[Federal Register Volume 61, Number 95 (Wednesday, May 15, 1996)]
[Proposed Rules]
[Pages 24466-24467]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12167]



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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 61, No. 95 / Wednesday, May 15, 1996 / 
Proposed Rules

[[Page 24466]]



DEPARTMENT OF THE INTERIOR

30 CFR Part 256

RIN 1010-AC18


Leasing of Sulphur or Oil and Gas in the Outer Continental Shelf

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of proposed rulemaking.

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SUMMARY: MMS proposes to modify regulations to allow the authorized 
officer to extend the time period within which we must accept or reject 
the high bids received on tracts offered for sale. Currently, the 
authorized officer must accept or reject high bids on most tracts 
within 90 days after the date on which the bids are opened.

DATES: MMS will consider all comments received by June 14, 1996. We 
will begin reviewing comments at that time and may not fully consider 
comments we receive after June 14, 1996.

ADDRESSES: Mail or hand-carry comments to the Department of the 
Interior; Minerals Management Service; 381 Elden Street; Mail Stop 
4700; Herndon, Virginia 22070-4817; Attention: Chief, Engineering and 
Standards Branch.

FOR FURTHER INFORMATION CONTACT:
Dr. Marshall Rose, Chief, Economic Evaluation Branch, telephone (703) 
787-1536.

SUPPLEMENTARY INFORMATION: We limited the comment period to 30 days to 
provide us with timely comments in the event that we need to extend the 
bid evaluation period for the lease sale held on April 24, 1996.
    The time to accept or reject high bids for tracts offered at an 
Outer Continental Shelf (OCS) lease sale is established under the 
regulations at 30 CFR 256.47. The authorized officer must accept or 
reject the high bids within 90 days after the bid opening, except for 
tracts identified by the Secretary of the Interior as subject to:
    (1) Another nation's claims of jurisdiction and control which 
conflict with the claims of the United States, or,
    (2) Defense-related activities that may be incompatible with 
mineral exploration and/or development activities.

Any bid not accepted within that period is deemed rejected.
    The 90-day period was established in 1982. Since then, we have held 
several sales, mainly areawide. The Outer Continental Shelf Deep Water 
Royalty Relief Act (Pub. L. 104-58, November 28, 1995) amended the 
Outer Continental Shelf Lands Act to define a new bidding system which 
provides for royalty suspensions. The deepwater incentive law did not 
amend the requirement that we obtain fair market value for tracts that 
are leased. Any lease sale held before November 28, 2000, must use the 
new bidding system for all tracts located in water depths of 200 meters 
or more in the Gulf of Mexico west of 87 degrees, 30 minutes west 
longitude. We believe that the increased workload resulting from 
compliance with the new statutory requirements and the potential for a 
large number of tracts to receive bids may exceed our ability to 
complete the bid review process for all tracts bid upon within 90 days 
as required by 30 CFR 256.47(e)(2).
    We propose to remedy the situation by giving the authorized officer 
authority to extend the time period for 30 days or longer when 
circumstances warrant. Recent examples include floods and furloughs; 
however, other circumstances such as excessive workload may arise which 
could warrant a longer time for bid evaluation.
    This rule addresses a housekeeping issue and will enable us to 
adjust the bid acceptance/rejection time period to meet changing 
conditions in the OCS lease market. Continuation of the 90-day review 
period would result in the rejection of the high bids which we fail to 
evaluate within 90 days. This would result in fewer leases being issued 
because of a failure to complete the bid review process within time and 
resource constraints. The Government may receive less bonus and rental 
monies.
    Today, without authority to extend the bid review period, the 1982 
90-day rule allows insufficient time and is arbitrarily rigid.
    Comments to the 1982 rule objected to the proposal to extend the 
bid review process from 60 to 120 days because of economic losses to 
the bidders whose high bids were later rejected. (High bidders received 
no interest payments on bonus monies returned by the Government.) 
Today, regulations provide for the payment of interest on the bonus 
monies submitted with the high bids which are ultimately rejected. 
Thus, bidders will not suffer economic loss because of an extended time 
period to complete the evaluation process.
    In Central Gulf of Mexico Sale 157, held April 24, 1996, we 
received 1,381 bids on 924 tracts--many in water depths of 200 or more. 
It is in the public interest to assure that adequate time is available 
to give all high bids a full and appropriate review, to ensure the 
receipt of fair market value, and ultimately to increase natural gas 
and oil supplies.

    Author: This document was prepared by Mary Vavrina, Offshore 
Resource Evaluation Division, MMS.

Executive Order (E.O.) 12866

    The proposed rule does not meet the criteria for a significant rule 
requiring review by the Office of Management and Budget under E.O. 
12866.

Regulatory Flexibility Act

    The Department of the Interior has determined that the proposed 
rule will not have a significant effect on a substantial number of 
small entities. In general, the entities that engage in offshore 
activities are not, by definition, small due to the technical 
complexities and financial resources and experience necessary to safely 
conduct such activities. The indirect effect of this rulemaking on 
small entities that provide support for offshore activities has also 
been determined to be small.

Paperwork Reduction Act

    The proposed rule contains no new reporting and information 
collection requirements.

Takings Implication Assessment

    The DOI certifies that the proposed rule does not represent a 
governmental action capable of interference with constitutionally 
protected property rights. A Takings Implication Assessment prepared 
under E.O. 12630, Government Action and Interference with 
Constitutionally Protected Property Rights, is not required.

[[Page 24467]]

E.O. 12988

    The DOI has certified to the Office of Management and Budget that 
the proposed rule meets the applicable reform standards provided in 
Section 3(b)(2) of E.O. 12988.

National Environmental Policy Act

    The DOI has determined that the proposed rule does not constitute a 
major Federal action significantly affecting the quality of the human 
environment; therefore, an environmental impact statement is not 
required.

Unfunded Mandate Reform Act of 1995

    This rule does not contain any unfunded mandates to State, local, 
or tribal governments or the private sector.

List of Subjects in 30 CFR Part 256

    Administrative practices and procedures, Continental shelf, 
Government contracts, Incorporation by reference, Oil and gas 
exploration, Public lands--mineral resources, Reporting and 
recordkeeping requirements, Surety bonds.

    Dated: May 2, 1996.
Sylvia V. Baca,
Assistant Secretary, Land and Minerals Management.

    For the reasons set forth in the preamble, we propose to amend 30 
CFR part 256 as follows:

PART 256--LEASING OF SULPHUR OR OIL AND GAS IN THE OUTER 
CONTINENTAL SHELF

    1. The Authority citation for part 256 continues to read as 
follows:

    Authority: 43 U.S.C. 1331 et seq.

    2. Section 256.47(e)(2) is revised to read as follows:


Sec. 256.47   Award of leases.

* * * * *
    (e) * * *
    (2) The authorized officer must accept or reject the bid within 90 
days. The authorized officer may extend the time period for acceptance 
or rejection of a bid for 30 days or longer, if circumstances warrant. 
Any bid not accepted within the prescribed time period, including any 
extension thereof, shall be deemed rejected.
* * * * *
[FR Doc. 96-12167 Filed 5-14-96; 8:45 am]
BILLING CODE 4310-MR-M