Directional Drilling into Federal Mineral Estate from Well Pads on Non‑Federal Locations

PIM 2018-014
Permanent Instruction Memorandum

UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
WASHINGTON, D.C. 20240
https://www.blm.gov

June 12, 2018

In Reply Refer To:

3160 (310) P

EMS TRANSMISSION 06/12/2018

Permanent Instruction Memorandum No. 2018-014

To:                   All Field Officials

From:              Deputy Director, Policy and Programs

Subject:           Directional Drilling into Federal Mineral Estate from Well Pads on Non‑Federal Locations              

Program Areas: Oil and Gas Exploration and Operations.

Purpose: This Instruction Memorandum (IM) establishes policies and procedures for processing Federal Applications for Permit to Drill (APD) proposing to drill into and produce leased Federal minerals from well pads on entirely non-Federal locations.

Policy/Action: These policies and procedures apply to the processing of APDs for wellbores that produce Federal minerals from well pads that are located on entirely non-Federal land.[1] The BLM commonly refers to such wells as “Fee/Fee/Fed,”[2] though the non-Federal landowner may also be a non-Federal governmental entity.

The BLM’s regulatory jurisdiction is limited to Federal lands (including minerals).  Because the BLM’s regulatory jurisdiction is so limited, BLM activities that affect non-Federal lands must be carefully examined to ensure that BLM does not exceed its authority.  For purposes of Federal and Indian oil and gas management, BLM’s jurisdiction extends to surface facilities on entirely non-Federal lands solely to the extent of assuring production accountability for royalties from Federal and Indian oil and gas (including prevention of theft, loss, waste, and assuring proper measurement).

This IM begins with guidance for complying with the National Environmental Policy Act (NEPA), the Endangered Species Act (ESA), and the National Historic Preservation Act (NHPA) when processing APDs in three specific Fee/Fee/Fed situations.  Following the discussion of these three situations, this IM provides additional general guidance for processing Fee/Fee/Fed APDs.

Application of NEPA, ESA and NHPA to Specific Fee/Fee/Fed Situations

This section provides guidance on complying with NEPA, ESA, and NHPA in three specific Fee/Fee/Fed situations: (1) where a new Fee/Fee/Fed well will be drilled from a pre-existing surface disturbance such that there will be no new surface disturbance; (2) where a new Fee/Fee/Fed well will be drilled from a pre-existing surface disturbance, but there will be additional surface disturbance, such as an expanded well pad; and, (3) where a new Fee/Fee/Fed well will be drilled from an entirely new well pad. In all of these situations, the Federal action or undertaking to be analyzed is the approval of the APD, and the BLM should focus its environmental analysis accordingly. References to “environmental analysis” are intended to address the scope of BLM’s analyses under NEPA, ESA, and NHPA.  Please see IB 2018-061 (June 6, 2018) for a discussion of available means of streamlining NEPA review, some of which are noted in the following guidance.

Situation 1: Pre-existing Well Pad with No New Surface Disturbance

The following procedure will apply when the operator submits an APD for drilling a new Federal wellbore or horizontal leg into Federal minerals from an existing surface disturbance constructed on non-Federal lands and no new surface disturbance is anticipated. The BLM’s approval of the APD is the Federal action or undertaking that requires NEPA, ESA, and NHPA compliance, not the pre-existing surface disturbance(s) associated with the well (well pad, access road, pipeline, power line, etc.). The pre-existing surface disturbance(s) and facilities are not the result of the Federal APD.

The BLM should consider whether a Determination of NEPA Adequacy (DNA) would be appropriate based on the availability of any pre-existing environmental analyses. See BLM NEPA Handbook, H-1790, Section 5.1 and Appendix 8, for further explanation regarding DNAs.  The BLM should also consider whether the proposed action is categorically excluded under an applicable statutory or regulatory categorical exclusion (CX). See BLM NEPA Handbook, H-1790-1, Chapter 4 and Appendix 2, for an explanation of CXs. Notably, CX No. 2 from Section 390 of the Energy Policy Act of 2005 is presumed to apply to drilling an oil or gas well, pursuant to the Mineral Leasing Act (MLA), at a location or well pad site at which drilling has occurred previously within five years prior to the date of spudding the well. If a DNA is not appropriate and the proposed action is not categorically excluded under an applicable CX, then an Environmental Assessment (EA) or Environmental Impact Statement (EIS) will be required and the following guidance applies. The following guidance also applies to the BLM’s obligations under ESA and NHPA.

The BLM should focus its environmental analysis on the potential impacts from the approval of the APD. Where no new surface disturbance is anticipated, the environmental analysis may be limited to a discussion of environmental effects of the downhole operations to be approved, such as: the adequacy of the proposed casing and cementing program and potential effects on aquifers and other subsurface resources; the potential for drilling, completion, and/or production fluids to migrate outside of the production zone; and, the effects related to drilling and operating the Federal wellbore (e.g., dust, noise, traffic). 

The environmental analysis does not require consideration of a range of siting alternatives for pre-existing surface facilities because the actual location (and, therefore, the more specific, site-determined effects) is not based on the Federal action or undertaking. The location-siting rationale must be explained in the environmental documentation.

The analysis of the cumulative effects on the resources affected by the action or undertaking (approving the APD) should include acknowledgement of any ongoing or future environmental effects of other actions if the effects of those actions are relevant to assessing how the Federal action or undertaking will affect specific resources. For example, where the approval of the APD is expected to result in additional dust, noise, traffic, etc., associated with drilling the Federal wellbore, the dust, noise, traffic, etc., associated with the non-Federal drilling from the well pad should be acknowledged in the cumulative effects analysis.

      Situation 2: Pre-existing Well Pad with Additional New Surface Disturbance

The following procedure will apply when the operator submits an APD for drilling a new Federal wellbore or horizontal leg into Federal minerals from an existing surface disturbance constructed on non-Federal lands, but additional surface disturbance (e.g., well pad expansion) is anticipated as a result of development of the Federal minerals. The BLM’s approval of the APD is the Federal action or undertaking that requires NEPA, NHPA, and ESA compliance, not the pre-existing surface disturbance(s) associated with the well (existing well pad, access road, pipeline, power line, etc.). The pre-existing surface disturbance(s) and facilities are not the result of the Federal APD.

As with Situation 1, the BLM should consider whether a DNA would be appropriate based on the availability of any pre-existing environmental analyses.  The BLM should also consider whether approval of the APD may be categorically excluded under Section 390 CX No. 2, or some other applicable CX. If the action does not qualify for a CX or a DNA, then an EA or EIS will ordinarily be required and the following guidance applies. The following guidance also applies to the BLM’s obligations under ESA and NHPA.

In addition to considering the effects of the downhole operations to be approved (as explained in Situation 1), the environmental analysis should also consider the potential effects of the additional disturbance that would result from the approval of the APD. For example, where an existing pit is to be used, the environmental analysis should consider the potential environmental effects of operating the pit in support of the Federal well, but should not consider the pre-existing pit structure as an environmental effect of approving the APD. However, where the APD proposes construction of a new pit (or expansion of an existing pit) to support the Federal well, the analysis should consider the potential environmental effects of both constructing (or expanding) and operating the pit.

The analysis of the cumulative effects on the resources affected by the action or undertaking (approving the APD) should include acknowledgement of any ongoing or future environmental effects of other actions if the effects of those actions are relevant to assessing how the Federal action or undertaking will affect specific resources. For example, where the approval of the APD is expected to result in additional dust, noise, traffic, etc., associated with drilling the Federal wellbore, the dust, noise, traffic, etc., associated with the non-Federal drilling from the well pad should be acknowledged in the cumulative effects analysis.

Situation 3: New Proposed Well Pad for Federal Well(s), No Existing Surface

Disturbance

The following procedure will apply when the operator submits an APD for drilling a Federal wellbore or horizontal leg into Federal minerals from a newly proposed well pad to be constructed on non-Federal lands that have no existing surface disturbance.

Drilling on a newly proposed well pad is not covered by Section 390 CX No. 2. However, BLM should consider whether approval of the APD may be categorically excluded under Section 390 CX No. 3. Section 390 CX No. 3 is presumed to apply to drilling an oil or gas well, pursuant to the MLA, within a developed field for which an approved land use plan or any environmental document prepared pursuant to NEPA analyzed such drilling as a reasonably foreseeable activity, so long as such plan or document was approved within five years prior to the date of spudding the well. See BLM NEPA Handbook, H-1790-1, Chapter 4 and Appendix 2. If the action does not qualify for a CX or a DNA, then an EA or EIS will ordinarily be required and the following guidance applies. The following guidance also applies to the BLM’s obligations under ESA and NHPA.

If it appears that the well pad would be constructed as proposed even if the Federal APD were not approved,[3] then the environmental analysis should be similar to that undertaken in Situation 1. That is, the environmental analysis may be limited to a discussion of the environmental effects of the downhole operations to be approved, such as: the adequacy of the proposed casing and cementing program and potential effects on aquifers and other subsurface resources; the potential for drilling, completion and/or production fluids to migrate outside of the production zone; and, the effects related to drilling and operating the Federal wellbore (e.g., dust, noise, traffic). The environmental analysis is not required to consider a range of alternatives in siting surface facilities because the actual location (and, therefore, more specific, site-determined effects) is not based on the Federal action or undertaking. The location-siting rationale must be explained in the environmental document. 

The analysis of the cumulative effects on the resources affected by the Federal action or undertaking (approving the APD) should include acknowledgement of any ongoing or future environmental effects of other actions if the effects of those actions are relevant to assessing how the Federal action or undertaking will affect specific resources. For example, where the approval of the APD is expected to result in dust, noise, traffic, etc., associated with drilling the Federal wellbore, the dust, noise, traffic, etc., associated with the non-Federal drilling from the well pad should be acknowledged in the cumulative effects analysis.

If, however, it appears that the well pad would only be constructed if the Federal APD is approved, [4] the environmental analysis must consider all potential environmental effects associated with construction and operation of the well, including the well pad, access roads, pipelines, or other infrastructure, as appropriate. In general, the NEPA analysis should consider a range of reasonable alternatives in the siting of surface facilities, to the extent such alternatives would be substantially different in effect from the proposed action.

General Guidance for APD Processing for Fee/Fee/Fed lands

  1. APD Submission

The BLM field office will require, at a minimum, the submission of an APD form using the Automated Fluid Minerals Support System, the processing fee, drilling plan, well plat, operator certification, and evidence of a 3104 performance bond (bond) coverage. No other APD submission provisions of Onshore Order No. 1 or corresponding portions of 43 CFR 3162.3-1 will apply. Information about the APD will be posted in accordance with 43 CFR 3162.3-1(g).[5]

Neither the MLA nor the Mineral Leasing Act for Acquired Lands of 1947 (MLAAL) requires a Surface Use Plan of Operations (SUPO) or an onsite inspection for Fee/Fee/Fed wells.  The BLM may request that the operator submit additional information regarding surface operations when this information is necessary to analyze the proposed operations under NEPA, the ESA, and the NHPA. To assist the BLM in meeting its statutory review obligations under NEPA, the ESA, and the NHPA, the BLM may encourage operators to submit additional information or allow agency access to the non-Federal land. Such additional information could include the location and dimensions of the well pad, access road, associated facilities, and existing and anticipated disturbances. If the operator submits a SUPO, the BLM will treat the SUPO as purely informational and will not approve, disapprove, or enforce the SUPO.

The BLM has no jurisdiction to require an APD before an operator may begin pad and road construction or drilling on the non-Federal land, and the field office may not cite the operator with an Incident of Noncompliance or issue an immediate assessment for doing so.[6]  However, APD approval is necessary before an operator may drill into the Federal mineral estate itself. The field office must issue an immediate assessment to an operator if it drills into the Federal mineral estate prior to receiving BLM approval for an APD (43 CFR 3163.1(b)(2)).

  1. Bonding

The BLM does not have authority to require a bond to protect non-Federal surface owner interests. Federal oil and gas bonds for Fee/Fee/Fed wells should be used to address downhole concerns only. The BLM may use the bond to plug the well in order to protect Federal minerals. If an operator orphans a Fee/Fee/Fed well, the BLM may use the bond to plug the well and address unresolved liabilities of the Federal lessee/operator under the terms of the APD, the Federal lease, unit or communitization agreement (CA), or applicable BLM regulations.[7]  If not obtained during the permitting process, the BLM should obtain any necessary permission from the surface owner to enter the lands for the purposes of plugging and/or addressing unresolved liabilities.

  1. Surface Access
  1. Access during APD Processing

The BLM does not have the authority to enter the non-Federal lands without the landowner’s consent. If the BLM deems surface access necessary to complete assessments and analyses required under NEPA, ESA, or NHPA, the BLM should ask the operator to provide access pursuant to its lease or other agreement with the landowner. Where operators hire consultants to complete pre-approval surveys, the operator should facilitate access to the non-Federal lands for the consultants. The inability to access the surface for resource surveys is not, in and of itself, sufficient reason to deny an APD. The BLM may use alternate methods of gathering information, including, but not limited to, literature reviews, photography, aerial photography, online mapping technologies, and Unmanned Aerial Vehicles (UAV) footage.[8]  The BLM may deny the APD if the inability to access the surface prevents the BLM from meeting its obligations under NEPA, ESA, or NHPA.

  1. Access after APD is approved

As a component of a complete Fee/Fee/Fed APD, the operator must provide a true and complete copy of a document or documents in which the surface owners (or their authorized representatives) authorize the Department of the Interior, the BLM, and its contractors, to enter all the non-Federal lands necessary to access the Fee/Fee/Fed wellsite, so that the BLM, or its contractors, may perform all necessary inspections (see “Inspection and Enforcement” section below), carry out plugging/abandonment procedures for Federal wellbores, and address any unresolved liabilities, as described in the “Bonding” section above. If the BLM’s access under the landowner agreement is denied or impeded, and access is necessary to ensure compliance or avoid adverse impacts to production accountability or royalty income, the BLM may order or cause the federally approved operations to be halted and the Federal well or wells shut-in (see 43 CFR 3163.1(a)(3)).

D.  NEPA

The BLM must comply with NEPA before issuing a decision on an APD. The Federal action to be analyzed under NEPA is the approval of the Federal APD. As a result, the BLM must focus its NEPA analysis on the potential impacts from the approval of the APD. [9]

Streamlining NEPA Review: Please see IB 2018-061 (June 6, 2018) for a discussion of available means of streamlining NEPA review, including DNAs, statutory and regulatory CXs, and the use of tiering.

Scope of Review: Under NEPA, the BLM must analyze the proposed and reasonably foreseeable surface disturbances and facilities needed for the production of Federal minerals pursuant to the APD. Pre-existing surface disturbances and facilities that have utility independent of the Federal lease development are not part of the proposed action. That is, where pre-existing surface disturbances and facilities might reasonably have been constructed without regard to approval of the Federal APD, they are not impacts attributable to the Federal action.  The BLM should analyze pre-existing surface disturbances in accordance with the guidance in Situation 1 and Situation 2, detailed above. Any past environmental impacts from development at the site are part of the environmental baseline. To the extent that ongoing or future non-Federal activities will have impacts that add to the impacts of the proposed Federal action, such impacts should be analyzed in the cumulative effects analysis.

Mitigation: Neither the Federal Land Policy and Management Act (FLPMA) nor the MLA provide the BLM with authority to require mitigation of surface disturbances on non-Federal lands, and NEPA’s procedural requirements do not expand or extend the BLM’s authority beyond that provided in those statutes. The BLM or the operator may propose measures that would mitigate significant impacts, and thus allow the BLM to issue an APD based on an EA and Finding of No Significant Impact (FONSI).[10]  However, these will be exceptional circumstances, and a FONSI based on mitigation will be appropriate only in the event that BLM’s approval of the Federal APD would otherwise result in significant impacts requiring an EIS.

Subsequent NEPA: If, after the NEPA process for the APD is completed and the APD is approved, the BLM becomes aware of new facilities, activities, or other surface disturbances for which no BLM approval was required, the BLM has no obligation to evaluate these facilities, activities, or other surface disturbances under NEPA. The installation of new equipment or facilities or other surface disturbances that will benefit a Fee/Fee/Fed well, but does not require BLM approval,[11] is not a BLM action and does not constitute a new “major Federal action” that triggers the need for any additional environmental analysis. For example, if an operator installs power lines that were not contemplated by the BLM during APD processing, NEPA does not require the BLM to conduct NEPA analysis on (or otherwise oversee) these power lines as they are non-Federal actions, occurring on non-Federal lands, that do not require BLM approval.

E.  ESA

Compliance with Section 7 of the ESA will be required if the BLM determines that the Federal action “may affect” listed species or critical habitat (for example, the dust from drilling the Federal well might interfere with nesting of a listed species). The Federal action to be analyzed under the ESA is the BLM’s approval of the APD. In its ESA review, the BLM should analyze the pre-existing surface disturbances in accordance with the guidance in Situation 1 and Situation 2, detailed below. Further guidance on ESA Section 7 compliance is provided in BLM Manual Section-6840 (BLM MS-6840, Special Status Species Management). In order to determine that approval of the APD “may affect” a listed species, the BLM must determine that there is some likelihood BLM’s proposed action will have an effect on listed species or designated critical habitat. For more detail on the “may affect” test, please see Solicitor’s Opinion M-37017 (Oct. 3, 2008).

F.  NHPA

Under NPHA Section 106 (54 U.S.C. 306108), the BLM is required to take into account the effect of a “Federal undertaking” on any “historic property.”[12]  See BLM MS-8140, Protecting Cultural Resources. A “Federal undertaking” is defined as a project, activity, or program either funded, in whole or in part, permitted, licensed, or approved by a Federal Agency (36 CFR 800.16(y)). The approval of an APD is a Federal undertaking under the NHPA, even when the resulting impacts are on non-Federal land. In determining the level of effort to expend in identifying historic properties, the BLM should take into account, among other things, “the magnitude and nature of the Federal involvement” (36 CFR 800.4(b)(1)). Situations covered by this IM generally represent circumstances in which the degree of Federal involvement may be limited. BLM’s level of effort in identifying historic properties pursuant to its responsibilities under the Section 106 regulations should reflect the circumstances surrounding a proposed APD.

The Section 106 regulations provide direction on identifying appropriate consulting parties, including Indian tribes, and the required steps for consulting with such parties, as well as for public involvement. See 36 CFR 800.2(c)(2)-(5), (d); 800.3(c), (e), (f). In particular, section 800.2(c)(ii) addresses the consultation of Indian tribes regarding historic properties of significance to the tribes. This provision requires the agency official to provide the tribe(s) with “a reasonable opportunity to identify its concerns about historic properties, advise on the identification and evaluation of historic properties, including those of traditional religious and cultural importance, articulate its views on the undertaking’s effects on such properties, and participate in the resolution of adverse effects” (36 CFR 800.2(c)(ii)(2)(A)). The regulation does not require that the tribes have access to a site when the agency official cannot reasonably provide such access.

The circumstances covered by this IM may present circumstances where BLM is unable to obtain access to non-Federal property that may be part of the area of potential effects (APE) for the undertaking. The BLM should make every effort to gain access to such property. An inability to access property does not mean that BLM cannot satisfy its obligations to make a reasonable and good faith effort to identify historic properties, nor does it preclude the BLM from providing a reasonable opportunity to Indian tribes to identify concerns about historic properties of significance to the tribe. If the BLM cannot obtain access to the site in order to conduct its NHPA review, the BLM should employ alternative methods of gathering information as contemplated in 36 CFR 800.4(b)(2). This might include, but is not limited to, the use of photography, aerial photography, online mapping technologies, UAV footage, ethnographic studies, or literature reviews. The BLM must consult with the State Historic Preservation Officer (SHPO) and complete the process whether or not the BLM, interested Indian tribes, or other consulting parties, obtain access to the private property.

The BLM may impose a condition of approval (COA) on the APD that requires the operator to inform the BLM if the operator discovers any historic properties during the course of the drilling and production operations approved under the APD.

Finally, actions taken by the operator that intentionally, significantly, and adversely affect a historic property with the intent to avoid the requirements of NHPA Section 106, such as intentional destruction of a historic property, are in violation of 54 U.S.C. 306113 and generally require the field office to deny the APD.[13]

G.  Resource Management Plan Conformance

Under FLPMA, Resource Management Plans (RMP) allocate public lands (including minerals) for particular uses, and establish the conditions under which those uses may occur. RMPs do not govern the use of non-Federal lands. Management actions in an RMP meant for the protection of Federal surface resources should not be applied to a Fee/Fee/Fed APD unless, and only to the extent that, activities authorized under the APD will impact Federal lands.[14]

H.  Inspection and Enforcement

This section describes the BLM’s inspection and enforcement authority with respect to Fee/Fee/Fed wells. As described above, a complete APD package must include documentation of an agreement with the landowner granting the BLM access for inspection and plugging and abandonment purposes. The BLM’s inspection and enforcement authority is generally limited to downhole operations, wellbore integrity, and production accountability directly related to the production of Federal minerals.[15]   Such downhole operations and production accountability include:

  1. Drilling, casing and cementing operations;
  2. Site security, measurement of oil and gas, metering and verification, and reporting of production and operations;
  3. Prevention of waste or loss of Federal oil and gas;
  4. Plugging and abandonment; and
  5. Loss of product due to undesirable events.

Regarding the disposition of Federal production, the BLM retains full authority and responsibility for inspections, including those pertaining to measurement and handling of production from lands committed to a federally approved unit or a CA. Inspection and enforcement authority does not extend to the drilling of non-Federal wells or the handling and storage of non-Federal production.

Generally, the BLM’s inspection and enforcement authority does not extend to surface operations without production accountability implications. However, the BLM’s inspection and enforcement authority does include compliance with any applicant/operator committed mitigation measures (ACMMs) established by the operator and BLM in the APD and relied on by the BLM in completing its reviews under NEPA, ESA, and/or NHPA. If an operator fails to carry out the ACMMs under the APD, the BLM may, in its discretion, take enforcement action against the operator for failure to comply with the terms of the APD (see 43 CFR 3163.1 and 3163.2). Note that the BLM is not authorized to enter the non-Federal land and perform the mitigation measures in response to the operator’s noncompliance. If the surface owner objects to the mitigation measures, or the operator encounters some other obstacle to undertaking the mitigation measures, then the BLM should take these issues into consideration in determining whether (and how) to pursue enforcement.

The BLM may require and inspect for proper plugging and abandonment of a well in order to protect the Federal mineral estate. Note that the BLM may enter private lands only with the landowner’s consent, which should be provided with the APD.

Actual reclamation of the surface is a matter to be settled by the surface owner. Since the final reclamation of a well site is the responsibility of the state, operator and landowner, the operator is not required to submit a Final Abandonment Notice to the BLM. The Field Office may release bond liability for an individual well once the BLM receives a Subsequent Report of Abandonment.  Upon approval of the subsequent report, BLM will change the well status to plugged and abandoned.

Operators must report undesirable events, such as spills, blowouts, fires, and major equipment failures, in compliance with NTL-3A. In the event of a spill, the operator is responsible for cleaning up the spill, and the landowner and state and local agencies are responsible for enforcing the cleanup.

Budget Impact: This IM may result in minor cost savings when processing APDs for drilling into Federal minerals from entirely non-Federal locations.

Background: The development of directional drilling has allowed oil and gas operators to reach multiple formations and multiple leases from the same well pad, thereby reducing the amount of surface disturbance necessary to develop an oil and gas field relative to the use of traditional vertical wells. At the same time, these drilling techniques have given rise to many questions about the BLM’s obligations and authority with respect to wells and facilities producing Federal minerals from non-Federal locations. The use of directional drilling technology is increasing and considered a Best Management Practice (BMP). The BLM strongly supports this environmental BMP as a means of limiting surface disturbance and overall impacts from oil and gas development.

Unlike the surface owner in the case of split-estate property interests (private surface/Federal minerals), the non-Federal surface owner over non-Federal minerals is not under any obligation to allow for the development of Federal minerals from their lands. Also unlike the case of split-estate property interests, the BLM does not have an obligation to ensure that surface disturbances of the non-Federal lands are reasonable and necessary. FLPMA does not authorize the BLM to manage non-Federal lands. Therefore, the BLM is not obligated to prevent “unnecessary or undue degradation” of these non-Federal lands. The obligation for protecting the surface and the interests of the surface owner in these cases remains with the surface owner, the lessee/operator, and the state and local governments. However, when an operator proposes to drill a Fee/Fee/Fed well, the BLM has a responsibility to comply with NEPA, ESA, and NHPA before approving an APD.[16]  This IM provides guidance to the BLM for meeting its responsibilities under these statutes.

This IM also addresses the BLM’s inspection and enforcement authority with respect to the operation of Fee/Fee/Fed wells. The BLM’s inspection and enforcement authority is generally limited to downhole and production accountability operations. The BLM must ensure wellbore integrity and protection of the resources in the Federal mineral estate.

These policy clarifications do not reflect a change in overall policy but are designed to identify and eliminate unnecessary permitting and review requirements and inconsistencies where the BLM has limited authority. These clarifications are intended to reduce cumulative environmental impacts within oil or gas fields by encouraging the use of multi-well pads and directional drilling.

Pages of Manual/Handbook Sections Affected: None. The BLM will continue to follow existing policy on compliance with NEPA, NHPA, and ESA; including the 8100 manual series; BLM H-1780-1, Improving and Sustaining BLM-Tribal Relations, General Procedural Guidance for Native American Consultation; and BLM H-1790-1, National Environmental Policy Act.

Instruction Memorandums Affected: This IM supersedes IM 2009-078.

Coordination: The Division of Fluid Minerals (WO-310) coordinated preparation of this IM with the U.S. Department of the Interior, Office of the Solicitor; and Directorates of Resources and Planning (WO-200) and Energy, Minerals and Realty Management (WO-300).

Contact: If you have any questions concerning the content of this IM, please contact Steve Wells, Chief, Division of Fluid Minerals, at 202-912-7343 or; Janna Simonsen, Senior Natural Resource Specialist, at 202-912-7154 or jsimonsen@blm.gov.

 

Signed by:                                                                   Authenticated by:

Brian C. Steed                                                             Robert M. Williams

Deputy Director, Policy and Programs                       Division of IT Policy and Planning,WO870


[1] For the purposes of this IM: the term “non-Federal” refers to lands where both the surface and the mineral estate are not owned or managed by the United States; the term “Federal” includes Indian trust surface or minerals (Tribal or allotted), and the term “non-Federal” excludes Indian trust surface or minerals; and, “Fee” refers to ownership other than Federal.

[2] The term “Fee/Fee/Fed” refers to all situations where a well is located on non-Federal land overlying non-Federal minerals, but some portion of the wellbore enters and produces from the Federal mineral estate. The wellbore may enter and produce from any combination of private, state and Federal minerals. The key is that the wellbore enters and produces Federal minerals from a lease not underlying the well’s surface location.

[3] This may be the case where the amount of Federal minerals to be developed by the well is small relative to the amount of non-Federal minerals to be developed.  Another potential example is where the well pad will be used for multiple wells, including some that will develop only non-Federal minerals, but the first well drilled from the pad happens to access Federal minerals.

[4] An example of this would be a situation in which a “no surface occupancy” (NSO) stipulation in the Federal lease necessitates drilling on adjacent non-Federal land in order to access Federal minerals.  In general, where a sizeable portion of the minerals to be developed from the well are Federal, it is likely that the well would be constructed only if the Federal APD were approved.

[5] Note that 43 CFR 3162.3-1(g) does not require posting of APD information for wells drilling into Indian lands.

[6] Actions taken by the operator that intentionally, significantly, and adversely affect a historic property with the intent to avoid the requirements of NHPA Section 106 are in violation of 54 U.S.C. 306113 and generally require the field office to deny the APD. See 36 CFR 800.9(c).

[7] An example of these unresolved liabilities are Federal fluids abandoned in oil tanks.

[8] BLM must obtain access from the landowner to use UAVs.

[9] See generally the BLM NEPA Handbook, H-1790-1, Chapter 6.

[10] See the BLM NEPA Handbook, H-1790-1, Section 7.3, for a discussion of “significance.”

[11] The requirements in Section VIII.A of Onshore Order No. 1 (72 Fed. Reg. 10308 (March 7, 2007)) are not intended to require Sundry Notices for all new surface disturbances on entirely non-Federal lands.

[12] The existing well pad itself may be a historic property.

[13] See 36 CFR 800.9(c).

[14] The management of Special Status Species (SSS) is established within a Field Office’s RMP(s) and the BLM MS-6840. Therefore, the management actions for SSS should not be taken into account in the Fee/Fee/Fed situations.

[15] See 43 CFR 3161.1, 3170.3, 3178.2, 3179.2, and 3186.1 (model unit agreement, ¶ 1); see also BLM MS-3160-9, Communitization.

[16] Although this IM focuses on these three Federal Laws, this should not be taken to indicate that compliance with other applicable laws and regulations is not required and expected.