The Bureau of Land Management NEWS |
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The Bureau of Land Management NEWS |
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Last updated: 04/04/03
Dear BLM Customer,
The BLM has just published a proposed revision of our oil and gas leasing and operations regulations. This proposal is aimed at reducing overlap among current regulations, giving operators increased flexibility in meeting agency requirements, ensuring appropriate bond amounts to cover such costs as reclamation, and simplifying classification of regulatory violations. The proposal also brings together in one place most of the existing oil and gas regulations, all of the existing onshore orders and national notices to lessees.
Some of the major components of the proposal include:
Performance Standards -- This proposed regulation provides operators with performance standards, which, in some instances, replace prescriptive requirements. Under the current regulations and onshore orders, operators must meet requirements that are very specific and often rigid. Using performance standards will give operators and the BLM increased flexibility to deal with unique geologic, ecological and engineering circumstances, while still protecting environmental and other federal interests.
Bonding -- The proposed rule would increase some bond amounts and create a new bond requirement. Individual bond amounts would increase from $10,000 to $20,000, and statewide bonds would increase from $25,000 to $75,000. Nationwide bonds would remain at $150,000. The BLM is proposing these increases because current bond amounts, which have not changed since 1960, are not sufficient to ensure that wells are properly plugged and reclaimed and that required royalties are paid. The BLM proposes phasing in the new bond amounts over two years. The BLM would also increase the operator bond if a federal well is inactive for more than one year. The operator would be required to increase the bond by $2 per foot of depth per well, or pay a $100 annual fee into a BLM account to help offset the cost of plugging orphan wells.
In addition, the BLM would cancel bonds after ensuring that all lease obligations are met, thus releasing the operator from liability. Currently, the agency does not cancel bonds unless liability is assumed by someone else.
Violations -- The proposed rule would eliminate the "major" and "minor" classification of regulatory violations. Instead, the BLM would require that severe violations be corrected more quickly than less critical violations. The proposal would also replace the $500-a-day assessment for major violations and the one-time $250 assessment for minor violations with an assessment of up to $250 a day for uncorrected violations.
Unit Regulations -- The proposed rule would replace current unitization regulations with a more flexible process that would allow the BLM and operators to negotiate key development terms. The BLM would also be able to limit the number of unit terms, enabling the agency to approve units more quickly.
In January, the BLM anticipates holding a satellite broadcast on this proposed rule, which would be available to all interested publics. Further details will be available on the BLM's Internet website (www.blm.gov).
The BLM has done part of the job in drafting this proposal; now it is up to you to do your part. The first step would be to get a copy of the regulation. Complete details of the rule are available by calling 202-452-5030. You may also retrieve a copy of the rule from the BLM's Internet website at http://www.blm.gov/nhp/news/regulatory/3100p5.html. The second step is to review the regulation and preamble carefully and, finally, to let us know what you think. The rule, which is published in the December 3, 1998 Federal Register, provides for a 120-day comment period, which will end April 2, 1999. The BLM will consider comments postmarked on or before this date in preparing the final rule. We strongly encourage you to comment, and we look forward to hearing from you.
You can deliver comments directly to the BLM's Administrative Record, Room 401, 1620 L St., N.W., Washington, D.C., or mail them to the Bureau of Land Management, Administrative Record, Room 401LS, 1849 C Street, N.W., Washington, D.C. 20240. You can also transmit comments electronically via the Internet to: WoComment@wo.blm.gov. Your comments should include the regulation identifier number "AC94," the name of the person or organization commenting, and a return address. Comments we have already received will be available for review at the L Street address during regular business hours from 7:45 a.m. to 4:15 p.m., Monday through Friday, except holidays.
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