Approved Application for Permit to Drill Extensions

IM 2023-011
Instruction Memorandum
In Reply Refer To:

3100 (HQ310) P

Expires:

09/30/2026

To:

All Field Officials

From:

Assistant Director, Energy, Minerals and Realty Management

Subject:

Approved Application for Permit to Drill Extensions

Program Area:

Oil and Gas Operations.

Purpose:

This Instruction Memorandum (IM) provides guidance to the Bureau of Land Management (BLM) Offices to use the specified criteria for evaluating Approved Application Permit to Drill (AAPD) extension decisions.

This IM informs the agency’s organization, procedures, and practice, and is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or equity by a party against the United States, its departments, agencies, instrumentalities or entities, its officers or employees, or any other person.

Administrative or Mission Related:

Mission Related.

Policy/Action:

The BLM’s authority to review and process AAPD extensions is located in Onshore Oil and Gas Order No. 1, as amended in 2017 (43 CFR 3160). Section III.G states: “An APD approval is valid for 2 years from the date that it is approved, or until lease expiration, whichever occurs first. If the operator submits a written request before the expiration of the original approval, the BLM . . . may extend the APD’s validity for up to 2 additional years.”

AAPD extensions are discretionary authorizations and should only be approved when the permit extension serves the public interest. The BLM Field Offices (FOs) should weigh the following criteria for reasonable timelines, justifications for the extension, the public interest, and administration considerations prior to issuing decisions for AAPD extensions.

Timelines

The BLM should consider the following timelines:

  • The earliest the BLM should grant an extension is three months prior to the original expiration date of the AAPD[1].
  • If the operator submits a request for extension after the AAPD has expired, the BLM must deny the request on the grounds that there is no valid AAPD for which an “extension” may be granted.
  • The BLM must consider the operator’s timeframe to establish drilling operations if it is provided, so the agency can determine the appropriate length for the extension. If the operator’s request does not include this information, the BLM may contact the operator to obtain the information.
  • The BLM should not approve more than one extension for an AAPD. Public interest will generally not favor successive extensions because requests for those extensions reflect a lack of diligence in drilling operations.
  • Under extenuating circumstances, the BLM may grant a request for a variance beyond the two-year extension provided in Onshore Oil and Gas Order No. 1.  The variance request must be received prior to the AAPD expiring and contain the minimum criteria required by Onshore Oil and Gas Order No. 1, Section X. The disposition must be entered into Automated Fluid Minerals Support System (AFMSS) and filed in the official well file. Examples of such extenuating circumstances include litigation of the AAPD, a lease penetrated by the AAPD, or the Master Development Plan. Refer to BLM
    PIM 2022-001, “National Environmental Policy Act Compliance for Applications for Permit to Drill where the National Environmental Policy Act prepared to support the authorizing lease is under review related to litigation.

Reasons Outside the Operator’s Control

The BLM must consider any proffered reasons why the operator was unable to drill the well within the provided two-year time frame. Such reasons may include, but are not limited to:

  • A multi-well pad with a large number of AAPDs that are being continuously and consecutively drilled, and on which some of the wells will not have been drilled at the time the AAPD is due to expire (particularly where the operator has adjusted the drilling schedule to accommodate lease stipulations, Conditions of Approval (COAs), or applicant-committed mitigation measures for seasonal timing limitation).
  • More time is needed to evaluate the results from proximate active drilling activities and/or recently completed wells, which may result in the operator drilling fewer wells and thus decreased surface disturbance.
  • More time is needed to efficiently drill multiple wells in a spacing unit.
  • Availability of drilling rigs, particularly the availability of cleaner emission rigs, like Tier 4, where COAs have been attached to the AAPD as a mitigation requirement to address air quality designations, such as nonattainment areas.
  • A Suspension of Operations or Production has been issued for the lease.
  • Emergency, or other force majeure reasons that the AAPD has not been drilled.

Public Interest

The FO must consider the public interest when making decisions on AAPD extensions. Appropriate considerations include, but are not limited to:

  • More time is needed to install pipeline(s) that would result in conservation of resources through a decrease in venting/flaring or the trucking of oil and/or water. The BLM must work with the operator to determine schedules and plans for pipeline installations that coincide with the well’s anticipated production.
    • To determine if additional NEPA compliance and mitigation may be necessary, the BLM must assess whether increased venting/flaring and truck traffic due to lack of installed pipelines is beyond what was originally submitted in the proposed APD and analyzed in previous NEPA.
  • Changes to the resources and/or the local environment that generate the need for additional NEPA analysis and/or additional mitigating COAs (e.g., a new species is proposed for listing under the Endangered Species Act (ESA), or greenhouse gas analysis is required by a court mandate).
  • The AAPD, including lease stipulations and COAs, is no longer consistent with:
  • A new Resource Management Plan and Record of Decision; or
  • A new statute, regulation, or policy.
  • Prior to approving an AAPD extension, the BLM must verify the bond disposition is “Accepted.”
  • The BLM should not grant a request for an AAPD extension if:
  • The operator is on the List of Entities in Noncompliance with Reclamation Requirements of Section 17(g) of the Mineral Leasing Act (17g list) or the BLM is in the process of placing the operator on the 17(g) list. Refer to Attachment 3 of
    IM 2021-039, Orphaned Well Identification, Prioritization, and Plugging and Reclamation, or updated guidance, 43 CFR § 3102.5-1(f), and 30 U.S.C. § 226(g)).

Administrative Considerations and Process

The BLM FOs must consider the following and adhere to the administrative process for APD extensions:

  • If the AAPD extension request is for a unit well, the BLM should consider whether the operator has met its unit obligations. An AAPD extension of a unit well will not automatically extend or relieve the unit operator from the unit obligations.
  • If the original APD was permitted utilizing the following statutory Categorical Exclusions (CXs) from section 390 of the Energy Policy Act of 2005 (refer to Appendix 2 of H-1790-1, National Environmental Policy Act), the BLM must undertake new NEPA compliance if the AAPD extension request is five years after:
  • The last well on the location was drilled (CX 2); or
  • The Record of Decision or Decision Record for the approved land use plan or NEPA document that analyzed drilling as a reasonably foreseeable activity was published (CX 3).
  • The BLM should contact surface management agencies, such as the U.S. Forest Service or Bureau of Indian Affairs, to obtain their input into the extension decision.
  • The BLM must ensure that APD extensions are submitted as sundry notices into AFMSS as a Notice of Intent “APD Extension” category. The original expiration date, approval date, and expiration date of extension should be entered in the well screen in AFMSS:

 

Image of the AFMSS well screen showing the Well Status, Well Status Effective Date, APD Expiration Date, APD Extension Approved Date, and APD Extension Expiration Date. The APD Expiration Date, APD Extension Approved Date, and APD Extension Expiration Date labels are highlighted to show users where to enter the referenced dates.

  • An extension approval should include this COA:
  • “The AAPD expires if only conductor or surface casing has been set, and the well is not being diligently drilled and completed at the expiration date of the extension.”

Location Statuses that Require an AAPD Extension

The operator will likely need to submit an APD extension request if they intend to drill the well, if the location is only in the AFMSS “application type” LOC - “Notification of Pad Construction” (AFMSS User Guide 2007, Application Types), nearly two years have elapsed since the APD was approved, and the well has not been drilled. Constructing the well pad does not constitute drilling operations, and therefore does not prevent an AAPD from expiring. This interpretation of drilling is consistent with the guidance in BLM Handbook H-3107-1
(
Rel. 3-291), Continuation, Extension, or Renewal of Leases, regarding lease extensions, which states: “Preliminary activities such as grading of access roads and the drill site or moving equipment onto the lease commenced prior to the end of the primary term shall not by itself qualify as actual diligent drilling operations.”

 

[1] Example: If the AAPD expires on June 1, the BLM should not grant an extension of the AAPD before March 1.

Budget Impact:

Minimal. There may be some additional workload to track AAPD extensions

Background:

Onshore Oil and Gas Orders implement and supplement the oil and gas regulations found at 43 CFR 3160 for conducting oil and gas operations on federal and Indian lands. The subpart, entitled Onshore Oil and Gas Operations, states that, “The objective of these regulations is to promote the orderly and efficient exploration, development and production of oil and gas.” This IM provides guidance for implementing the BLM’s discretionary authority in Onshore Order No. 1, Section III.G.

This IM is issued under the authority of the Mineral Leasing Act, as amended, and supplemented (30 U.S.C. § 181 et seq.), the Mineral Leasing Act for Acquired Lands, as amended (30 U.S.C. 351-359), the Federal Land Policy and Management Act of 1976, Pub. L. No. 94-579, 90 Stat. 2743 (codified as amended at 43 U.S.C. § 1701-1789) (FLPMA), the National Environmental Policy Act of 1969, as amended (40 U.S.C. § 4321 et seq.).

Manual/Handbook Sections Affected:

None.

Contact:

If you have questions or concerns regarding this IM, please contact Nicholas Douglas, at 970-256-4944. For program questions, your staff may contact Lonny Bagley, Acting Chief, Division of Fluid Minerals, (HQ-310) at lbagley@blm.gov or 307-261-7777; or Janna Simonsen, Senior Natural Resource Specialist (HQ-310), at 202-821-8081 or jsimonsen@blm.gov.

Coordination:

This policy was coordinated with Department of the Interior Office of the Solicitor, and the BLM Headquarters Energy, Minerals, and Realty Management Directorate (HQ-300), Division of Fluid Minerals (HQ-310), and State Offices.

Signed By

Nicholas Douglas
Assistant Director
Energy, Minerals and Realty Management

Authenticated By

Ambyr Fowler
Division of Regulatory Affairs and Directives (HQ-630)

Fiscal Year

2023