Source: https://www.federalregister.gov/articles/2013/03/27/2013-07052/oil-shale-management-general
Timestamp: 2015-07-07 20:04:34
Document Index: 524457930

Matched Legal Cases: ['ART 3900', 'art 3903', 'ART 3920', 'art 3925', 'art 3926', 'ART 3930', 'art 3931', 'arts 3900', 'art 3809', 'art 3900', 'arts 3900', 'ART 3900', 'art 3900', '§ 3903', 'art 3903', '§ 3903', 'ART 3920', 'art 3920', 'art 3925', '§ 3925', '§ 3925', '§ 3924', 'art 3926', '§ 3926', '§ 3926', 'ART 3930', 'art 3930', 'art 3931', '§ 3931', '§ 3931', '§ 3931', '§ 3931']

Dates: Send your comments to reach the BLM on or before May 28, 2013. The BLM will not necessarily consider any comments received after the above date in making its decision on the final rule.
78 FR 18547
-18558 (12 pages)
LLWO-3200000 L13100000.PP0000 L.X.EMOSHL000.241A
1004-AE28
Document Number: 2013-07052
Shorter URL: https://federalregister.gov/a/2013-07052 Related Topics
BLM-2013-0001
Oil Shale Management -- General
The Bureau of Land Management (BLM) is proposing to amend the BLM's commercial oil shale regulations by revising these regulations in order to address concerns about the royalty system in the existing regulations and to provide more detail to the environmental protection requirements.
Oil Shale Management 5 actions from March 27th, 2013 to December 2014
78 FR 35601
Proposed 2008 Rule
Final 2008 Rule and This Proposal
Oil Shale Research, Development, and Demonstration (R, D and D) Program
Section 3903.52Production royalties
Option 1. Invite Comment on Proposed Lease Terms in a Proposed Notice of Lease Sale
Option 2. Invite Public Comment Using Coal Lease Sale Process
Option 3. Sliding Scale Royalty Based on the Market Prices of Oil and Gas
Option 4. Establish a Minimum Royalty of 12.5% in Regulation, With Secretarial Flexibility To Establish a Higher Rate Later
Section 3925.10Award of Lease
3926.10Conversion of an R, D and D Lease to a Commercial Lease
Section 3931.10Exploration Plans and Plans of Development for Mining and In Situ Operations
Section 3931.11Content of Plan of Development
PART 3900—OIL SHALE MANAGEMENT—GENERAL
Subpart 3903—Fees, Rentals, and Royalties
PART 3920—OIL SHALE LEASING
Subpart 3925—Award of Lease
Subpart 3926—Conversion of Preference Right for Research, Development, and Demonstration (R, D and D) Leases
PART 3930—MANAGEMENT OF OIL SHALE EXPLORATION AND LEASES
Subpart 3931—Plans of Development and Exploration Plans
Send your comments to reach the BLM on or before May 28, 2013. The BLM will not necessarily consider any comments received after the above date in making its decision on the final rule.
Mail: Director (630) Bureau of Land Management, U.S. Department of the Interior, Mail Stop 2143LM, 1849 C St. NW., Washington, DC 20240, Attention: 1004-AE28. Personal or messenger delivery: U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134 LM, Attention: Regulatory Affairs, Washington, DC 20003. Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions at this Web site.
Mitchell Leverette, Chief, Division of Solid Minerals, at (202) 912-7113 for issues related to the BLM's commercial oil shale leasing program or Ian Senio, Chief, Division of Regulatory Affairs at (202) 912-7440 for regulatory process issues. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service at 1-800-877-8339, 24 hours a day, 7 days a week to contact the above individuals.
If you wish to comment, you may submit your comments by any one of several methods: You may mail comments to Director (630), Bureau of Land Management, U.S. Department of the Interior, Mail Stop 2143LM, 1849 C St. NW., Washington DC 20240, Attention: 1004-AE28. You may deliver comments to U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, Attention: Regulatory Affairs, Washington, DC 20003; or you may access and comment on the proposed rule at the Federal eRulemaking Portal by following the instructions at that site (see ADDRESSES). Written comments on the proposed rule should be specific, should be confined to issues pertinent to the proposed rule, and should explain the reason for any recommended change. Where possible, comments should reference the specific section or paragraph of the proposed rule that the comment is addressing. The BLM need not consider or include in the Administrative Record for the proposed rule comments that it receives after the close of the comment period (see DATES) or comments delivered to an address other than those listed above (see ADDRESSES). Comments, including names and street addresses of respondents, will be available for public review at the U.S. Department of the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, Washington, DC 20003 during regular hours (7:45 a.m. to 4:15 p.m.) Monday through Friday, except holidays. They also will be available at the Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions at this Web site.
Before including your address, telephone number, email address, or other personal identifying information in your comment be advised that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment for the BLM to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
The BLM published in the Federal Register an advance notice of proposed rulemaking (ANPR) on August 25, 2006 (71 FR 50378). The ANPR requested public comments on key components to be considered in the development of a commercial oil shale leasing and development program. On September 26, 2006, the BLM published in the Federal Register a notice reopening and extending the comment period on the ANPR (71 FR 56085). The BLM received 48 comment letters on the ANPR and considered those comments in developing the proposed and final rules.
On July 23, 2008, the BLM published in the Federal Register a proposed rule entitled Oil Shale Management—General (73 FR 42926). The comment period for the proposed rule closed on September 22, 2008. The BLM received over 75,000 comment letters on the proposed rule from individuals, Federal and state governments and agencies, interest groups, and industry representatives. The BLM considered those comments in developing the final rule.
On November 18, 2008, the BLM published in the Federal Register the final oil shale regulations (73 FR 69414). The regulations were required by Section 369 of the Energy Policy Act of 2005 (42 U.S.C. 15927) (EPAct). Section 369 addresses oil shale development and directs the Secretary of the Interior (Secretary) to establish regulations for a commercial leasing program. The Mineral Leasing Act of 1920 (30 U.S.C. 241(a)) (MLA) also authorizes the BLM to lease oil shale resources on BLM-managed public lands. Additional statutory authorities for the 2008 regulations and for the amendments proposed in this notice are:
(1) Section 32 of the Mineral Leasing Act of 1920 (30 U.S.C. 189);
(2) Section 10 of the Mineral Leasing Act for Acquired Lands of 1947 (30 U.S.C. 359); and
(3) Section 310 of the Federal Land Policy and Management Act (FLPMA) of 1976 (43 U.S.C. 1740).
For additional information on the ANPR, the 2008 proposed rule, and the final rule, please see the above-referenced Federal Register notices.
After publication of the final rule in 2008, the regulations were challenged in Federal court. As part of the settlement agreement, the BLM agreed to propose certain revisions to the regulations, as presented below, relating to the royalty rate and other environmental protection requirements applicable to commercial oil shale leasing, in addition to clarifying certain other regulatory provisions. This proposed rule would revise the BLM's oil shale leasing regulations at 43 CFR parts 3900, 3920, and 3930.
On November 28, 2008, the BLM published in the Federal Register a Notice of Availability of the Approved Resource Management Plan Amendments/Record of Decision (ROD) for Oil Shale and Tar Sands Resources to Address Land use Allocations in Colorado, Utah, and Wyoming and the Final Programmatic Environmental Impact Statement (EIS) (73 FR 72519). The amendments and ROD expanded the acreage potentially available for commercial tar-sands leasing and amended 10 Resource Management Plans (RMP) in Utah, Colorado, and Wyoming to make approximately 1.9 million acres of public lands potentially available for commercial oil shale development and 431,224 acres potentially available for tar sands leasing and development. The oil shale resources are found in the Piceance and Washakie Basins in Colorado, the Uintah Basin in Utah, and the Green River and Washakie Basins in Wyoming. The tar sands resources are found in certain sedimentary provinces in the Colorado Plateau in Utah.
The Programmatic EIS summarized information on oil shale and tar sands technologies and their potential environmental and socio-economic impacts, along with potential mitigating measures that would be evaluated and applied when subsequent site-specific National Environmental Policy Act (NEPA) analysis is undertaken for lease issuance or project approval.
Concurrently with its review of the 2008 final oil shale regulations, the BLM has undertaken a new public planning process related to oil shale and tar sands. Specifically, on April 14, 2011, the BLM published in the Federal Register a Notice of Intent to Prepare a Programmatic Environmental Impact Statement (EIS) and Possible Land Use Plan Amendments for Allocation of Oil Shale and Tar Sands Resources on Lands Administered by the BLM in Colorado, Utah, and Wyoming (76 FR 21003). On February 6, 2012, the BLM published in the Federal Register a Notice of Availability of the Draft Programmatic Environmental Impact Statement for Allocation of Oil Shale and Tar Sands Resources on Lands Administered by the Bureau of Land Management in Colorado, Utah, and Wyoming (77 FR 5833). In addition to announcing the opening of the 90-day comment period, the notice provided background information on the Draft Programmatic EIS and stated that the BLM planned to hold public meetings to provide an overview of the Draft Programmatic EIS, respond to questions, and take written comments.
The BLM held Open House meetings during March 2012 to provide additional information on the Draft PEIS. During the comment period that closed on May 4, 2012, approximately 160,000 comment letters were received. Comments on the Draft PEIS received from the public and cooperating agencies, other federal agencies, as well as internal BLM review, were considered and incorporated, as appropriate, into the proposed plan amendments. The proposed plan amendments in the Final EIS would revise the current land use plans in the study area, which describe land allocations analyzed in the 2008 PEIS and approved in the subsequent Record of Decision.
The BLM published the notice of availability of the Final PEIS on November 9, 2012. This began both the 30-day protest period, which ended December 10, 2012, and the 60-day Governor's Consistency Review, which ended January 9, 2013.
The BLM received seventeen protest letters, including 1 from the State of Utah, 5 from county governments, 6 from industry-affiliated groups or companies, and 5 from environmental groups. Major protest issues raised by government and industry interests relate to: the rationale and need for revising decisions of the 2008 PEIS; the proposed reduction in the amount of lands available for leasing; the proposed requirement for Research, Development, and Demonstration (R, D and D) before issuance of commercial leases; the consideration of lands with wilderness characteristics; the consideration of sage-grouse habitat inventories and related State policies; and the consideration of new oil shale technologies in the PEIS analysis.
Major protest issues raised by environmental groups relate to the adequacy of the NEPA analysis, particularly impacts related to climate change, air quality, cultural resources, water resources, and cumulative impacts.
The BLM answered the protests on March 23, 2013 and responded to the Governor's Consistency Review letters on February 6, 2013. The Record of Decision (ROD) was signed on February 22, 2013.
The BLM's Oil Shale R, D and D program began on June 9, 2005, with a call for nominations published in the Federal Register (70 FR 33753). The BLM received 20 nominations and after intense review, six tracts of 160 acres each were determined to be suitable for R, D and D. These six tracts were evaluated under NEPA. On January 1, 2007, five R, D and D leases were issued in Colorado and on July 1, 2007, one lease was issued for BLM lands in Utah. These were the first R, D and D leases issued for public lands and the first Federal oil shale leases issued in 35 years. Most of the six leases are currently in various stages of testing and research for the potential production of oil shale resources.
On November 3, 2009, the BLM published a Notice in the Federal Register (74 FR 56867) calling for nominations for a second round of oil shale R, D and D leasing. The BLM received three nominations—two in Colorado and one in Utah. The three nominations were reviewed by an Interdisciplinary Review team to determine the:
(1) Potential for the proposal to advance the knowledge of effective technology;
(2) Economic viability of the applicant; and
(3) Means of managing the environmental effects of the proposed oil shale technology.
The Interdisciplinary Review Team found that all three nominations adequately addressed the evaluation criteria, and, on October 19, 2010, the proponents were notified that their nominations would be forwarded for NEPA review. The two Colorado tracts were evaluated under NEPA and leases were issued effective December 1, 2012. The Utah nomination was canceled and the case closed on December 7, 2012, because the proponent failed to initiate the NEPA process.
This proposed rule provides the BLM with an opportunity to reconsider certain portions of the 2008 regulations, which were challenged in Federal court. As part of the settlement agreement, the BLM agreed to propose specific revisions to the 2008 regulations, as presented below, to address the royalty rate and certain environmental protection requirements applicable to commercial oil shale leasing.
In this rulemaking proceeding, the BLM will consider several options for amending the current royalty rates for commercial oil shale production. The BLM will particularly consider whether a single royalty rate or rate structure should be set in advance in regulation to provide greater certainty to potential lessees or whether some administrative flexibility may be retained to make adjustments to royalty terms after more is known about the costs and resource impacts associated with emerging oil shale technologies, whether future applications to lease should include specified resource-protection plans, and whether other aspects of the regulations should be clarified.
The proposed revisions are intended to clarify specific provisions, to ensure that the royalty rate provides a fair return to the American taxpayer while encouraging the development of Federal oil shale resources, and that adequate measures are in place to protect the environment.
The Energy Policy Act of 2005 (Section 369(o)) directs the agency to establish royalties and other payments for oil shale leases that “shall
(1) Encourage development of the oil shale and tar sands resources; and
(2) Ensure a fair return to the United States.”
The BLM extensively discussed the issue of the royalty rates for commercial oil shale production in the preamble to the 2008 oil shale rules. See 73 FR at 69419-69429.Those rules, which are currently in effect, set the royalty rate at 5 percent for the first 5 years of commercial production and increases it by 1 percent each year starting with the sixth year of commercial production, reaching a maximum royalty rate of 121/2percent in the thirteenth year of commercial production.
Notwithstanding the 2008 analysis, there are some concerns that cause the BLM to revisit the issue. On the one hand, the Federal lands open for oil shale leasing in Colorado, Utah, and Wyoming have, in many locations, vast quantities of oil shale per surface acre. If the royalty rates were set too low and the industry were to develop a highly efficient technology, then there could be immense private profits from Federal oil shale leases without a fair return to the American people.
On the other hand, as has been previously explained, oil shale is a class of rocks such as marlstone containing not oil, but kerogen. See 73 FR 69414. Oil shale is not like any of the shales or “tight” formations found in many parts of the United States that contain oil or gas that can be produced by hydraulic fracturing. All known technologies to convert the kerogen to liquid hydrocarbons require significant amounts of energy. Thus, there is a reasonable likelihood that developers will continue to view commercial oil shale production as a more expensive prospect than competing conventional oil and gas projects. If the royalty rates are set too high, they could discourage development of the oil shale resources.
None of the R, D and D leases issued in 2006 and 2007 have yet demonstrated a commercially viable technology. The recently issued R, D and D leases are probably years away from demonstrating technologies. Although there are entities conducting various types of activities on other oil shale lands in the United States, the BLM does not have data showing that oil shale development is commercially viable at this time. Thus, even though the existing royalty rates might be appropriate for the oil shale industry when it comes into being, at present the BLM is faced with uncertainty.
Pursuant to the settlement agreement, the BLM is proposing to remove the royalty rates currently in section 3903.52(b). Additionally, the BLM is proposing that the royalty rate will be set by the BLM in the notice of sale or, for R, D and D conversion, it will be established by the Secretary of the Interior. The BLM has not yet made a decision on what would replace the current rule's royalty rates, but rather is seeking comment on several different options as set forth below.
Under this option, the BLM would first publish a proposed notice of sale or conversion to a commercial lease for a period of not less than 30 days. That proposed notice would include all proposed lease terms and stipulations, including proposed royalty and rental rates. It also would include an explanation of how the BLM determined the proposed royalty rate. This would give interested parties and the public an opportunity to comment on all the proposed terms, including the proposed royalty rate. Under this option and so as to allow adequate time for both comment and consideration of the comments, the BLM would amend Section 3924.5 to require at least 60 days between publication of the proposed notice of sale and the notice of sale.
As an alternative to publishing a proposed notice of sale, the BLM specifically seeks comments on a possible alternative procedure that would be modeled after a provision in the Federal coal leasing regulations at 43 CFR 3422.1. Instead of publishing a proposed notice of sale, the BLM would, at least 30 days before the notice of sale, solicit public comment on the fair market value of, and expected recovery from, the oil shale lands proposed to be offered for lease and on what royalty rate and other lease terms or stipulations commenters believe should be required. The authorized officer would prepare a report evaluating the comments and containing his or her recommendations for the minimum bid and for the royalty rate and other lease terms to be included in the leases offered.
In the 2008 proposed oil shale rule, the BLM considered and sought comment on a sliding scale royalty. That approach was not adopted in the final 2008 rule, but in light of the need to reconsider the existing royalty rates under the terms of the settlement, we would like to reconsider this option and are seeking public comment on the best approach to implementing a sliding scale royalty structure.
4. Are there other ways to simplify a sliding scale royalty system so as to reduce the administrative costs for the BLM, the Office of Natural Resources Revenue, and producers while still providing a reasonable assurance that the public is receiving its fair share of revenue from production? Option 4. Establish a Minimum Royalty of 12.5% in Regulation, With Secretarial Flexibility To Establish a Higher Rate Later
Under this option, a minimum royalty of 12.5% would be established to address concerns about the existing rate and implement the terms of the settlement agreement. The minimum royalty rate at 12.5%, the same rate as currently applied in the BLM's oil and gas program, is being considered as it is contemplated that the primary products produced from oil shale will compete directly with those from onshore oil and gas production. However, the Secretary would have the authority to establish a higher rate, if determined to be appropriate, without completing a new rulemaking. This option would provide flexibility for the Secretary to adapt and respond accordingly to new information, such as emerging oil shale technologies and future oil shale production cost information, and changes to the price of this commodity, in order to help assure a fair return to the United States. Establishing a minimum royalty would be consistent with how other conventional fuels (e.g., oil, gas, and coal) are treated under existing statutes and regulations.
The BLM also invites comments on variations of the aforementioned options, including setting a minimum royalty rate as part of options 1 and 2 or not setting a minimum royalty rate, as well as any other royalty systems rates that would meet the dual requirements of the EPAct to encourage production and ensure a fair return to the public. Comments with technical economic data and analysis would be most useful. The final rule will include a royalty provision that will be informed by public comments the BLM receives as a result of this proposed rule.
Section 3925.10(a) currently provides that a lease will be awarded to the qualified bidder submitting the highest bid that meets or exceeds the BLM's estimate of fair market value (FMV). The section would be revised by substituting the word “may” for the word “will” in the first sentence to clarify that issuing a lease is a discretionary action on the part of the BLM, rather than mandatory. In the case of a competitive lease sale, the BLM may award a lease to the highest qualified bidder, but has no obligation to do so (see 30 U.S.C. 241(a)(1).
The proposed UER standard should not be confused with assessment or regulation of environmental risk by any other agency, acting under any other statutory or regulatory authority. For instance, the public might be most familiar with the risk assessments that provide the framework for human health and ecosystem health evaluations developed by the Environmental Protection Agency (EPA) under laws that govern hazardous or toxic substances. Such risk assessments characterize the probability of adverse effects from exposure to environmental stressors and differ from the proposed UER standard in that they are quantitative characterizations derived from scientific processes that use statistical and biological models to calculate numerical estimates of ecological and health risks. See Office of Emergency and Remedial Response, U.S. EPA, Risk Assessment Guidance for Superfund Volume I Human Health Evaluation Manual (Part A) Interim Final (EPA/540/1-89/002) (1989). Available at http://www.epa.gov/oswer/riskassessment/ragsa/index.htm. These types of risk assessments are required under environmental statutes such as the Resource Conservation and Recovery Act of 1976, as amended (RCRA), 42 U.S.C. 6901 et seq., and the Comprehensive Environmental Response Compensation and Liability Act/Superfund Amendments and Reauthorization Act (CERCLA/SARA), 42 U.S.C. 9601 et seq., where they are used to characterize the current and potential threats to human health and the environment from potentially hazardous or toxic substances. See e.g., CERCLA/SARA Sections 104, 105(a)(2), 121(b)-(d); 40 CFR 300; EPA, RCRA Risk Assessment.
http://www.epa.gov/oswer/riskassessment/risk_rcra.htm. Agencies such as the Agency for Toxic Substances and Disease Registry, within the Department of Health and Human Services, as well as the Occupational Safety and Health Administration employ a similar approach with respect to the potentially hazardous or toxic substances whose use and/or regulation is within their purview.
In fact, in light of the existence of the FLPMA statutory standard, the BLM may determine that no additional substantive standard is necessary, either for determining whether or not to issue an R, D and D lease, or determining whether or not to approve a POD, or conversion from an R, D and D lease to a commercial lease.
Section 3926.10 provides application procedures and requirements to convert R, D and D leases, including preference rights areas, into commercial leases. Paragraph (a) of this section would be expanded to clarify that the BLM may, in its discretion, deny an application to convert an R, D and D lease to a commercial lease based on environmental or other resource considerations. Similarly, paragraph (c) of this section would be expanded by adding a sentence to clarify that the BLM may, in its discretion, deny an application to convert an R, D and D lease based on environmental or other resource considerations. This reference to “other resource considerations” reflects the wide latitude afforded the Secretary's discretion under the MLA and FLPMA, as discussed above. Those considerations are likely to depend, in large part, on the specifics pertaining to each project. Some examples of “other resource considerations” might include, but are not limited to requirements to: (1) Protect and conserve other mineral resources which may occur in the same lands, such as nahcolite and dawsonite in the “Multi-mineral zone” in the White River Field Office area, Colorado; (2) Honor pre-existing rights, such as oil-and-gas leases, mining claims, etc.; (3) Achieve the ultimate maximum recovery of the mineral resources; (4) Prove that commercial quantities of shale oil will be produced from the lease; (5) Consult with State, local, or tribal officials to develop a plan for mitigating the socioeconomic impacts of commercial development.
The last sentence of paragraph (c) would also be revised by adding the words “in its discretion” and substituting the word “may” for the word “will.” These changes to paragraph (c) are intended to clarify that approval of conversion of an R, D and D lease to a commercial lease is a discretionary action on the part of the BLM and is, therefore, not mandatory. Nothing in EPAct's provisions concerning R, D and D leases requires that such leases be converted to commercial leases (see 42 U.S.C. 15927(c)). New paragraphs (c)(6) would require that commercial scale operations be conducted without UER.
Section 3931.10 provides requirements for submission of exploration plans and PODs. This rule would revise paragraph (e) by adding a sentence stating that the BLM will not approve a POD unless it determines that operations under the POD can occur without UER.
Additionally, we propose adding a new paragraph (g) to make it clear that the BLM may deny a POD based on environmental or other resource considerations or the BLM may require a modification of or condition a POD to protect the environment or other resources. As noted above, with respect to considerations pertaining to conversion of R, D and D leases, this reference to “other resource considerations” as well as, here, “other resources,” reflects the wide latitude afforded the Secretary's discretion under the MLA and FLPMA, as discussed above. The reference is broad to reflect that these considerations are likely to depend, in large part, on the specifics pertaining to each project. Section 3931.11Content of Plan of Development
Section 3931.11 lists the required contents of a POD. This section would be revised to include additional information that the BLM would require in a POD. For instance, in the surface management regulations at 43 CFR part 3809 there is a similar list of specific information required; however in most program areas, the BLM requests detailed information from private proponents on a project specific basis in order to inform environmental analysis. The new requirements would include submission of a watershed and groundwater-protection plan under new paragraph (h); an airshed review under new paragraph (i); an integrated waste-management plan under new paragraph (j); and an environmental-protection plan under new paragraph (k). The new proposed requirements are intended to ensure that adequate measures are in place to protect the environment.
These plans and reviews are intended to facilitate both better decisions by the BLM in reviewing proposed PODs, and better environmental performance of operations under an approved POD. These plans and reviews are likely to be necessary to properly analyze a POD under NEPA, and thus would be required pursuant to 43 CFR 3931.11(k) in most if not all cases, even in the absence of the proposed amendments to section 3931.11.
Executive Order 12866 requires agencies to assess the benefits and costs of regulatory actions, and for significant regulatory actions, submit a detailed report of their assessment to the Office of Management and Budget (OMB) for review. A rule may be significant under Executive Order 12866 if it meets any of four criteria. A significant regulatory action is any rule that may:
Royalty payments are recurring income to the government and costs to the operator/lessee. As such, they are transfer payments that do not affect total resources available to society. Changes in the royalty rate have the potential to significantly alter the future distributional effects; however, they would not represent a cost or benefit to the economy. OMB defines “transfer payment” to include payments to the government in addition to the unearned payments from the government (Economic Analysis of Federal Regulations Under Executive Order 12866, January 11, 1996, http://www.whitehouse.gov/omb/inforeg_riaguide). In addition, the definition OMB uses encompasses the revenue collected through a fee, surcharge, or tax (in excess of the cost of any service provided) as a transfer payment. Since a royalty is not a payment for service, this OMB transfer payment definition holds that a royalty is a transfer payment and is not to be included in the annual effect to the economy calculation. Thus, even though oil shale royalties may someday amount to billions of dollars of annual revenue, that revenue is excluded from the annual effect to the economy calculation because royalties are transfer payments for purposes of this analysis and as defined in OMB guidance.
Based on the available information, we estimate the annual effect on the economy of the regulatory changes will be less than $100 million and will not adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local or tribal governments or communities. This rule will not create inconsistencies or otherwise interfere with an action taken or planned by another agency. This rule would not change the relationships of the oil shale programs with other agencies' actions. This rule does not materially affect the budgetary impact of entitlements, grants, loan programs, or the rights and obligations of their recipients. In addition, the proposed rules do not raise any novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.
Executive Order 12866 requires each agency to write regulations that are simple and easy to understand. The BLM invites your comments on how to make these proposed regulations easier to understand, including answers to questions such as the following:
For a major rule, as defined by the Small Business Regulatory Enforcement Fairness Act (SBREFA), the BLM must prepare an initial regulatory flexibility analysis. For SBREFA, a rule may be major if it meets any of three criteria:
Have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.
If determined to be a major rule SBREFA requires an agency to prepare an analysis when issuing a proposed rule that will have a significant impact on a substantial number of small entities.
Based on the available information, the BLM estimates the annual effect on the economy of the regulatory changes will be less than $100 million. This rule will not create a major increase in costs or prices for consumers, individual industries, Federal, state, or local government agencies, or geographic regions. In addition, this proposed regulation will not have any significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.
The proposed regulatory amendments are categorically excluded from the requirement to prepare an environmental assessment (EA) pursuant to the regulations at 43 CFR 46.205 and 46.210. Nonetheless, the BLM has prepared an EA (DOI-BLM-WO-3900-2012-0001-EA) to inform the decision-maker and the public. The EA concludes that this proposed rule would not constitute a major Federal action significantly affecting the quality of the human environment under Section 102(2)(C) of NEPA, 42 U.S.C. 4332(2)(C). A detailed statement under NEPA is not required.
The Regulatory Flexibility Act (RFA) requires agencies to analyze the economic impact of proposed and final regulations to determine the extent to which there is a significant economic impact on a substantial number of small entities. Executive Order 13272 reinforces executive intent that agencies give serious attention to impacts on small entities and develop regulatory alternatives to reduce the regulatory burden on small entities. When the proposed regulation will impose a significant economic impact on a substantial number of small entities, the agency must evaluate alternatives that would accomplish the objectives of the rule without unduly burdening small entities. Inherent in the RFA is a desire to remove barriers to competition and encourage agencies to consider ways of tailoring regulations to the size of the regulated entities.
The BLM therefore does not anticipate the proposed rule to have a significant economic impact on a substantial number of small entities.
In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.) the proposed rule would not impose an unfunded mandate on state, local, or tribal governments or the private sector, in the aggregate, of $100 million or more per year; nor would this rule have a significant or unique effect on state, local, or tribal governments. The rule imposes no requirements on any of those entities. Therefore, the BLM is not required to prepare a statement containing the information required by the Unfunded Mandates Reform Act.
This rule is a not a government action capable of interfering with constitutionally protected property rights. A takings implication assessment is not required. The rule would not authorize any specific activities that would result in any effects on private property. Therefore, the Department has determined that the rule would not cause a taking of private property or require further discussion of takings implications under this Executive Order.
The proposed rule will 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 levels of government. It would not apply to states or local governments or state or local governmental entities. The management of Federal oil shale leases is the responsibility of the Secretary of the Interior and the BLM. This rule does not alter any lease management or regulatory role of the states or the rules governing revenue sharing with the states. In addition, this rule does not impose any costs on the states. Therefore, in accordance with Executive Order 13132, the BLM has determined that this rule does not have sufficient Federalism implications to warrant preparation of a Federalism Assessment.
Under Executive Order 12988, the BLM has determined that this proposed rule would not unduly burden the judicial system and that it would meet the requirements of sections 3(a) and 3(b)(2) of the Order.
In accordance with Executive Order 13175, the BLM has found that this rule may include policies that have tribal implications. The rule implements the Federal oil shale leasing and management program, which does not apply on tribal or allotted Indian lands. At present, there are no oil shale leases or agreements on tribal or allotted Indian lands. If tribes or allottees should ever enter into any leases or agreements with the approval of the Bureau of Indian Affairs, the BLM would then likely be responsible for the approval of any proposed operations on Indian oil shale leases and agreements. In light of this possibility, and because tribal interests could be implicated in oil shale leasing on Federal lands, the BLM has begun consultation on this proposed rule with potentially affected tribes and will continue consulting during the comment period.
In developing this rule the BLM did not conduct or use experiments or surveys requiring peer review under the Information Quality Act (Section 515 of Pub. L. 106-554).
In accordance with Executive Order 13211, the BLM has determined that the proposed rule would not be likely to have a substantial direct effect on the supply, distribution, or use of energy. Executive Order 13211 requires an agency to prepare a Statement of Energy Effects for a rule that is a significant regulatory action under Executive Order 12866, or any successor order, and is likely to have a significant adverse effect on the supply, distribution, or use of energy.
As discussed earlier in this preamble, under the proposal on future leases, the Secretary is considering several options for replacing the royalty rate structure established by the 2008 final rule. Additional information about oil shale production may be available in the future that would inform the Secretary's decision on royalty rates. The royalty rate and other proposed changes are not anticipated to have a significant negative effect on the economic viability of industry or on the nation's supply, distribution, or use of energy. The BLM believes the proposed rules would not have an adverse effect on the supply, distribution, or use of energy, and therefore has determined that the preparation of a Statement of Energy is not required.
In accordance with Executive Order 13352, the BLM has determined that this rule would not impede facilitating cooperative conservation; takes appropriate account of and considers the interests of persons with ownership or other legally recognized interests in the land or other natural resources; properly accommodates local participation in the Federal decision-making process; and provides that the programs, projects, and activities are consistent with protecting public health and safety. The proposed revisions to the oil shale regulations are in accordance with the terms of settlement agreement to a lawsuit relating to the 2008 final rule. Several of the proposed revisions are procedural in nature and provide clarification of existing provisions. The proposed rule also includes new environmental protection requirements for plans of development. The proposed rule will not affect opportunities under existing regulatory provisions for governors, state, local, and tribal governments to provide comments prior to the BLM offering the tracts for competitive oil shale leasing.
The proposed rule contains information collection requirements that are subject to review by OMB under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3520). The PRA provides that an agency may not conduct or sponsor, and no response is required for, a “collection of information” unless it displays a currently valid control number. Collections of information include any request or requirement that an individual, partnership, or corporation obtain information, and report it to a Federal agency (44 U.S.C. 3502(3) and 5 CFR 1320.3(c)). OMB has approved existing information collection requirements associated with the 2008 Oil Shale Final Rule, and has assigned control number 1004-0201 to those requirements.
The BLM requests comments to:
If you wish to comment on the information collection aspects of this proposed rule, please send your comments directly to OMB via fax or electronic mail:
Electronic mail: oira_docket@omb.eop.gov. Please indicate “Attention: OMB Control Number 1004-0201,” regardless of the method used to submit comments on the information collection burdens. If you submit comments on the information collection burdens, please provide the BLM with a copy of your comments by mail, fax, or electronic mail:
OMB is required to make a decision concerning the collection of information contained in this proposed rule between 30 to 60 days after publication of this document in the Federal Register. Therefore, a comment to OMB is best assured of having its full effect if OMB receives it by April 26, 2013.
The proposed rule would revise section 3931.11 to require the following additional information in a plan of development: Proposed section 3931.11(h) would add a requirement for a watershed and groundwater protection plan:
The BLM estimates that the watershed and groundwater protection plan, airshed review, integrated waste management plan, and environmental protection plan that would be required under proposed section 3931.11(h), (i), (j), and (k) would each require 10 hours to prepare/assemble. The proposed revisions to section 3911.11 would increase the burden hours associated with the plan of development from 308 hours to 348 hours.
The principal authors of this proposed rule are Mitchell Leverette, Mary Linda Ponticelli, Larry Jackson, and Paul McNutt, Division of Solid Minerals (Washington Office) and the BLM's Division of Regulatory Affairs (Washington Office).
43 CFR Part 3900
Accordingly, for the reasons stated in the preamble and under the authorities stated below, the BLM proposes to amend 43 CFR parts 3900, 3920, and 3930 as set forth below:
PART 3900—OIL SHALE MANAGEMENT—GENERAL Back to Top
1.The authority citation for part 3900 continues to read as follows: Authority:
30 U.S.C. 189, 359, and 241(a), 42 U.S.C. 15927, 43 U.S.C. 1732(b) and 1740.
2.Amend § 3903.52 by revising paragraph (b) to read as follows: end regulatory text
Subpart 3903—Fees, Rentals, and Royalties Back to Top
§ 3903.52 Production royalties.
(b) The royalty rate will be set by the BLM in the notice of sale as provided in section 3924.5(b)(3) of this part or, for R, D and D conversion, will be established by the Secretary of the Interior.
PART 3920—OIL SHALE LEASING Back to Top
3.The authority citation for part 3920 continues to read as follows: Authority:
; 30 U.S.C. 241(a), 42 U.S.C. 15927, 43 U.S.C. 1732(b) and 1740.
Subpart 3925—Award of Lease Back to Top
4.Amend § 3925.10 by revising paragraph (a) to read as follows: § 3925.10 Award of lease.
(a) The lease may be awarded to the highest qualified bidder whose bid meets or exceeds the BLM's estimate of FMV, except as provided in § 3924.10. The BLM will not issue a commercial lease unless it determines that oil shale operations can occur without unacceptable environmental risk. When the BLM determines that the lease should be issued, it will provide the successful bidder 3 copies of the oil shale lease form for execution. Commercial oil shale leases will be issued only under the procedures in this part.
Subpart 3926—Conversion of Preference Right for Research, Development, and Demonstration (R, D and D) Leases Back to Top
5.Amend § 3926.10 by revising paragraph (a) by adding a sentence to the end of the paragraph, by revising the introductory text of paragraph (c), and by adding paragraph (c)(6) to read as follows: § 3926.10 Conversion of an R, D and D lease to a commercial lease.
PART 3930—MANAGEMENT OF OIL SHALE EXPLORATION AND LEASES Back to Top
6.The authority citation for part 3930 continues to read as follows: Authority:
Subpart 3931—Plans of Development and Exploration Plans Back to Top
7.Amend § 3931.10 by revising paragraph (e) and adding new paragraph (g) to read as follows: § 3931.10 Exploration plans and plans of development for mining and in situ operations.
8.Amend § 3931.11 by adding new paragraphs (h), (i), (j), and (k) and redesignating existing paragraphs (h) as (l); (i) as (m); (j) as (n); and (k) as (o). § 3931.11 Content of plan of development.
[FR Doc. 2013-07052 Filed 3-26-13; 8:45 am]