Oil and Gas
Updated Onshore Orders
The BLM has finalized three regulations designed to improve the accuracy of measuring and accounting for oil and gas produced from wells on Federal and Indian leases in an effort to ensure that proper royalties are paid. The rules – which replace formerly known as Onshore Oil and Gas Orders 3, 4, and 5 (written in 1989) -- respond directly to recommendations from the Government Accountability Office and of the Office of the Inspector General. The Secretary of the Interior’s Subcommittee on Royalty Management also examined BLM’s old regulations and found them deficient.
43 CFR 3173, which replaces Order 3, establishes standards to ensure that oil and gas are properly and securely handled to prevent theft and loss, and to enable accurate measurement and production accountability. Related: Fact Sheet
43 CFR 3174, which replaces Order 4, establishes minimum standards for the accurate measurement of all oil. Related: Fact Sheet
43 CFR 3175, which replaces Order 5, establishes minimum standards for the accurate measurement of gas. Related: Fact Sheet
Hydraulic Fracturing Rule
Modern hydraulic fracturing and directional drilling techniques have opened vast sections of the United States to oil and gas development. They have also raised public concerns about the safety and potential environmental impacts of those activities. To address those concerns and to take into account modern industry practices, the BLM published a final rule in March 2015 to ensure that when those operations are undertaken on lands where a BLM permit is required, steps are taken to ensure wellbore integrity, proper waste water management, and greater transparency about the process, including information about the composition of fracturing fluids. The final rule marked the culmination of five years of tribal, public and stakeholder engagement. Implementation of the final rule is on hold pending the outcome of ongoing litigation in the 10th Circuit Court of Appeal in Denver.
To view the HF rule click here.
Trespass Case Resolution
Wells drilled without approval have been an increasing problem across the BLM with many of these incidents originating on privately owned surface. Drilling Without Approval on leased land is a violation under 43 CFR 3162.3-1. The BLM has authority under 43 CFR 3163.1 to assess fines and shut down operations until a permit has been received, reviewed, and a decision issued. However, drilling on unleased lands without approval does not fall under the 43 CFR 3100 regulations and is considered “mineral trespass” with no clear statutory or policy guidance other than criminal prosecution. BLM turns over these cases to the Department of Justice for resolution.
Settlement of Trespass Claims Against Statoil Oil & Gas LP and Statoil Oil & Gas Services, Inc. - Statoil agrees to pay nearly $2,000,000 to resolve claims related to mineral trespass.
United States Settles Mineral Trespass Claims Against SWN n (Arkansas), LLC f/k/a SEECO, Inc. - SEECO forced to pay $950,000 for producing and selling federally owned natural gas from wells in unleased federally lands.
Oil and Gas Leasing Reform, June 2010--Background Information
Oil and Gas Leasing Reform--Overview of land use planning, master leasing plans, and lease parcel review (12 pages, PDF)
Comparison of Process Changes--2 page side-by-side comparison of current and proposed leasing reform policy
A significant portion of funding in the BLM Oil and Gas program is used to fulfill the Federal government's trust responsibilities to American Indian Tribes and individual Indian mineral owners. The BLM supervises operational activities on 3,700 Indian oil and gas leases, and provides advice on leasing and operational matters to the Bureau of Indian Affairs, Indian Tribes, and Indian mineral owners.
Federal Permit Improvement Pilot Project
Under the direction of the Energy Policy Act of 2005, the BLM has also established seven Federal Permit Processing Pilot Offices, where improvements in coordinating permit processing among Federal agencies and inspection & enforcement can be tested.
Pilot Offices have been established in these BLM Field Offices, which together receive more than 70 percent of the APDs each year:
The Pilot Project is a vehicle for fostering innovation, creating efficient management processes, and testing new and emerging technologies.
A report summarizing interim results from the first two years of the project is available here.