[Federal Register Volume 81, Number 146 (Friday, July 29, 2016)]
[Proposed Rules]
[Pages 49913-49921]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17400]
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DEPARTMENT OF THE INTERIOR
Bureau of Land Management
43 CFR Part 3160
[WO-300-L13100000.PP0000]
RIN 1004-AE37
Onshore Oil and Gas Operations; Federal and Indian Oil and Gas
Leases; Onshore Oil and Gas Order Number 1, Approval of Operations
AGENCY: Bureau of Land Management, Interior.
ACTION: Proposed order.
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SUMMARY: The Bureau of Land Management (BLM) is proposing to amend its
existing Onshore Oil and Gas Order Number 1 (Onshore Order 1) to
require the electronic filing (or e-filing) of all Applications for
Permit to Drill (APD) and Notices of Staking (NOS). Currently, Onshore
Order 1 states that an ``operator must file an APD or any other
required documents in the BLM Field Office having jurisdiction over the
lands described in the application,'' but allows for e-filing of such
documents in the alternative. This proposal would change that structure
to make e-filing the required method of submission, subject to limited
exceptions. The BLM is making this change to improve the efficiency and
transparency of the APD and NOS processes.
DATES: Send your comments on this proposal to the BLM on or before
August 29, 2016. The BLM need not consider, nor include in the
administrative record for the final order, comments received after this
date. If you wish to comment on the information collection requirements
in this proposed order, please note that the Office of Management and
Budget (OMB) is required to make a decision concerning the collection
of information contained in this proposed order between 30 and 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 August 29, 2016.
ADDRESSES: You may submit comments on the proposed order to the BLM by
any of the following methods:
Mail: Director (630) Bureau of Land Management, U.S.
Department of the Interior, 1849 C St. NW., Room 2134 LM, Washington,
DC 20240, Attention: 1004-AE37.
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.
You may submit comments on the proposed collection of information
by fax or electronic mail to OMB by any of the following methods:
Fax: Office of Management and Budget, Office of
Information and Regulatory Affairs, Desk Officer for the Department of
the Interior, 202-395-5806.
Electronic mail: [email protected].
On all submissions to OMB, please indicate ``Attention: Approval of
Operations, OMB Control Number 1004-XXXX,'' regardless of the method
used. If you submit comments on the proposed collection of information,
please provide the BLM with a courtesy copy of your comments at one of
the addresses shown above.
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 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.
FOR FURTHER INFORMATION CONTACT: Steven Wells, Division Chief, Fluid
Minerals Division, 202-912-7143 for information regarding the substance
of the order or information about the BLM's Fluid Minerals Program. For
information on procedural matters or the rulemaking process, please
contact Mark Purdy, Regulatory Affairs Division, 202-912-7635. Persons
who use a telecommunications device for the deaf (TDD) may call the
Federal
[[Page 49914]]
Information Relay Service (FIRS) at 1-800-877-8339 to contact the above
individuals during normal business hours. FIRS is available 24 hours a
day, 7 days a week to leave a message or question with the above
individuals. You will receive a reply during normal business hours.
SUPPLEMENTARY INFORMATION:
I. Public Comment Procedures
II. Background
III. Discussion of the Proposed Order
IV. Procedural Matters
I. Public Comment Procedures
This proposed order is administrative in nature and would not
change the content of what must be submitted in an APD or NOS, only the
method of submission; therefore, this proposed order has a 30-day
public comment period. Please make your comments as specific as
possible by confining them to issues directly related to the content of
this proposed rule, and explain the basis for your comments. The
comments and recommendations that will be most useful and likely to
influence agency decisions are:
1. Those supported by quantitative information or studies; and
2. Those that include citations to, and analyses of, the applicable
laws and regulations.
The BLM is not obligated to consider or include in the
Administrative Record for the final order comments received 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 address listed under ADDRESSES during regular
hours (7:45 a.m. to 4:15 p.m.), Monday through Friday, except holidays.
II. Background
The BLM regulations governing onshore oil and gas operations are
found at 43 Code of Federal Regulations (CFR) part 3160, Onshore Oil
and Gas Operations. Section 3164.1 provides for the issuance of Onshore
Oil and Gas Orders to implement and supplement the regulations found in
part 3160. Onshore Order 1 has been in effect since October 21, 1983,
and was most recently amended in 2007 (see 72 FR 10308 (March 7,
2007)).
Through this proposal, the BLM is proposing to modify Onshore Order
1 to require operators to submit NOSs and APDs through the BLM's
electronic permitting (e-permitting) system, as opposed to the current
system, which allows either hardcopy or electronic submission. Under
the proposed order, the BLM would consider granting waivers to the e-
filing requirement for individuals who request a waiver because they
would experience hardship if required to e-file (e.g., if an operator
is prevented from e-filing or is in a situation that would make e-
filing so difficult to perform that it would significantly delay an
operator's APD submission).
An APD is a request to drill an oil or gas well on Federal or
Indian lands. An operator must have an approved APD prior to
drilling.\1\ Prior to submitting an APD, an applicant may file an NOS
requesting the BLM to conduct an onsite review of an operator's
proposed oil and gas drilling project. The purpose of an NOS is to
provide the operator with an opportunity to gather information and
better address site-specific resource concerns associated with a
project while preparing their APD package. Operators are not required
to submit an NOS prior to filing an APD.
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\1\ In some cases, operators are companies owned by individual
Indian tribes. Such companies are usually established to produce the
minerals owned by the tribe and, thus, are operated for the benefit
of the tribe.
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The BLM has recently experienced a decrease in the number of APDs
received due to current market conditions. Historically, the BLM
received an average of about 5,000 APDs per year for wells on Federal
and Indian lands, of which Indian lands account for about 16%. In FY
2015, the BLM received approximately 4,500 APDs. In FY 2016 to date,
through the end of June 2016, BLM has received 1,010 APDs. In coming
years, due to the recent drop in oil prices and persistently low
natural gas prices, the BLM conservatively estimates that an average of
3,000 APDs will be submitted per year. The BLM anticipates these market
conditions to continue for the near term.
Over the last few years, roughly half of the APDs submitted to the
BLM were submitted using the e-permitting system (Well Information
System, or WIS). The other half of the APDs were submitted in hard
copy. The available data show that use of the BLM's e-permitting system
for APDs and NOSs is common and broad-based among operators, and
therefore is not a novel concept. More importantly, the data show that
the use of e-filing has increased over time, with the rate nearly
doubling from 26 percent in FY 2010 to 51 percent in FY 2014. As of
2014, approximately 411 operators had used the BLM's legacy WIS to e-
file NOSs, APDs, well completion reports, sundry notices, and other
application materials. Those operators represent an estimated 85
percent of the operators that conduct drilling and completion
operations on Federal and Indian leases nationwide.
The BLM's legacy WIS system is a web-based application that
operators can use to submit permit applications and other types of
information electronically over the Internet. The WIS system was an
extension of the BLM's current Automated Fluid Minerals Support System
(AFMSS). AFMSS is a database used to track various types of oil and gas
information on Federal and Indian lands, including the processing of
APDs.
Automated Fluid Minerals Support System II
The BLM has developed and deployed an update to its Automated Fluid
Minerals Support System called AFMSS II. The APD module within AFMSS II
replaces the legacy WIS system. In December 2015, the BLM began phasing
in AFMSS II's APD module and conducting training for staff and
operators. As of the date of this proposal, the APD module is fully
operational, and the BLM anticipates that WIS will be phased out in the
third quarter of calendar year 2016. Therefore, the BLM anticipates
that the number of operators who use the APD module will continue to
increase.
Efficiency and Transparency
The goal of the AFMSS II system and the proposed amendments to
Onshore Order 1 is to improve operational efficiency and transparency
in the processing of APDs and NOSs by requiring operators to use BLM's
updated e-permitting system as the default approach to APD filing.
Although data show that voluntary use of the e-permitting system has
increased over time, the proposal is necessary to move towards 100
percent electronic APD submission.
This shift presents potential advantages to operators, including
operators owned by individual Indian tribes, because the new AFMSS II
system is expected to streamline the application process. The system
will expedite processing and enhance transparency resulting in savings
to both operators and the U.S. Government by:
Reducing the number of applications with deficiencies by
providing users the ability to identify and correct errors through
error notifications during the submission process;
Utilizing the auto-fill function to automatically populate
data fields based on users' previously submitted information;
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Allowing operators to track the progress of their
application throughout the BLM review process;
Facilitating the use of pre-approved plans, such as Master
Development Plans and Master Leasing Plans; and
Allowing users to directly interface with BLM
applications.
The AFMSS II system was developed in response to the Government
Accountability Office's (GAO) and the Department of the Interior Office
of the Inspector General's (OIG) recommendations in GAO report 13-572
(GAO-13-572) and OIG report CR-EV-MOA-0003-2013 (Report No. CR-EV-MOA-
0003-2013). Both reports recommended that the BLM ensure that all key
dates associated with the processing of APDs are completely and
accurately entered and retained in AFMSS, and in any new system that
replaces AFMSS, to help assess compliance with deadlines and identify
ways to improve the efficiency of the APD review process. Additionally,
the OIG report recommends that the BLM: (1) Develop, implement,
enforce, and report performance timelines for APD processing; (2)
Develop outcome-based performance measures for the APD process that
help enable management to improve productivity; and (3) Ensure that the
modifications to AFMSS enable accurate and consistent data entry,
effective workflow management, efficient APD processing, and APD
tracking at the BLM Field Office level. The APD module developed for
AFMSS II addresses these recommendations from the OIG and the GAO.
III. Discussion of the Proposed Rule
This proposal would revise existing Onshore Order 1, which
primarily supplements 43 CFR 3162.3 and 3162.5. Section 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.
Section-by-Section Discussion of Proposed Changes
This section of the preamble explains the handful of changes that
the BLM is proposing to make to the existing provisions of Order 1.
However, in order to provide context for the proposed changes, we have
included the subsections where BLM's proposed changes are being made in
their entirety--Where To File an APD, Where To File an NOS, and APD
Posting. No other changes beyond the modifications proposed here are
being made to those sections.
Where To File an APD
The proposed revision to section III.A. would require operators to
file APDs using the BLM's electronic commerce application, AFMSS II,
for oil and gas permitting and reporting. The BLM hopes to move towards
an electronic submission rate of 100 percent. Receiving a portion of
the APDs electronically and a portion in hard copy introduces a number
of inefficiencies and necessitates multiple records management systems.
In addition, the BLM anticipates that submission through the e-
permitting system will improve processing times, public participation,
and transparency.
Where To File an NOS
Similarly, the proposed revision to section III.C. would require
operators to file NOSs using the BLM's e-permitting system for oil and
gas permitting and reporting. As for APDs, the BLM hopes to move
towards an electronic submission rate for NOSs of 100 percent. As with
APDs, receiving a portion of the NOSs electronically and a portion in
hard copy introduces a number of inefficiencies and necessitates
multiple records management systems. In addition, we expect that
submission through the e-permitting system will improve processing
times, transparency, and public participation.
APD Posting
Section III.E.1. currently requires the BLM to post information
about the APD or NOS in an area of the local BLM Field Office that is
readily accessible to the public. Section III.E.1. also calls for this
information to be posted on the Internet when possible, though this is
not required. Currently, some offices are posting information about an
APD or an NOS on their local Field Office Web site. Under the proposed
revision to section III.E.1., the BLM would still post hardcopy
information about the APD or NOS in the applicable BLM Field Office,
but it would also post the information on the Internet in all cases.
The BLM is making this change to increase consistency, transparency,
and efficiency for both operators who file APD submissions and the
public. In addition to revising section III.E.1. to require the BLM to
post information about APDs and NOSs online in all cases, the BLM has
also clarified that section to ensure consistency with 43 CFR 3162.3-
1(g), which requires the BLM to post certain information about an APD
or NOS at least 30 days before approval for publication inspection. In
addition to consistency with the regulations, this change is also
consistent with the BLM's statutory obligations to protect confidential
business obligation.
Although this proposed revision would update how the BLM posts APD
and NOS information, it would not change the type of information that
would be posted, which is specified in 43 CFR 3162.3-1(g). This section
already identifies what information should be posted: The company/
operator name; the well name/number; and the well location described to
the nearest quarter-quarter section (40 acres), or similar land
description in the case of lands described by metes and bounds, or maps
showing the affected lands and the location of all tracts to be leased,
and of all leases already issued in the general area. Where the
inclusion of maps in such posting is not practicable, the BLM provides
maps of the affected lands available to the public for review. In
addition, as under the current order, this posting requirement would
apply only to APDs or NOSs proposing to drill into and produce Federal
minerals. The posting requirement would not apply to APDs or NOSs for
Indian minerals, which are not made publicly available.
Waiver From Electronic Submissions
Proposed section III.I. is a new section that would allow operators
to request a waiver from the requirements in proposed sections III.A.
and III.C. This section would be different from section X., which
addresses the requirements for requesting a variance from this Order.
Unlike a variance from the substantive requirements of Order 1, a
waiver under this proposed order is limited to the means of submission
of an APD (electronic or hardcopy). A waiver under section III. would
also be different from a waiver under section XI., which addresses
lease stipulations. Unlike a waiver from the requirement(s) of a lease
stipulation, a waiver under this proposed order is not a permanent
exemption from the BLM's requirement to file applications
electronically. The BLM's approval of a waiver request under this
proposed order would apply specifically to those applications
identified in the waiver request. In connection with any request for a
waiver under section III.I., the operator would need to explain the
reason(s) that prevents it from using the e-permitting system. The
waiver would be subject to BLM approval.
Under the proposed order, the BLM would not consider an APD or NOS
that the operator did not submit through the e-permitting system,
unless the BLM approves a waiver from the e-permitting
[[Page 49916]]
filing requirement under proposed section III.I. The BLM understands
that under certain circumstances the operator may experience a hardship
that prevents use of the e-permitting system. When considering a waiver
request, the BLM will evaluate each circumstance that serves as a basis
for claiming a hardship. While the BLM cannot conceive of every
scenario that may qualify as a hardship, for purposes of illustrating
the waiver process, hardships are those conditions or circumstances
that may prevent an operator from e-filing or would make e-filing so
difficult to perform that it would significantly delay an operator's
APD submission. In those exceptional cases, the BLM will review the
operator's request and determine whether a waiver allowing the operator
to submit hard copies is warranted.
IV. Procedural Matters
Considerations
While the order would require that all operators e-file NOSs and
APDs, as a practical matter, it would likely have a greater impact on
operators that do not currently use the BLM's e-permitting system.
Operators that already use the e-permitting system would likely
continue to use the system, regardless of the proposed order, and
therefore will not be impacted by the proposed changes.
The proposed requirements are estimated to pose relatively small
compliance costs (see discussion in the Affected Entities section)
associated with administrative compliance and access to the BLM's e-
filing system, if an impacted operator has not used the BLM's e-
permitting system due to a limiting factor, e.g., if the operator has
not purchased access to the Internet or if access is not available due
to the remoteness of its location. These operators are likely to hire a
permit agent to e-file the APD, acquire Internet access depending on
the coverage and the availability of service providers, or find another
work-around solution. While the proposed order places requirements on
the mechanism by which the operators submit APDs or NOSs, it does not
change the content required for either submission.
The requirements may also result in cost savings to the impacted
operators by reducing the amount of time spent correcting deficiencies
in APDs. The filing of APDs through the modernized AFMSS II is expected
to reduce the number of APD submissions that have deficiencies and, for
APDs where deficiencies exist, reduce the time it takes for the
operator to correct those deficiencies. Reduced APD processing times
would benefit impacted operators in that they would be able to commence
drilling and develop the mineral resources sooner. On Indian lands,
this would be very beneficial to the tribes and Indian allottees since
they are the direct recipients of the royalties generated from the
minerals that they own.
There will also be improved transparency during the application and
review process for APDs that are e-filed. With the transition to AFMSS
II, the operator is able to check the status of the APD, and the public
is able to find and access information online, in one location. In the
interim, the BLM continues to maintain hard copy records for APDs
submitted in hard copy consistent with records management and retention
requirements.
Affected Entities
All entities involved in the exploration and production of crude
oil and natural gas resources on Federal and Indian leases and that
submit APDs or NOSs after the effective date of the final rule would be
subject to its requirements.
We estimate that the proposed amendments would impact about 484
operators,\2\ and that these operators might experience a small
increase in administrative costs associated with submitting an APD and
NOS to the BLM through the new APD module, due to the newness of the
system. Operators that comply by submitting a waiver request that is
accepted by the BLM might also experience a small increase in costs
associated with preparing the waiver request. We estimate the annual
average costs per operator to be approximately $3,920 per operator
during the rule's initial implementation period; however, we expect
those costs to decrease quickly over time as operators become familiar
with the new AFMSS II submission system. In total, we estimate that the
proposed amendments might pose annual administrative costs of $2.2
million (about $1.9 million per year to the industry and $315,000 per
year to the BLM) during the initial phases. We believe this is a
conservative estimate of costs given the relatively high proportion of
APDs already submitted using BLM's existing e-filing systems.
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\2\ We examined AFMSS data over a 5-year period (from 2008 to
2012) and found that there were 484 operators that completed wells
on Federal and Indian leases. We believe that this pool of operators
is a good basis for an estimate about the entities that are likely
to file APDs in the future, and therefore be subject to the
requirements.
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In addition, we estimate that the proposed amendments would pose
additional costs for those operators that currently do not use the
BLM's e-permitting system. Specifically, those 73 entities \3\ might
face additional compliance costs of $1,200 per operator per year for
Internet access, using the conservative assumption that they do not
already have such access. In total, these compliance costs could be
about $90,000 per year for all 73 affected operators. The increased e-
filing rates that the BLM has observed during the rollout of the AFMSS
II APD module suggest, however, that fewer than 73 operators would face
these compliance costs.
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\3\ According to BLM records, as of 2014, there were
approximately 411 WIS users, representing 85 percent of the
operators that would be subject to the proposed requirements. By
extension, we can estimate that there are 73 entities that did not
use WIS, representing 15 percent of the operators that would be
subject to the requirements. These 73 entities were not users of the
e-permitting system and will be most impacted by the rule.
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We estimate that the proposed amendments would also benefit
operators, since operators are expected to receive cost savings from
more expedited APD processing. We estimate that receiving an APD via
the e-permitting system rather than in hard-copy would reduce
processing time by 27 percent or 60 days. Further, we estimate the cost
savings to the operator of that increased efficiency to be $6,195 per
APD. Given that the order would impact about 1,500 APDs per year, we
estimate that the total cost savings could be about $9.3 million per
year.
Together, the total benefits are expected to exceed the total
costs, and the rule is expected to result in total cost savings of
about $7 million per year on aggregate. We expect these aggregate
benefits to translate to individual operators. For purposes of
illustration, even if we assume an individual operator incurs costs as
result of the proposed amendments because they do not currently use
BLM's existing e-filing system and have to learn the new system, such
an operator would still be expected to receive a net cost savings on a
per-APD basis, given that the cost savings will exceed the combined
administrative and other compliance costs. On a per APD basis, we
expect increased costs of $1,716 per year--$516 in administrative
burden/compliance costs, plus $1,200 in other compliance costs. Those
costs are expected to be offset, however, by cost savings of $6,195 per
APD. Therefore, on net, an operator submitting one APD per year would
be expected to realize a net reduction in costs of $4,479 ($6,195
[[Page 49917]]
minus $1,716). That expected net benefit would increase as an
operator's familiarity with the new e-filing system increases, as
administrative costs would be reduced by such familiarity.
As noted elsewhere in the preamble, some operators are owned by
individual Indian tribes. Those operators typically develop the
minerals owned by and for the benefit of the tribe. We expect the
impacts and benefits of this proposal to apply to these operators to
the same extent and in the same manner as to other entities operating
on Federal or Indian lands. On net, we anticipate that the benefits of
permitting-time efficiencies associated with 100% e-filing, will
significantly outweigh any costs, especially as operators become more
familiar with the AFMSS II system.
Executive Order 12866, Regulatory Planning and Review
The proposed order does not meet the criteria for economic
significance under Executive Order 12866. The proposed order would not
have an annual effect on the economy of $100 million or more or
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. The proposed order would not create inconsistencies or
otherwise interfere with an action taken or planned by another agency.
In addition, the proposed order would not materially affect the
budgetary impact of entitlements, grants, loan programs, or the rights
and obligations of their recipients.
Regulatory Flexibility Act and Small Business Regulatory Enforcement
Fairness Act
The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act (SBREFA), generally
requires an agency to prepare a regulatory flexibility analysis of any
rule subject to notice and comment rulemaking requirements under the
Administrative Procedure Act, unless the agency certifies that the rule
will not have a significant economic impact on a substantial number of
small entities (see 5 U.S.C. 601-612). Congress enacted the RFA to
ensure that government regulations do not unnecessarily or
disproportionately burden small entities. Small entities include small
businesses, small governmental jurisdictions, and small not-for-profit
enterprises.
The Small Business Administration (SBA) has developed size
standards to carry out the purposes of the Small Business Act and those
size standards can be found in 13 CFR 121.201. The BLM reviewed the SBA
classifications and found that the SBA specifies different size
standards for potentially affected industries. The SBA defines a small
business in the crude petroleum and natural gas extraction industry
(North American Industry Classification System or NAICS code 211111) as
one with 1,250 or fewer employees. However, for the natural gas liquid
extraction industry (NAICS code 211112), it defines a small business as
one with 750 or fewer employees.
The BLM reviewed the SBA size standards for small businesses and
the number of entities fitting those size standards as reported by the
U.S. Census Bureau in the 2012 Economic Census. The data show the
number of firms with fewer than 100 employees and those with 100
employees or more (well below the SBA size standards for the respective
industries). According to the available data, over 95% and 91% of firms
in the crude petroleum and natural gas extraction industry and the
natural gas liquid extraction industry, respectively, have fewer than
100 employees. Therefore, we would expect that an even higher
percentage of firms would be considered small according to the SBA size
standards. Thus, based on the available information, the BLM believes
that the vast majority of potentially affected entities would meet the
SBA small business definition.
We examined the potential impacts of the proposed order and
determined that up to 484 small entities would be subject to the
proposed order's requirements and could face administrative burdens of
about $3,920 per entity per year. In addition, up to 73 small entities
could face other compliance costs of $1,200 per entity per year.
However, we estimate that the administrative and other compliance costs
would be offset as a result of improved APD processing times. We
estimate that cost savings from faster APD processing could be $6,195
per APD. Moreover, we expect that the administrative burdens of the
rule will lessen over time as operators become more familiar with the
BLM's new e-permitting system.
Based on this review, we have determined that, although the
proposal would impact a substantial number of small entities, it would
not have a significant economic impact on a substantial number of small
entities. Therefore, a regulatory flexibility analysis is not required.
This proposed order is also not a major rule under 5 U.S.C. 804(2)
of the RFA, as amended by the SBREFA. This proposed order will not have
an annual effect on the economy of $100 million or more. In fact, the
BLM estimates that the benefits would exceed the costs, and that the
rulemaking could result in net savings of $7 million per year.
Similarly, this proposed order will not cause a major increase in costs
or prices for consumers, individual industries, Federal, State, tribal,
or local government agencies, or geographic regions, nor does this
proposed order have significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises. This
proposed order is administrative in nature and only affects the method
for submitting APDs and NOSs. The BLM prepared a preliminary economic
threshold analysis as part of the record, which is available for
review.
Unfunded Mandates Reform Act
Under the Unfunded Mandates Reform Act (UMRA), agencies must
prepare a written statement about benefits and costs before issuing a
proposed or final rule that may result in aggregate expenditure by
State, local, and tribal governments, or by the private sector, of $100
million or more in any one year.
The proposed order does not contain a Federal mandate that may
result in expenditures of $100 million or more for State, local, and
tribal governments, in the aggregate, or for the private sector, in any
one year. Thus, the proposed order is also not subject to the
requirements of sections 202 or 205 of UMRA. This proposed order is
also not subject to the requirements of section 203 of UMRA because it
contains no regulatory requirements that might significantly or
uniquely affect small governments, because it contains no requirements
that apply to such governments, nor does it impose obligations on them.
Executive Order 12630, Governmental Actions and Interference With
Constitutionally Protected Property Rights (Takings)
In accordance with Executive Order 12630, the BLM has determined
that the proposed order would not have significant takings
implications. The proposed order would not be a governmental action
capable of interfering with constitutionally protected property rights.
Therefore, the proposed order will not cause a taking of private
property or require a takings implication assessment under the
Executive order.
[[Page 49918]]
Executive Order 13132, Federalism
This proposed order would not have federalism implications. The
proposed order would not have substantial direct effects 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. Therefore, in accordance with Executive Order
13132, a Federalism Assessment is not required.
Executive Order 13175, Consultation and Coordination With Indian Tribal
Governments
The BLM evaluated possible effects of the proposed order on
federally recognized Indian tribes. Since the BLM approves proposed
operations on all Indian onshore oil and gas leases (other than those
of the Osage Tribe), the proposed order has the potential to affect
Indian tribes, particularly those tribes with tribally-owned and -
operated oil and gas drilling or exploration companies, which currently
submit APDs and/or NOSs. In conformance with the Secretary's policy on
tribal consultation, the BLM has extended an invitation to consult on
the proposed rule to affected tribes, including tribes that either: (i)
Own an oil and gas company; or (ii) own minerals for which the BLM has
recently received an APD. Over the years, oil and gas development on
Indian and allotted lands has been focused in the States of Colorado,
Montana, New Mexico, North Dakota, Oklahoma, Texas, and Utah. Based on
BLM records, the BLM anticipates that there are nearly 40 tribes for
which the BLM has received or will foreseeably receive APDs or NOSs in
connection with the development of tribal or allotted mineral
resources.
Executive Order 12988, Civil Justice Reform
This rule complies with the requirements of Executive Order 12988.
Specifically, this proposed order does not unduly burden the Federal
court system and meets the requirements of sections 3(a) and 3(b)(2) of
the Executive Order. The BLM has reviewed the proposed order to
eliminate drafting errors and ambiguity and the proposed order has been
written to minimize litigation and provide clear legal standards.
Paperwork Reduction Act of 1995
The Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3521) provides
that an agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information, unless it displays a valid
OMB control number. Relevant authorities (44 U.S.C. 3502(3) and 5 CFR
1320.3(c) and (k)) provide that collections of information include any
request or requirement that persons obtain, maintain, retain, or report
information to an agency, or disclose information to a third party or
to the public. This proposed order contains information collection
requirements that are subject to review by OMB under the PRA. OMB has
approved the existing collection of information associated with onshore
oil and gas operations under control number 1004-0137 (expiration date:
January 31, 2018). In accordance with the PRA, the BLM has asked OMB
for a new control number for the information-collection provisions in
this proposed order and is inviting public comment on that request.
When this proposed order is finalized and becomes effective, the BLM
intends to ask OMB to combine the requirements and burdens of this
proposed order with existing control number 1004-0137. For reference,
the current burdens for control number 1004-0137 (920,464 hours and
$32.5 million in non-hour costs) can be viewed at http://www.reginfo.gov/public/. Those burdens for the existing control number
are unaffected by this proposed rule.
A copy of the information collection request may be obtained from
the BLM by electronic mail request to Steven Wells at [email protected]
or by telephone request to 202-912-7143.
Completion of the new collection of information request would be
required to obtain or retain a benefit for the operators of Federal and
Indian onshore oil and gas leases, or units or communitization
agreements that include Federal and Indian leases (except on the Osage
Reservation or the Crow Reservation, or in certain other areas). The
frequency of the collection would be ``on occasion.'' The BLM has
requested a 3-year term of approval for the new control number.
The BLM requests comments on the following subjects:
1. Whether the collection of information is necessary for the
proper functioning of the BLM, including whether the information will
have practical utility;
2. The accuracy of the BLM's estimate of the burden of collecting
the information, including the validity of the methodology and
assumptions used;
3. The quality, utility, and clarity of the information to be
collected; and
4. How to minimize the information collection burden on those who
are to respond, including the use of appropriate automated, electronic,
mechanical, or other forms of information technology.
If you would like to comment on the information collection
requirements of this proposed rule, please send your comments directly
to OMB, with a copy to the BLM, as directed in the ADDRESSES section of
this preamble. Please identify your comments with ``Approval of
Operations, OMB Control Number 1004-XXXX.'' OMB is required to make a
decision concerning the collection of information contained in this
proposed order 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 August 29, 2016.
Summary of Proposed Information Collection Activities
Title: Approval of Operations (43 CFR part 3160).
Forms:
Application for Permit to Drill or Re-Enter (Form 3160-3).
Sample Format for Notice of Staking (Attachment 1 to 2007
Onshore Order 1, 72 FR at 10338).
OMB Control Number: This is a request for a new control number.
Description of Respondents: Private sector oil and gas operators.
Abstract: The BLM proposes to require e-filing of APDs and NOSs,
and proposes a provision that would authorize applicants to seek a
waiver from that requirement.
Frequency of Collection: On occasion.
Obligation to Respond: APDs and waiver requests are required to
obtain or retain benefits. NOSs are voluntary.
Estimated Annual Responses: 3,450.
Estimated Reporting and Recordkeeping ``Hour'' Burden: 29,400.
Discussion of the Proposed Collection Activities
APDs: As revised here, section III.A. of Onshore Order 1 would
require an operator to file an APD and associated documents using the
BLM's electronic commerce application for oil and gas permitting and
reporting. In addition to amending Onshore Order 1, this would have the
effect of revising OMB control number 1004-0137. As discussed above,
the BLM plans to seek OMB approval to incorporate the burdens of this
proposed order into control number 1004-0137 after this proposed order
is finalized and effective.
NOSs: As revised here, section III.C. of Onshore Order 1 would
continue to provide that an NOS may be submitted voluntarily. Section
III.C. would also require an operator who chooses to file an NOS to use
the BLM's electronic
[[Page 49919]]
commerce application for oil and gas permitting and reporting. Except
for the new e-filing requirement, this is an existing collection in use
without a control number. The purpose of submitting an NOS is to
provide an operator an opportunity to gather information and better
address site-specific resource concerns associated with a project while
preparing an APD package.
Waiver Requests: Proposed section III.I. is a new section that
would allow operators to request a waiver from the requirements in
proposed sections III.A. and III.C. The request would have to be
supported by an explanation of why the operator is not able to use the
e-permitting system. In those exceptional cases, the BLM would review
the operator's request and determine whether a waiver allowing the
operator to submit hard copies is warranted.
Although the proposed order would direct the method by which
operators must submit an APD or an NOS, it does not direct operators to
obtain, maintain, retain, or report any more information than what is
already required by the existing Onshore Order 1. The BLM recognizes
operators may encounter a learning curve as they familiarize themselves
with the database system, like any new software system to which users
must adapt. However, that learning curve is expected to be temporary.
Furthermore, the BLM has sponsored multiple outreach strategies and
training forums for its AFMSS clients, which should further mitigate
the extent of industry's learning curve. These outreach efforts
include:
Easily accessible internet-based resources, including
user-guides, audiovisual modules, user toolkits, and FAQs, that are
available to operators or their agents, and
Live trainings provided to users to allow for a more
robust discussion with the BLM on how to use the system. The following
table outlines the locations where the BLM has sponsored these
trainings:
----------------------------------------------------------------------------------------------------------------
Training location Dates Operator/agent participation
----------------------------------------------------------------------------------------------------------------
BLM Offices................... Jan-May 2016..... Over 230 BLM Employees Trained.
Online Operator Training at Dec 2015......... Over 110 Operators Trained/47 Companies.
the BLM's National Training
Center, Phoenix, Arizona.
Online Operator Training and Mar-May 2016..... Over 150 Operators trained.
Individual Sessions at the
BLM's National Operations
Center, Denver, Colorado.
----------------------------------------------------------------------------------------------------------------
Nonetheless, the BLM provides an estimate of the incremental
burdens of e-filing and waiver submittal, which are itemized in the
following table. These burdens would apply to both tribally and non-
tribally-owned operators. In the case of APDs, these burdens are in
addition to those estimated under OMB control number 1004-0137.
----------------------------------------------------------------------------------------------------------------
B. Number of C. Hours per
A. Type of response responses response D. Total hours
----------------------------------------------------------------------------------------------------------------
Application to Drill or Re-Enter \4\ 3,000 8 24,000
43 CFR 3162.3-1 and Section III.A. of
Onshore Order 1
Form 3160-3
----------------------------------------------------------------------------------------------------------------
Notice of Staking \5\ 300 16 4,800
Section III.C. of Onshore Order 1
----------------------------------------------------------------------------------------------------------------
Waiver Request \6\ 150 4 600
Section III.I. of Onshore Order 1
----------------------------------------------------------------------------------------------------------------
Totals................................. 3,450 28 29,400
----------------------------------------------------------------------------------------------------------------
National Environmental Policy Act
---------------------------------------------------------------------------
\4\ The estimated number of APDs submitted in a given year,
based on historic data.
\5\ Estimated as 10 percent of the roughly 3,000 APDs filed
annually.
\6\ Estimated as 10 percent of the 1,500 APDs likely to be
impacted by the proposed order. BLM data show that half of APDs were
already e-filed through the legacy WIS.
---------------------------------------------------------------------------
This proposed order does not constitute a major Federal action
significantly affecting the quality of the human environment. The BLM
has analyzed this proposed order and determined it meets the criteria
set forth in 43 CFR 46.210(i) for a Departmental Categorical Exclusion
in that this proposed order is ``. . . of an administrative, financial,
legal, technical or procedural nature . . . .'' Therefore, it is
categorically excluded from environmental review under the National
Environmental Policy Act, pursuant to 43 CFR 46.205 and 46.210(c) and
(i). The BLM also has analyzed this proposed order to determine if it
involves any of the extraordinary circumstances that would require an
environmental assessment or an environmental impact statement, as set
forth in 43 CFR 46.215, and concluded that this proposed order does not
involve any extraordinary circumstances.
Data Quality Act
In developing this proposed order, we did not conduct or use a
study, experiment, or survey requiring peer review under the Data
Quality Act (Pub. L. 106-554, app. C 515, 114 Stat. 2763, 2763A-153 to
154).
Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
Under Executive Order 13211, agencies are required to prepare and
submit to OMB a Statement of Energy Effects for significant energy
actions. This Statement is to include a detailed statement of ``any
adverse effects of energy supply, distribution, or use (including a
shortfall in supply, price increases, and increase use of foreign
supplies)'' for the action and reasonable alternatives and their
effects.
Section 4(b) of Executive Order 13211 defines a ``significant
energy action'' as ``any action by an agency (normally
[[Page 49920]]
published in the Federal Register) that promulgates or is expected to
lead to the promulgation of a final rule or regulation, including
notices of inquiry, advance notices of proposed rulemaking, and notices
of proposed rulemaking: (1)(i) That is a significant regulatory action
under Executive Order 12866 or any successor order, and (ii) is likely
to have a significant adverse effect on the supply, distribution, or
use of energy; or (2) that is designated by the Administrator of the
Office of Information and Regulatory Affairs (OIRA) as a significant
energy action.'' The proposed order would not be a significant
regulatory action under Executive Order 12866 as it would not have a
significant adverse effect on the supply, distribution, or use of
energy. The proposed order has also not been designated by the
Administrator of OIRA as a significant energy action.
Executive Order 13352, Facilitation of Cooperative Conservation
The BLM determined that this proposed order involves changes to BLM
processes. In accordance with Executive Order 13352, this proposed
order would not impede facilitating cooperative conservation. The
proposed order takes appropriate account of and respects the interests
of persons with ownership or other legally recognized interests in 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.
Authors
The principal author of this proposed rule is Catherine Cook of the
BLM, Division of Fluid Minerals, assisted by Mark Purdy, BLM, Division
of Regulatory Affairs, and the Department of the Interior's Office of
the Solicitor.
List of Subjects in 43 CFR Part 3160
Administrative practice and procedure, Government contracts,
Indian-lands, Mineral royalties, Oil and gas exploration, Penalties,
Public lands--mineral resources, Reporting and recordkeeping
requirements.
Janice M. Schneider,
Assistant Secretary, Land and Minerals Management.
For reasons set out in the preamble, the Bureau of Land Management
proposes to amend the appendix following the regulatory text of the
final rule published in the Federal Register at 72 FR 10308 at 10328
(March 7, 2007), corrected on March 9, 2007 (72 FR 10608), effective
March 7, 2007, as follows:
Note: This appendix does not appear in the BLM regulations in
43 CFR part 3160.
Appendix--Text of Oil and Gas Onshore Order
Amend the Onshore Oil and Gas Order Number 1 by revising
sections III.A, III.C, and III.E, and adding section III.I to read
as follows:
Onshore Oil and Gas Order Number 1
* * * * *
III. Application for Permit To Drill
* * * * *
A. Where To File
The operator must file an APD and associated documents using the
BLM's electronic commerce application for oil and gas permitting and
reporting. The operator may contact the local BLM Field Office for
information on how to gain access to the electronic commerce
application.
* * * * *
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. An
operator must file a Notice of Staking using the BLM's electronic
commerce application for oil and gas permitting and reporting.
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.
* * * * *
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. The BLM will post information about the APD
or Notice of Staking for Federal oil and gas leases to the Internet
and in an area of the BLM Field Office having jurisdiction that is
readily accessible to the public. 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.
[[Page 49921]]
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.
* * * * *
I. Waiver From Electronic Submission Requirements
The operator may request a waiver from the electronic submission
requirement for an APD or Notice of Staking if compliance would
cause hardship or the operator is unable to file these documents
electronically. In the request, the operator must explain the
reason(s) that prevents it from using the electronic system. The
waiver request is subject to BLM approval. The BLM will not consider
an APD or Notice of Staking that the operator did not submit through
the electronic system, unless the BLM approves a waiver.
[FR Doc. 2016-17400 Filed 7-28-16; 8:45 am]
BILLING CODE 4310-84-P