Questions and Answers
Record of Decision
Resource Management Plan Amendment for Oil and Gas Leasing and Development in Otero and Sierra Counties
The BLM has just issued a Record of Decision approving its proposed plan amendment. What is a Record of Decision?
A Record of Decision (ROD) describes the decision reached by the BLM’s New Mexico State Director following analysis of various alternatives in the planning document.
What is in the ROD?
This ROD approves the Resource Management Plan Amendment (RMPA) that was proposed for oil and gas leasing and development on public lands in Sierra and Otero Counties. The plan amendment provides guidance for managing a limited amount of environmentally sensitive oil and gas development, while protecting the area’s natural resources.
Almost 36,000 acres of grasslands with the highest potential as habitat for the endangered Aplomado falcon will be permanently protected by being closed to leasing, as will six existing and eight proposed Areas of Critical Environmental Concern and four Wilderness Study Areas (over 88,000 acres).
The plan amendment will allow strictly regulated and carefully monitored activity, leading to a maximum surface disturbance of only 1,589 acres in the two counties from well pads, roads and pipelines – less than one-tenth of one percent of the total surface area. At most, 141 exploratory wells could be drilled, resulting in up to 84 producing wells.
The ROD provides a summary of the planning process used to develop the RMPA. It describes the decisions BLM made regarding what lands will be available for leasing and under what constraints development can occur. The ROD also describes how the plan will be implemented and monitored, and what mitigation measures will apply. It includes a description of Best Management Practices that will be used during exploration, development, and reclamation of oil and gas activities (see below for details).
As approved by the ROD, the RMPA provides for leasing of federal minerals on more than 1.9 million acres of public lands in the planning area. Of these lands, 40,500 acres will be available with a stipulation of No Surface Occupancy, 484,100 acres will be available with a stipulation of Controlled Surface Use, and 1,406,600 acres will be available with standard lease terms and conditions.
How did BLM’s Director respond to Governor Richardson’s appeal of the New Mexico State Office’s decision to reject his proposal for Sierra and Otero Counties?
The alternative the Governor proposed for Sierra and Otero Counties was similar to an alternative in the draft RMPA, issued for public comment in 2002. Extensive state and public comments and technical information were received on the draft, which caused BLM to propose a different, modified alternative in its final plan amendment.
The alternative the Governor proposed would have placed over 1.5 million acres (75 percent of the planning area) off-limits to drilling or under stipulations that would have placed significant barriers to effective exploration and development. BLM determined that the alternative did not provide a reasonable balance of state and federal interests; it did not give reasonable consideration of the federal and state interests in domestic energy production in the two counties.
BLM Director Kathleen Clarke issued a final response to the Governor on January 24 (which will be published in the January 25, 2005, Federal Register), affirming the State Director’s decision and providing reasons for rejecting the Governor's recommendations.
What are the key protections offered for sensitive resources in the planning area?
BLM developed a variety of protections for Chihuahuan desert grasslands within the planning area, including permanent protection for 35,790 acres of potential habitat for the endangered Aplomado falcon. BLM determined that the Otero Mesa area in southern Otero County and the Nutt Grasslands in southern Sierra County represented important grasslands with values as wildlife and special status species habitat. The most intact portions of these two areas combined, encompass approximately 121,000 acres. Within that, BLM identified three separate parcels as representing potential Aplomado falcon habitat. In order to provide future opportunities for this endangered species to occupy these areas (there are currently no resident populations in either county), BLM closed the potential habitat areas to leasing.
In the remainder of the grassland areas, leasing will be allowed, but under several constraints. Newly leased lands will have a stipulation that limits surface disturbance to 5 percent of the lease and also requires that lessees form an exploratory unit prior to development of their leases. A unique feature of the unitization requirement is it will require greater planning and coordination of development activities on the part of the oil and gas industry. There will be less surface disturbance because BLM will be working with one unit operator rather than numerous lease holders and therefore avoid the disturbance that comes from the duplication of wells, pipelines, and roads.
How will the BLM implement the plan amendment?
The BLM’s Las Cruces District Office will develop an implementation plan for specific decisions within the plan amendment. The implementation plan will identify how leasing will proceed and what Best Management Practices will be expected for future surface-disturbing activities from oil and gas exploration and development. All future activities will be analyzed for compliance with RMPA decisions as well as having environmental assessments developed for those activities. The public can provide input to, and review of, the environmental assessments. When projects are proposed, the Las Cruces office logs them in on its website and lists them at the office.
When will federal oil and gas leasing begin in the planning area?
Now that the ROD has been signed, BLM can proceed with the orderly leasing of federal fluid minerals. Existing Expressions of Interest (nominations) will be considered along with new lease nominations, but detailed analyses must be performed on leasing strategies and impacts before any parcels can be offered at BLM quarterly lease sales.
How will BLM deal with the approximately 250,000 acres that were nominated for leasing in Otero County in 1998?
BLM will review existing nominations and determine what lands are available for leasing under the new decisions. BLM will then develop a list of lease parcels to be included in a future lease sale notice. The BLM will be putting lease parcels together that will meet the intent of the decisions in the approved plan such as the requirement for development of units in the grassland areas. In addition, parcels will be initially offered that are likely to be bid on, which will generate revenue for the Federal and State Governments. It is likely that not all of the lands nominated in 1998 will be offered at the same time; a more orderly approach was determined to be in the best interest of environmentally sensitive development and natural resource management.
How will unitization work in the grassland area?
This special protection measure will allow BLM to protect surface resources, as well as control the rate of reservoir development. The objective is to protect remnant Chihuahuan Desert grassland habitat and associated special status species through improved planning and regulation of future oil and gas development on a unit.
The BLM has the authority to require and approve Unit Agreements; require specific provisions of Unit Agreements; establish the rate of exploration and development; approve the tract allocation formula; and terminate units that cease production (or where production was never established).
A simple definition of unitization is the operation of multiple leases as a single lease under a single operator. A Federal Oil and Gas Unit would result in less surface disturbance, because the rate of exploration and development would be supervised by the BLM. Wells would be drilled in the most favorable locations. The operator and the BLM would establish corridors for access roads and pipelines, and there would be no need for redundant facilities. All operations would be held to the highest level of BMPs, encouraging performance-based innovations, and creativity.
There are also lease benefits in that individual leases could be extended beyond their primary term without actual production, as long as there is production on the unit. LCFO currently has one existing unit (the Bennett Ranch Unit), and has identified other areas that would require unitization.
How will ‘managed leasing’ work in the grasslands?
For the Chihuahuan desert grasslands area of Otero Mesa, the BLM will develop a lease strategy based on industry interest, natural resource protection concerns, plus ongoing exploration and development.
Managed leasing will allow the BLM to offer leases in blocks, monitor exploration and production activity over time and determine the conditions under which additional lease parcels will be offered.
The BLM will retain the flexibility to respond to industry development of state or private lands adjacent to unleased Federal lands by offering those tracts at an earlier time. This will permit concurrent development of Federal minerals and limit uneven drainage of underground oil and gas reservoirs.
What is the Reasonable Foreseeable Development (RFD) scenario, and what is its significance?
The RFD is a projection of fluid minerals actions and activities that are likely to occur in the planning area over the 20-year life of the plan. BLM used the RFD to analyze the potential impacts of each alternative in the proposed RMPA. After a lease is issued, subsequent requests for surface-disturbing activities (e.g., wells, roads, pipelines, etc.) are analyzed for environmental effects. As projected in the RFD, BLM expects that up to 141 wells could be drilled, resulting in less than 1,600 acres of total disturbance.
The two-county planning area is considered a frontier area, but exploration success could eventually indicate a larger RFD then currently is used for environmental analysis. If oil and gas development activities exceed the level analyzed in the EIS, BLM would be required to halt further activity until further NEPA analysis is conducted. A lease notice will be issued for all leases in Sierra and Otero County to make lessees aware that approval of future requests for lease-related activities could be delayed, as we conduct required NEPA review to consider new information and update the cumulative affects analysis.
How will the upcoming Tri-County Plan affect this amendment?
The upcoming Tri-County Plan will update BLM’s planning decisions for Dona Ana, Sierra, and Otero Counties. BLM anticipates carrying forward the decisions approved in this ROD, into the Tri-County planning effort. However, other issues that have been raised will be addressed in this subsequent plan. The issues relate to grazing and rangeland management; noxious weeds and exotic species; special status species and wildlife habitat management; special management areas (i.e., nominated ACECs); recreation use; Rights-of-way management; renewable energy development; and land tenure adjustments.
What are Standard Lease Terms and Conditions?
Standard lease terms require operators to conduct operations in a manner that minimizes adverse impacts on resources anywhere within the leasehold. Included in these terms is the right of the BLM to require site-specific mitigation at the time an APD is issued at a site. These mitigation measures would be attached to the APD as ‘Conditions of Approval,’ when site-specific environmental and planning analyses have demonstrated that additional and more stringent environmental protection is needed.
What are Best Management Practices?
Best management practices (BMPs) apply to all fluid minerals projects on public land within the Planning Area. BMPs are environmentally responsible land management methods that, when applied properly, minimize adverse impacts on the ecosystem, and retain the reclamation potential of the disturbed area while accommodating land-user objectives. BLM requires examinations of resource values and development of appropriate surface protection and reclamation measures prior to surface disturbing activities associated with preliminary investigations (such as seismic exploration) and developmental activities. The BLM will solicit involvement from public land users (e.g., grazing allottees) to develop site-specific protection measures and reclamation specifications.
How does the new State Pit Rule for Sierra and Otero Counties affect the BLM’s ability to issue oil and gas leases and applications for permit to drill (APDs)?
Now that the Record of Decision has been signed, BLM can begin offering leases in compliance with the Resource Management Plan Amendment. When leases are issued APDs can be submitted; applicants will be required to include provisions for the use of steel tanks (closed-loop drilling systems), per the requirements established by the New Mexico Oil Conservation Division (OCD).
