminates private parties from significant 
decisions that affect their ability to manage their private property. 
It is unclear what in the rule these commenters believe is limiting 
private surface owner rights. This Order does not change existing laws 
that deal with

[[Page 10312]]

split estate situations. The laws (Stockraising Homestead Act and 
others and implementing regulations at 43 CFR subpart 3814) are not 
revised as a result of this rule. This Order clarifies and ensures the 
APD review process includes the private surface owner and that the BLM 
adheres to existing laws and legal decisions involving split estate. 
Also this rule offers surface owners more input into the process and 
also provides surface owners more information than did the previous 
Order.
    Several commenters stated that the rule does not promote 
cooperative conservation, but rather removes rights of the private 
property owner and places them in the hands of BLM personnel with 
regards to negotiations for surface activities and damages. The 
commenters appear to be addressing the provisions in Section VI. of the 
Order that address operations on private surface with underlying 
Federal minerals. We disagree with the commenters that the Order does 
not promote cooperative conservation. This rule offers surface owners 
more input into the process and also provides surface owners more 
information than did the previous Order. In addition, the rule is not 
creating new procedures, but is merely implementing existing law and 
procedures.
    Several commenters said that the BLM should acknowledge that its 
attempt to impose Federal regulations for oil and gas development 
underneath private lands in states with surface owner protection acts 
is not in any way simple or easy to understand. Commenters said that it 
complicates and confuses the issue, regardless of the words used and 
that it could have an effect on energy supplies. The same commenters 
said that if the BLM wants to clarify this issue, then it needs to 
intervene and have the courts resolve the issue of Federal preemption 
of state statutes. No intervention by the BLM on this subject is 
necessary; any party may raise that issue. The final rule implements 
existing law, it does not change its interpretation. There is no 
administrative action the rulemaking can take which will change the 
acts of Congress, the body of law, nor over a hundred years of legal 
decisions, highlighted by the decision in Kinney-Coastal Oil Co. v. 
Kieffer, 277 U.S. 488 (1928).
    Several commenters disagreed that the rule will not have Federalism 
implications as defined by Executive Order 13132. We disagree. Existing 
policy and this final rule are based on a strict interpretation of 
existing law. Surface owners have only the substantive rights provided 
by Federal statute, including the laws under which the surface was 
patented. The Order adds a procedural requirement of a good faith 
attempt to notify the surface owner and attempt to reach an agreement, 
but that does not change the dominant character of the federally owned 
oil and gas or the rights of Federal lessees. The Order includes the 
lessee's right to post a bond if a good faith attempt to reach an 
agreement with the surface owner fails and requires compensation to 
surface owners as is required by the patenting act. The authority of 
states with respect to reserved Federal minerals is established in 
statutes dating back to the early twentieth century and is not altered 
by this Order and there are no Federalism implications because it is 
existing law, not this Order, that may conflict with state statutes.
    Several commenters said that private landowners would be 
significantly impacted by the rule and were ``* * * entitled to 
protection under the Regulatory Flexibility Act * * *.'' We disagree. 
Even if private land owners were considered to be ``small entities'' as 
that term is defined under the Regulatory Flexibility Act, we do not 
believe that private land owners are significantly impacted by the 
changes that this rule makes to the existing Order. Furthermore, it is 
existing law that governs split estate; this rule merely codifies the 
existing law.
    Several commenters stated that the rule would constitute a taking 
because of diminution of land values that the rule causes. We disagree. 
This Order implements existing law. Surface owners still own the 
surface, which remains subservient to the dominant mineral ownership of 
the United States. The procedures adopted in this Order do not affect 
surface owners' property rights.
    Many commenters disagreed with the statement in the proposed rule 
that the regulations do not impose an unfunded mandate on State, local, 
or tribal governments or the private sector of more than $100 million 
citing costs private landowners are forced to bear by being limited in 
the damages that they can receive for oil and gas activities on their 
lands. We disagree. The changes that this rule makes to the existing 
Order and existing procedures do not alter the damages to be covered by 
bond. The changes this rule makes having to do with damages that occur 
on private surface as a result of operations to extract Federal 
minerals are not as a result of the BLM's exercise of this rulemaking, 
but our effort to more faithfully reflect existing statutory law. 
Furthermore, the rule primarily impacts lessees or operators filing 
APDs with the BLM and the FS, not State, local, or tribal governments.
    Several commenters stated that they disagree with the statement in 
the proposed rule that ``this proposed rule would not unduly burden the 
judicial system * * *.'' The commenters said that given the inherent 
legal conflict with states which have passed surface owner protection 
acts with provisions that are different than those included in this 
rule, the BLM's statement that this will not burden the judicial system 
is unsubstantiated. We disagree. As stated earlier, this rule 
implements well established law and therefore is not the source of the 
legal conflict in which the commenters are involved.

Section-By-Section Discussion

Section I. Introduction

    Purpose: This section describes the statutory authority on which 
this Order is based and describes the purpose and scope of the Order. 
The authority upon which the Order is based has changed since the 1983 
Order was published by the Reform Act and the Energy Policy Act of 
2005. The Reform Act granted the Secretary of Agriculture authority to 
regulate all surface disturbing activities conducted pursuant to an oil 
and gas lease on NFS lands.
    Comments and Responses: One commenter asked that the BLM consider 
delegating the permitting responsibility to state agencies. The BLM 
cannot delegate permitting responsibility because Federal law requires 
that the Department of Interior (delegated to the BLM) authorize 
permitting of oil and gas activities on Federal land. Also, 30 U.S.C. 
1735 does not provide for delegation of APD approval as it does for 
other aspects of the oil and gas program. The process of delegation is 
available to State governments for consideration under 43 CFR subpart 
3191; however, it is limited to inspection, enforcement, and 
investigation, but not for the approval of operations. Further, the 
commenter didn't offer any statutory authority for this delegation and 
we are not aware of any.
    One commenter did not think it appropriate for the Order to apply 
to operations within a unit or communitized area on private minerals or 
private surface. We agree. While the site security, measurement, and 
production reporting regulations apply to unitized wells drilled on 
private minerals (43 CFR 3161.1), it is not appropriate for the BLM or 
the FS to exercise authority over surface operations conducted on 
privately

[[Page 10313]]

owned lands just because those lands are contained within a unit or 
communitized area. The BLM only requires a copy of the permit to be 
provided for non-Federal wells within a unit or communitized area and 
wording in the ``Scope'' section of the Order is revised to make this 
clear.

Section II. Definitions

    Purpose: This section contains the meaning of terms that are 
necessary to ensure consistent interpretation and implementation of 
this Order.
    Summary of Changes: We added definitions for Best Management 
Practices and Casual Use to make the definition of those terms clearer. 
Another change made in this section was to accept the many 
recommendations to change ``Surface Management Entity'' to ``Surface 
Managing Agency.'' By doing so, many of the other comments that sought 
clarification of the role of BIA and tribes were resolved. We also 
added a definition of ``Private Surface Owner'' to provide clarity.
    Comments and Responses: Several commenters expressed concern that 
all maps and plats required as part of a complete APD (see the 
definition of ``Complete APD'') must be submitted in both hard copy and 
geospatial data formats. They were concerned that the requirement could 
impose a financial hardship for some operators and that some of the 
data may be proprietary. They requested that the geospatial data format 
be optional. Geospatial data is a vital tool for facilitating timely 
processing of applications. The BLM and the FS use the geospatial data 
to link data and facilitate analysis. However, we recognize the 
concerns expressed in the comments and have modified the rule to make 
submission of geospatial data, except for the well plat, optional 
rather than mandatory. The BLM strongly recommends the submission of 
the data in geospatial format as it will assist us in timely review of 
applications. We will still require geospatial data for the well plat 
showing the proposed well location to assist us in assuring that the 
well is accurately located in relation to lease boundaries.
    Many commenters made observations or asked questions about the 
definition of a complete APD. Many noted that the definition now 
includes an onsite inspection. A few commenters stated that this 
requirement circumvents the intent of Congress expressed in the Energy 
Policy Act of 2005 by making moot the statutory 10-day timeframe for 
the BLM to determine the completeness of an APD. These commenters note 
that there is no set timeframe from the date the APD is received until 
the onsite must be conducted. Many of these commenters assume that 
various inventories must be completed in order to hold the onsite, 
thereby creating additional delays. However, one commenter expressed 
support for including the onsite inspection as part of the ``Complete 
APD'' definition. A few other commenters expressed concerns that the 
Order fails to put timeframes on the BLM and the FS staff for the 
timely review of APDs and allows each specialist to review the APD on 
their own schedule. The BLM and the FS recognize the significance of 
these comments, but from our experience we know that it is necessary to 
conduct an onsite inspection to determine if certain aspects of the APD 
are accurate, sufficient to describe the proposed action and, thereby, 
complete. It is also our experience that scheduling and conducting an 
onsite inspection within a specific period of time (e.g., 15 days from 
receipt of the APD as is in the existing Order) is often not possible 
because of availability of key agency staff, the operator, and surface 
owner (in the case of private surface) or because of inclement weather. 
It is the policy of the BLM and the FS to conduct onsite inspections as 
soon as they can be scheduled. The BLM and the FS plan to closely 
monitor the interval between Notice of Staking or APD filing and onsite 
inspections to ensure that excessive delays do not occur and take 
corrective action if patterns of delay are noted. We added a 
requirement for the BLM and the FS, if appropriate, to evaluate any 
additional material requested in the 10-day notice or at the onsite 
inspection within 7 days (see Section III.D.2.a.). Inventories are not 
necessary for a complete APD and are not required before the onsite 
inspection. The operator may voluntarily provide cultural and wildlife 
survey data, but the responsibility to comply with NEPA, Endangered 
Species Act, National Historic Preservation Act, and other requirements 
is the responsibility of the agencies and therefore, is not a 
requirement of the applicant. Inventories are not part of an 
application. They are part of the analysis that must be made of the 
proposed action. They must be conducted prior to the approval of the 
proposed actions, not prior to determination of completeness of the 
application. In the final Order we modified the definition of 
``Complete APD'' to clarify that inventories and NEPA documentation are 
not part of a ``Complete APD'' determination.
    Several commenters wanted the definition of ``Complete APD'' to be 
expanded to clarify that a second onsite inspection is not needed if 
one was done as part of the Notice of Staking process. We believe that 
the Order adequately addresses this concern. The definition states that 
an onsite inspection is required for a complete APD. However, Section 
III. of the Order indicates that an onsite inspection will not be 
necessary after the APD is filed if one was conducted as part of the 
Notice of Staking process. These commenters also wanted the text to 
provide criteria for circumstances when an onsite would not be 
necessary. We understand that in some cases onsite inspections may not 
be necessary (e.g., new wells in developed fields). These situations 
are relatively uncommon and would be better addressed by a request for 
variance on a case-by-case basis, rather than by addressing it in the 
rule.
    One commenter requested that ``other information that may be 
required by Order or Notice'' (see 43 CFR 3162.3-1(d)(4)) in the 
definition of ``Complete APD'' be deleted because it is not necessary. 
We did not delete the phrase from the definition in the final rule 
because the BLM may require additional information before approving an 
APD.
    One commenter suggested that in addition to public health and 
safety or the environment, the definition of emergency repairs should 
be expanded to allow for repairs designed to preserve reservoir 
integrity. The BLM did not modify the final rule as a result of this 
comment because operators already have the option in Section VIII. to 
request approval of emergency operations verbally, if needed, followed 
by a Sundry Notice for reservoir operations.
    Several commenters asked for clarification to the definitions of 
``Indian Oil and Gas'' and ``Indian lands.'' They also asked that in 
the final rule we add a definition of ``Tribal Lands'' and clarify what 
we mean by the reference to ``tribal lands held in trust'' in Section 
VII. of the proposed Order. For the purpose of this Order, the 
definitions for ``Indian lands'' and ``Indian Oil and Gas'' is limited 
to those lands held in trust by the United States or subject to Federal 
restrictions against alienation and as such do not include unrestricted 
fee lands. Only for surface held in trust by the United States or 
subject to Federal restrictions against alienation does the BLM seek 
input from the Bureau of Indian Affairs (BIA) for APD approval. For 
other lands held in unrestricted fee, Indian owners are

[[Page 10314]]

treated as any other private surface owner, including for the purposes 
of bonding in lieu of surface owner agreement. We have added a 
definition of ``Private Surface Owner'' that includes certain Indian 
surface owners. We deleted the term ``Tribal lands'' from the Order 
and, therefore, did not provide a definition for that term.
    One commenter stated that the regulations on Master Development 
Plans should not require submission of detailed surveys and designs for 
projected or future potential development. We agree. The intent of the 
requirement is to have the operator provide sufficient detail in the 
Master Development Plan application to facilitate NEPA analysis. The 
detail submitted with a Master Development Plan can vary depending on 
the project size and other criteria. However, final design and surveys 
are required for subsequent APDs that will reference a Master 
Development Plan before those APDs are approved. Another commenter 
stated that the filing of Master Development Plans should start the 30-
day public posting requirement rather than the subsequent APDs. The 
Master Development Plan does initiate the 30-day posting period for any 
APDs contained in the Master Development Plan. However, any subsequent 
APD will have its own 30-day posting. We do not believe that it is 
necessary to change the text as a result of these comments because the 
process the commenter points out can be followed within the provisions 
in the final Order.
    Several commenters stated that the proposed reclamation standard of 
``reasonably practical,'' in the definition of ``Reclamation'' in 
Section II. is unacceptable. Commenters stated that this standard is so 
low that it flouts the Order's accountability mandate that lessees and 
operators properly reclaim disturbed lands in what could amount to a 
taking of private property. We understand the commenter's concern, but 
also recognize the difficulty in writing regulations that fit all 
circumstances when local conditions are highly variable. ``Reasonably 
practical'' is dependent upon the conditions at the specific site. The 
Conditions of Approval that address specific site conditions are much 
more effective in achieving reclamation goals than are general 
regulations. We also note that the surface owner is given an 
opportunity to participate in the development of the site specific 
reclamation standards and is consulted prior to acceptance of final 
abandonment. Other commenters were concerned that in some cases the BLM 
or the FS require that the disturbed area be reclaimed to a new use. 
They observe that some well pads have been reclaimed for trailheads 
rather than back to pre-existing condition. We agree and have added 
``or as specified in an approved APD'' to the definition of reclamation 
to address these concerns.
    Many commenters recommended replacing the term ``Surface Management 
Entity'' with ``Surface Managing Agency'' because use of the word 
``entity'' implies that Federal agencies may delegate their 
responsibilities to states. Other commenters thought use of the word 
``entity'' suggested that private land owners may have the same 
authority as state or Federal agencies. This definition also caused 
uncertainty relative to the role of tribes in the approval process. We 
agree with the commenters that the proposed term could cause confusion, 
therefore, in the final Order the term ``Surface Management Entity'' 
has been replaced by the term ``Surface Managing Agency.'' Under 
existing regulations and this final rule the BIA is the Surface 
Managing Agency when tribal lands are held in trust, but if lands are 
held in fee by an individual Indian those lands are treated as private 
surface.
    Many comments suggested that the definition of ``split estate'' 
include surface that is leased from the Federal Government (such as 
grazing permits), and require that these permittees be notified when an 
APD or Notice of Staking is filed. Permittees are given use privileges, 
not property rights, and, therefore, are not considered surface owners. 
Therefore we did not amend the definition of split estate as requested 
by the commenter. Posting requirements under Section III. of the final 
Order and in existing 43 CFR 3162.3-1(h) are intended to make this type 
of information available to the interested public, including other 
Federal permit holders.
    Several commenters suggested that we add definitions for waivers, 
exceptions, and modifications and a few commenters were unclear about 
the criteria for granting of variances. Based on these comments, in the 
final rule we added a section that addresses waivers, exceptions, and 
modifications to distinguish them from variances. Waivers, exceptions, 
and modifications are described in the BLM guidance and FS regulations 
(see 36 CFR 228.104). A variance from the Order may be granted if the 
applicant shows to the authorized officer that the purpose of the Order 
will still be met. We removed the reference to 43 CFR 3101.1-4 from the 
definition of variance because that regulation applies to waivers and 
modifications. One commenter stated that the granting of waivers, 
exceptions, and modifications should be based solely on technical 
grounds and that all challenges or appeals be reserved to the lessee or 
operator. We disagree because challenges and appeals of waivers, 
exceptions, and modifications cannot be restricted to lessees or 
operators unless the basis for this decision has already been made in a 
land use plan or other document that received public comment. Further, 
43 CFR 3101.1-4 requires that if the authorized officer determines that 
the modification or waiver of a lease term or stipulation is 
substantial, the modification or waiver is subject to public review for 
at least 30 days.
    One commenter recommended that the Order include definitions of 
``Notice of Staking'' and of ``Sundry Notice.'' Proposed Section III.F. 
(Section III.C. in the final Order) describes the Notice of Staking 
option and a sample format is attached as an exhibit to the Order. The 
Sundry Notices and Reports on Wells (Form 3160-5) is self-explanatory 
and instructions are on the back of the form. We believe that the 
meaning of ``Notice of Staking'' and of ``Sundry Notice'' is adequately 
explained and, therefore, no change to the regulation text is 
necessary.

Section III. Application for Permit To Drill

    Note: This section has been reorganized in the final rule and 
the references to sections used in this discussion of comments are 
from the proposed rule unless otherwise noted.


    Purpose: This section describes where an operator files an APD; the 
early notification process; the Notice of Staking option; the 
components of a complete APD; how an APD is posted for public notice; 
how it is processed by the BLM and the FS; how the APD is approved; and 
the valid period of the APD. This section is the heart of the Order 
because it addresses the content of the APD; what an operator must do 
and some options an operator may take prior to filing an APD (in the 
form of early notification and Notice of Staking options); how the APD 
is processed and approved; and the period for which the APD is valid. 
We received more comments on this section than any other.
    Summary of Changes: This section has been reorganized to follow the 
sequential progression of the APD submission and approval process. 
Information related to specific components of a complete APD was moved 
to the description of that component to make the process clearer. Many 
of the comments and changes in

[[Page 10315]]

this section related to timeframes associated with posting notices, 
holding onsite inspections, supplying needed information, and 
processing of the APD once deemed complete. The above mentioned 
reorganization and associated clarification should address those 
concerns and ensure that the Order is consistent with timeframes 
mandated by the Energy Policy Act of 2005.
    In the final rule we added a provision stating the BLM's authority 
to deny an APD within 30 days after the BLM determines the APD to be 
complete (see Section III.C.2.b. of the further proposed rule or 
Section III.E.2.b. in the final rule). This addition restates the 
present authority to deny a permit in 43 CFR 3162.3-1(h). Denial of an 
APD is not mentioned in Section 366 (2) of the Energy Policy Act, but 
it is authorized by the Reform Act which added subsection (g) to 30 
U.S.C. 226 which provides that no drilling permit may be issued unless 
the appropriate Secretary approves the surface disturbing activities. 
It has been the policy of the agency to deny APDs when analysis or 
negotiation with the operator will not enable the BLM to approve the 
permit. We believe that it is in the operator's best interest for the 
BLM to deny an APD that is so flawed that it cannot be modified to 
warrant approval as early as possible. We also believe that it is the 
intent of Congress to keep the agencies and operators working on APDs 
so that none would be left unresolved for unreasonable lengths of time. 
If the BLM decides that an APD is so flawed that we would deny it, the 
operator has the right to know promptly and to have an appeal right. 
The alternative would be to issue a deferment notice that would require 
the operator to wait up to 2 years before receiving a denial and an 
appeal right. That would defeat the purpose of expediency that 
motivated Congress in enacting Section 366 of the Act.
    Associated with the timeframes is the clear recognition that 
compliance with non-discretionary environmental laws prior to approval 
of an APD is an integral part of those timeframes. In the final rule we 
made one discretionary timeframe change so that an approved APD is 
valid for 2 years rather than the 1 year period in the previous Order. 
Another change in this section of the Order is to require the operator 
to certify that they have provided or made a good faith effort to 
provide a copy of the Surface Use Plan of Operations to the private 
surface owner in the case of split estate. What constitutes a good 
faith effort will be determined by the authorized officer. The BLM has 
assumed the responsibility to ensure the private surface owner is 
invited to attend the onsite inspection and that their concerns are 
considered in the approval process.
    We also modified this section and the definition of Best Management 
Practices to make it clear that Best Management Practices are voluntary 
for the operator to use in the design of their project and are only a 
requirement if they are a result of the NEPA process as a Condition of 
Approval for an APD. Finally, we modified Sections III.a. and b. to 
make it clear that the BLM is responsible for compliance with NEPA, the 
National Historic Preservation Act, and the Endangered Species Act on 
BLM lands and the FS has the same responsibility on their lands.
    We received a number of comments about reposting when the proposed 
well location is moved. Existing BLM regulations require that the well 
location be described in the posting to the nearest quarter-quarter 
section in the Public Land Survey System. Therefore, if the proposed 
location is moved to a different quarter-quarter section, the APD will 
be reposted. For lands that do not have a Public Land Survey, proposed 
locations that are moved 660 feet or more will be reposted. We 
established the 660 feet criterion because a well at the center of a 
quarter-quarter section that is moved 660 feet will by definition be in 
a different quarter-quarter section.
    In Section III.G. we deleted the language that stated that if no 
well is drilled during the initial period or extension of the APD, the 
APD expires. We deleted the statement because it is self evident.
    In Section III.D.6., we modified the Operator Certification 
slightly by adding an entry for the operator to insert an email address 
where the operator can be contacted. This entry is optional, but will 
provide the BLM and the operator another avenue for communication.
    In Section III.D.2.a. we added language to clarify who the operator 
should contact prior to surveying and staking on tribal or allotted 
lands. This is not a new requirement and is consistent with existing 
practice.
    Comments and Responses: Several commenters recommended that the 
subsections within Section III. be rearranged to better follow the 
sequential progression of the APD submission and approval process. 
Another commenter asked for further clarification of the Notice of 
Staking section. We recognize that reorganization would add clarity and 
have reorganized the subsections in Section III. to follow the order in 
which they occur. In the final rule we:
    (A) Explain where to file the APD (subsection A);
    (B) Describe the advantages of Early Notification (subsection B) 
and Notice of Staking (subsection C);
    (C) Provide a detailed discussion of the components of a complete 
APD (subsection D) and describe the posting and processing of the APD 
(subsection E); and
    (D) Describe some of the responsibilities of the approving agencies 
and the period for which the APD is valid (subsections F and G).
    This reorganization also makes clear the purpose and advantages of 
the Notice of Staking option.
    Many commenters recommend that early notification in Section III.B. 
be mandatory. One commenter supported the early notification section as 
drafted. Early Notification, as the Order states, could help all 
parties identify unusual conditions of the land, time-sensitive issues, 
and potential areas of conflict. The BLM and the FS recognize the 
advantages of early notification, but the same level of resource 
protection will be applied whether there is early notification or not. 
There is no statutory requirement for early notification and we do not 
believe that it is necessary in all cases. Therefore, we did not change 
the Order based on this comment.
    One commenter suggested that the wording ``wildlife inventory'' in 
Section III.B. be changed to ``biological inventory'' to cover flora as 
well as fauna. We adopted the commenter's suggestion and revised 
Section III.B., accordingly.
    One commenter asked how early notification relates to the Notice of 
Staking Option. We amended the wording in the Early Notification 
section based on this comment to make it clear that early notification 
is different from and precedes the Notice of Staking, that neither 
option is required, and that one may be used without the other.
    One commenter suggested that we revise the Order to make it clear 
that the operator is not required to conduct surveys or studies under 
Section III.B. We believe that the Order is clear on the subject of 
inventories, surveys, and studies; they are the responsibility of the 
agencies and are not required as part of the APD. However, in the final 
rule we added language in Section III.B. to clarify that they are not 
the responsibility of the operator.
    A few commenters stated that the BLM must recognize in Section 
III.B., Early Notification, that in some cases it may be impossible to 
contact all private surface owners. Consistent with existing

[[Page 10316]]

practice, the Order requires the operator to make a good faith effort 
to contact private surface owners. However, a good faith effort does 
not mean that there is an absolute requirement to make contact with the 
surface owner. Section VI. of the Order provides procedures for 
operations on private surface.
    One commenter stated that even if a categorical exclusion is used, 
the 30-day posting is required. We agree. Posting is an existing 
requirement under the Reform Act, even for actions covered by a 
statutory categorical exclusion. We did not revise the proposed Order 
because we do not discuss categorical exclusions in the Order.
    Several commenters stated that they opposed the requirement that an 
APD be reposted for an additional 30 days when the operator 
subsequently moves the proposed well location. They further state that 
this 30-day reposting time period should not be required when the new 
location is covered by an existing NEPA document or if the new location 
is for an in-fill well within a developed field. One commenter said 
that posting for public notice was duplicative of NEPA requirements for 
soliciting public comments. We disagree. The 30-day public posting 
period is required by the Reform Act and is distinct from NEPA related 
public participation. However, we have revised proposed Section 
III.C.1. (final Section III.E.1.) to provide clarity and conform with 
regulations at 43 CFR 3162.3-1 and 36 CFR 228.115 that require posting. 
As previously discussed, we adopted a 660 feet criterion for reposting 
where no Public Land Survey exists because that would mean the well 
could be relocated in a different quarter-quarter section if the survey 
did exist. The 660 feet criterion would apply the same standard for 
reposting where Public Lands Survey descriptions are not available. We 
also retained the criterion of ``substantial'' to assure that the 
authorized officer can notify the public of changes that create 
essentially ``new'' proposals within the existing APD in the same 
quarter-quarter section.
    Many commenters stated that the Order requires an agency to give at 
least 30 days public notice before approval of an APD. They suggested 
that the BLM inform the surface owner and any other Federal lease or 
permit holders directly. We did not amend the Order as a result of this 
comment. We are required by the Reform Act to post APDs for public 
notification. In the final rule we modified Section III. of the Order 
to require the operator to certify that they have provided to the 
private surface owner copies of the Surface Use Plan of Operations and 
any related subsequent changes. We believe that this provides ample 
notification to the surface owner. We addressed notification of other 
Federal permittees in the Section II. discussion above.
    One commenter said it is unclear whether APD notices must be posted 
by the BIA and/or the affected Indian tribe, in addition to such 
notices being posted by the BLM, or whether only the BLM will post APD 
notices. The final rule requires that other Federal Surface Managing 
Agencies, including the BIA where Indian lands overlie Federal 
minerals, post the APD information for Federal leases. Posting is not 
required for an APD on an Indian oil and gas lease, since there is no 
requirement in the Indian leasing statutes similar to that in Section 
17 of the Mineral Leasing Act.
    One commenter stated that the Order needs to be revised to 
recognize the timeframes specified in the Energy Policy Act of 2005. 
The further proposed rule published in the Federal Register on March 
13, 2006, incorporated the specified timeframes in Section III.C.2. 
(Section III.E.2. in the final Order), APD Posting and Processing, for 
APD processing as does the final rule.
    One commenter stated that the Order should be revised to recognize 
the need to issue permits within 30 days of the BLM's receipt of a 
complete APD as the Energy Policy Act of 2005 requires. We recognize 
the importance of this comment, but also recognize that the Energy 
Policy Act does not relieve the BLM or the FS from complying with other 
applicable laws. Section 366 of the Act clearly states that the BLM 
cannot approve a permit without first complying with other applicable 
laws.
    One commenter stated that the proposed timeframe in Section III. is 
so short as to be impractical and unrealistic, and encourages sloppy 
processing. They believe that no matter how much increased funding is 
channeled to the budgets, neither the BLM nor the FS could be 
sufficiently staffed to be able to competently handle the turnaround 
time in Section III. of the Order. Further, they believe there is no 
justification for expediting permits. The timeframe for processing APDs 
is mandated by the Energy Policy Act of 2005. As such, the agencies 
must comply with this timeframe. However, neither the Energy Policy Act 
nor this Order requires a final decision on an APD prior to compliance 
with non-discretionary statutes.
    One commenter stated that the BLM must establish timelines for 
``outside agencies and surveyors'' to act on pain of waiver of their 
participation. Regulation of other Federal, state, or local agencies or 
of their contractors is beyond the scope of this Order.
    One commenter noted that there is no time limit for completion of a 
NEPA analysis nor is there a definitive time limit for approval of the 
APD once NEPA is completed. The commenter is correct; there is no time 
limit for the completion of the NEPA analysis but there is a 
requirement to comply with NEPA. The Order states (proposed Order 
Section III.C.2.c.1. and final rule Section III.E.2.c.1.) that the BLM 
should make the decision on whether to approve the APD within 10 days 
of the operator submitting the information or actions identified in the 
deferral notice (required by Section 366 (2)(B) of the Energy Policy 
Act), unless other legal requirements such as NEPA have not yet been 
met. When these requirements are met, the BLM will make the final 
decision on the APD. These requirements are consistent with Section 366 
of the Act. The Energy Policy Act requires that the BLM comply with 
NEPA and other applicable laws, it does not set a time limit for 
compliance. The BLM and the FS understand the urgency for approving 
APDs, but cannot establish a regulatory time limit for complying with 
applicable law.
    A few commenters noted that the operator is given 45 days after 
receiving notice from the BLM to provide any additional information 
requested before the APD is returned to the operator. The commenter 
stated that the data the BLM requests could take longer than 45 days to 
accumulate (e.g., an endangered species survey); therefore, a rigid 45-
day deadline may not be possible to meet. The commenter seems to 
misunderstand what is included in a ``Complete APD'' determination. The 
definition of a complete APD is very specific and does not include 
things such as endangered species surveys and therefore any information 
that the BLM requires to make a complete APD determination should be 
easily provided within 45 days; however, the authorized officer has the 
discretion to extend the 45-day limit especially if the operator so 
requests.
    One commenter stated that the operator has 2 years and 45 days 
after receiving notice of a request for additional information from the 
BLM to provide the additional information or the BLM may return the APD 
to the operator. Under the proposed rule Section III.C.2.a. (final 
Section III.E.2.a.), the operator has 45 days (non-statutory) from the 
BLM's request at the onsite inspection to provide missing information 
that will make the APD

[[Page 10317]]

complete. The BLM has 30 days (Section 366 (2) of the Act) from the 
date that the APD is complete to approve the APD or to notify the 
operator that the decision must be deferred pending compliance with 
NEPA and other laws. The notice must also tell the operator what 
specific steps, if any, that the operator could take for the permit to 
be issued (Section 366 (2)(B) of the Act). Consistent with the Act, the 
operator has 2 years (Section 366 (3)(A) of the Act) to complete the 
steps specified in the notice. Without a complete APD the 30-day 
timeframe and, therefore, the 2-year timeframe do not begin. If the 
operator has not taken the specific steps within 2 years, the BLM must 
deny the APD (Section 366 (3)(C) of the Act).
    One commenter stated that the phrase ``Within 7 days of the onsite 
inspection, BLM, and the FS if appropriate, will notify the operator 
that the APD is complete or that additional information is required to 
make the APD complete'' in Section III.C.2.b. of the proposed Order, 
should be deleted because it is inconsistent with paragraph (a) of the 
Order. We agree and in the final Order we moved Section III.C.2. to 
III.E.2. and revised the statement to state that ``deficiencies will be 
identified at the onsite'' and deleted the wording cited above. In the 
final Order we retained the 7-day timeframe for Notices of Staking 
because agencies typically would not have had a detailed proposal to 
review prior to an onsite inspection associated with a Notice of 
Staking (final Section III.C.).
    Many commenters stated it is clear that no final decisions will be 
made until the regulatory requirements of the Endangered Species Act, 
National Historic Preservation Act, and NEPA have been satisfied. The 
commenters said that the Order should not violate the opinion of the 
two 1988 solicitor's memos. The commenter said that the memos required 
the BLM to consider and adopt landowner suggestions and concerns to the 
extent they do not violate the statutory requirements of the cited 
acts. We believe that the intent of the 1988 solicitor's memorandum was 
to emphasize that these statutes apply to private surface overlying 
Federal minerals and nothing in the memos preclude consideration of 
surface owner concerns and suggestions that do not conflict with 
Federal statutes or implementing regulations. We emphasize that we 
invite the surface owner to the onsite inspection (Section VI.) to 
facilitate surface owner input and to ensure consideration of their 
suggestions and concerns. As discussed earlier, we have added a 
requirement that the operators certify that they have provided a copy 
of the Surface Use Plan of Operations to the private surface owner so 
that the surface owner has the clearest possible understanding of the 
proposed action. The BLM will explain the statutory requirements of 
NEPA, National Historic Preservation Act, and Endangered Species Act to 
the surface owners and will discuss any concerns that the surface owner 
may have about compliance with these statutes. We believe that any 
substantive request of the surface owner can be accommodated within 
these statutory requirements.
    One commenter referred to Section III.C.2.c., which states that no 
final decision is made pending regulatory compliance with Federal 
statutes and suggested that this provision should be revised to 
recognize the actions that have been categorically excluded from NEPA 
analysis pursuant to the Energy Policy Act of 2005. We did not modify 
the Order as a result of this comment. It is not the intent of this 
Order to make determinations on whether or not NEPA applies in a given 
situation.
    One commenter requested that we revise Section III.C.2.c. to state 
that the BLM and the FS must be sure that the NEPA and Endangered 
Species Act analysis are current prior to approving the APD, especially 
in cases where there is a lengthy delay in APD approval. We did not 
modify the Order as a result of this comment. Nothing in this Order 
relieves the BLM or the FS from compliance with these statutes. Nor is 
it our intent to provide in this Order detailed procedures for 
compliance with other laws and regulations.
    One commenter recommended that APDs should be effective within 60 
days if no action is taken by the BLM within that time. We emphasize 
that the Energy Policy Act of 2005 establishes timeframes for APD 
approvals, but it also requires that all applicable environmental laws 
be complied with prior to APD approval (Section 366 (2)(A) and (3)(A) 
and (B)).
    A few commenters referred to Section III.C.2.d. dealing with the FS 
Appeal procedures applicable to APDs on NFS lands and stated that they 
oppose having the FS appeal procedures apply to oil and gas operations 
on NFS lands. The commenter suggested that the FS conform its 
administrative appeals process to the BLM timeframes. We did not modify 
the Order as a result of this comment because the FS appeal timeframes 
contained in 36 CFR part 215 are consistent with timeframes in the 
Appeals Reform Act (P.L. 102-381) and therefore we did not make the 
suggested change.
    Several commenters suggested that the BLM should continue reviewing 
the drilling plan while FS reviews the Surface Use Plan of Operations. 
One commenter stated that evaluation of the application should continue 
while waiting for the onsite inspection to be held. We agree. Our 
existing processes and those in the final Order are consistent with 
what the commenter suggests. Furthermore, the Order states that the 
application will be processed up to the point that missing information 
or actions makes it impractical (proposed Section III.C.2.a.). This 
statement will be moved to the lead paragraph for final Section 
III.E.2. so that it pertains to all of this section.
    Several commenters noted that an APD approval is valid for 1 year 
from the date of approval and commented that this does not provide 
adequate flexibility for operators, particularly given the high demand 
for, and limited availability of, drill rigs. They suggested that the 
valid period should be expanded to at least 2 years to allow operator's 
more operating flexibility (i.e., drill rig availability). Another 
commenter stated that the shortest timeframe of either 1 year or lease 
expiration is too long a period for an APD to remain valid and 
requested that an extension not be automatically granted. We considered 
these comments and in the final Order will allow an APD to be valid for 
2 years with an option to extend for an additional 2 years. This takes 
into account the narrow drilling windows created by seasonal 
conditions, wildlife habitat needs, and the availability of drilling 
rigs. We considered the adequacy of the information and analysis from 
the perspective of timeliness in this decision. We believe that NEPA 
documentation and cultural and wildlife surveys will be adequate for at 
least the 2 year term and potential 2 year extension. Our decision is 
consistent with the Energy Policy Act of 2005 in that the categorical 
exclusions in Section 390 are based on NEPA documents that are up to 5 
years in age, which is longer than the initial APD term and extension 
in the final Order.
    One commenter asked how we can require diligent drilling, continue 
the APD, and potentially extend a lease. The commenter also asked that 
we add a deadline for reclamation, especially on private surface. We 
did not modify the final Order as a result of these comments. We are 
not certain what the commenter meant by diligent drilling. If the 
commenter is asking how we will require the operator to commence 
drilling soon after the APD is approved, we do not believe this to be 
an issue of

[[Page 10318]]

concern. In fact, we are concerned that seasonal restrictions and drill 
rig availability may cause delays and we have extended the valid period 
for the APD to accommodate this potential problem. If the comment 
concerned environmental obligations (43 CFR 3162.5-1(b)), we believe 
that involving the surface owner in the onsite inspection, the 
environmental review process done before approving the APD, and the 
periodic inspection conducted by the BLM personnel are adequate to 
assure surface protection, compliance with lease terms and reclamation. 
Lease extension is beyond the scope of this Order and is covered in 
other regulations (43 CFR subpart 3107). Reclamation properly begins as 
soon as the drilling operation ends. We typically require interim 
reclamation of that portion of the site that is no longer needed once a 
producing well is established. We believe that interim reclamation can 
best be handled by attaching Conditions of Approval and by compliance 
with lease terms rather than by regulation.
    One commenter recommended that the BLM develop a standard checklist 
of required information for processing an APD. This checklist should 
include NEPA, National Historic Preservation Act, and Endangered 
Species Act requirements applicable to the APD that have been, or still 
need to be, completed. The commenter said that this form would aid 
operators in ensuring that they submit to the BLM a complete APD and 
aid the BLM in efficiently ascertaining items that may be missing from 
the APD submission. We did not modify the rule as a result of this 
comment. Section III.D. of the final Order lists all of the components 
of a complete APD. The Order clearly states that the operator may 
voluntarily provide cultural and wildlife survey data, but the 
responsibility to comply with NEPA, Endangered Species Act, National 
Historic Preservation Act, and other applicable laws, is the 
responsibility of the agencies and not a requirement of the applicant 
and, therefore, is not listed as being part of a complete APD.
    Many commenters stated that Best Management Practices should be 
strictly voluntary and not constitute a new set of stipulations or 
Conditions of Approval for every future Federal lease or APD. These 
commenters believe that while Best Management Practices may be 
innovative and dynamic, they must be considered for their economic 
viability and be applied to site specific projects only when necessary 
to mitigate adverse environmental, cultural, or social impacts. Other 
commenters stated that Best Management Practices should be mandatory to 
ensure protection from resource abuse. One commenter asked that 
operators be required to explain what Best Management Practices they 
intend to use in their Surface Use Plan of Operations. While the BLM 
encourages the use of Best Management Practices, they are voluntary 
unless after specific analysis during the APD processing, the BLM 
includes them as Conditions of Approval to mitigate impacts. In the 
cases where Best Management Practices are included as Conditions of 
Approval, costs of the Best Management Practices will be considered in 
the environmental review, but may not determine the final decision if 
the BLM finds that the Conditions of Approval are necessary to mitigate 
environmental, cultural, or social impacts. If an operator proposes 
using Best Management Practices, they should be included in the Surface 
Use Plan of Operations. We added a definition of ``Best Management 
Practices'' and we modified the definition of ``Conditions of 
Approval'' for clarity.
    One commenter recommended deleting the paragraph about Best 
Management Practices that leads the discussion of components of a 
complete APD package because they should not be required. We agree that 
Best Management Practices are not a required component of a complete 
APD and we revised the final rule to make it clear that Best Management 
Practices are not mandatory unless they have been analyzed as a 
mitigation measure in the environmental review, but that we encourage 
their use.
    One commenter asked why the BLM should be notified prior to 
entering private lands for surveying, staking, and inventories. The 
final rule does not require, but only encourages, operators to notify 
the BLM or the FS prior to entering private lands. In general, early 
BLM notification is encouraged regardless of surface ownership so that 
applicants are aware of lease specific issues (such as the presence of 
endangered species) before an operator commits to a particular course 
of action or completes an inventory that does not address all relevant 
issues.
    A few commenters recommend that we revise the sentence that states, 
``No entry on private lands for surveying, staking, and inventories 
should occur without the operator first making an effort to notify the 
surface owner.'' Commenters said that requiring approval from a surface 
owner prior to entry could impair rights under their mineral lease. The 
BLM and the FS believe that it is important to involve the surface 
owner in the process as soon as possible. However, the final rule makes 
it clear that the Order only requires an operator to attempt to obtain 
approval from the surface owner, but after such effort, surveying and 
staking may proceed.
    Many commenters noted that the level of effort required of the 
operators to notify the surface owners prior to staking is not clearly 
defined. We agree. We cannot add a requirement to contact the surface 
owner because in some circumstances such contact may not be possible. 
Such a requirement could negate lease rights. In the final rule we 
added language requiring the operator to certify that they have made a 
good faith effort to provide a copy of the Surface Use Plan of 
Operations to the surface owner but that plan may not have been 
prepared at the staking stage. One commenter disagreed with our 
statement that staking on private lands is casual use. We agree with 
this comment. The statement that staking is a casual use refers only to 
staking on public lands for which casual use is a defined term. 
Therefore, casual use does not apply to private surface. We understand 
that this is a sensitive issue, but the BLM cannot make an absolute 
requirement that the operator obtain surface owner consent prior to 
entering private land, because the Stockraising Homestead Act offers 
the option of bonding to the lessee. However, we do require that the 
operator make a good faith effort to contact the surface owner and 
enter into a Surface Access Agreement at the earliest possible time.
    One commenter noted that not all access permits for Indian lands 
are granted by the area offices of the BIA, now known as regional 
offices. We agree and have replaced ``Area Offices'' with ``appropriate 
office.'' Further discussion of access to Indian lands is in Section 
VII. of the Order.
    Many commenters asked that we delete the following language in 
paragraph (d) of Section III.E.2.: ``The operator must include the 
minimum design criteria, including casing loading assumptions and 
corresponding safety factors for burst, collapse, and tensions (body 
yield, and joint strength).'' These commenters recommend that this 
provision be deleted because it is too detailed and no rationale for 
requiring such additional specificity in the APD has been given. We did 
not delete the language in the final rule because we believe that the 
information is necessary to ensure compliance with minimum standards 
defined in Onshore Orders Number 2, Drilling Operations (53 FR 46790) 
and Number 6, Hydrogen Sulfide Operations (55 FR 48958) and to meet

[[Page 10319]]

other regulatory requirements in 43 CFR 3161.2.
    One commenter asked that all aspects of a Drilling Plan be made 
available to the surface owners at or before submission of the APD. The 
commenter believes that the surface owners are entitled to review the 
plan in order to assess the necessity and extent of the disturbance 
proposed. We believe that the Surface Use Plan of Operations is more 
useful to the surface owner and that the Drilling Plan would provide no 
useful information to the surface owner because it primarily contains 
technical information about the drilling of a well and down-hole 
issues. Although we did not amend the Order to require operators to 
provide drilling plans to surface owners, we amended the Order to 
require operators to certify that they have attempted to provide a copy 
of the Surface Use Plan of Operations to the surface owner. In 
addition, the complete APD is available for public review at the 
approving BLM office, with the exception of proprietary information 
under the provisions of the Freedom of Information Act--43 CFR part 2.
    A few commenters stated that the proposed rule is unclear as to 
whether roads associated with an APD that cross Indian surface must 
meet the standards of the pertinent tribe or the standards of the BIA, 
or in the case of tribal Indian surface, both. If the roads are on the 
lease, the BLM will consult with the other Surface Managing Agencies 
(BIA) to obtain the appropriate road standards and route. After this 
consultation, in order to comply with the standards that the BIA 
provided to the BLM, the BLM may add Conditions of Approval. For off-
lease roads the operator must contact the appropriate Surface Managing 
Agency or tribe.
    A commenter suggested we add ``map or'' after ``include'' to the 
phrase, ``the operator must include a plat diagram and geospatial 
database of facilities planned either on or off the well pad that 
shows, to the extent known or anticipated, the location of all 
production facilities and lines likely to be installed if the well is 
successfully completed for production.'' We agree with the commenter 
and we added the phrase because a map may in some cases provide 
sufficient detail rather than requiring a detailed survey in all cases.
    One commenter stated that the information called for in Section 
III.E.3.d. (Location of Existing and Proposed Production Facilities) is 
usually provided before construction. We agree with the commenter. That 
section refers to existing production facilities within the general 
area of the proposed well and, therefore, no change is necessary.
    One commenter says that they may not know where they will obtain 
water if they intend to buy it at the time they submit their APD. We 
did not modify the Order as a result of this comment. The BLM and the 
FS need the information to ascertain the impacts associated with 
operations and the need for any mitigation applicable to public lands. 
Under this provision, we don't require specific contract information, 
just the location of the water supply and transportation method 
proposed so that we can complete the NEPA analysis. If the water source 
is unknown at the time the APD is filed, the information can be 
submitted as a Sundry Notice once it is identified.
    One commenter suggested that we add language to the Order to direct 
operators to obtain appropriate state agency water permits to avoid 
misunderstanding regarding jurisdiction in permitting water source 
wells. We did not modify the Order as a result of this comment since 
the Order is not intended to enforce regulations or requirements of 
other governing agencies and those rules stand on their own authority.
    One commenter suggested deleting the last sentence of the Section 
III.E.3.f. on construction materials described in the Surface Use Plan 
of Operations. The provision requires that the operator contact the 
Surface Managing Agency or owner of construction materials before those 
materials are used. We believe that the operator should make 
arrangements with the owner prior to use; however, it is not necessary 
for the Order to regulate private agreements. Therefore, we removed the 
final sentence of that section.
    Many commenters noted that an operator may amend his plan for 
surface reclamation at the time of abandonment, yet no notice must be 
given to a surface owner then or at any stage of the reclamation 
process. These commenters ask that the operator be required to notify 
and at least attempt discussing reclamation needs with the surface 
owners. We agree with the commenters. Changes to reclamation plans are 
not unusual because final reclamation may not occur for several years 
after the original plan was approved, especially if the well is 
productive or because reclamation standards or techniques change. We 
added language to the reclamation part of the abandonment section to 
require the operator to notify the surface owner and consider their 
views when an operator submits a reclamation plan for wells not having 
an approved plan. The surface owner will have an opportunity to express 
their views regarding all issues including reclamation before APDs for 
new wells are approved.
    Several commenters recommended that the APD should only require a 
basic reclamation plan that meets current standards and then require a 
more detailed, site appropriate final reclamation plan when the notice 
of intent to abandon is filed. We disagree. The reclamation plan must 
be sufficiently detailed at the APD stage to facilitate analysis and 
identification of needed Conditions of Approval to ensure adequate 
reclamation. If changes are proposed prior to abandonment, they may be 
submitted with a Sundry Notice.
    A few commenters suggested that ``when obtainable'' or ``to the 
best of his ability'' (regarding surface owner contact information) be 
added to the first sentence in proposed Section III.E.3.k. and in the 
last paragraph of proposed Section III.F. to recognize that some 
surface owners are difficult to locate. We believe the phrase ``if 
known'' already in that sentence addresses this concern and additional 
wording would be redundant (see Section III.D.4.k. in the final rule).
    Some commenters supported the use of Master Development Plans and a 
few recommended that the BLM encourage their use. The commenters note 
that Master Development Plans are an effective method to address the 
impacts associated with Surface Use Plans of Operation in a 
comprehensive manner, especially the development of access roads and 
pipeline systems for wells that are to be developed under a common 
drilling plan. However, they note, because of the unique environmental 
impacts that each well site may pose, specific environmental 
assessments are imperative for each well pad location. We agree with 
the comment concerning the advantages gained by using Master 
Development Plans. Subsequent APDs will be reviewed in light of the 
Master Development Plan when such a Plan is in place. Any new 
environmental concerns that are identified will be addressed before any 
subsequent APD is approved. This is existing practice and no change in 
the Order is necessary.
    One commenter suggested that the BLM should clarify whether all 
APDs submitted as part of the Master Development Plan will be approved 
at the same time. The commenter said that if all the APDs associated 
with the Plan were approved at one time, there may be a problem with 
validity (we assume this means difficulty in timely drilling because of 
the 1-year term). Under this

[[Page 10320]]

section the BLM will analyze all APDs proposed with the Plan and 
subsequent APDs that are anticipated in the Plan and make a decision on 
whether to approve the Master Development Plan. Subsequent phased 
implementation of that decision will involve approval of individual 
APDs. The operator should work with the BLM and the FS to assure that 
APDs are phased according to the operator's schedule. We believe that 
this can be achieved without changing the text of the Order. However, 
we have for other reasons extended the term of the APD to 2 years (see 
the discussion of Section III.D. above).
    One commenter wanted master APDs to be included in a Master 
Development Plan. We agree and view a master APD to be the part of the 
proposed Master Development Plan that addresses proposed and 
anticipated future wells. Master APDs contain common details of 
multiple wells. The master APD can be approved by the BLM and then in 
subsequent APDs the operator references the master APD and makes any 
appropriate changes such that the material referenced in the master APD 
or Master Development Plan and the changes or new material constitute a 
complete APD. Our environmental review, including NEPA analysis, would 
then focus on the new or changed information and rely on the existing 
analysis of the referenced material in the master APD or Master 
Development Plan. We did not amend the Order as a result of this 
comment because we believe that the existing provisions allow for 
master APDs.
    Several commenters expressed concerns about having to provide both 
state and Federal bonds in varying amounts. We understand the 
commenter's concerns, but operators are required by statute (30 U.S.C 
226(g)) and our regulations to have a Federal bond (see 43 CFR subpart 
3104). The Order cannot regulate bonds that may be required by states. 
The BLM requirements and procedures may be different than those of any 
given state. For example, states may have different criteria for 
releasing bonds than our criteria or they may release bonds without 
informing us and that could lead to insufficient bond coverage. State 
bonds cannot replace Federal bonds, but the BLM may, under certain 
circumstances, consider state bonds in setting Federal bond amounts. 
However, we did not modify the rule as a result of these comments.
    A few commenters pointed out that several references in the bonding 
section were incorrect and related to coal leases rather than oil and 
gas. The commenters are correct. We did not intend to limit the 
regulatory requirements to only those in 25 CFR part 200 and those 
specific references have been deleted. The FS is required to consider 
the cost of reclamation and, if deemed necessary, require additional 
bonding. The operator has the option to either increase the bond held 
by the BLM or file a separate bond with the FS (36 CFR 228.109).
    Many commenters expressed concern that the bond amounts are 
inadequate and do not address the concerns of the surface owners or 
consider other surface uses. They asked why the BLM and the FS do not 
have the ability to increase bond amounts. One commenter referenced the 
sentence in Section III.E.5. that states ``In determining the bond 
amount, the BLM may consider impacts of activities on both Federal and 
non-Federal lands required to develop the lease that impact lands, 
waters, and other resources off the lease'' and they requested that the 
BLM clarify what they may or may not consider in determining the bond 
amount under this rule. Lease bonds under 43 CFR 3104.1 ensure 
performance of the operator in the drilling, production, and 
reclamation of the well and compliance with lease terms and the 
approved APD. If lease operations adversely affect off lease lands or 
surface waters, these impacts may be covered by the bond. The preamble 
for the proposed rule (see 70 FR 43354) discussed the authority for 
considering the costs of restoration of any lands or surface waters 
that are adversely affected by lease operations in setting the bond 
amount, citing 30 U.S.C. 226(g). The Order does not, as the commenter 
requested, provide a comprehensive list of what may or may not be 
considered in setting the bond amount. However, existing regulations at 
43 CFR 3104.5 as well as Section III.E.5.a. of the final Order provide 
criteria for that purpose.
    Section III.E.5.a. of this Order and 43 CFR 3104.5 state the 
criteria for setting bond amounts. The regulation and our policy to 
require less than the full bond amounts have shown to be greatly 
effective in managing risk without excessive costs. We have not 
modified the Order as a result of these comments. Surface owner 
compensation is not provided by lease bonds under 43 CFR subpart 3104 
or this section of the Order. Bonds for the benefit of the surface 
owner are addressed in Section VI. of this Order and are addressed 
later in the discussion of that section of this preamble.
    One commenter asked why the bond number was included in the self 
certification when it is required on Form 3160-3. We agree with the 
commenter and since it is duplicative we eliminated it from being a 
requirement in the self certification clause in the final rule.
    One commenter stated that the requirement to stake the outer limits 
of the pad, pit, etc., should not be required for the Notice of Staking 
option. We agree. Complete staking is not required for the Notice of 
Staking option, but is required for final staking when the APD is filed 
(see Section III.F. of the proposed rule (Section III.C. of the final 
Order)).
    Many commenters noted that before filing an APD, the operator ``may 
file a Notice of Staking with BLM'' who will then inform the surface 
owner. Commenters asked why notice to those directly affected by 
operations is only voluntary, implying that the notice to surface 
owners should be mandatory. We did not modify the final rule as a 
result of this comment. It should be noted that the Notice of Staking 
is a voluntary process. The BLM will notify the surface owner if 
possible and invite them to the onsite inspection.
    One commenter expressed concern that surveying and related 
requirements are scattered between the APD and Notice of Staking 
sections of the Order and are confusing. In the final rule we 
rearranged Section III. of the Order so that the provisions are in a 
more logical sequence and to make the process clearer.
    One commenter suggested that the bottom-hole location should not be 
a requirement of the Notice of Staking option. We disagree. The bottom 
hole location is key in identifying the lease involved and the 
associated permitting requirements. The sooner this is known, the less 
likely there will be delays. Because of this importance, Attachment I, 
Sample Format for Notice of Staking, has been edited to eliminate the 
``if known'' wording associated with the bottom hole location 
component.
    One commenter stated that it is inconsistent to have the BLM as the 
lead agency for NEPA compliance and the BIA the lead for Right-of-Way 
approval. We disagree. Sections III.G.a. and III.G.c. refer to 
different, discrete actions, APD approval and Right-of-Way approval, 
respectively, and therefore may require separate NEPA analysis.
    A few commenters stated that the proposed Order is inconsistent 
with 25 CFR 211.7 and 225.4, which gives the BIA environmental review 
authority. The commenters also note that our statement that the BIA has 
responsibility for approving Rights-of-Way on Indian lands is partially 
incorrect. The commenters stated that

[[Page 10321]]

Rights-of-Way on Indian lands are granted by the Secretary of the 
Interior, but only with the consent of the Indian landowner (see U.S.C. 
323-328 and 25 CFR 169.3(a) and (b)). The BIA is responsible for NEPA 
analysis for actions that it approves, similarly, the BLM is 
responsible for NEPA analysis for actions that it approves. The BLM 
approves all lease operations that occur on the lease or under Indian 
Minerals Development Act of 1982 (IMDA), 25 U.S.C. 2101-2108. This 
includes drilling, access to drilling, flowlines to or from the wells, 
construction of on-lease facilities for oil and gas development, and 
other well operations. The BIA's role for on-lease activities is to 
consult with the BLM on those actions if the minerals or the surface 
are Indian trust.

Section IV. General Operating Requirements

    Purpose: This section summarizes general requirements of the 
operator such as conducting operations to minimize impacts to surface 
and subsurface resources. It also summarizes responsibilities for 
protecting cultural and biological resources and briefly describes 
safety issues. It requires the operator to submit a Completion Report 
after it completes a well. This section identifies some key operating 
requirements without details that might limit or unnecessarily 
constrain operations based on site specific proposals.
    Summary of Changes: No substantive changes have been made to this 
section. However, we changed ``Watershed Protection'' to ``Surface 
Protection'' because the term ``watershed'' has legal implications that 
are not intended and are beyond the scope of this Order. We also 
amended the Endangered Species Act language in this section to more 
accurately reflect the statutory language and existing policy.
    Comments and Responses: One commenter stated that under the heading 
of ``Operator Responsibilities,'' the proposed rule states that an 
``operator must conduct operations to minimize adverse effects to 
surface and subsurface resources and prevent unnecessary surface 
disturbance.'' The commenter suggested that to avoid vague and 
ambiguous language, the phrase ``unnecessary surface disturbance'' 
should be precisely and narrowly defined or explained. We disagree that 
narrowly defining ``unnecessary surface disturbance'' would be useful. 
We purposefully use broad language in the Order to cover the many 
different circumstances and conditions that may occur during drilling. 
Also, we carefully review surface use plans and limit surface 
disturbance to that which we think is necessary for the proposed 
operation. We limit the size of drill pads and require interim 
reclamation of the area no longer needed after drilling is complete.
    One commenter stated that when third party contractors are used, 
the operator needs to have assurances that the work will be accepted by 
the BLM if established standards or procedures have been followed. We 
disagree. Products and services supplied by third party contractors 
will be reviewed on their own merits and, as with any operations on 
public lands, the BLM approval will not occur until we are sure that 
operations or reclamation is consistent with the APD, Orders, and 
regulations. Operators and third party contractors should contact the 
local BLM office if they are not clear what is expected of them.
    A few commenters suggested that the sentence referring to 43 CFR 
3163.1(b)(2) be corrected. They believe that sentence is partially 
incorrect as the regulatory language specifies ``For drilling without 
approval or for causing surface disturbance on Federal or Indian 
surface preliminary to drilling without approval, $500 per day for each 
day that the violation existed, including days the violation existed 
prior to discovery, not to exceed $5,000.'' We believe that it is not 
necessary to include in the final Order all of the regulatory language 
in 43 CFR 3163.1(b)(2) since that provision is already a regulatory 
requirement. However, we removed from the final rule the text regarding 
the immediate daily assessment because it is not in 43 CFR 3163.1.
    One commenter stated that cultural resource, endangered species, 
and watershed protection requirements are better addressed in 
Conditions of Approval, rather than imposing a broad requirement in 
this Order. In addition, the commenter stated that the proposed rule 
does not recognize the authority of the State Historic Preservation 
Officer with respect to cultural resources. With regard to the State 
Historic Preservation Office, we believe that failure to establish 
national procedures could potentially cause substantial delays and wide 
variation in procedures. Therefore, we believe it is advantageous to 
define a uniform process in this Order rather than to allow each BLM 
and FS office to develop unique procedures. With regard to the 
requirements in Section IV., we believe that the requirements in this 
section are broad and apply to every APD. Only specific requirements 
that apply to the actual conditions at the site are appropriate for 
Conditions of Approval.
    A few commenters stated that the proposed language that requires 
recording of historical or archeological sites that the operator avoids 
is not appropriate. One commenter suggested changing ``recording'' to 
``reporting.'' We disagree. The operator is responsible for recording 
the site (Section 106 of the National Historic Preservation Act). 
Recordation means those routine procedures adopted by the BLM or the 
FS, as appropriate, and the State Historic Preservation Officer to 
record any cultural site inventoried or discovered during earthwork and 
are part of compliance with the requirements of 36 CFR part 800 
regulations governing Section 106 compliance and many State Historic 
Preservation Officer protocols. Recordation is a routine part of any 
cultural survey provided by third party cultural contractors and does 
not refer to extensive data recovery or other site mitigation 
techniques that are necessary if the site is not avoided. Recordation 
is the least complicated method of reporting a site that is required 
under Section 106 regulations and most protocols.
    One commenter stated that Section IV.a. of the Order (describing 
what an operator must do if cultural resources are uncovered during 
construction and the operator chooses to avoid further impacts to the 
site) does not provide adequate protection of cultural resources. They 
asked that the rule be amended to state that when an operator 
encounters cultural or historic resources during the conduct of 
operations, they would be immediately shut down and required to 
relocate, rather than to produce a report that potentially minimizes 
the impacts and allows the operator to proceed. We disagree. We believe 
that the process in the Order, which is consistent with existing 
practice, will provide and has provided adequate protection to cultural 
resources. A report intentionally falsified would likely result in 
revocation of permits and possible penalties, including revocation of 
authorizations to conduct cultural surveys.
    One commenter requested clarity as to who is defined as the Surface 
Managing Agency in various scenarios relative to Indian lands. The 
final Order makes it clear that for tribal or allotted lands held in 
trust, the BIA is the Surface Managing Agency. The final Order also 
recognizes that surface owners have rights and responsibilities with 
respect to trust lands.

[[Page 10322]]

    One commenter requested that the Order address the protection of 
vertebrate fossil materials. We did not modify the Order as a result of 
this comment. It is existing policy that will continue under this Order 
to address the protection of fossils through Conditions of Approval.
    One commenter asked for an explanation of procedures for tribal 
involvement should cultural resources be encountered on lands covered 
by the APD. We did not modify the final rule as a result of this 
comment. Cultural resource compliance under the National Historical 
Preservation Act is covered by the implementing regulations for Section 
106 of the National Historic Preservation Act along with various local 
agreements with State (and Tribal) Historical Preservation Officers. 
Since those procedures are defined elsewhere and are subject to 
protocols and agreements that differ depending on locale, we did not 
address them in this Order.
    One commenter stated that in order to protect watersheds, an 
operator ``must take measures to minimize or prevent erosion and 
sediment production.'' The commenter said that the agency should be 
much more specific and careful in protecting water values. Section 
IV.c. of the Order and 36 CFR 228.108(j) address watershed protection. 
In addition, it is existing policy that will continue under the Order 
to require site specific mitigation for each approved APD. Effective 
protective measures can be developed only after an actual proposed 
action is evaluated and this must be done on a case-by-case basis. 
Therefore, we did not modify the Order to address this comment. Many 
commenters wanted more specific protection of municipal watersheds and 
water resources. Protection of municipal watersheds and water resources 
is outside the scope of this Order. Measures to protect resources such 
as water are included in oil and gas leases, are addressed in Resource 
Management Plans, and are developed by site specific NEPA analysis, as 
appropriate.
    One commenter requested that we remove the word, ``may'' from the 
sentence, ``Such measures may include, but are not limited to: Avoiding 
steep slopes and excessive land clearing * * *'' in the watershed 
protection provisions of the Order. The commenter believes that these 
measures should be mandatory, not discretionary. A few commenters 
suggested that this requirement should be reworded to say, 
``Construction with frozen material is prohibited and surface 
disturbance may be suspended during periods when the soil material is 
saturated or when watershed damage is likely to occur (from Wyoming BLM 
Surface Disturbance Mitigation Guidelines).'' We did not accept these 
comments because the list is intended to illustrate conditions to be 
avoided and is not intended to be comprehensive. Detailed mitigation 
measures are best developed on a case-by-case basis or in guidance 
documents such as the one the commenters quoted.
    A few commenters asked whether an operator is required to notify 
the affected tribe, the BIA, or both for operations on split estate 
lands containing Indian surface and Federal oil and gas when there are 
``emergency situations.'' We replaced ``surface management entity'' 
with ``Surface Managing Agency'' and revised the definition. As a 
result, it is now clear that in the emergency situation the commenter 
described, an operator should notify the BLM and Surface Managing 
Agency (BIA in this case).

Section V. Rights-of-Way and Special Use Authorization

    Purpose: This section describes the requirements for obtaining a 
Right-of-Way (BLM) or Special Use Authorization (FS) for activities 
that are attendant to but not part of the APD.
    Summary of Changes: No substantive changes were made to this 
section and comments focused on the desire or need to have both the 
Rights-of-Way and APD approved at the same time to avoid operating 
delays.
    Comments and Responses: A few commenters suggested that the BLM 
should combine Right-of-Way filing and approval with the APD process 
because it would allow approval of the access road Right-of-Way at the 
same time as the APD approval. They also suggested that the BLM 
standardize the Right-of-Way process for all BLM offices. One commenter 
suggested that we not approve an APD until any associated Right-of-Way 
or other authorizations were also approved. We did not amend the Order 
as a result of these comments. There is no need to address these issues 
in regulation. Given the limited time of an APD, no operator would want 
to start the term running before it has access to the well site. While 
it is the intent of this Order and BLM policy to ensure uniformity in 
approval processes, local conventions sometimes evolve to accommodate 
local needs.
    A few commenters said it was not clear whether to file a Right-of-
Way application with the BIA for allotted Indian lands and to the tribe 
for tribal Indian lands for split estate easements, or whether the 
operator should file in accordance with the rules in 25 CFR part 169. 
The operator should comply with BIA regulations which define the 
appropriate tribal/Indian owner role in approving Rights-of-Way where 
Indian land is involved.

Section VI. Operating on Lands With Private/State Surface and Federal 
or Indian Oil and Gas

    Purpose: This section discusses the requirements and procedures for 
operating on split estate lands. It describes:
    (A) The requirement of the operator to contact the surface owner 
before entry, including entry to stake the location;
    (B) Surface Access Agreements that are made with the surface owner 
for access to the private surface; and
    (C) Compensation for damage to the surface estate that are provided 
by law and the bond for the benefit of the surface owner if a good 
faith effort to reach agreement fails.
    The BLM will also make a good faith effort to contact the surface 
owner to assure that they understand their rights and to invite them to 
any onsite inspection that may be conducted.
    Summary of Changes: We made several changes to this section that 
are as a result of public comment. Those changes include: (A) Adding a 
requirement of the operator to provide a copy of the Surface Use Plan 
of Operations, the Conditions of Approval, and any emergency notices to 
the surface owner; and (B) Removing from the rule the universal use of 
the Stockraising Homestead Act standard to define the damages covered.
    We also clarified the section regarding access to Federal minerals 
underlying Indian surface. The new language makes clear that the 
operator must make a good faith effort to obtain a surface access 
agreement with a majority of the Indian surface owners who can be 
located with the assistance and concurrence of the BIA or with the 
tribe in the case of tribally owned surface. This is consistent with 
existing practice and 25 CFR 169.3.
    Comments and Responses: One commenter complains that the Order 
would give new rights to surface owners. We disagree. The Order only 
formalizes the existing practice of making a good faith effort to 
notify the surface owners. The surface owners' participation and input 
is welcome, but the Order gives them no veto over development of 
Federal oil and gas.
    Several commenters were uncertain whether or not privately owned 
surface includes tribal surface estates owned in fee simple. When 
tribal lands are held in trust or are subject to Federal restrictions 
against alienation the BIA is

[[Page 10323]]

the Surface Managing Agency, but if lands are held in unrestricted fee, 
those lands are treated the same as private surface.
    Many commenters expressed concerns that the Order changed current 
procedures for operations on private surface with Federal oil and gas. 
We disagree. The Order does not change the existing legal relationship 
between the surface and mineral estates or the relationship between the 
surface owner and the operator, but clarifies the relationship between 
operators and surface owners.
    Many commenters wanted the Order to support state laws that address 
split estate operations. Existing policy and this final rule are based 
on a strict interpretation of existing law. The authority of states 
with respect to reserved Federal minerals is established in statutes 
dating back to the early twentieth century and is not altered by this 
Order. Therefore, we did not amend the final rule as a result of this 
comment.
    Some commenters wanted the policy stated in BLM's Instruction 
Memorandum 2003-131, Permitting Oil and Gas on Split Estate Lands and 
Guidance for Onshore Oil and Gas Order No. 1 (IM 2003-131), to be 
included in the final rule. Section VI. of the proposed and final rule 
is based on IM 2003-131. However, we addressed an inaccuracy in the 
existing 1983 version of the Order and IM 2003-131. The existing Order 
and the Instruction Memorandum extends the Stockraising Homestead Act 
(43 U.S.C. 299) limitation on compensation to all split estate. The 
Stockraising Homestead Act (and our regulations at 43 CFR 3814.1(c)) 
clearly limit compensation to grazing and associated tangible 
improvements. Other laws that created split estates may not have this 
same limitation. The final rule states that compensation is based on 
the law that reserved the mineral estate.
    One commenter said that the Order and the BLM are biased toward 
surface owners in violation of law. The final rule incorporates the 
split estate policy that has been in effect since 2003 which is based 
on a strict interpretation of existing law. It adds nothing new with 
the exception that it bases compensation on the patenting act rather 
than extending the terms of the Stockraising Homestead Act to all split 
estate. As explained elsewhere, surface owners have only the 
substantive rights provided by statute, especially the laws under which 
the surface was patented. A procedural requirement of a good faith 
attempt to notify the surface owner and attempt to reach an agreement 
does not change the dominant character of the federally owned oil and 
gas or the rights of Federal lessees. The Order reflects no bias; it 
includes the lessee's right to post a bond if a good faith attempt to 
reach a Surface Access Agreement with the surface owner fails. This 
Order does not require compensation to surface owners beyond that which 
is required by the patenting act.
    Several commenters objected to the surface owner compensation 
limitations in the Stockraising Homestead Act and wanted us to 
eliminate them. The BLM cannot modify a statute through rulemaking.
    Several commenters want a clear definition of ``good faith'' as 
that term pertains to negotiations with a surface owner and a 
definition of what an operator must do to contact and negotiate with a 
surface owner. We did not modify the Order as a result of these 
comments. We believe that a good faith effort can be demonstrated in 
too many ways to be codified. For example, a single phone call does not 
demonstrate a good faith effort while in similar circumstances an 
extensive log of unanswered phone calls or evidence of numerous 
returned unopened properly addressed letters would. Therefore, the 
final Order does not contain such a definition. In response to the 
second comment, we believe that once contact has been made, 
negotiations are private and methods of negotiation are not easily 
codified. Some commenters oppose disclosing the terms of the Surface 
Access Agreements since the agreements are private contracts. 
Therefore, we have chosen to not address contract negotiations or terms 
of agreements in the Order. We have, however, eliminated the 
requirement that the operator provide the BLM with those terms of the 
Surface Access Agreement that could impact surface operations. We 
believe that the Surface Use Plan of Operations will contain sufficient 
detail to make this requirement redundant.
    Several commenters want the BLM to devise reasonable bonding 
requirements and provide guidelines for setting surface values rather 
than rely on the Stockraising Homestead Act. Bonds are used in lieu of 
a Surface Access Agreement to assure surface owner compensation for 
damages as prescribed by the appropriate law. Bonds can only be used 
when the operator certifies that a Surface Access Agreement could not 
be reached and the BLM confirms that fact with the surface owner, if 
possible. Bonds are not required when a Surface Access Agreement has 
been made. A commenter expressed concern that an operator may take the 
easy way out and merely post a bond rather than to negotiate an 
agreement with the surface owner. The final rule states that bonds are 
in lieu of a Surface Access Agreement only when the operator certifies 
that a Surface Access Agreement could not be reached and the BLM 
confirms this fact with the surface owner, if possible. The bond amount 
will be reviewed by the BLM to assure that it is sufficient based on 
the appropriate law. Some commenters said that these bonds would 
constitute ``double bonding.'' We disagree. Bonds for the benefit of 
the surface owner are for a different purpose than the reclamation 
bonds required for all APDs. When both bonds are required, they satisfy 
the requirements of different statutes, protect different parties, and 
assure performance of different obligations, i.e., surface restoration 
versus damage to structures.
    One commenter alleged that the BLM managers actively dissuade 
surface owners from participating in the bonding process, thus somehow 
rendering the Order illegal. Any such conduct would be improper under 
the existing Order. No change to the Order is necessary based on this 
comment.
    One commenter asked why we require the operator to enter into an 
agreement with the surface owner prior to approval of the APD since the 
agreement may need to be revised to comply with changes that the BLM 
may make to the proposed action. We did not revise the Order as a 
result of this comment. Under the terms of the patenting statutes, the 
BLM cannot approve entry onto the land for drilling until either 
agreement is reached or a bond is posted. Each party should anticipate 
that changes to a proposed action may occur during the APD approval 
process and negotiate accordingly.
    Another commenter suggested that the Order should set minimum 
standards for Surface Access Agreements and suggested language for an 
agreement. The BLM and the FS believe that most surface owners and 
operators would object to such a requirement. In most split estate 
cases surface owners and operators do reach an agreement. This is 
evidenced by the very few bonds that we hold for the benefit of the 
surface owner. Also, there appears to be a general reluctance from both 
surface owners and operators alike to divulge the terms of these 
agreements and we take that to indicate that they would object to 
required terms for such agreements. We did not set minimum standards 
for Surface Access Agreements. However, the BLM and the FS are always 
willing to discuss

[[Page 10324]]

concerns with surface owners and operators.
    Some commenters asked for more involvement of the surface owner in 
review of the proposed action and asked why the BLM will not include 
all surface owner requests in the approved APD. We emphasize that the 
BLM will always invite the surface owner to the onsite inspection if 
they can be located. The BLM will consider any input that the surface 
owner may have and will make adjustments to the operator's plans that 
are reasonable. These changes may include road realignment and other 
similar adjustments. They would not include terms of a Surface Access 
Agreement that are not directly related to the proposed action in the 
APD. A private contract may include an agreement to provide benefits 
that are not related to development of the oil and gas. These items 
would not be enforceable by the BLM and cannot be included in the 
Conditions of Approval of the APD. To avoid confusion, we removed the 
statement that suggested we would only consider the surface owner 
concerns to the extent that they are consistent with Federal land 
management policy.
    One commenter asked why the BLM and the FS would only require 
reclamation and not restoration, but did not provide a distinction 
between the two terms. We define reclamation in the Order to mean 
``returning disturbed land as near to its predisturbed condition as is 
reasonably practical or as specified in an approved APD.'' Section 
XI.B. of the Order requires the BLM to contact the surface owner and 
involve them in determining reclamation requirements, any changes to 
reclamation plans, and the final approval of reclamation operations.
    A few commenters stated that the private surface owner should be 
provided with notices of oil and gas lease sales and be allowed to 
provide input into the leasing process. The commenters also wanted 
improved involvement in decisions that affect their private surface. 
The BLM's leasing processes are outside the scope of this Order. 
However, under current rules and processes, diligent landowners have 
ample opportunities to make themselves aware of decisions to lease 
lands. The BLM makes decisions regarding areas to be made available for 
leasing and lease stipulations during the land use planning process. 
The land use planning process is open to public participation and 
comment and the BLM encourages private landowners to make their views 
known through this process. Also, lease sales are posted on the BLM's 
Web sites and the details are also available through individual BLM 
offices.
    Several commenters stated that the BLM does not have the authority 
to require a private landowner to submit to cultural and biological 
surveys on privately owned surface. One commenter stated that it is 
incumbent upon the BLM to respect the wishes of the private landowner 
with respect to these surveys. We disagree. The Federal mineral estate 
is the dominant estate and the BLM and its lessees may enter the lands 
to perform such operations as are necessary to develop the minerals. 
The BLM and the FS are required to comply with Section 106 of the 
National Historic Preservation Act and Section 7 of the Endangered 
Species Act prior to approving the lease operations on Federal minerals 
regardless of surface ownership. Satisfying statutory requirements may 
include conducting specific inventories. To the extent that these 
inventories are a necessary prerequisite to developing the minerals, 
they are within the rights reserved to the United States in the patent. 
We modified Section VI. of the Order to make this clear.
    One commenter wanted the Order to adopt language in proposed 
Federal legislation pending before Congress that provides more 
protections for surface owners. The final rule is consistent with 
existing law pertaining to split estate and the rights possessed by the 
holders of outstanding leases that limit what the BLM can do under 
current law. Therefore, we did not modify the Order as requested by the 
commenter.

Section VII. Leases for Indian Oil and Gas

    Purpose: This section discusses the requirements and procedures for 
operating on Indian oil and gas leases. It also discusses the process 
for approval of APDs, Master Development Plans, and Sundry Notices on 
Indian tribal and allotted oil and gas leases held in trust and Indian 
Mineral Development Trust mineral agreements.
    Summary of Changes: In the final rule we clarified the relationship 
of the BIA as the Surface Managing Agency and the Indian mineral owners 
relative to the BLM approvals under the Order.
    Comments and Responses: A few commenters stated that the reference 
to Indian oil and gas does not clearly address the issues surrounding 
the relationship between the BLM and the tribal management with respect 
to APDs. They encouraged the BLM to approve APDs on tribal lands within 
30 days of receipt of a complete APD. The final rule reduces the 
confusion caused by using the term ``Surface Management Entity'' that 
included both the BIA and the Indian mineral owner. The final rule 
refers to the ``Surface Managing Agency,'' which is the BIA and not the 
tribe. The BLM cannot approve an APD until all non-discretionary 
actions are completed and other Surface Managing Agencies, including 
the BIA in these cases, are consulted. The BLM must seek BIA input for 
Indian oil and gas leases and will strive to issue permits in a timely 
manner.
    One commenter asked for an explanation of the procedure to be used 
for processing APDs on tribal lands. The final rule makes it clear that 
on tribal lands held in trust or subject to Federal restrictions 
against alienation, the BLM will review and process APDs in the same 
manner as on BLM lands, but will consult and consider recommendations 
for the Surface Use Plan of Operations from the Surface Managing Agency 
(BIA) and surface owners (the tribe). We modified the provisions on 
surface access of Indian lands to make them consistent with BIA 
regulations. Decisions on APD approval are subject to State Director 
Review and the BLM's appeal procedures.

Section VIII. Subsequent Operations and Sundry Notices

    Purpose: This section describes approval of operations that occur 
after the APD has been approved, including changes to the drilling 
plan. The additional operations occasionally include additional surface 
disturbance.
    Summary of Changes: In the final rule we added a requirement that 
the operator must make a good faith effort to provide a copy of any 
Sundry Notice that requires additional surface disturbance to the 
private surface owner in the case of split estate. This is consistent 
with the requirement in the final rule to make a good faith effort to 
provide the Surface Use Plan of Operations to the split estate surface 
owner and is a result of comments that we received.
    Comments and Responses: One commenter suggested that operators be 
allowed to use e-mail and voice messages for notification of emergency 
repair. We agree. In the final rule the form of the contact is not 
specified, but the BLM will allow any form of contact as long as it is 
reasonable. The BLM and the FS contact information is listed on the 
approved APD.

Section IX. Well Conversion

    Purpose: This section describes the process of converting an 
existing well into either an injection well or water well.

[[Page 10325]]

    Summary of Changes: We added language to the final rule to clarify 
that if a Surface Managing Agency or surface owner acquires a water 
supply well, they assume liability for that well.
    Comments and Responses: One commenter noted that the proposed Order 
requires application to both the BLM and the Surface Managing Agency to 
convert a production well to an injection well. The commenter stated 
that actual approval to inject rests with either the Environmental 
Protection Agency (EPA) or a state to which primacy has been granted by 
the EPA. The BLM recognizes the EPA's (and the primacy states') role in 
the Underground Injection Control program. However, that does not mean 
that the BLM does not have a role to play in the approval of the 
conversion of a well to an injection well on Federal lands. The BLM 
approves underground injection on Federal and Indian oil and gas leases 
under existing regulations at 43 CFR 3162.3-4(b) (see also Onshore 
Order Number 7, Disposal of Produced Water, 58 FR 47354).
    Several commenters questioned the authority given to the Surface 
Managing Agency regarding approval of injection well conversions. One 
commenter asked if the Surface Managing Agency has veto authority over 
the approval. Under existing procedures and this final rule, if another 
Federal agency other than the FS manages the surface, the decision will 
be made by the BLM in consultation with that agency if additional 
surface disturbance is involved. The FS approves surface use on NFS 
lands. The commenters also asked if the disapproval is the result of 
the position of the Surface Managing Agency, whether such disapproval 
is subject to appeal under Section XIII. The commenters pointed out 
that Interior Board of Land Appeals (IBLA) has no authority over BIA 
decisions. There are no decisions by other agencies to appeal. All BLM 
decisions under this rule are appealable to the IBLA. The FS's 
decisions are appealable under Title 36 of the CFR. One cannot appeal a 
recommendation from another agency. One commenter stated that it is 
inappropriate to request that operators file the listed applications 
with Surface Managing Agencies that do not have any regulatory 
authority over conversions. The requirement to submit a Sundry Notice 
to a Surface Managing Agency other than the BLM has been eliminated 
from the Order if no additional surface disturbance is required.
    One commenter mentioned that in addition to the BLM approval, 
notice to the state agency with authority for conversion to a water 
well will also be required. They suggested that including a reference 
to the appropriate state agency with authority over groundwater would 
help avoid failing to meet any state requirements. We did not revise 
the Order as a result of this comment because such a list would be 
extensive and would have the potential to change periodically. Also, 
the Order only covers Federal approvals and, therefore, the suggested 
list is outside the scope of this rule.

Section X. Variances

    Purpose: This section provides guidance and requirements for 
obtaining a variance from the requirements of the Order or Notice to 
Lessee. A request for variance must show how the operator expects to 
meet the intent of the Order with the variance.
    Summary of Changes: In the final rule we moved the discussion of 
waiver, exceptions, and modifications to a new section. We also explain 
that operators must demonstrate in their request for a variance that 
they will still meet the intent of the Order. This is based on comments 
requesting that we clarify the variance process (see the discussion in 
Section II. of this rule).
    Comments and Responses: One commenter asked why the BIA's 
concurrence is not needed for variances. The BIA's concurrence is not 
necessary to grant a variance because it is a request to vary from the 
provisions of this Order for which the BLM and the FS have 
responsibility.

Section XI. Waivers, Exceptions, or Modifications

    We added this section to the final rule to distinguish variances, 
which concern requirements of the Order, from waivers, exceptions, and 
modifications which concern lease terms. We did not add a definition 
for these three terms in Section II.; however, we did add language that 
clarifies the differences between the waivers, exceptions, and 
modifications. The text in this section was moved from the variance 
section in the proposed rule.
    One commenter asked whether the BIA has authority to approve or 
deny waivers, exceptions, or modifications to lease stipulations. We 
did not amend the final rule as a result of this comment. On Indian oil 
and gas leases, where the surface is held in trust, the BIA is the sole 
authority for approval of waivers, exceptions, or modifications to 
lease stipulations.
    One commenter pointed out that a 30-day posting is not always 
necessary when a waiver, exception, or modification of lease terms is 
requested because these are often addressed in the planning document. 
We agree. A 30-day posting is only required if the waiver, exception, 
or modification is substantial. The granting of a waiver, exception, or 
modification would not be considered substantial if the circumstances 
warranting a waiver, exception, or modification were prescribed in the 
planning document and the associated impacts were disclosed in the 
environmental impact statement for the Resource Management Plan.
    One commenter was concerned that the requirement for concurrence 
from the Surface Managing Agency for waiver, exception, or modification 
will result in unnecessary delays. The BLM is required by the Reform 
Act to provide public notice whenever a waiver, exception, or 
modification is substantial (Section 5102(d) of the Federal Onshore Oil 
and Gas Leasing Reform Act of 1987, 101 Stat. 1330-256, P.L. 100-203). 
The reason the BLM consults with the Surface Managing Agency is because 
the agency developed the lease stipulations and therefore any 
associated waivers, exceptions, or modifications must be based on that 
agency's concurrence as well.

Section XII. Abandonment

    Note: Since the final rule adds a separate section for waivers, 
exceptions, and modifications, the abandonment section has been 
renumbered from XI. to XII.


    Purpose: This section describes the requirements for notification 
of intent to abandon a well and reclaim the site. It describes 
requirements for providing notice of intended change in reclamation. 
Some of the comments related to this section dealt with timing of 
reclamation and involvement of a private surface owner (also see 
Section VI.).
    Summary of Changes: In the final rule we moved from this section to 
Section IX. the statements about the BLM and the FS approving complete 
abandonment of the well if the Surface Managing Agency or surface owner 
commits to acquiring it as a water well and the acquiring party's 
assumption of liability. We also modified this section to require the 
operator to notify and consider the views of the private surface owner 
prior to a Notice of Abandonment being filed.
    Comments and Responses: One commenter asked that we add to the 
final rule a deadline for reclamation, especially on private surface. 
Reclamation properly begins as soon as the drilling operation ends. We 
typically require interim reclamation of that portion of the site that 
is no longer

[[Page 10326]]

needed when a producing well is established. We believe that this can 
best be handled in Conditions of Approval and by lease terms rather 
than in the Order. We made no change based on this comment.

XIII. Appeal Procedures

    Note: With the addition of a separate section for waivers, 
exceptions, and modifications the appeal procedures section has been 
renumbered from XII. to XIII.


    Purpose: This section describes the process of appealing decisions 
of the agencies and statutory basis for appeal procedures.
    Summary of Changes: The only change to this section was to change 
the term ``are subject to'' to ``may be subject to'' as that phrase 
applies to appeals of FS decisions. We made this change because some 
decisions based on categorical exclusions may not be subject to 36 CFR 
part 215.
    Comments and Responses: Comments received on this section are 
discussed earlier in previous section discussions of this preamble.

XIV. Procedural Matters

Executive Order 12866, Regulatory Planning and Review

    The final rule will not have an annual economic effect of $100 
million or adversely affect an economic sector, productivity, jobs, the 
environment, or other units of government. A cost-benefit and economic 
analysis has not been prepared. The final rule primarily involves 
changes to the BLM's and the FS's administrative processes. The 
revision to the definition of ``Complete APD'' requiring onsite 
inspections would have no impact on operators since onsite inspections 
are currently required as part of the APD approval process. The 
provisions are consistent with existing policy and practice when 
operating on split estate lands with Indian surface ownership, and 
therefore would have no economic impact. Other changes, such as adding 
a provision for the use of Master Development Plans, may improve 
processing and predictability of operations due to better advance 
planning of field development. Clarifying that our authority to require 
additional bond applies to off-lease facilities would have no economic 
impact since the BLM already has the authority under the existing 
regulatory scheme to require this bond. The other revisions this final 
rule makes to the Order primarily involve changing the BLM and the FS's 
administrative processes. Because of clearer rules, operators will have 
a better understanding of the BLM and the FS requirements, processes, 
and timelines, and thus the result may be a reduction in delays when 
processing APDs. The BLM and operators should both see administrative 
cost savings realized from implementing the final rule.
    The final rule will not create inconsistencies with other agency 
actions. The BLM has worked closely with the FS in assuring the maximum 
consistency between the policies of the two agencies. In fact, the 
Forest Service will adopt the final rule under their regulations at 36 
CFR 228.105.
    The final rule will not materially affect entitlements, grants, 
user fees, loan programs, or the rights and obligations of their 
recipients. As stated above, the final rule primarily revises 
administrative processes for APD approvals and should not impact any of 
the above listed items.
    The final rule does not raise novel legal or policy issues. Legal 
and policy issues addressed by the final rule are already addressed in 
the existing Order, existing regulations, existing policy, or existing 
law.

Regulatory Flexibility Act

    Congress enacted the Regulatory Flexibility Act of 1980 (RFA), as 
amended, 5 U.S.C. 601-612, to ensure that Government regulations do not 
unnecessarily or disproportionately burden small entities. The RFA 
requires a regulatory flexibility analysis if a rule would have a 
significant economic impact, either detrimental or beneficial, on a 
substantial number of small entities. For the purposes of this 
analysis, we will assume that all entities (all lessees and operators) 
that may be impacted by these regulations are small entities.
    The final rule deals mainly with the requirements necessary for the 
approval of all proposed oil and gas exploratory, development, or 
service wells on all Federal and Indian (other than those of the Osage 
Tribe) onshore oil and gas leases. These changes are not significantly 
different from the existing Order and primarily consist of changes to 
the BLM's and the FS's administrative processes. As a result of clearer 
rules, operators will have a better understanding of the BLM's and the 
FS's requirements, processes, and timelines. This will likely reduce 
delays in processing and both the BLM and operators should see some 
administrative cost savings. The provision(s) for operating on split 
estate lands with Indian surface ownership is consistent with existing 
policy and practice and therefore would have no economic impact. 
Therefore, the BLM has determined under the RFA that the final rule 
would not have a significant economic impact on a substantial number of 
small entities.
    The use of Best Management Practices in Conditions of Approval for 
a permit to drill is not new. The BLM currently uses them as Conditions 
of Approval and therefore this provision will have no economic impact 
on small entities.
    The bonding provision in the rule will not impact small entities 
since the provision merely clarifies the existing regulations. As 
stated earlier, an Assistant Solicitor's Opinion of July 19, 2004, 
concluded that under the current regulation the BLM has the authority 
to require additional bond for off-site facilities and to require 
either a separate bond or an increase in the required amount of an 
existing bond. Accordingly, the rule does not represent a change in the 
regulatory scheme.

Small Business Regulatory Enforcement Fairness Act

    These final regulations are not a ``major rule'' as defined at 5 
U.S.C. 804(2). For the reasons stated in the RFA and Executive Order 
12866 discussions, this rule would not have an annual effect on the 
economy greater than $100 million; it would not result in major cost or 
price increases for consumers, industries, government agencies, or 
regions; and it would not have significant adverse effects on 
competition, employment, investment, productivity, innovation, or the 
ability of U.S.-based enterprises to compete with foreign-based 
enterprises.

Unfunded Mandates Reform Act

    These final regulations do not impose an unfunded mandate on State, 
local, or tribal governments or the private sector of more than $100 
million per year; nor do these proposed regulations have a significant 
or unique effect on State, local, or tribal governments or the private 
sector. The final rule codifies certain decisions made by the Congress 
in the Energy Policy Act of 2005. The discretionary provisions 
primarily involve changes to the BLM's and the FS's administrative 
processes and would not have any significant effect monetarily, or 
otherwise, on the entities listed and therefore would not add to any 
burden imposed by the final rule. Therefore, the BLM is not required to 
prepare a statement containing the information required by the Unfunded 
Mandates Reform Act (2 U.S.C. 1531 et seq.).

[[Page 10327]]

Executive Order 12630, Governmental Actions and Interference With 
Constitutionally Protected Property Rights (Takings)

    In accordance with Executive Order 12630, the final rule does not 
have significant takings implications. A takings implication assessment 
in not required. This final rule identifies the procedural requirements 
necessary for approval of proposed exploratory, development of service 
wells, and most subsequent well operations. All such actions are 
subject to lease terms which expressly require that subsequent least 
activities must be approved in compliance with applicable Federal laws 
and regulations, including NEPA, ESA, and NHPA. The final rule 
carefully conforms to the terms of those Federal leases and regulations 
and as such the rule is not a governmental action capable of 
interfering with constitutionally protected property rights. 
Furthermore, this final rule has no potential to affect property rights 
because the changes reduce the burdens on regulated parties. Therefore, 
the final rule will not cause a taking of private property or require 
further discussion of takings implications under this Executive Order.

Executive Order 13132, Federalism

    In accordance with Executive Order 13132, the final rule does not 
have significant Federalism effects. A Federalism assessment is not 
required because the rule does not have a substantial direct effect on 
the states, on the relationship between the national government and the 
states, or on the distribution of power and responsibilities among the 
various levels of government. The final rule will not have any effect 
on any of the items listed. The final rule affects the relationship 
between operators, lessees, and the BLM and the FS, but would not 
impact states. Therefore, in accordance with Executive Order 13132, the 
BLM has determined that the final rule does not have sufficient 
Federalism implications to warrant preparation of a Federalism 
Assessment.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    In accordance with the President's memorandum of April 29, 1994, 
``Government-to-Government Relations with Native American Tribal 
Governments'' (59 FR 22951) and 512 Departmental Manual 2, the BLM 
evaluated possible effects on federally recognized Indian tribes. The 
BLM approves proposed operations on all Indian (other than those of the 
Osage Tribe) onshore oil and gas leases and agreements and therefore 
the final rule has the potential to impact Indian tribes. The BLM has 
consulted with the tribes on the proposed revisions to the Order.

Executive Order 12988, Civil Justice Reform

    In accordance with Executive Order 12988, the Office of the 
Solicitor has determined that the final rule does not unduly burden the 
judicial system and meets the requirements of Sections 3(a) and 3(b)(2) 
of the Order. We have reviewed the final rule to eliminate drafting 
errors and ambiguity. It has been written to minimize litigation, 
provide clear legal standards for affected conduct rather than general 
standards, and promote simplification and burden reduction. The final 
rule was written in plain language and legal counsel assisted in all of 
these areas.

Paperwork Reduction Act

    These regulations contain information collection requirements. As 
required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.), we submitted a copy of the proposed information collection 
requirements to the Office of Management and Budget for review. The OMB 
approved the information collection requirements under Control Number 
1004-0137, which expires on March 31, 2007.

National Environmental Policy Act

    We have analyzed this final rule in accordance with the criteria of 
the NEPA and 516 Departmental Manual. The revisions to the existing 
Order will not impact the environment significantly. For the most part, 
the revisions would involve changes to the BLM's administrative 
processes. For example, changes to the meaning of ``Complete APD'' only 
pertain to the application and the process the BLM will use to review 
APD packages and would have no impact on the environment. Other 
changes, such as adding provisions for the use of Master Development 
Plans, should provide improved environmental protection due to better 
advance planning of field development. The clarification as to the 
BLM's obligation under the National Historic Preservation Act and the 
Endangered Species Act on split estate lands should reduce effects on 
cultural resources and protected species and their habitats. The 
clarification of the BLM's authority to increase bond requirements to 
cover off-site facilities should also reduce potential effects on the 
environment. Also, procedural and clarifying changes will have no 
meaningful impact on the environment. The use of Best Management 
Practices as Conditions of Approval can lead to reduced environmental 
damage. Furthermore, environmental effects of proposed operations on 
public and Federal lands are analyzed on a case-by-case basis. The BLM 
and the FS have prepared an environmental assessment and have found 
that this final rule would not constitute a major Federal action 
significantly affecting the quality of the human environment under 
Section 102(2)(C) of the NEPA, 42 U.S.C. 4332(2)(C). A detailed 
statement under NEPA is not required. The BLM has placed the EA and the 
Finding of No Significant Impact on file in the BLM Administrative 
Record at the address specified in the ADDRESSES section.

Data Quality Act

    In developing this rule, we did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Pub.L. 106-554).

Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    In accordance with Executive Order 13211, the BLM has determined 
that the proposed rule will not have substantial direct effects on the 
energy supply, distribution or use, including a shortfall in supply or 
price increase. This rule would clarify the administrative processes 
involved in approving an APD and more clearly lay out the timeline for 
processing applications. It is not clear to what extent clarification 
of the rules will save the BLM, the FS, or operators' administrative 
cost, but we anticipate that the cost savings will be minimal, as will 
any direct effects on the energy supply, distribution or use.

Executive Order 13352, Facilitation of Cooperative Conservation

    In accordance with Executive Order 13352, the BLM has determined 
that the final rule primarily involves changes to the BLM and Forest 
Service administrative processes. This rule does not impede 
facilitating cooperative conservation; takes appropriate account of and 
considers the interests of persons with ownership or other legally 
recognized interests in land or other natural resources; has no effect 
on local participation in the Federal decision-making process except to 
enhance the opportunities for surface owners; and provides that the 
programs, projects, and activities are consistent with protecting 
public health and safety.

[[Page 10328]]

Authors

    The principal authors of this rule are: James Burd of the BLM 
Washington Office; Bo Brown of the BLM Alaska State Office; Brian 
Pruiett and Jennifer Spegon of the BLM Buffalo, Wyoming Field Office; 
Gary Stephens of the BLM New Mexico State Office; Hank Szymanski of the 
BLM Colorado State Office; Al McKee of the BLM Utah State Office; 
Howard Clevinger of the BLM Vernal, Utah Field Office; Roy Swalling of 
the Montana State Office; Greg Noble of the Alaska State Office; Steve 
Hansen of the BLM Arizona State Office; and Barry Burkhardt of the FS 
Intermountain Regional Office, Ogden, Utah, and assisted by the staff 
of the BLM's Division of Regulatory Affairs and the Department of the 
Interior's Office of the Solicitor.

List of Subjects

36 CFR Part 228

    Environmental protection; Mines; National forests; Oil and gas 
exploration; Public lands-mineral resources; Public lands-rights-of-
way; Reporting and recordkeeping requirements; Surety bonds; Wilderness 
areas.

43 CFR Part 3160

    Administrative practice and procedure; Government contracts; 
Indians-lands; Mineral royalties; Oil and gas exploration; Penalties; 
Public lands-mineral resources; Reporting and recordkeeping 
requirements.

36 CFR Chapter II

0
For the reasons set out in the joint preamble, the FS amends 36 CFR 
part 228 as follows:

PART 228--MINERALS

0
1. The authority citation for part 228 continues to read as follows:

    Authority: 30 Stat. 35 and 36, as amended (16 U.S.C. 478, 551); 
41 Stat. 437, as amended, Sec. 5102(d), 101 Stat. 1330-256 (30 
U.S.C. 226); 61 Stat. 681, as amended (30 U.S.C. 601); 61 Stat. 914, 
as amended (30 U.S.C. 352); 69 Stat. 368, as amended (30 U.S.C. 
611); and 94 Stat. 2400.


0
2. Revise Sec.  228.105(a)(1) to read as follows:


Sec.  228.105  Issuance of onshore orders and notices to lessees

    (a) * * *
    (1) Surface Use Plans of Operations and Master Development Plans. 
Operators shall submit Surface Use Plans of Operations or Master 
Development Plans in accordance with Onshore Oil and Gas Order No. 1. 
Approval of a Master Development Plan constitutes a decision to approve 
Surface Use Plans of Operations submitted as a part of the Master 
Development Plan. Subsequently submitted Surface Use Plans of 
Operations shall be reviewed to verify that they are consistent with 
the approved Master Development Plan and whether additional NEPA 
documentation or consultation pursuant to the National Historic 
Preservation Act or the Endangered Species Act is required. If the 
review determines that additional documentation is required, the Forest 
Service will review the additional documentation or consult as 
appropriate and make an independent decision regarding the subsequently 
submitted Surface Use Plan of Operations, and notify the BLM and the 
operator whether the Surface Use Plan of Operations is approved.
* * * * *

0
3. Revise Sec.  228.107(c) to read as follows:


Sec.  228.107  Review of surface use plan of operations.

* * * * *
    (c) Public notice. The authorized Forest Service officer will give 
public notice of the decision regarding a surface use plan of 
operations and include in that notice whether the decision is 
appealable under the applicable Forest Service appeal procedures.
* * * * *

Appendix A to subpart E of part 228 [Removed]

0
4. Remove Appendix A to subpart E of part 228.

    Dated: February 9, 2007.
David P. Tenny,
Deputy Under Secretary, Natural Resources Environment, Forest Service.

 43 CFR Chapter II

0
For the reasons set out in the joint preamble, the Bureau of Land 
Management amends 43 CFR part 3160 as follows:

PART 3160--ONSHORE OIL AND GAS OPERATIONS

0
1. The authority citation for part 3160 continues to read as follows:

    Authority: 25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and 
1751; and 43 U.S.C. 1732(b), 1733, and 1740.


0
2. Amend Sec.  3164.1(b) by revising the first entry in the table as 
follows:


Sec.  3164.1  Onshore Oil and Gas Orders.

* * * * *
    (b) * * *

----------------------------------------------------------------------------------------------------------------
                                                                          Federal Register
           Order No.                   Subject         Effective date         reference           Supersedes
----------------------------------------------------------------------------------------------------------------
1..............................  Approval of         May 7, 2007.......  71 FR.............  NTL-6.
                                  operations.
----------------------------------------------------------------------------------------------------------------

* * * * *
    The following Order would be implemented by the BLM and the FS, but 
will not be codified in the Code of Federal Regulations.

    Dated: December 1, 2006.
C. Stephen Allred,
Assistant Secretary, Land and Minerals Management.

Appendix--Text of Oil and Gas Onshore Order

    Note: This appendix will not appear in the BLM regulations in 43 
Code of Federal Regulations.

Onshore Oil and Gas Order Number 1

Approval of Operations

I. Introduction
    A. Authority
    B. Purpose
    C. Scope
II. Definitions
III. Application for Permit To Drill (APD)
    A. Where to File
    B. Early Notification
    C. Notice of Staking Option
    D. Components of a Complete APD Package
    E. APD Posting and Processing
    F. Approval of APDs
    G. Valid Period of Approved APD
    H. Master Development Plans
IV. General Operating Requirements
V. Rights-of-Way and Special Use Authorizations
VI. Operating on Lands With Private/State Surface and Federal or 
Indian Oil and Gas
VII. Leases for Indian Oil and Gas
    A. Approval of Operations
    B. Surface Use
VIII. Subsequent Operations and Sundry Notices
    A. Surface Disturbing Operations
    B. Emergency Repairs
IX. Well Conversions
    A. Conversion to an Injection Well
    B. Conversion to a Water Supply Well
X. Variances
XI. Waivers, Exceptions, or Modifications
XII. Abandonment

[[Page 10329]]

    A. Plugging
    B. Reclamation
XIII. Appeal Procedures
Attachment I--Sample Format for Notice of Staking

Onshore Oil and Gas Order Number 1

Approval of Operations

I. Introduction

A. Authority

    The Secretaries of the Interior and Agriculture have authority 
under various Federal and Indian mineral leasing laws, as defined in 30 
U.S.C. 1702, to manage oil and gas operations. The Secretary of the 
Interior has delegated this authority to the Bureau of Land Management 
(BLM), which has issued onshore oil and gas operating regulations 
codified at part 3160 of Title 43 of the Code of Federal Regulations. 
The operating regulations at 43 CFR 3164.1 authorize the BLM's Director 
to issue Onshore Oil and Gas Orders when necessary to implement and 
supplement the operating regulations. The section also states that all 
such Orders are binding on the operator(s) of Federal and Indian 
onshore oil and gas leases (other than those of the Osage Tribe). For 
leases on Indian lands, the delegation to the BLM appears at 25 CFR 
parts 211, 212, 213, 225, and 227.
    The Secretary of Agriculture has authority under the Federal 
Onshore Oil and Gas Leasing Reform Act of 1987 (P.L. 100-203) (Reform 
Act) to regulate surface disturbing activities conducted pursuant to a 
Federal oil and gas lease on National Forest Service (NFS) lands. This 
authority has been delegated to the Forest Service (FS). Its regulatory 
authority is at Title 36 CFR, Chapter II, including, but not limited 
to, part 228 subpart E, part 251 subpart B, and part 261. Section 
228.105 of 36 CFR authorizes the Chief of the FS to issue, or cosign 
with the Director of the BLM Onshore Oil and Gas Orders necessary to 
implement and supplement the operating regulations. The FS is 
responsible only for approving and regulating surface disturbing 
activities on NFS lands and appeals related to FS decisions or 
approvals.

B. Purpose

    The purpose of this Order is to state the application requirements 
for the approval of all proposed oil and gas and service wells, certain 
subsequent well operations, and abandonment.

C. Scope

    This Order applies to all onshore leases of Federal and Indian oil 
and gas (other than those of the Osage Tribe). It also applies to 
Indian Mineral Development Act agreements. For proposed operations on a 
committed state or fee tract in a federally supervised unit or 
communitized tract, the operator must furnish a copy of the approved 
state permit to the authorized officer of the BLM which will be 
accepted for record purposes.

II. Definitions

    As used in this Order, the following definitions apply:
    Best Management Practices (BMP) are practices that provide for 
state-of-the-art mitigation of specific impacts that result from 
surface operations. Best Management Practices are voluntary unless they 
have been analyzed as a mitigation measure in the environmental review 
for a Master Development Plan, APD, Right-of-Way, or other related 
facility and included as a Condition of Approval.
    Blooie Line means a discharge line used in conjunction with a 
rotating head in drilling operations when air or gas is used as the 
circulating medium.
    Casual Use means activities involving practices that do not 
ordinarily lead to any appreciable disturbance or damage to lands, 
resources, or improvements. This term does not apply to private 
surface. Casual use includes surveying activities.
    Complete APD means that the information in the APD package is 
accurate and addresses all of the requirements of this Order. The 
onsite inspection verifies important information that is part of the 
APD package and is a critical step in determining if the package is 
complete. Therefore, the onsite inspection must be conducted, and any 
deficiencies identified at the onsite corrected, before the APD package 
can be considered to be complete. While cultural, biological, or other 
inventories and environmental assessments (EA) or environmental impact 
statements (EIS) may be required to approve the APD, they are not 
required before an APD package is considered to be complete. The APD 
package must contain:
    <bullet> A completed Form 3160-3 (Application for Permit to Drill 
or Reenter) (see 43 CFR 3162.3-1(d));
    <bullet> A well plat certified by a registered surveyor with a 
surveyor's original stamp (see Section III.D.2. of this Order);
    <bullet> A Drilling Plan (see 43 CFR 3162.3-1(d) and Section 
III.D.3. of this Order);
    <bullet> A Surface Use Plan of Operations (see 43 CFR 3162.3-1(d) 
and Section III.D.4. of this Order);
    <bullet> Evidence of bond coverage (see 43 CFR 3162.3-1(d) and 
Section III.D.5. of this Order);
    <bullet> Operator certification with original signature (see 
Section III.D.6. of this Order); and
    <bullet> Other information that may be required by Order or Notice 
(see 43 CFR 3162.3-1(d)(4)).
    The BLM and the Surface Managing Agency, as appropriate, will 
review the APD package and determine that the drilling plan, the 
Surface Use Plan of Operations, and other information that the BLM may 
require (43 CFR 3162.3-1(d)(4)), including the well location plat and 
geospatial databases, completely describe the proposed action.
    Condition of Approval (COA) means a site-specific requirement 
included in an approved APD or Sundry Notice that may limit or amend 
the specific actions proposed by the operator. Conditions of Approval 
minimize, mitigate, or prevent impacts to public lands or other 
resources. Best Management Practices may be incorporated as a Condition 
of Approval.
    Days means all calendar days including holidays.
    Emergency Repairs means actions necessary to correct an unforeseen 
problem that could cause or threaten immediate substantial adverse 
impact on public health and safety or the environment.
    Geospatial Database means a set of georeferenced computer data that 
contains both spatial and attribute data. The spatial data defines the 
geometry of the object and the attribute data defines all other 
characteristics.
    Indian Lands means any lands or interest in lands of an Indian 
tribe or an Indian allottee held in trust by the United States or which 
is subject to a Federal restriction against alienation.
    Indian Oil and Gas means any oil and gas interest of an Indian 
tribe or on allotted lands where the interest is held in trust by the 
United States or is subject to Federal restrictions against alienation. 
It does not include minerals subject to the provisions of Section 3 of 
the Act of June 28, 1906 (34 Stat. 539), but does include oil and gas 
on lands administered by the United States under Section 14(g) of 
Public Law 92-203, as amended.
    Master Development Plan means information common to multiple 
planned wells, including drilling plans, Surface Use Plans of 
Operations, and plans for future production.
    National Forest System Lands means those Federal lands administered 
by the U.S. Forest Service, such as the National Forests and the 
National Grasslands.
    Onsite Inspection means an inspection of the proposed drill pad, 
access road, flowline route, and any associated Right-of-Way or Special 
Use

[[Page 10330]]

Authorization needed for support facilities, conducted before the 
approval of the APD or Surface Use Plan of Operations and construction 
activities.
    Private Surface Owner means a non-Federal or non-state owner of the 
surface estate and includes any Indian owner of surface estate not held 
in trust by the United States.
    Reclamation means returning disturbed land as near to its 
predisturbed condition as is reasonably practical.
    Split Estate means lands where the surface is owned by an entity or 
person other than the owner of the Federal or Indian oil and gas.
    Surface Managing Agency means any Federal or state agency having 
jurisdiction over the surface overlying Federal or Indian oil and gas.
    Variance means an approved alternative to a provision or standard 
of an Order or Notice to Lessee.

III. Application for Permit To Drill (APD)

    An Application for Permit to Drill or Reenter, on Form 3160-3, is 
required for each proposed well, and for reentry of existing wells 
(including disposal and service wells), to develop an onshore lease for 
Federal or Indian oil and gas.

A. Where To File

    The operator must file an APD or any other required documents in 
the BLM Field Office having jurisdiction over the lands described in 
the application. As an alternative to filing in a local BLM office, an 
operator may file an APD using the BLM's electronic commerce 
application for oil and gas permitting and reporting. Contact the local 
BLM Field Office for details before using the electronic commerce 
application.

B. Early Notification

    The operator may wish to contact the BLM and any applicable Surface 
Managing Agency, as well as all private surface owners, to request an 
initial planning conference as soon as the operator has identified a 
potential area of development. Early notification is voluntary and 
would precede the Notice of Staking option or filing of an APD. It 
allows the involved Surface Managing Agency or private surface owner to 
apprise the prospective operator of any unusual conditions on the lease 
area. Early notification also provides both the Surface Managing Agency 
or private surface owner and the prospective operator with the earliest 
possible identification of seasonal restrictions and determination of 
potential areas of conflict. The prospective operator should have a map 
of the proposed project available for Surface Managing Agency review to 
determine if a cultural or biological inventory or other information 
may be required. Inventories are not the responsibility of the 
operator.

C. Notice of Staking Option

    Before filing an APD or Master Development Plan, the operator may 
file a Notice of Staking with the BLM. The purpose of the Notice of 
Staking is to provide the operator with an opportunity to gather 
information to better address site-specific resource concerns while 
preparing the APD package. This may expedite approval of the APD. 
Attachment I, Sample Format for Notice of Staking, provides the 
information required for the Notice of Staking option.
    For Federal lands managed by other Surface Managing Agencies, the 
BLM will provide a copy of the Notice of Staking to the appropriate 
Surface Managing Agency office. In Alaska, when a subsistence 
stipulation is part of the lease, the operator must also send a copy of 
the Notice of Staking to the appropriate Borough and/or Native Regional 
or Village Corporation.
    Within 10 days of receiving the Notice of Staking, the BLM or the 
FS will review it for required information and schedule a date for the 
onsite inspection. The onsite inspection will be conducted as soon as 
weather and other conditions permit. The operator must stake the 
proposed drill pad and ancillary facilities, and flag new or 
reconstructed access routes, before the onsite inspection. The staking 
must include a center stake for the proposed well, two reference 
stakes, and a flagged access road centerline. Staking activities are 
considered casual use unless the particular activity is likely to cause 
more than negligible disturbance or damage. Off-road vehicular use for 
the purposes of staking is casual use unless, in a particular case, it 
is likely to cause more than negligible disturbance or damage, or 
otherwise prohibited.
    On non-NFS lands, the BLM will invite the Surface Managing Agency 
and private surface owner, if applicable, to participate in the onsite 
inspection. If the surface is privately owned, the operator must 
furnish to the BLM the name, address, and telephone number of the 
surface owner if known. All parties who attend the onsite inspection 
will jointly develop a list of resource concerns that the operator must 
address in the APD. The operator will be provided a list of these 
concerns either during the onsite inspection or within 7 days of the 
onsite inspection. Surface owner concerns will be considered to the 
extent practical within the law. Failure to submit an APD within 60 
days of the onsite inspection will result in the Notice of Staking 
being returned to the operator.

D. Components of a Complete APD Package

    Operators are encouraged to consider and incorporate Best 
Management Practices into their APDs because Best Management Practices 
can result in reduced processing times and reduced number of Conditions 
of Approval. An APD package must include the following information that 
will be reviewed by technical specialists of the appropriate agencies 
to determine the technical adequacy of the package:
1. A Completed Form 3160-3; And
2. Well Plat
    Operators must include in the APD package a well plat and 
geospatial database prepared by a registered surveyor depicting the 
proposed location of the well and identifying the points of control and 
datum used to establish the section lines or metes and bounds. The 
purpose of this plat is to ensure that operations are within the 
boundaries of the lease or agreement and that the depiction of these 
operations is accurately recorded both as to location (latitude and 
longitude) and in relation to the surrounding lease or agreement 
boundaries (public land survey corner and boundary ties). The 
registered surveyor should coordinate with the cadastral survey 
division of the appropriate BLM State Office, particularly where the 
lands have not been surveyed under the Public Land Survey System.
    The plat and geospatial database must describe the location of 
operations in:
    <bullet> Geographical coordinates referenced to the National 
Spatial Reference System, North American Datum 1983 or latest edition; 
and
    <bullet> In feet and direction from the nearest two adjacent 
section lines, or, if not within the Rectangular Survey System, the 
nearest two adjacent property lines, generated from the BLM's current 
Geographic Coordinate Data Base.
    The surveyor who prepared the plat must sign it, certifying that 
the location has been staked on the ground as shown on the plat.
    a. Surveying and staking are necessary casual uses, typically 
involving negligible surface disturbance. The operator is responsible 
for making access arrangements with the appropriate Surface Managing 
Agency (other than the BLM and the FS) or

[[Page 10331]]

private surface owner. On tribal or allotted lands, the operator must 
contact the appropriate office of the BIA to make access arrangements 
with the Indian surface owners. In the event that not all of the Indian 
owners consent or may be located, but a majority of those who can be 
located consent, or the owners of interests are so numerous that it 
would be impracticable to obtain their consent and the BIA finds that 
the issuance of the APD will cause no substantive injury to the land or 
any owner thereof, the BIA may approve access. Typical off-road 
vehicular use, when conducted in conjunction with these activities, is 
a necessary action for obtaining a permit and may be done without 
advance approval from the Surface Managing Agency, except for:
    <bullet> Lands administered by the Department of Defense;
    <bullet> Other lands used for military purposes;
    <bullet> Indian lands; or
    <bullet> Where more than negligible surface disturbance is likely 
to occur or is otherwise prohibited.
    b. No entry on split estate lands for surveying and staking should 
occur without the operator first making a good faith effort to notify 
the surface owner. Also, operators are encouraged to notify the BLM or 
the FS, as appropriate, before entering private lands to stake for 
Federal mineral estate locations.
3. Drilling Plan
    With each copy of Form 3160-3, the operator must submit to the BLM 
either a Drilling Plan or reference a previously submitted field-wide 
drilling plan (a drilling plan that can be used for all the wells in a 
field, any differences for specific wells will be described in the APD 
specific to that well). The Drilling Plans must be in sufficient detail 
to permit a complete appraisal of the technical adequacy of, and 
environmental effects associated with, the proposed project. The 
Drilling Plan must adhere to the provisions and standards of Onshore 
Oil and Gas Order Number 2 (see 53 FR 46790) (Order 2) and, if 
applicable, Onshore Oil and Gas Order Number 6 (see 55 FR 48958) (Order 
6), and must include the following information:
    a. Names and estimated tops of all geologic groups, formations, 
members, or zones.
    b. Estimated depth and thickness of formations, members, or zones 
potentially containing usable water, oil, gas, or prospectively 
valuable deposits of other minerals that the operator expects to 
encounter, and the operator's plans for protecting such resources.
    c. The operator's minimum specifications for blowout prevention 
equipment and diverter systems to be used, including size, pressure 
rating, configuration, and the testing procedure and frequency. Blowout 
prevention equipment must meet the minimum standards outlined in Order 
2.
    d. The operator's proposed casing program, including size, grade, 
weight, type of thread and coupling, the setting depth of each string, 
and its condition. The operator must include the minimum design 
criteria, including casing loading assumptions and corresponding safety 
factors for burst, collapse, and tensions (body yield and joint 
strength). The operator must also include the lengths and setting depth 
of each casing when a tapered casing string is proposed. The hole size 
for each well bore section of hole drilled must be included. Special 
casing designs such as the use of coiled tubing or expandable casing 
may necessitate additional information.
    e. The estimated amount and type(s) of cement expected to be used 
in the setting of each casing string. If stage cementing will be used, 
provide the setting depth of the stage tool(s) and amount and type of 
cement, including additives, to be used for each stage. Provide the 
yield of each cement slurry and the expected top of cement, with 
excess, for each cemented string or stage.
    f. Type and characteristics of the proposed circulating medium or 
mediums proposed for the drilling of each well bore section, the 
quantities and types of mud and weighting material to be maintained, 
and the monitoring equipment to be used on the circulating system. The 
operator must submit the following information when air or gas drilling 
is proposed:
    <bullet> Length, size, and location of the blooie line, including 
the gas ignition and dust suppression systems;
    <bullet> Location and capacity of the compressor equipment, 
including safety devices, describe the distance from the well bore, and 
location within the drill site; and
    <bullet> Anticipated amounts, types, and other characteristics as 
defined in this section, of the stand by mud or kill fluid and 
associated circulating equipment.
    g. The testing, logging, and coring procedures proposed, including 
drill stem testing procedures, equipment, and safety measures.
    h. The expected bottom-hole pressure and any anticipated abnormal 
pressures, temperatures, or potential hazards that the operator expects 
to encounter, such as lost circulation and hydrogen sulfide (see Order 
6 for information on hydrogen sulfide operations). A description of the 
operator's plans for mitigating such hazards must be included.
    i. Any other facets of the proposed operation that the operator 
would like the BLM to consider in reviewing the application. Examples 
include, but are not limited to:
    <bullet> For directional wells, proposed directional design, plan 
view, and vertical section in true vertical and measured depths;
    <bullet> Horizontal drilling; and
    <bullet> Coil tubing operations.
4. Surface Use Plan of Operations
    The Surface Use Plan of Operations must:
    <bullet> Describe the access road(s) and drill pad, the 
construction methods that the operator plans to use, and the proposed 
means for containment and disposal of all waste materials;
    <bullet> Provide for safe operations, adequate protection of 
surface resources, groundwater, and other environmental components;
    <bullet> Include adequate measures for stabilization and 
reclamation of disturbed lands;
    <bullet> Describe any Best Management Practices the operator plans 
to use; and
    <bullet> Where the surface is privately owned, include a 
certification of Surface Access Agreement or an adequate bond, as 
described in Section VI. of this Order.
    All maps that are included in the Surface Use Plan of Operations 
must be of a scale no smaller than 1:24,000, unless otherwise stated 
below. Geospatial vector and raster data must include appropriate 
attributes and metadata. Georeferenced raster images must be from the 
same source as hardcopy plats and maps submitted in the APD package. 
All proposed on-lease surface disturbance must be surveyed and staked 
as described below in items a through l, including:
    <bullet> The well location;
    <bullet> Two 200-foot (61-meter) directional reference stakes;
    <bullet> The exterior pad dimensions;
    <bullet> The reserve pit;
    <bullet> Cuts and fills;
    <bullet> Outer limits of the area to be disturbed (catch points); 
and
    <bullet> Any off-location facilities.
    Proposed new roads require centerline flagging with stakes clearly 
visible from one to the next. In rugged terrain, cut and fill staking 
and/or slopestaking of proposed new access roads and locations for 
ancillary facilities that may be necessary, as determined by the BLM or 
the FS.
    The onsite inspection will not occur until the required surveying 
and staking

[[Page 10332]]

is complete, and any new access road(s) have been flagged, unless a 
variance is first granted under Section X. of this Order.
    Information required by the Surface Use Plan of Operations may be 
shown on the same map if it is appropriately labeled or on separate 
diagrams or maps and must include the following:
    a. Existing Roads: The operator must submit a legible map such as a 
highway or county road, United States Geological Survey (USGS) 
topographic, Alaska Borough, or other such map that shows the proposed 
well site and access route to the proposed well in relation to a town, 
village, or other locatable public access point.
    1. The operator must improve or maintain existing roads in a 
condition the same as or better than before operations began. The 
operator must provide any plans for improvement and/or maintenance of 
existing roads. The information provided by the operator for 
construction and use of roads will be used by the BLM for any Right-of-
Way application, as described in Section V. of this Order. The operator 
may use existing terrain and two-track trails, where appropriate, to 
assure environmental protection. The operator should consider using 
Best Management Practices in improving or maintaining existing roads.
    2. The operator may use existing roads under the jurisdiction of 
the FS for access if they meet the transportation objectives of the FS. 
When access involves the use of existing roads, the FS may require that 
the operator contribute to road maintenance. This is usually authorized 
by a Road Use Permit or a joint road use agreement. The FS will charge 
the operator a pro rata share of the costs of road maintenance and 
improvement, based upon the anticipated use of the road.
    b. New or Reconstructed Access Roads: The operator must identify on 
a map all permanent and temporary access roads that it plans to 
construct or reconstruct in connection with the drilling of the 
proposed well. Locations of all existing and proposed road structures 
(culverts, bridges, low water crossings, etc.) must be shown. The 
proposed route to the proposed drill site must be shown, including 
distances from the point where the access route exits established 
roads. All permanent and temporary access roads must be located and 
designed to meet the applicable standards of the appropriate Surface 
Managing Agency, and be consistent with the needs of the operator. The 
operator should consider using Best Management Practices in designing 
and constructing roads.
    The operator must design roads based upon the class or type of 
road, the safety requirements, traffic characteristics, environmental 
conditions, and the vehicles the road is expected to carry. The 
operator must describe for all road construction or reconstruction:
    <bullet> Road width;
    <bullet> Maximum grade;
    <bullet> Crown design;
    <bullet> Turnouts;
    <bullet> Drainage and ditch design;
    <bullet> On-site and off-site erosion control;
    <bullet> Revegetation of disturbed areas;
    <bullet> Location and size of culverts and/or bridges;
    <bullet> Fence cuts and/or cattleguards;
    <bullet> Major cuts and fills;
    <bullet> Source and storage of topsoil; and
    <bullet> Type of surfacing materials, if any, that will be used.
    c. Location of Existing Wells: The operator must include a map and 
may include a geospatial database that includes all known wells, 
regardless of the well status (producing, abandoned, etc.), within a 
one-mile radius of the proposed location.
    d. Location of Existing and/or Proposed Production Facilities: The 
operator must include a map or diagram of facilities planned either on 
or off the well pad that shows, to the extent known or anticipated, the 
location of all production facilities and lines likely to be installed 
if the well is successfully completed for production.
    The map or diagram and optional geospatial database must show and 
differentiate between proposed and existing flow lines, overhead and 
buried power lines, and water lines. If facilities will be located on 
the well pad, the information should be consistent with the layout 
provided in item i. of this section.
    The operator must show the dimensions of the facility layouts for 
all new construction. This information may be used by the BLM or the FS 
for Right-of-Way or Special Use Authorization application information, 
as specified in Section V. of this Order.
    If the operator has not developed information regarding production 
facilities, it may defer submission of that information until a 
production well is completed, in which case the operator will follow 
the procedures in Section VIII. of this Order. However, for purposes of 
NEPA analysis, the BLM or the FS will need a reasonable estimate of the 
facilities to be employed.
    e. Location and Types of Water Supply: Information concerning water 
supply, such as rivers, creeks, springs, lakes, ponds, and wells, may 
be shown by quarter-quarter section on a map or plat, or may be 
described in writing. The operator must identify the source, access 
route, and transportation method for all water anticipated for use in 
drilling the proposed well. The operator must describe any newly 
constructed or reconstructed access roads crossing Federal or Indian 
lands that are needed to haul the water as provided in item b. of this 
section. The operator must indicate if it plans to drill a water supply 
well on the lease and, if so, the operator must describe the location, 
construction details, and expected production requirements, including a 
description of how water will be transported and procedures for well 
abandonment.
    f. Construction Materials: The operator must state the character 
and intended use of all construction materials, such as sand, gravel, 
stone, and soil material. The proposed source must be shown on a 
quarter-quarter section of a map or plat or in a written description.
    g. Methods for Handling Waste: The Surface Use Plan of Operations 
must contain a written description of the methods and locations 
proposed for safe containment and disposal of each type of waste 
material (e.g., cuttings, garbage, salts, chemicals, sewage, etc.) that 
results from drilling the proposed well. The narrative must include 
plans for the eventual disposal of drilling fluids and any produced oil 
or water recovered during testing operations. The operator must 
describe plans for the construction and lining, if necessary, of the 
reserve pit.
    h. Ancillary Facilities: The operator must identify on a map the 
location and construction methods and materials for all anticipated 
ancillary facilities such as camps, airstrips, and staging areas. The 
operator must stake on the ground the approximate center of proposed 
camps and the centerline of airstrips. If the ancillary facilities are 
located off-lease, depending on Surface Managing Agency policy, the BLM 
or the FS may require the operator to obtain an additional 
authorization, such as a Right-of-Way or Special Use Authorization.
    i. Well Site Layout: A diagram of the well site layout must have an 
arrow indicating the north direction. Diagrams with cuts and fills must 
be surveyed, designed, drawn, digitized, and certified by licensed 
professional surveyors or engineers. The operator must submit a plat of 
a scale of not less than 1 inch = 50 feet showing the location and 
orientation of:
    <bullet> The proposed drill pad;
    <bullet> Reserve pit/blooie line/flare pit location;

[[Page 10333]]

    <bullet> Access road entry points and their approximate location 
with respect to topographic features and with cross section diagrams of 
the drill pad; and
    <bullet> The reserve pit showing all cuts and fills and the 
relation to topography.
    The plat must also include the approximate proposed location and 
orientation of the:
    <bullet> Drilling rig;
    <bullet> Dikes and ditches to be constructed; and
    <bullet> Topsoil and/or spoil material stockpiles.
    j. Plans for Surface Reclamation: The operator must submit a plan 
for the surface reclamation or stabilization of all disturbed areas. 
This plan must address interim (during production) reclamation for the 
area of the well pad not needed for production, as well as final 
abandonment of the well location. Such plans must include, as 
appropriate:
    <bullet> Configuration of the reshaped topography;
    <bullet> Drainage systems;
    <bullet> Segregation of spoil materials (stockpiles);
    <bullet> Surface disturbances;
    <bullet> Backfill requirements;
    <bullet> Proposals for pit/sump closures;
    <bullet> Redistribution of topsoil;
    <bullet> Soil treatments;
    <bullet> Seeding or other steps to reestablish vegetation;
    <bullet> Weed control; and
    <bullet> Practices necessary to reclaim all disturbed areas, 
including any access roads and pipelines.
    The operator may amend this reclamation plan at the time of 
abandonment. Further details for reclamation are contained in Section 
XII. of this Order.
    k. Surface Ownership: The operator must indicate (in a narrative) 
the surface ownership at the well location, and of all lands crossed by 
roads that the operator plans to construct or upgrade, including, if 
known, the name of the agency or owner, phone number, and address. The 
operator must certify that they have provided a copy of the Surface Use 
Plan of Operations required in this section to the private surface 
owner of the well site location, if applicable, or that they made a 
good faith effort if unable to provide the document to the surface 
owner.
    l. Other Information: The operator must include other information 
required by applicable orders and notices (43 CFR 3162.3-1(d)(4)). When 
an integrated pest management program is needed for weed or insect 
control, the operator must coordinate plans with state or local 
management agencies and include the pest management program in the 
Surface Use Plan of Operations. The BLM also encourages the operator to 
submit any additional information that may be helpful in processing the 
application.
5. Bonding
    a. Most bonding needs for oil and gas operations on Federal leases 
are discussed in 43 CFR subpart 3104. The operator must obtain a bond 
in its own name as principal, or a bond in the name of the lessee or 
sublessee. If the operator uses the lessee or sublessee's bond, the 
operator must furnish a rider (consent of surety and principal) that 
includes the operator under the coverage of the bond. The operator must 
specify on the APD, Form 3160-3, the type of bond and bond number under 
which the operations will be conducted.
    For Indian oil and gas, the appropriate provisions at 25 CFR 
Subchapter I, govern bonding.
    Under the regulations at 43 CFR 3104.5 and 36 CFR 228.109, the BLM 
or the FS may require additional bond coverage for specific APDs. Other 
factors that the BLM or the FS may consider include:
    <bullet> History of previous violations;
    <bullet> Location and depth of wells;
    <bullet> The total number of wells involved;
    <bullet> The age and production capability of the field; and
    <bullet> Unique environmental issues.
    These bonds may be in addition to any statewide, nationwide, or 
separate lease bond already applicable to the lease. In determining the 
bond amount, the BLM may consider impacts of activities on both Federal 
and non-Federal lands required to develop the lease that impact lands, 
waters, and other resources off the lease.
    Separate bonds may be required for associated Rights-of-Way and/or 
Special Use Authorizations that authorize activities not covered by the 
approved APD.
    b. On Federal leases, operators may request a phased release of an 
individual lease bond. The BLM will grant this reduction after 
reclamation of some portion of the lease only if the operator:
    <bullet> Has satisfied the terms and conditions in the plan for 
surface reclamation for that particular operation; and
    <bullet> No longer has any down-hole liability.
    c. If appropriate, the BLM may reduce the bond in the amount 
requested by the operator or appropriate Surface Managing Agency. The 
FS also may reduce bonds it requires (but not the BLM-required bonds). 
The BLM and the FS will base the amount of the bond reduction on a 
calculation of the sum that is sufficient to cover the remaining 
operations (including royalty payments) and abandonment (including 
reclamation) as authorized by the Surface Use Plan of Operations.
6. Operator Certification
    The operator must include its name, address, and telephone number, 
and the same information for its field representative, in the APD 
package. The following certification must carry the operator's original 
signature or meet the BLM standards for electronic commerce:
    I hereby certify that I, or someone under my direct supervision, 
have inspected the drill site and access route proposed herein; that I 
am familiar with the conditions which currently exist; that I have full 
knowledge of state and Federal laws applicable to this operation; that 
the statements made in this APD package are, to the best of my 
knowledge, true and correct; and that the work associated with the 
operations proposed herein will be performed in conformity with this 
APD package and the terms and conditions under which it is approved. I 
also certify that I, or the company I represent, am responsible for the 
operations conducted under this application. These statements are 
subject to the provisions of 18 U.S.C. 1001 for the filing of false 
statements.

Executed this ---- day of----------, 20----.

Name-------------------------------------------------------------------

Position Title---------------------------------------------------------

Address----------------------------------------------------------------

Telephone--------------------------------------------------------------

Field representative (if not above signatory)--------------------------

Address (if different from above)--------------------------------------

Telephone (if different from above)------------------------------------

E-mail (optional)------------------------------------------------------

    Agents not directly employed by the operator must submit a letter 
from the operator authorizing that agent to act or file this 
application on their behalf.
7. Onsite Inspection
    The onsite inspection must be conducted before the APD will be 
considered complete.

E. APD Posting and Processing

1. Posting
    The BLM and the Federal Surface Managing Agency, if other than the 
BLM, must provide at least 30 days public notice before the BLM may 
approve an APD or Master Development Plan on a Federal oil and gas 
lease. Posting is not required for an APD for an Indian oil and gas 
lease or agreement.

[[Page 10334]]

    The BLM will post the APD or Notice of Staking in an area of the 
BLM Field Office having jurisdiction that is readily accessible to the 
public and, when possible, electronically on the internet. If the 
surface is managed by a Federal agency other than the BLM, that agency 
also is required to post the notice for at least 30 days. This would 
include the BIA where the surface is held in trust but the mineral 
estate is federally owned. The posting is for informational purposes 
only and is not an appealable decision. The purpose of the posting is 
to give any interested party notification that a Federal approval of 
mineral operations has been requested. The BLM or the FS will not post 
confidential information.
    Reposting of the proposal may be necessary if the posted location 
of the proposed well is:
    a. Moved to a different quarter-quarter section;
    b. Moved more than 660 feet for lands that are not covered by a 
Public Land Survey; or
    c. If the BLM or the FS determine that the move is substantial.
2. Processing
    The timeframes established in this subsection apply to both 
individual APDs and to the multiple APDs included in Master Development 
Plans and to leases of Indian minerals as well as leases of Federal 
minerals.
    If there is enough information to begin processing the application, 
the BLM (and the FS if applicable) will process it up to the point that 
missing information or uncorrected deficiencies render further 
processing impractical or impossible.
    a. Within 10 days of receiving an application, the BLM (in 
consultation with the FS if the application concerns NFS lands) will 
notify the operator as to whether or not the application is complete. 
The BLM will request additional information and correction of any 
material submitted, if necessary, in the 10-day notification. If an 
onsite inspection has not been performed, the applicant will be 
notified that the application is not complete. Within 10 days of 
receiving the application, the BLM, in coordination with the operator 
and Surface Managing Agency, including the private surface owner in the 
case of split estate minerals, will schedule a date for the onsite 
inspection (unless the onsite inspection has already been conducted as 
part of a Notice of Staking). The onsite inspection will be held as 
soon as practicable based on participants' schedules and weather 
conditions. The operator will be notified at the onsite inspection of 
any additional deficiencies that are discovered during the inspection. 
The operator has 45 days after receiving notice from the BLM to provide 
any additional information necessary to complete the APD, or the APD 
may be returned to the operator.
    b. Within 30 days after the operator has submitted a complete 
application, including incorporating any changes that resulted from the 
onsite inspection, the BLM will:
    1. Approve the application, subject to reasonable Conditions of 
Approval, if the appropriate requirements of the NEPA, National 
Historic Preservation Act, Endangered Species Act, and other applicable 
law have been met and, if on NFS lands, the FS has approved the Surface 
Use Plan of Operations;
    2. Notify the operator that it is deferring action on the permit; 
or
    3. Deny the permit if it cannot be approved and the BLM cannot 
identify any actions that the operator could take that would enable the 
BLM to issue the permit or the FS to approve the Surface Use Plan of 
Operations, if applicable.
    c. The notice of deferral in paragraph (b)(2) of this section must 
specify:
    1. Any action the operator could take that would enable the BLM (in 
consultation with the FS if applicable) to issue a final decision on 
the application. The FS will notify the applicant of any action the 
applicant could take that would enable the FS to issue a final decision 
on the Surface Use Plan of Operations on NFS lands. Actions may 
include, but are not limited to, assistance with:
    (A) Data gathering; and
    (B) Preparing analyses and documents.
    2. If applicable, a list of actions that the BLM or the FS need to 
take before making a final decision on the application, including 
appropriate analysis under NEPA or other applicable law and a schedule 
for completing these actions.
    d. The operator has 2 years from the date of the notice under 
paragraph (c)(1) of this section to take the action specified in the 
notice. If the appropriate analyses required by NEPA, National Historic 
Preservation Act, Endangered Species Act, and other applicable laws 
have been completed, the BLM (and the FS if applicable), will make a 
decision on the permit and the Surface Use Plan of Operations within 10 
days of receiving a report from the operator addressing all of the 
issues or actions specified in the notice under paragraph (c)(1) of 
this section and certifying that all required actions have been taken. 
If the operator has not completed the actions specified in the notice 
within 2 years from the operator's receipt of the paragraph (c)(1) 
notice, the BLM will deny the permit.
    e. For APDs on NFS lands, the decision to approve a Surface Use 
Plan of Operations or Master Development Plan may be subject to FS 
appeal procedures. The BLM cannot approve an APD until the appeal of 
the Surface Use Plan of Operations is resolved.

F. Approval of APDs

    a.1. The BLM has the lead responsibility for completing the 
environmental review process, except in the case of NFS lands.
    2. The BLM cannot approve an APD or Master Development Plan until 
the requirements of certain other laws and regulations including NEPA, 
the National Historic Preservation Act, and the Endangered Species Act 
have been met. The BLM must document that the needed reviews have been 
adequately conducted. In some cases, operators conduct these reviews, 
but the BLM remains responsible for their scope and content and makes 
its own evaluation of the environmental issues, as required by 40 CFR 
1506.5(b).
    3. The approved APD will contain Conditions of Approval that 
reflect necessary mitigation measures. In accordance with 43 CFR 
3101.1-2 and 36 CFR 228.107, the BLM or the FS may require reasonable 
mitigation measures to ensure that the proposed operations minimize 
adverse impacts to other resources, uses, and users, consistent with 
granted lease rights. The BLM will incorporate any mitigation 
requirements, including Best Management Practices, identified through 
the APD review and appropriate NEPA and related analyses, as Conditions 
of Approval to the APD.
    4. The BLM will establish the terms and Conditions of Approval for 
any associated Right-of-Way when the application is approved.
    b. For NFS lands, the FS will establish the terms and Conditions of 
Approval for both the Surface Use Plan of Operations and any associated 
Surface Use Authorization. On NFS lands the FS has principal 
responsibility for compliance with NEPA, the National Historic 
Preservation Act, and the Endangered Species Act, but the BLM should be 
a cooperating or co-lead agency for this purpose and adopt the analysis 
as the basis for its decision.
    After the FS notifies the BLM it has approved a Surface Use Plan of 
Operations on NFS lands, the BLM must approve the APD before the 
operator may begin any surface-disturbing activity.

[[Page 10335]]

    c. On Indian lands, BIA has responsibility for approving Rights-of-
Way.
    d. In the case of Indian lands, the BLM may be a cooperating or co-
lead agency for NEPA compliance or may adopt the NEPA analysis prepared 
by the BIA (516 DM 3).

G. Valid Period of Approved APD

    1. An APD approval is valid for 2 years from the date that it is 
approved, or until lease expiration, whichever occurs first. If the 
operator submits a written request before the expiration of the 
original approval, the BLM, in coordination with the FS, as appropriate 
may extend the APD's validity for up to 2 additional years.
    2. The operator is responsible for reclaiming any surface 
disturbance that resulted from its actions, even if a well was not 
drilled.

H. Master Development Plans

    An operator may elect to submit a Master Development Plan 
addressing two or more APDs that share a common drilling plan, Surface 
Use Plan of Operations, and plans for future development and 
production. Submitting a Master Development Plan facilitates early 
planning, orderly development, and the cumulative effects analysis for 
all the APDs expected to be drilled by an operator in a developing 
field. Approval of a Master Development Plan serves as approval of all 
of the the APDs submitted with the Plan. Processing of a Master 
Development Plan follows the procedures in Section III.E.2. of this 
Order. After the Master Development Plan is approved, subsequent APDs 
can reference the Master Development Plan and be approved using the 
NEPA analysis for the Master Development Plan, absent substantial 
deviation from the Master Development Plan previously analyzed or 
significant new information relevant to environmental effects. 
Therefore, an approved Master Development Plan results in timelier 
processing of subsequent APDs. Each subsequent proposed well must have 
a survey plat and an APD (Form 3160-3) that references the Master 
Development Plan and any specific variations for that well.

IV. General Operating Requirements

Operator Responsibilities

    In the APD package, the operator must describe or show, as set 
forth in this Order, the procedures, equipment, and materials to be 
used in the proposed operations. The operator must conduct operations 
to minimize adverse effects to surface and subsurface resources, 
prevent unnecessary surface disturbance, and conform with currently 
available technology and practice. While appropriate compliance with 
certain statutes, such as NEPA, the National Historic Preservation Act, 
and the Endangered Species Act, are Federal responsibilities, the 
operator may choose to conduct inventories and provide documentation to 
assist the BLM or the Surface Managing Agency to meet these 
requirements. The inventories and other work may require entering the 
lease and adjacent lands before approval of the APD. As in Staking and 
Surveying, the operator should make a good faith effort to contact the 
Surface Managing Agency or surface owner before entry upon the lands 
for these purposes.
    The operator can not commence either drilling operations or 
preliminary construction activities before the BLM's approval of the 
APD. A copy of the approved APD and any Conditions of Approval must be 
available for review at the drill site. Operators are responsible for 
their contractor and subcontractor's compliance with the requirements 
of the approved APD and/or Surface Use Plan of Operations. Drilling 
without approval or causing surface disturbance without approval is a 
violation of 43 CFR 3162.3-1(c) and is subject to a monetary assessment 
under 43 CFR 3163.1(b)(2).
    The operator must comply with the provisions of the approved APD 
and applicable laws, regulations, Orders, and Notices to Lessees, 
including, but not limited to, those that address the issues described 
below.
    a. Cultural and Historic Resources. If historic or archaeological 
materials are uncovered during construction, the operator must 
immediately stop work that might further disturb such materials, 
contact the BLM and if appropriate, the FS or other Surface Managing 
Agency. The BLM or the FS will inform the operator within 7 days after 
the operator contacted the BLM as to whether the materials appear 
eligible for listing on the National Register of Historic Places.
    If the operator decides to relocate operations to avoid further 
costs to mitigate the site, the operator remains responsible for 
recording the location of any historic or archaeological resource that 
are discovered as a result of the operator's actions. The operator also 
is responsible for stabilizing the exposed cultural material if the 
operator created an unstable condition that must be addressed 
immediately. The BLM, the FS, or other appropriate Surface Managing 
Agency, will assume responsibility for evaluation and determination of 
significance related to the historic or archaeological site.
    If the operator does not relocate operations, the operator is 
responsible for mitigation and stabilization costs and the BLM, the FS, 
or appropriate Surface Managing Agency will provide technical and 
procedural guidelines for conducting mitigation. The operator may 
resume construction operations when the BLM or the FS verifies that the 
operator has completed the required mitigation.
    Relocation of activities may subject the proposal to additional 
environmental review. Therefore, if the presence of such sites is 
suspected, the operator may want to submit alternate locations for 
advance approval before starting construction.
    b. Endangered Species Act. To comply with the Endangered Species 
Act, as amended (16 U.S.C. 1531 et seq.), and its implementing 
regulations, the operator must conduct all operations such that all 
operations avoid a ``take'' of listed or proposed threatened or 
endangered species and their critical habitats.
    c. Surface Protection. Except as otherwise provided in an approved 
Surface Use Plan of Operations, the operator must not conduct 
operations in areas subject to mass soil movement, riparian areas, 
floodplains, lakeshores, and/or wetlands. The operator also must take 
measures to minimize or prevent erosion and sediment production. Such 
measures may include, but are not limited to:
    <bullet> Avoiding steep slopes and excessive land clearing when 
siting structures, facilities, and other improvements; and
    <bullet> Temporarily suspending operations when frozen ground, 
thawing, or other weather-related conditions would cause otherwise 
avoidable or excessive impacts.
    d. Safety Measures. The operator must maintain structures, 
facilities, improvements, and equipment in a safe condition in 
accordance with the approved APD. The operator must also take 
appropriate measures as specified in Orders and Notices to Lessees to 
protect the public from any hazardous conditions resulting from 
operations.
    In the event of an emergency, the operator may take immediate 
action without prior Surface Managing Agency approval to safeguard life 
or to prevent significant environmental degradation. The BLM or the FS 
must receive notification of the emergency situation and the remedial 
action taken by the operator as soon as possible, but not later than 24 
hours after the emergency occurred. If the emergency only affected

[[Page 10336]]

drilling operations and had no surface impacts, only the BLM must be 
notified. If the emergency involved surface resources on other Surface 
Managing Agency lands, the operator should also notify the Surface 
Managing Agency and private surface owner within 24 hours. Upon 
conclusion of the emergency, the BLM or the FS, where appropriate, will 
review the incident and take appropriate action.
    e. Completion Reports. Within 30 days after the well completion, 
the lessee or operator must submit to the BLM two copies of a completed 
Form 3160-4, Well Completion or Recompletion Report and Log. Well logs 
may be submitted to the BLM in an electronic format such as ``.LAS'' 
format. Surface and bottom-hole locations must be in latitude and 
longitude.

V. Rights-of-Way and Special Use Authorizations

    The BLM or the FS will notify the operator of any additional 
Rights-of-Way, Special Use Authorizations, licenses, or other permits 
that are needed for roads and support facilities for drilling or off-
lease access, as appropriate. This notification will normally occur at 
the time the operator submits the APD or Notice of Staking package, or 
Sundry Notice, or during the onsite inspection.
    The BLM or the FS, as appropriate, will approve or accept on-lease 
activities that are associated with actions proposed in the APD or 
Sundry Notice and that will occur on the lease as part of the APD or 
Sundry Notice. These actions do not require a Right-of-Way or Special 
Use Authorization. For pipeline Rights-of-Way crossing lands under the 
jurisdiction of two or more Federal Surface Managing Agencies, except 
lands in the National Park Service or Indian lands, applications should 
be submitted to the BLM. Refer to 43 CFR parts 2800 and 2880 for 
guidance on BLM Rights-of-Way and 36 CFR part 251 for guidance on FS 
Special Use Authorizations.

A. Rights-of-Way (BLM)

    For BLM lands, the APD package may serve as the supporting document 
for the Right-of-Way application in lieu of a Right-of-Way plan of 
development. Any additional information specified in 43 CFR parts 2800 
and 2880 will be required in order to process the Right-of-Way.
    The BLM will notify the operator within 10 days of receipt of a 
Notice of Staking, APD, or other notification if any parts of the 
project require a Right-of-Way. If a Right-of-Way is needed, the 
information required from the operator to approve the Right-of-Way may 
be submitted by the operator with the APD package if the Notice of 
Staking option has been used.

B. Special Use Authorizations (FS) (36 CFR 251 Subpart B)

    When a Special Use Authorization is required, the Surface Use Plan 
of Operations may serve as the application for the Special Use 
Authorization if the facility for which a Special Use Authorization is 
required is adequately described (see 36 CFR 251.54(d)(ii)). Conditions 
regulating the authorized use may be imposed to protect the public 
interest, to ensure compatibility with other NFS lands programs and 
activities consistent with the Forest Land and Resources Management 
Plan. A Special Use Authorization, when related to an APD, will include 
terms and conditions (36 CFR 251.56) and may require a specific 
reclamation plan or incorporate applicable parts of the Surface Use 
Plan of Operations by reference.

VI. Operating on Lands With Non-Federal Surface and Federal Oil and Gas

    The operator must submit the name, address, and phone number of the 
surface owner, if known, in its APD. The BLM will invite the surface 
owner to the onsite inspection to assure that their concerns are 
considered. As provided in the oil and gas lease, the BLM may request 
that the applicant conduct surveys or otherwise provide information 
needed for the BLM's National Historic Preservation Act consultation 
with the State Historic Preservation Officer or Indian tribe or its 
Endangered Species Act consultation with the relevant fisheries agency. 
The Federal mineral lessee has the right to enter the property for this 
purpose, since it is a necessary prerequisite to development of the 
dominant mineral estate. Nevertheless, the lessee or operator should 
seek to reach agreement with the surface owner about the time and 
method by which any survey would be conducted.
    Likewise, in the case of actual oil and gas operations, the 
operator must make a good faith effort to notify the private surface 
owner before entry and make a good faith effort to obtain a Surface 
Access Agreement from the surface owner. This section also applies to 
lands with Indian trust surface and Federal minerals. In these cases, 
the operator must make a good faith effort to obtain surface access 
agreement with the tribe in the case of tribally owned surface, 
otherwise with the majority of the Indian surface owners who can be 
located with the assistance and concurrence of the BIA. The Surface 
Access Agreement may include terms or conditions of use, be a waiver, 
or an agreement for compensation. The operator must certify to the BLM 
that: (1) It made a good faith effort to notify the surface owner 
before entry; and (2) That an agreement with the surface owner has been 
reached or that a good faith effort to reach an agreement failed. If no 
agreement was reached with the surface owner, the operator must submit 
an adequate bond (minimum of $1,000) to the BLM for the benefit of the 
surface owner sufficient to: (1) Pay for loss or damages; or (2) As 
otherwise required by the specific statutory authority under which the 
surface was patented and the terms of the lease.
    Surface owners have the right to appeal the sufficiency of the 
bond. Before the approval of the APD, the BLM will make a good faith 
effort to contact the surface owner to assure that they understand 
their rights to appeal.
    The BLM must comply with NEPA, the National Historic Preservation 
Act, the Endangered Species Act, and related Federal statutes when 
authorizing lease operations on split estate lands where the surface is 
not federally owned and the oil and gas is Federal. For split estate 
lands within FS administrative boundaries, the BLM has the lead 
responsibility, unless there is a local BLM/FS agreement that gives the 
FS this responsibility.
    The operator must make a good faith effort to provide a copy of 
their Surface Use Plan of Operations to the surface owner. After the 
APD is approved the operator must make a good faith effort to provide a 
copy of the Conditions of Approval to the surface owner. The APD 
approval is not contingent upon delivery of a copy of the Conditions of 
Approval to the surface owner.

VII. Leases for Indian Oil and Gas

A. Approval of Operations

    The BLM will process APDs, Master Development Plans, and Sundry 
Notices on Indian tribal and allotted oil and gas leases, and Indian 
Mineral Development Act mineral agreements in a manner similar to 
Federal leases. For processing such applications, the BLM considers the 
BIA to be the Surface Managing Agency. Operators are responsible for 
obtaining any special use or access permits from appropriate BIA and, 
where applicable, tribal offices. The BLM is not required to post for 
public inspection APDs for minerals subject to Indian oil and gas 
leases or agreements.

[[Page 10337]]

B. Surface Use

    Where the wellsite and/or access road is proposed on Indian lands 
with a different beneficial owner than the minerals, the operator is 
responsible for entering into a surface use agreement with the Indian 
tribe or the individual Indian surface owner, subject to BIA approval. 
This agreement must specify the requirements for protection of surface 
resources, mitigation, and reclamation of disturbed areas. The BIA, the 
Indian surface owner, and the BLM, pursuant to 25 CFR 211.4, 212.4 and 
225.4, will develop the Conditions of Approval. If the operator is 
unable to obtain a surface access agreement, it may provide a bond for 
the benefit of the surface owner(s) (see Section VI. of the Order).

VIII. Subsequent Operations and Sundry Notices

    Subsequent operations must follow 43 CFR part 3160, applicable 
lease stipulations, and APD Conditions of Approval. The operator must 
file the Sundry Notice in the BLM Field Office having jurisdiction over 
the lands described in the notice or the operator may file it using the 
BLM's electronic commerce system.

A. Surface Disturbing Operations

    Lessees and operators must submit for BLM or FS approval a request 
on Form 3160-5 before:
    <bullet> Undertaking any subsequent new construction outside the 
approved area of operations; or
    <bullet> Reconstructing or altering existing facilities including, 
but not limited to, roads, emergency pits, firewalls, flowlines, or 
other production facilities on any lease that will result in additional 
surface disturbance.
    If, at the time the original APD was filed, the lessee or operator 
elected to defer submitting information under Section III.E.3.d. 
(Location of Existing and/or Proposed Facilities) of this Order, the 
lessee or operator must supply this information before construction and 
installation of the facilities. The BLM, in consultation with any other 
involved Surface Managing Agency, may require a field inspection before 
approving the proposal. The lessee or operator may not begin 
construction until the BLM approves the proposed plan in writing.
    The operator must certify on Form 3160-5 that they have made a good 
faith effort to provide a copy of any proposal involving new surface 
disturbance to the private surface owner in the case of split estate.

B. Emergency Repairs

    Lessees or operators may undertake emergency repairs without prior 
approval if they promptly notify the BLM. Lessees or operators must 
submit sufficient information to the BLM or the FS to permit a proper 
evaluation of any:
    <bullet> Resulting surface disturbing activities; or
    <bullet> Planned accommodations necessary to mitigate potential 
adverse environmental effects.

IX. Well Conversions

A. Conversion to an Injection Well

    When subsequent operations will result in a well being converted to 
a Class II injection well (i.e., for disposal of produced water, oil 
and gas production enhancement, or underground storage of 
hydrocarbons), the operator must file with the appropriate BLM office a 
Sundry Notice, Notice of Intent to Convert to Injection on Form 3160-5. 
The BLM and the Surface Managing Agency, if applicable, will review the 
information to ensure its technical and administrative adequacy. 
Following the review, the BLM, in consultation with the Surface 
Managing Agency, where applicable, will decide upon the approval or 
disapproval of the application based upon relevant laws and regulations 
and the circumstances (e.g., the well used for lease or non-lease 
operations, surface ownership, and protection of subsurface mineral 
ownership). The BLM will determine if a Right-of-Way or Special Use 
Authorization and additional bonding are necessary and notify the 
operator.

B. Conversion to a Water Supply Well

    In cases where the Surface Managing Agency or private surface owner 
desires to acquire an oil and gas well and convert it to a water supply 
well or acquire a water supply well that was drilled by the operator to 
support lease operations, the Surface Managing Agency or private 
surface owner must inform the appropriate BLM office of its intent 
before the approval of the APD in the case of a dry hole and no later 
than the time a Notice of Intent to Abandon is submitted for a depleted 
production well. The operator must abandon the well according to BLM 
instructions, and must complete the surface cleanup and reclamation, in 
conjunction with the approved APD, Surface Use Plan of Operations, or 
Notice of Intent to Abandon, if the BLM or the FS require it. The 
Surface Managing Agency or private surface owner must reach agreement 
with the operator as to the satisfactory completion of reclamation 
operations before the BLM will approve any abandonment or reclamation. 
The BLM approval of the partial abandonment under this section, 
completion of any required reclamation operations, and the signed 
release agreement will relieve the operator of further obligation for 
the well. If the Surface Managing Agency or private surface owner 
acquires the well for water use purposes, the party acquiring the well 
assumes liability for the well.

X. Variances

    The operator may make a written request to the agency with 
jurisdiction to request a variance from this Order. A request for a 
variance must explain the reason the variance is needed and demonstrate 
how the operator will satisfy the intent of the Order. The operator may 
include the request in the APD package. A variance from the 
requirements of this Order does not constitute a variance to provisions 
of other regulations, laws, or orders. When the BLM is the decision 
maker on a request for a variance, the decision whether to grant or 
deny the variance request is entirely within the BLM's discretion. The 
decision on a variance request is not subject to administrative appeals 
either to the State Director or pursuant to 43 CFR part 4.

XI. Waivers, Exceptions, or Modifications

    An operator may also request that the BLM waive (permanently 
remove), except (case-by-case exemption) or modify (permanently change) 
a lease stipulation for a Federal lease. In the case of Federal leases, 
a request to waive, except, or modify a stipulation should also include 
information demonstrating that the factors leading to its inclusion in 
the lease have changed sufficiently to make the protection provided by 
the stipulation no longer justified or that the proposed operation 
would not cause unacceptable impacts.
    When the waiver, exception, or modification is substantial, the 
proposed waiver, exception, or modification is subject to public review 
for 30 days. Prior to such public review, the BLM, and when applicable 
the FS, will post it in their local Field Office and, when possible, 
electronically on the internet. When the request is included in the 
Notice of Staking or APD, the request will be included as part of the 
application posting under Section III.C. of this Order. Prior to 
granting a waiver, exception, or modification, the BLM will obtain the 
concurrence or approval of the FS or Federal Surface Managing Agency. 
Decisions on such waivers, exceptions,

[[Page 10338]]

or modifications are subject to appeal pursuant to 43 CFR part 4.
    After drilling has commenced, the BLM and the FS may consider 
verbal requests for waivers, exceptions, or modifications. However, the 
operator must submit a written notice within 7 days after the verbal 
request. The BLM and the FS will confirm in writing any verbal 
approval. Decisions on waivers, exceptions, or modifications submitted 
after drilling has commenced are final for the Department of the 
Interior and not subject to administrative review by the State Director 
or appeal pursuant to 43 CFR part 4.

XII. Abandonment

    In accordance with the requirements of 43 CFR 3162.3-4, before 
starting abandonment operations the operator must submit a Notice of 
Intent to Abandon on Sundry Notices and Reports on Wells, Form 3160-5. 
If the operator proposes to modify the plans for surface reclamation 
approved at the APD stage, the operator must attach these modifications 
to the Notice of Intent to Abandon.

A. Plugging

    The operator must obtain BLM approval for the plugging of the well 
by submitting a Notice of Intent to Abandon. In the case of dry holes, 
drilling failures, and in emergency situations, verbal approval for 
plugging may be obtained from the BLM, with the Notice of Intent to 
Abandon promptly submitted as written documentation. Within 30 days 
following completion of well plugging, the operator must file with the 
BLM a Subsequent Report of Plug and Abandon, using Sundry Notices and 
Reports on Wells, Form 3160-5. For depleted production wells, the 
operator must submit a Notice of Intent to Abandon and obtain the BLM's 
approval before plugging.

B. Reclamation

    Plans for surface reclamation are a part of the Surface Use Plan of 
Operations, as specified in Section III.D.4.j., and must be designed to 
return the disturbed area to productive use and to meet the objectives 
of the land and resource management plan. If the operator proposes to 
modify the plans for surface reclamation approved at the APD stage, the 
operator must attach these modifications to the Subsequent Report of 
Plug and Abandon using Sundry Notices and Reports on Wells, Form 3160-
5.
    For wells not having an approved plan for surface reclamation, 
operators must submit to the BLM a proposal describing the procedures 
to be followed for complete abandonment, including a map showing the 
disturbed area and roads to be reclaimed. The BLM will forward the 
request to the FS or other Surface Managing Agency. If applicable, the 
private surface owner will be notified and their views will be 
carefully considered.
    Earthwork for interim and final reclamation must be completed 
within 6 months of well completion or well plugging (weather 
permitting). All pads, pits, and roads must be reclaimed to a 
satisfactorily revegetated, safe, and stable condition, unless an 
agreement is made with the landowner or Surface Managing Agency to keep 
the road or pad in place. Pits containing fluid must not be breached 
(cut) and pit fluids must be removed or solidified before backfilling. 
Pits may be allowed to air dry subject to BLM or FS approval, but the 
use of chemicals to aid in fluid evaporation, stabilization, or 
solidification must have prior BLM or FS approval. Seeding or other 
activities to reestablish vegetation must be completed within the time 
period approved by the BLM or the FS.
    Upon completion of reclamation operations, the lessee or operator 
must notify the BLM or the FS using Form 3160-5, Final Abandonment 
Notice, when the location is ready for inspection. Final abandonment 
will not be approved until the surface reclamation work required in the 
Surface Use Plan of Operations or Subsequent Report of Plug and Abandon 
has been completed to the satisfaction of the BLM or the FS and Surface 
Managing Agency, if appropriate.

XIII. Appeal Procedures

    Complete information concerning the review and appeal processes for 
BLM actions is contained in 43 CFR part 4 and subpart 3165. 
Incorporation of a FS approved Surface Use Plan of Operations into the 
approval of an APD or a Master Development Plan is not subject to 
protest to the BLM or appeal to the Interior Board of Land Appeals.
    The FS's decisions approving use of NFS lands may be subject to 
agency appeal procedures, in accordance with 36 CFR parts 215 or 251.
    Decisions governing Surface Use Plan of Operations and Special Use 
Authorization approvals on NFS lands that involve analysis, 
documentation, and other requirements of the NEPA may be subject to 
agency appeal procedures, under 36 CFR part 215.
    The FS's regulations at 36 CFR part 251 govern appeals by an 
operator of written FS decisions related to Conditions of Approval or 
administration of Surface Use Plans of Operations or Special Use 
Authorizations to occupy and use NFS lands.
    The operator may appeal decisions of the BIA under 25 CFR part 2.

Attachment I--Sample Format for Notice of Staking

Attachment I Sample Format for Notice of Staking
    (Not to be used in place of Application for Permit to Drill or 
Reenter Form 3160-3)
    1. Oil Well
    Gas Well
    Other (Specify)
    2. Name, Address, and Telephone of Operator
    3. Name and Telephone of Specific Contact Person
    4. Surface Location of Well
    Attach:
    (a) Sketch showing road entry onto pad, pad dimensions, and reserve 
pit
    (b) Topographical or other acceptable map (e.g., a USGS 7\1/2\'' 
Quadrangle) showing location, access road, and lease boundaries
    5. Lease Number
    6. If Indian, Allottee or Tribe Name
    7. Unit Agreement Name
    8. Well Name and Number
    9. American Petroleum Institute (API) Well Number (if available)
    10. Field Name or Wildcat
    11. Section, Township, Range, Meridian; or Block and Survey; or 
Area
    12. County, Parish, or Borough
    13. State
    14. Name and Depth of Formation Objective(s)
    15. Estimated Well Depth
    16. For directional or horizontal wells, anticipated bottom-hole 
location.
    17. Additional Information (as appropriate; include surface owner's 
name, address and, if known, telephone).

    18. Signed ----------Title---------- Date


    Note: When the Bureau of Land Management or the Forest Service, 
as appropriate, receives this Notice, the agency will schedule the 
date of the onsite inspection. You must stake the location and flag 
the access road before the onsite inspection. Operators should 
consider the following before the onsite inspection and incorporate 
these considerations into the Notice of Staking Option, as 
appropriate:

    (a) H<INF>2</INF>S Potential;
    (b) Cultural Resources (Archeology); and
    (c) Federal Right-of-Way or Special Use Permit.

[FR Doc. 07-934 Filed 3-6-07; 8:45 am]
BILLING CODES 3410-11-P; 4310-84-P