Onshore Order No. 1 -- preamble

Onshore Oil and Gas Order
Preamble to the Order

Wednesday
March 7, 2007

No. 1
Onshore Oil and Gas Operations;
Federal and Indian Oil and Gas Leases;
Approval of Operations

Issued Under
43 CFR 3160
U. S. Department of the Interior
Bureau of Land Management
U. S. Department of Agriculture
Forest Service

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DEPARTMENT OF AGRICULTURE
Forest Service
36 CFR Part 228
RIN 0596–AC20

DEPARTMENT OF THE INTERIOR
Bureau of Land Management
43 CFR Part 3160
[W0–610–411H12–24 1A]
RIN 1004–AD59

Onshore Oil and Gas Operations;
Federal and Indian Oil and Gas Leases;
Onshore Oil and Gas Order Number 1,
Approval of Operations
U.S. Forest Service,
Agriculture; Bureau of Land
Management, Interior.
ACTION: Joint final rule.

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AGENCIES:

SUMMARY: This final rule revises existing
Onshore Oil and Gas Order Number 1
which was published in the October 21,
1983, edition of the Federal Register.
The Order provides the requirements
necessary for the approval of all
proposed oil and gas exploratory,
development, or service wells on all
Federal and Indian (other than those of
the Osage Tribe) onshore oil and gas
leases, including leases where the
surface is managed by the U.S. Forest
Service (FS). It also covers most
approvals necessary for subsequent well
operations, including abandonment.
The revision is necessary due to
provisions of the 1987 Federal Onshore
Oil and Gas Leasing Reform Act (Reform
Act), the Energy Policy Act of 2005
(Act), legal opinions, court cases since
the Order was issued, and other policy
and procedural changes. The revised
Order addresses the submittal of a
complete Application for Permit to Drill
or Reenter package (APD), including a
Drilling Plan, Surface Use Plan of
Operations, evidence of bond coverage
and Operator Certification. The final
rule ensures that the processing of APDs
is consistent with the Act and clarifies
the regulations and procedures that are
to be used when operating in split
estates, including those lands within
Indian country. The final rule addresses
using Master Development Plans (which
address two or more APDs) to approve
multiple well development proposals
and encourages the voluntary use of
Best Management Practices as a part of
APD processing. Finally, the rule
requires additional bonding on certain
off-lease facilities and clarifies the

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BLM’s authority to require this
additional bond.
DATES: This final rule is effective April
6, 2007.
FOR FURTHER INFORMATION CONTACT:
James Burd at (202) 452–5017 or Ian
Senio at (202) 452–5049 at the BLM or
Barry Burkhardt at (801) 625–5157 at
the Forest Service. Persons who use a
telecommunications device for the deaf
(TDD) may contact these persons
through the Federal Information Relay
Service (FIRS) at 1–800–877–8339, 24
hours a day, 7 days a week.
SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion of the Final Rule and
Comments
III. Procedural Matters
I. Background
The regulations at 43 Code of Federal
Regulations (CFR) part 3160, Onshore
Oil and Gas Operations, in section
3164.1 provide for the issuance of
onshore oil and gas orders to
‘‘implement and supplement’’ the
regulations in part 3160. Also, 36 CFR
228.105 provides for the issuance of FS
Onshore Orders or for the co-signing of
orders with the BLM. Although they are
not codified in the CFR, all onshore
orders are issued using notice and
comment rulemaking and, when issued
in final form, apply nationwide to all
Federal and Indian (other than those of
the Osage Tribe) onshore oil and gas
leases. The table in 43 CFR 3164.1(b)
lists existing Orders. This rule revises
existing Onshore Oil and Gas Order
Number 1 (the Order) which
supplements primarily 43 CFR 3162.3
and 3162.5. Section 43 CFR 3162.3
covers conduct of operations,
applications to drill on a lease,
subsequent well operations, other
miscellaneous lease operations, and
abandonment. Section 3162.5 covers
environmental and safety obligations. In
this rule the FS adopts the Order which
would supplement 36 CFR 228 subpart
E. The existing Order has been in effect
since November 21, 1983. For further
information, see the October 21, 1983
Federal Register at 48 FR 48916.
The BLM and the FS published the
proposed rule in the Federal Register on
July 27, 2005 (70 FR 43349), for a 30day comment period and on August 26,
2005 (70 FR 50262) extended the
comment period for 60 days. On August
8, 2005, the President signed the Energy
Policy Act of 2005 (Act). Provisions in
the Act impacted the timing of APD
approval provisions in the original
proposed rule. Therefore, on March 13,
2006, the BLM and the FS published a
further proposed rule to make the

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provisions in the originally published
proposed rule consistent with the Act.
The further proposed rule also modified
a provision in the proposal regarding
proposed operations on lands with
Indian surface and Federal minerals.
II. Discussion of the Final Rule and
Comments
There are four primary reasons the
Order is being revised:
1. The 1987 Reform Act, which
amended the Mineral leasing Act, 30
U.S.C. 181 et seq., included two
significant changes affecting APD
processing on Federal leases. The first
important change is the addition of a
provision for public notification of a
proposed action before APD approval or
substantial modification of the terms of
a Federal lease.
The second important change the
Reform Act made is the assignment of
authority to the Secretary of Agriculture
to approve and regulate the surface
disturbing activity associated with oil
and gas wells on National Forest System
(NFS) lands. Where NFS lands are
involved, a Surface Use Plan of
Operations, included in an APD, is now
approved by the FS. The FS also
approves surface disturbing aspects of
related and subsequent operations. The
FS has actively participated in this
revision, and is a cosigner of this Order.
The Order would apply to FS review of
oil and gas surface operations.
Section 366 of the Energy Policy Act
of 2005 sets steps and time requirements
for processing APDs. The Order has
been revised to be consistent with
section 366 requirements.
2. In response to protests to two
Resource Management Plans in April
1988, the Office of the Solicitor of the
Department of the Interior issued two
memorandums related to oil and gas
issues. The first and most far-reaching
(issued by the Associate Solicitor,
Energy and Resources on April 1, 1988,
titled ‘‘Legal Responsibilities of BLM for
Oil and Gas Leasing and Operations on
Split Estate Lands’’), concerned BLM
responsibilities on Federal leases
overlain by private surface (split estate).
In this memorandum the Solicitor’s
Office opined that the National
Environmental Policy Act (NEPA), the
Endangered Species Act (ESA), and the
National Historic Preservation Act
(NHPA) require the BLM to regulate
exploration, development, and
abandonment on Federal leases on split
estate lands in essentially the same
manner as a lease overlain by Federal
surface. The memorandum also stated
that while a private owner’s wishes
should be considered in decisions, they
do not overrule requirements of these

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statutes and their implementing
regulations.
The second memorandum (issued by
the Assistant Solicitor, Onshore
Minerals, Division of Energy and
Resources on April 4, 1988, titled ‘‘Legal
Responsibilities of BLM for Oil and Gas
Leasing and Operations under the
National Historic Preservation Act’’)
lays out in more detail the BLM’s
responsibilities under NHPA,
elucidating further the discussion on
cultural resources in the first opinion.
The pertinent requirements of the
existing Order do not fully conform to
the memorandums issued by the
Solicitor’s Office in 1988.
3. The existing Order does not
adequately address the BLM Rights-ofWay or FS Special Use Authorizations
which are often required for ancillary
facilities or those activities outside of
lands committed to a unitized area. This
has led to confusion and delays on the
part of both the agencies and industry.
Under the existing Order, APD approval
is often delayed pending completion
and approval of a Right-of-Way or
Special Use Authorization. We intend
for the proposal to eliminate or reduce
this delay. The rule provides for early
identification of any needed Right-ofWay or Special Use Authorization,
allows for conducting a single
environmental analysis for the APD and
Right-of-Way or Special Use
Authorization, and permits concurrent
approval of the Right-of-Way or Special
Use Authorization with the APD. On
NFS lands, the FS will approve
activities directly related to the drilling
and production of the well consistent
with 36 CFR Subpart E.
4. Existing Order Number 1 is over 20
years old. Conditions, regulations,
policies, procedures, and requirements
have been altered, added, and
eliminated since the Order was issued.
The BLM is in the process of reviewing
Field Office practices and the
preliminary findings from that review
were considered in the proposed
revisions to the Order. The BLM has
reorganized the Order to follow the
review and approval process and the
processing timeframes for each step are
now in one section. Also, operations on
split estate are discussed in more detail.
The BLM encourages operators to
employ Best Management Practices
when they develop their APDs. Best
Management Practices are innovative,
dynamic, and economically feasible
mitigation measures applied on a sitespecific basis to reduce, prevent, or
avoid adverse environmental or social
impacts. The BLM Field Offices
incorporate appropriate Best
Management Practices into proposed

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APDs and associated on-lease and offlease Rights-of-Way approvals after
required NEPA evaluation. They can
then be included in approved APDs as
Conditions of Approval. Typical Best
Management Practices can currently be
found on the BLM’s Web site at
http://www.blm.gov/bmp/.
Discussion of Major Changes
Definition of ‘‘Complete APD’’
The term ‘‘Technically and
Administratively Complete APD’’ has
been replaced with a clear definition of
‘‘Complete APD.’’ This new definition
reflects what is already a common
practice in many Field Offices and
would require all Field Offices to adopt
the same convention. The new
definition makes the approval process
more consistent. The BLM considered
defining the terms ‘‘Administratively
complete’’ and ‘‘Technically complete’’
separately, but abandoned this idea
because it is difficult to separate the two
concepts and because potential delays
might be caused when processing APDs
in certain circumstances. This final rule
requires that an onsite inspection
conducted jointly by the BLM (and the
FS if appropriate) and the operator be
completed prior to the BLM designating
the APD package as complete. The BLM
(and the FS if appropriate) currently
conducts onsite inspections to
determine if the material submitted in
the APD package is accurate and to
determine if Conditions of Approval are
necessary. Examining existing on-theground circumstances is the only way to
ensure that the information in the APD
package is consistent with conditions at
the proposed drill site and along the
proposed access route. The final rule
codifies the current BLM practice of
onsite inspections as part of the APD
approval process.
APD Processing
Section 366 of the Act amends the
Mineral Leasing Act (30 U.S.C.
226(p)(1)) and adds the statutory
requirement that the Secretary shall
notify an applicant within 10 days of
receiving an APD and state that either
the APD is complete or specify what
additional information is required to
make the application complete.
The Act requires that the Secretary
(the BLM is the delegated authority)
approve an APD within 30 days after its
completion or notify the applicant of:
(1) Any actions that the operator can
take to get approval; and (2) What steps,
such as National Environmental Policy
Act (NEPA) or other regulatory
compliance, remain to be completed
and the schedule for completion of

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these requirements. This provision of
the Act is made a part of the final rule.
In those situations where the BLM
defers the decision, the Act and the final
rule give the applicant 2 years to take
whatever actions are identified in the
30-day notice. The Act amends 30
U.S.C. 226 by adding a new paragraph
(p)(3)(B), and the final rule also adds a
new requirement that the BLM must
make a final decision on the application
within 10 days of the applicant’s
completion of these requirements, if all
other regulatory requirements are
complete. The timeframes established in
this section apply to both individual
APDs and to the multiple APDs
included in Master Development Plans.
Even though the time limits established
in Section 366 of the Act are
amendments to the Mineral Leasing Act
and, therefore, do not apply to Indian
leases, the final rule states that the same
time limit will apply to both Federal
and Indian leases.
The BLM does not approve Surface
Use Plans of Operations for National
Forest Service (NFS) lands. The FS
notifies the BLM of its Surface Use Plan
of Operations approval and the BLM
proceeds with its APD review. For APDs
on NFS lands, the decision to approve
a Surface Use Plan of Operations or
Master Development Plan are subject to
existing FS appeal procedures, which
may take up to 105 days from the date
of the decision. Pursuant to the Mineral
Leasing Act (30 U.S.C. 226(g)), as
amended by the Reform Act, the final
rule in Section III.E.2.b. provides that
the BLM may not approve an APD until
the FS has approved the Surface Use
Plan of Operations. This condition is
consistent with the addition to Section
17 of the Mineral Leasing Act (30 U.S.C.
226(p)(2)) adopted in Section 366 of the
Energy Policy Act, which provides that
the Secretary shall issue a permit within
30 days only if requirements of other
applicable law have been completed
within that timeframe. Therefore, in
situations where the Surface Use Plan of
Operations is not approved, the BLM
will provide notice within the 30-day
period that action on the APD will be
deferred until the FS completes action
on the Surface Use Plan of Operations.
Operating on Split Estate Lands With
Indian Surface Ownership
The final rule makes it clear that split
estate lands include those having Indian
surface and Federal minerals. It also
explains that the operator is required to
address surface use issues with the
Bureau of Indian Affairs (BIA) when
Indian trust lands are involved.
The final rule addresses the
responsibility of the operator to confer

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with surface owners in the case of
privately owned surface and Federal/
Indian leases, as well as Indian oil and
gas leases where the surface is in
different Indian ownership. The final
rule applies to privately owned surface
and to all Indian surface and Federal oil
and gas lease situations. The final rule
requires a good faith effort to reach a
Surface Access Agreement, and
provides for the posting of a bond to
protect against covered damages in the
absence of an agreement. This final rule
codifies existing policy with the
exception that surface owner
compensation is based on the terms of
the statute that reserved the mineral
estate. Under the previous rules, this
compensation was based on the terms of
the Stockraising Homestead Act.
Drilling and Surface Use Plans
The final rule makes specific changes
to the drilling and surface use plans as
follows:
The former 8-point Drilling Program
(also referred to as the Subsurface Use
Plan) is replaced with a 9-point Drilling
Plan. The new requirement in the final
rule requires the operator to address the
type and amount of cement to be used
in setting each casing string.
The final rule replaces the former 13point Surface Use Program (or Plan)
with a 12-point Surface Use Plan of
Operations. ‘‘Operator Certification’’ is a
separate component of the APD in the
final rule. The final rule makes it clear
that the Operator Certification covers
the entire APD package and not just the
Surface Use Plan of Operations. Under
the final rule, the operator is required to
certify that they have made a good faith
effort to provide the surface owner with
a copy of the Surface Use Plan of
Operations and any Conditions of
Approval that are attached to the APD.

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Master Development Plans
The final rule establishes a new
approval process for Master
Development Plans. An operator uses
this process to submit plans for field
development of a multiple well
program. A Master Development Plan
proposal can be addressed in a single
NEPA analysis and approval. This
facilitates the consideration of
cumulative effects early in the process
and enables broad application of
identified mitigation measures, and
minimizes the overall timeframe for
approval. Because the process allows for
better planning of field development,
adverse environmental impacts are
minimized.

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Use of Best Management Practices
The final rule encourages operators to
use Best Management Practices when
developing their APDs. Using Best
Management Practices is the BLM’s
current policy. Best Management
Practices are innovative, dynamic, and
economically feasible mitigation
measures applied on a site-specific basis
that reduce, prevent, and avoid adverse
environmental or social impacts of oil
and gas activities. The BLM Field
Offices currently incorporate Best
Management Practices into proposed
APDs and associated on-lease and offlease Rights-of-Way approvals if they
are carried forward as part of the NEPA
required evaluation or environmental
review. This final rule clarifies the
existing policy that Best Management
Practices may be included as Conditions
of Approval. The BLM started using
Best Management Practices in 2004 and
encourages the voluntary use of these
practices.
Bonding Authority
The final rule clarifies the BLM’s
authority under 43 CFR 3104.5 to
require an additional bond to be applied
to off-lease facilities that are required to
develop a lease, such as the large
impoundments being created in
Wyoming for water produced from
Federal and non-Federal coalbed natural
gas wells. The BLM is directed by the
Reform Act to require sufficient bond to
insure ‘‘the restoration of any lands or
surface waters adversely affected by
lease operations after the abandonment
or cessation of oil and gas operations on
the lease’’ 30 U.S.C. 226(g). An Assistant
Solicitor’s Opinion of July 19, 2004,
concluded that the BLM has the
authority under existing regulations to
require an additional bond for such
facilities and that the current regulation
does not limit the BLM to increasing the
required amount of an existing bond.
Accordingly, the final rule does not
represent a change in the regulatory
scheme.
Response to Comments
The BLM received 81 comments on
the proposed and further proposed
rules. In the following discussion we
categorize the comments according to
the sections of the text or preamble to
which the comments were directed.
Some comments were general in nature
and did not relate to a particular section
in the text or preamble. These are
grouped in a general category and
addressed accordingly. Other comments
are grouped by the section of the Order
to which they pertain. If a section of the
Order is not discussed in this preamble,

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that means that we received no public
comment on that section. Note that,
when used in conjunction with Section
106 of the National Historic
Preservation Act and the Endangered
Species Act, ‘‘inventory’’ and ‘‘survey’’
are equivalent terms and are used
interchangeably.
Although we received no substantive
comments on the proposed changes to
36 CFR 228.105(a)(1) (FS regulations),
we amended that section in the final
rule to make it consistent with the final
Order.
General Comments
Several commenters asked that the
five statutory categorical exclusions that
are in Section 390 of the Energy Policy
Act of 2005 be included in the Order.
The Order does not address the
statutory categorical exclusions because
they are already a legal requirement and
we believe they would best be
addressed in subsequent manual and
handbook updates. Some commenters
were concerned that we would apply
acreage limits for categorical exclusions
to Master Development Plans rather
than leases. These comments exemplify
the problems that would be inherent in
addressing categorical exclusions in the
Order.
One commenter asserted that revising
the Order was premature until the BLM
has the data from the pilot project under
Section 365 of the Energy Policy Act of
2005. We disagree. The BLM is looking
forward to obtaining useful information
from the pilot projects, but there is no
reason to delay revisions to the Order.
A few commenters believed that we
should use stronger language than
saying that ‘‘BLM will comply with
other applicable laws’’ before approving
an APD as stated in Section III. and in
numerous other places in the Order. We
disagree. The language in the rule is
similar to that in the Energy Policy Act
of 2005 (Act). The Order is clear and
requires that the BLM comply with
applicable law naming NEPA, the
National Historic Preservation Act, and
the Endangered Species Act, which are
the principal laws impacting Federal
actions related to approval of APDs. We
do not believe that a description of the
requirements of other applicable law is
needed or appropriate because those
requirements are adequately addressed
in other rules and policy specific to
implementation of those laws.
One commenter said the rule should
address conducting cultural inventories
prior to approving geophysical
operations. We disagree. Geophysical
operations are outside the scope of this
rule and are generally approved under

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43 CFR subpart 3150 (or FSM 2860 on
National Forest System (NFS) lands).
One commenter asked that we delay
publishing a final rule until the split
estate report to Congress required by
Section 1835 of the Act was complete.
We believe that it is not necessary to
wait for completion of the report
because the rule must be consistent with
existing law and we cannot speculate on
potential changes to law that may occur
as a result of the split estate report.
However, the rule has been written in
consultation with those involved in
drafting the split estate report and is
consistent with their findings and
existing law.
One commenter asked that we
describe in the Order how we would
revise existing leases and modify them
with a stronger emphasis on monitoring
and public involvement that result from
new or updated land use plans. The
BLM involves stakeholders in land use
plans when they are written and this
becomes the basis for subsequent
leasing decisions. However, revision of
existing leases is beyond the scope of
this Order. We are required by the
Reform Act to post for public
notification each pending APD and we
evaluate each APD and attach
appropriate Conditions of Approval
depending on the proposed action.
While this may not change previously
approved APDs, the duration of the
approved APD and subsequent drilling
activity is sufficiently short that we do
not anticipate that they will need to be
updated. We are required by the Reform
Act to conduct a certain level of
monitoring regardless of Conditions of
Approval or even the vintage of the APD
so that existing productive wells are
similarly not likely to present a problem
relevant to decisions based on old land
use plans.
Several commenters suggested that
the BLM and the FS adopt certain state
procedures that the commenter said
would greatly reduce the amount of
time required to process an application.
The BLM and the FS have other
regulatory requirements that exceed the
states’ responsibilities. The additional
requirements may lengthen the
application and approval process. The
BLM and the FS must comply with
various legal mandates such as NEPA
and the National Historic Preservation
Act that do not apply to states, but must
be addressed in the Order. These
Federal mandates make the process for
approving oil and gas operations
different than the process for State
governments and, therefore, we did not
modify the final Order as a result of this
comment.

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A few commenters stated that as
proposed, the Order will not streamline
the APD process. The Order cannot
eliminate any steps required by various
environmental laws, but can provide
clarification, for both industry and the
involved agencies. We believe that the
Order will facilitate and encourage upfront planning, application of Best
Management Practices, submission of
geospatial data, etc., which may shorten
the time needed to approve an APD.
Also, the use of Master Development
Plans will facilitate early project design
and analysis and help to streamline
subsequent permitting.
Many commenters believe that the
Order nullifies or preempts the various
state laws related to drilling operations
and private surface owner negotiations.
We disagree. The Order only addresses
Federal obligations for operations on
Federal lands which may be distinct
from state obligations or private surface
owner agreements. The Order would
only impact state law or private
agreements to the extent that they
conflict with Federal obligations. In
addition, the Order does not negate or
preempt other Federal, state, or local
laws and/or ordinances.
Two commenters challenged our
purpose for the proposed Order and said
that our purpose was really to elevate
the legal standing of the existing Order
and to limit the ability of surface owners
to negotiate damages with operators as
may be provided in certain state laws.
We disagree. The proposed Order will
have the same level of importance as the
existing Order. As a regulation the
Order does not change or negate other
Federal or state statutes. State laws are
limited in their application to Federal
leases by the terms of Federal law, such
as those that are the source of the titles
of the surface owners, i.e., Federal land
patenting statutes, and not because of
this regulation.
Several commenters challenged our
inclusion of the April 1, 1988 solicitor’s
memorandum that defines the BLM’s
responsibilities regarding compliance
with various laws without input from
the current solicitor. The Office of the
Solicitor was fully involved in review
and drafting of the proposed rule, the
further proposed rule, and this final
rule. Contrary to what the commenters
imply, the Solicitor’s memorandum
cited in the proposed rule still reflects
the state of the law.
Several commenters suggested that
the BLM and the FS honor state statutes
which outline a procedure whereby
private landowners negotiate with oil
and gas lessees toward damages
presumably caused by oil and gas
development. Some commenters

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contended that the proposed rule would
put new limits on compensation that are
based in the original surface patents.
The BLM and the FS do not enforce
state law; however, we do not object to
negotiations between the surface owner
and operators. In fact, Federal law and
our policy require that the operator
make a good faith effort to enter into an
agreement with the surface owner. How
that negotiation takes place and the
nature of any agreement reached is
beyond our authority to direct. We do
not determine the amount of
compensation unless a bond is filed
when the operator and surface owner
are unable to reach an agreement. In
those cases we must determine what, if
any, limitations on compensation were
contained in the original patent and
then determine the amount of bond
necessary under Federal law for the
damages it addresses. We will assure
that the bond amount is maintained
throughout the life of the oil and gas
operation by requiring replenishment of
the bond if it is drawn upon for
compensation. Whether states require,
or can require, additional bonding is
outside the scope of this rule.
Several commenters stated that the
Surface Use Plan of Operations does not
require the operator to identify the
location of the proposed well and that
the draft Order should require
restoration, not reclamation. A listing of
the proposed well location is a required
part of a complete APD. A well plat is
required as is a map in the Surface Use
Plan of Operations that shows all
proposed surface disturbance.
Reclamation is described in the Order as
returning the disturbed land to as near
its predisturbed condition as is
reasonably possible. Section XII.B. of
the Order requires that the surface
owner be notified and involved in
determining reclamation requirements.
Several commenters stated that the
rule removes the rights of private
landowners granted by various state
statutes pertaining to planning and
damage compensation. We disagree. The
final rule does not affect rights of
private landowners; it is based on long
established law.
Several commenters stated that the
rule was contrary to the provisions of
Executive Order 13352 on the
facilitation of cooperative conservation.
We disagree with the commenters. The
same commenters believe that the Order
eliminates private parties from
significant decisions that affect their
ability to manage their private property.
It is unclear what in the rule these
commenters believe is limiting private
surface owner rights. This Order does
not change existing laws that deal with

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split estate situations. The laws
(Stockraising Homestead Act and others
and implementing regulations at 43 CFR
subpart 3814) are not revised as a result
of this rule. This Order clarifies and
ensures the APD review process
includes the private surface owner and
that the BLM adheres to existing laws
and legal decisions involving split
estate. Also this rule offers surface
owners more input into the process and
also provides surface owners more
information than did the previous
Order.
Several commenters stated that the
rule does not promote cooperative
conservation, but rather removes rights
of the private property owner and places
them in the hands of BLM personnel
with regards to negotiations for surface
activities and damages. The commenters
appear to be addressing the provisions
in Section VI. of the Order that address
operations on private surface with
underlying Federal minerals. We
disagree with the commenters that the
Order does not promote cooperative
conservation. This rule offers surface
owners more input into the process and
also provides surface owners more
information than did the previous
Order. In addition, the rule is not
creating new procedures, but is merely
implementing existing law and
procedures.
Several commenters said that the
BLM should acknowledge that its
attempt to impose Federal regulations
for oil and gas development underneath
private lands in states with surface
owner protection acts is not in any way
simple or easy to understand.
Commenters said that it complicates
and confuses the issue, regardless of the
words used and that it could have an
effect on energy supplies. The same
commenters said that if the BLM wants
to clarify this issue, then it needs to
intervene and have the courts resolve
the issue of Federal preemption of state
statutes. No intervention by the BLM on
this subject is necessary; any party may
raise that issue. The final rule
implements existing law, it does not
change its interpretation. There is no
administrative action the rulemaking
can take which will change the acts of
Congress, the body of law, nor over a
hundred years of legal decisions,
highlighted by the decision in KinneyCoastal Oil Co. v. Kieffer, 277 U.S. 488
(1928).
Several commenters disagreed that
the rule will not have Federalism
implications as defined by Executive
Order 13132. We disagree. Existing
policy and this final rule are based on
a strict interpretation of existing law.
Surface owners have only the

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substantive rights provided by Federal
statute, including the laws under which
the surface was patented. The Order
adds a procedural requirement of a good
faith attempt to notify the surface owner
and attempt to reach an agreement, but
that does not change the dominant
character of the federally owned oil and
gas or the rights of Federal lessees. The
Order includes the lessee’s right to post
a bond if a good faith attempt to reach
an agreement with the surface owner
fails and requires compensation to
surface owners as is required by the
patenting act. The authority of states
with respect to reserved Federal
minerals is established in statutes dating
back to the early twentieth century and
is not altered by this Order and there are
no Federalism implications because it is
existing law, not this Order, that may
conflict with state statutes.
Several commenters said that private
landowners would be significantly
impacted by the rule and were ‘‘* * *
entitled to protection under the
Regulatory Flexibility Act * * *.’’ We
disagree. Even if private land owners
were considered to be ‘‘small entities’’
as that term is defined under the
Regulatory Flexibility Act, we do not
believe that private land owners are
significantly impacted by the changes
that this rule makes to the existing
Order. Furthermore, it is existing law
that governs split estate; this rule merely
codifies the existing law.
Several commenters stated that the
rule would constitute a taking because
of diminution of land values that the
rule causes. We disagree. This Order
implements existing law. Surface
owners still own the surface, which
remains subservient to the dominant
mineral ownership of the United States.
The procedures adopted in this Order
do not affect surface owners’ property
rights.
Many commenters disagreed with the
statement in the proposed rule that the
regulations do not impose an unfunded
mandate on State, local, or tribal
governments or the private sector of
more than $100 million citing costs
private landowners are forced to bear by
being limited in the damages that they
can receive for oil and gas activities on
their lands. We disagree. The changes
that this rule makes to the existing
Order and existing procedures do not
alter the damages to be covered by bond.
The changes this rule makes having to
do with damages that occur on private
surface as a result of operations to
extract Federal minerals are not as a
result of the BLM’s exercise of this
rulemaking, but our effort to more
faithfully reflect existing statutory law.
Furthermore, the rule primarily impacts

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lessees or operators filing APDs with the
BLM and the FS, not State, local, or
tribal governments.
Several commenters stated that they
disagree with the statement in the
proposed rule that ‘‘this proposed rule
would not unduly burden the judicial
system * * *.’’ The commenters said
that given the inherent legal conflict
with states which have passed surface
owner protection acts with provisions
that are different than those included in
this rule, the BLM’s statement that this
will not burden the judicial system is
unsubstantiated. We disagree. As stated
earlier, this rule implements well
established law and therefore is not the
source of the legal conflict in which the
commenters are involved.
Section-By-Section Discussion
Section I. Introduction
Purpose: This section describes the
statutory authority on which this Order
is based and describes the purpose and
scope of the Order. The authority upon
which the Order is based has changed
since the 1983 Order was published by
the Reform Act and the Energy Policy
Act of 2005. The Reform Act granted the
Secretary of Agriculture authority to
regulate all surface disturbing activities
conducted pursuant to an oil and gas
lease on NFS lands.
Comments and Responses: One
commenter asked that the BLM consider
delegating the permitting responsibility
to state agencies. The BLM cannot
delegate permitting responsibility
because Federal law requires that the
Department of Interior (delegated to the
BLM) authorize permitting of oil and gas
activities on Federal land. Also, 30
U.S.C. 1735 does not provide for
delegation of APD approval as it does
for other aspects of the oil and gas
program. The process of delegation is
available to State governments for
consideration under 43 CFR subpart
3191; however, it is limited to
inspection, enforcement, and
investigation, but not for the approval of
operations. Further, the commenter
didn’t offer any statutory authority for
this delegation and we are not aware of
any.
One commenter did not think it
appropriate for the Order to apply to
operations within a unit or
communitized area on private minerals
or private surface. We agree. While the
site security, measurement, and
production reporting regulations apply
to unitized wells drilled on private
minerals (43 CFR 3161.1), it is not
appropriate for the BLM or the FS to
exercise authority over surface
operations conducted on privately

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owned lands just because those lands
are contained within a unit or
communitized area. The BLM only
requires a copy of the permit to be
provided for non-Federal wells within a
unit or communitized area and wording
in the ‘‘Scope’’ section of the Order is
revised to make this clear.
Section II. Definitions
Purpose: This section contains the
meaning of terms that are necessary to
ensure consistent interpretation and
implementation of this Order.
Summary of Changes: We added
definitions for Best Management
Practices and Casual Use to make the
definition of those terms clearer.
Another change made in this section
was to accept the many
recommendations to change ‘‘Surface
Management Entity’’ to ‘‘Surface
Managing Agency.’’ By doing so, many
of the other comments that sought
clarification of the role of BIA and tribes
were resolved. We also added a
definition of ‘‘Private Surface Owner’’ to
provide clarity.
Comments and Responses: Several
commenters expressed concern that all
maps and plats required as part of a
complete APD (see the definition of
‘‘Complete APD’’) must be submitted in
both hard copy and geospatial data
formats. They were concerned that the
requirement could impose a financial
hardship for some operators and that
some of the data may be proprietary.
They requested that the geospatial data
format be optional. Geospatial data is a
vital tool for facilitating timely
processing of applications. The BLM
and the FS use the geospatial data to
link data and facilitate analysis.
However, we recognize the concerns
expressed in the comments and have
modified the rule to make submission of
geospatial data, except for the well plat,
optional rather than mandatory. The
BLM strongly recommends the
submission of the data in geospatial
format as it will assist us in timely
review of applications. We will still
require geospatial data for the well plat
showing the proposed well location to
assist us in assuring that the well is
accurately located in relation to lease
boundaries.
Many commenters made observations
or asked questions about the definition
of a complete APD. Many noted that the
definition now includes an onsite
inspection. A few commenters stated
that this requirement circumvents the
intent of Congress expressed in the
Energy Policy Act of 2005 by making
moot the statutory 10-day timeframe for
the BLM to determine the completeness
of an APD. These commenters note that

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there is no set timeframe from the date
the APD is received until the onsite
must be conducted. Many of these
commenters assume that various
inventories must be completed in order
to hold the onsite, thereby creating
additional delays. However, one
commenter expressed support for
including the onsite inspection as part
of the ‘‘Complete APD’’ definition. A
few other commenters expressed
concerns that the Order fails to put
timeframes on the BLM and the FS staff
for the timely review of APDs and
allows each specialist to review the APD
on their own schedule. The BLM and
the FS recognize the significance of
these comments, but from our
experience we know that it is necessary
to conduct an onsite inspection to
determine if certain aspects of the APD
are accurate, sufficient to describe the
proposed action and, thereby, complete.
It is also our experience that scheduling
and conducting an onsite inspection
within a specific period of time (e.g., 15
days from receipt of the APD as is in the
existing Order) is often not possible
because of availability of key agency
staff, the operator, and surface owner (in
the case of private surface) or because of
inclement weather. It is the policy of the
BLM and the FS to conduct onsite
inspections as soon as they can be
scheduled. The BLM and the FS plan to
closely monitor the interval between
Notice of Staking or APD filing and
onsite inspections to ensure that
excessive delays do not occur and take
corrective action if patterns of delay are
noted. We added a requirement for the
BLM and the FS, if appropriate, to
evaluate any additional material
requested in the 10-day notice or at the
onsite inspection within 7 days (see
Section III.D.2.a.). Inventories are not
necessary for a complete APD and are
not required before the onsite
inspection. The operator may
voluntarily provide cultural and
wildlife survey data, but the
responsibility to comply with NEPA,
Endangered Species Act, National
Historic Preservation Act, and other
requirements is the responsibility of the
agencies and therefore, is not a
requirement of the applicant.
Inventories are not part of an
application. They are part of the
analysis that must be made of the
proposed action. They must be
conducted prior to the approval of the
proposed actions, not prior to
determination of completeness of the
application. In the final Order we
modified the definition of ‘‘Complete
APD’’ to clarify that inventories and

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NEPA documentation are not part of a
‘‘Complete APD’’ determination.
Several commenters wanted the
definition of ‘‘Complete APD’’ to be
expanded to clarify that a second onsite
inspection is not needed if one was
done as part of the Notice of Staking
process. We believe that the Order
adequately addresses this concern. The
definition states that an onsite
inspection is required for a complete
APD. However, Section III. of the Order
indicates that an onsite inspection will
not be necessary after the APD is filed
if one was conducted as part of the
Notice of Staking process. These
commenters also wanted the text to
provide criteria for circumstances when
an onsite would not be necessary. We
understand that in some cases onsite
inspections may not be necessary (e.g.,
new wells in developed fields). These
situations are relatively uncommon and
would be better addressed by a request
for variance on a case-by-case basis,
rather than by addressing it in the rule.
One commenter requested that ‘‘other
information that may be required by
Order or Notice’’ (see 43 CFR 3162.3–
1(d)(4)) in the definition of ‘‘Complete
APD’’ be deleted because it is not
necessary. We did not delete the phrase
from the definition in the final rule
because the BLM may require additional
information before approving an APD.
One commenter suggested that in
addition to public health and safety or
the environment, the definition of
emergency repairs should be expanded
to allow for repairs designed to preserve
reservoir integrity. The BLM did not
modify the final rule as a result of this
comment because operators already
have the option in Section VIII. to
request approval of emergency
operations verbally, if needed, followed
by a Sundry Notice for reservoir
operations.
Several commenters asked for
clarification to the definitions of
‘‘Indian Oil and Gas’’ and ‘‘Indian
lands.’’ They also asked that in the final
rule we add a definition of ‘‘Tribal
Lands’’ and clarify what we mean by the
reference to ‘‘tribal lands held in trust’’
in Section VII. of the proposed Order.
For the purpose of this Order, the
definitions for ‘‘Indian lands’’ and
‘‘Indian Oil and Gas’’ is limited to those
lands held in trust by the United States
or subject to Federal restrictions against
alienation and as such do not include
unrestricted fee lands. Only for surface
held in trust by the United States or
subject to Federal restrictions against
alienation does the BLM seek input
from the Bureau of Indian Affairs (BIA)
for APD approval. For other lands held
in unrestricted fee, Indian owners are

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treated as any other private surface
owner, including for the purposes of
bonding in lieu of surface owner
agreement. We have added a definition
of ‘‘Private Surface Owner’’ that
includes certain Indian surface owners.
We deleted the term ‘‘Tribal lands’’ from
the Order and, therefore, did not
provide a definition for that term.
One commenter stated that the
regulations on Master Development
Plans should not require submission of
detailed surveys and designs for
projected or future potential
development. We agree. The intent of
the requirement is to have the operator
provide sufficient detail in the Master
Development Plan application to
facilitate NEPA analysis. The detail
submitted with a Master Development
Plan can vary depending on the project
size and other criteria. However, final
design and surveys are required for
subsequent APDs that will reference a
Master Development Plan before those
APDs are approved. Another commenter
stated that the filing of Master
Development Plans should start the 30day public posting requirement rather
than the subsequent APDs. The Master
Development Plan does initiate the 30day posting period for any APDs
contained in the Master Development
Plan. However, any subsequent APD
will have its own 30-day posting. We do
not believe that it is necessary to change
the text as a result of these comments
because the process the commenter
points out can be followed within the
provisions in the final Order.
Several commenters stated that the
proposed reclamation standard of
‘‘reasonably practical,’’ in the definition
of ‘‘Reclamation’’ in Section II. is
unacceptable. Commenters stated that
this standard is so low that it flouts the
Order’s accountability mandate that
lessees and operators properly reclaim
disturbed lands in what could amount
to a taking of private property. We
understand the commenter’s concern,
but also recognize the difficulty in
writing regulations that fit all
circumstances when local conditions
are highly variable. ‘‘Reasonably
practical’’ is dependent upon the
conditions at the specific site. The
Conditions of Approval that address
specific site conditions are much more
effective in achieving reclamation goals
than are general regulations. We also
note that the surface owner is given an
opportunity to participate in the
development of the site specific
reclamation standards and is consulted
prior to acceptance of final
abandonment. Other commenters were
concerned that in some cases the BLM
or the FS require that the disturbed area

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be reclaimed to a new use. They observe
that some well pads have been
reclaimed for trailheads rather than back
to pre-existing condition. We agree and
have added ‘‘or as specified in an
approved APD’’ to the definition of
reclamation to address these concerns.
Many commenters recommended
replacing the term ‘‘Surface
Management Entity’’ with ‘‘Surface
Managing Agency’’ because use of the
word ‘‘entity’’ implies that Federal
agencies may delegate their
responsibilities to states. Other
commenters thought use of the word
‘‘entity’’ suggested that private land
owners may have the same authority as
state or Federal agencies. This definition
also caused uncertainty relative to the
role of tribes in the approval process.
We agree with the commenters that the
proposed term could cause confusion,
therefore, in the final Order the term
‘‘Surface Management Entity’’ has been
replaced by the term ‘‘Surface Managing
Agency.’’ Under existing regulations
and this final rule the BIA is the Surface
Managing Agency when tribal lands are
held in trust, but if lands are held in fee
by an individual Indian those lands are
treated as private surface.
Many comments suggested that the
definition of ‘‘split estate’’ include
surface that is leased from the Federal
Government (such as grazing permits),
and require that these permittees be
notified when an APD or Notice of
Staking is filed. Permittees are given use
privileges, not property rights, and,
therefore, are not considered surface
owners. Therefore we did not amend the
definition of split estate as requested by
the commenter. Posting requirements
under Section III. of the final Order and
in existing 43 CFR 3162.3–1(h) are
intended to make this type of
information available to the interested
public, including other Federal permit
holders.
Several commenters suggested that we
add definitions for waivers, exceptions,
and modifications and a few
commenters were unclear about the
criteria for granting of variances. Based
on these comments, in the final rule we
added a section that addresses waivers,
exceptions, and modifications to
distinguish them from variances.
Waivers, exceptions, and modifications
are described in the BLM guidance and
FS regulations (see 36 CFR 228.104). A
variance from the Order may be granted
if the applicant shows to the authorized
officer that the purpose of the Order will
still be met. We removed the reference
to 43 CFR 3101.1–4 from the definition
of variance because that regulation
applies to waivers and modifications.
One commenter stated that the granting

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of waivers, exceptions, and
modifications should be based solely on
technical grounds and that all
challenges or appeals be reserved to the
lessee or operator. We disagree because
challenges and appeals of waivers,
exceptions, and modifications cannot be
restricted to lessees or operators unless
the basis for this decision has already
been made in a land use plan or other
document that received public
comment. Further, 43 CFR 3101.1–4
requires that if the authorized officer
determines that the modification or
waiver of a lease term or stipulation is
substantial, the modification or waiver
is subject to public review for at least 30
days.
One commenter recommended that
the Order include definitions of ‘‘Notice
of Staking’’ and of ‘‘Sundry Notice.’’
Proposed Section III.F. (Section III.C. in
the final Order) describes the Notice of
Staking option and a sample format is
attached as an exhibit to the Order. The
Sundry Notices and Reports on Wells
(Form 3160–5) is self-explanatory and
instructions are on the back of the form.
We believe that the meaning of ‘‘Notice
of Staking’’ and of ‘‘Sundry Notice’’ is
adequately explained and, therefore, no
change to the regulation text is
necessary.
Section III. Application for Permit To
Drill
Note: This section has been reorganized in
the final rule and the references to sections
used in this discussion of comments are from
the proposed rule unless otherwise noted.

Purpose: This section describes where
an operator files an APD; the early
notification process; the Notice of
Staking option; the components of a
complete APD; how an APD is posted
for public notice; how it is processed by
the BLM and the FS; how the APD is
approved; and the valid period of the
APD. This section is the heart of the
Order because it addresses the content
of the APD; what an operator must do
and some options an operator may take
prior to filing an APD (in the form of
early notification and Notice of Staking
options); how the APD is processed and
approved; and the period for which the
APD is valid. We received more
comments on this section than any
other.
Summary of Changes: This section
has been reorganized to follow the
sequential progression of the APD
submission and approval process.
Information related to specific
components of a complete APD was
moved to the description of that
component to make the process clearer.
Many of the comments and changes in

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this section related to timeframes
associated with posting notices, holding
onsite inspections, supplying needed
information, and processing of the APD
once deemed complete. The above
mentioned reorganization and
associated clarification should address
those concerns and ensure that the
Order is consistent with timeframes
mandated by the Energy Policy Act of
2005.
In the final rule we added a provision
stating the BLM’s authority to deny an
APD within 30 days after the BLM
determines the APD to be complete (see
Section III.C.2.b. of the further proposed
rule or Section III.E.2.b. in the final
rule). This addition restates the present
authority to deny a permit in 43 CFR
3162.3–1(h). Denial of an APD is not
mentioned in Section 366 (2) of the
Energy Policy Act, but it is authorized
by the Reform Act which added
subsection (g) to 30 U.S.C. 226 which
provides that no drilling permit may be
issued unless the appropriate Secretary
approves the surface disturbing
activities. It has been the policy of the
agency to deny APDs when analysis or
negotiation with the operator will not
enable the BLM to approve the permit.
We believe that it is in the operator’s
best interest for the BLM to deny an
APD that is so flawed that it cannot be
modified to warrant approval as early as
possible. We also believe that it is the
intent of Congress to keep the agencies
and operators working on APDs so that
none would be left unresolved for
unreasonable lengths of time. If the BLM
decides that an APD is so flawed that
we would deny it, the operator has the
right to know promptly and to have an
appeal right. The alternative would be
to issue a deferment notice that would
require the operator to wait up to 2
years before receiving a denial and an
appeal right. That would defeat the
purpose of expediency that motivated
Congress in enacting Section 366 of the
Act.
Associated with the timeframes is the
clear recognition that compliance with
non-discretionary environmental laws
prior to approval of an APD is an
integral part of those timeframes. In the
final rule we made one discretionary
timeframe change so that an approved
APD is valid for 2 years rather than the
1 year period in the previous Order.
Another change in this section of the
Order is to require the operator to certify
that they have provided or made a good
faith effort to provide a copy of the
Surface Use Plan of Operations to the
private surface owner in the case of split
estate. What constitutes a good faith
effort will be determined by the
authorized officer. The BLM has

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assumed the responsibility to ensure the
private surface owner is invited to
attend the onsite inspection and that
their concerns are considered in the
approval process.
We also modified this section and the
definition of Best Management Practices
to make it clear that Best Management
Practices are voluntary for the operator
to use in the design of their project and
are only a requirement if they are a
result of the NEPA process as a
Condition of Approval for an APD.
Finally, we modified Sections III.a. and
b. to make it clear that the BLM is
responsible for compliance with NEPA,
the National Historic Preservation Act,
and the Endangered Species Act on
BLM lands and the FS has the same
responsibility on their lands.
We received a number of comments
about reposting when the proposed well
location is moved. Existing BLM
regulations require that the well
location be described in the posting to
the nearest quarter-quarter section in the
Public Land Survey System. Therefore,
if the proposed location is moved to a
different quarter-quarter section, the
APD will be reposted. For lands that do
not have a Public Land Survey,
proposed locations that are moved 660
feet or more will be reposted. We
established the 660 feet criterion
because a well at the center of a quarterquarter section that is moved 660 feet
will by definition be in a different
quarter-quarter section.
In Section III.G. we deleted the
language that stated that if no well is
drilled during the initial period or
extension of the APD, the APD expires.
We deleted the statement because it is
self evident.
In Section III.D.6., we modified the
Operator Certification slightly by adding
an entry for the operator to insert an
email address where the operator can be
contacted. This entry is optional, but
will provide the BLM and the operator
another avenue for communication.
In Section III.D.2.a. we added
language to clarify who the operator
should contact prior to surveying and
staking on tribal or allotted lands. This
is not a new requirement and is
consistent with existing practice.
Comments and Responses: Several
commenters recommended that the
subsections within Section III. be
rearranged to better follow the
sequential progression of the APD
submission and approval process.
Another commenter asked for further
clarification of the Notice of Staking
section. We recognize that
reorganization would add clarity and
have reorganized the subsections in

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Section III. to follow the order in which
they occur. In the final rule we:
(A) Explain where to file the APD
(subsection A);
(B) Describe the advantages of Early
Notification (subsection B) and Notice
of Staking (subsection C);
(C) Provide a detailed discussion of
the components of a complete APD
(subsection D) and describe the posting
and processing of the APD (subsection
E); and
(D) Describe some of the
responsibilities of the approving
agencies and the period for which the
APD is valid (subsections F and G).
This reorganization also makes clear
the purpose and advantages of the
Notice of Staking option.
Many commenters recommend that
early notification in Section III.B. be
mandatory. One commenter supported
the early notification section as drafted.
Early Notification, as the Order states,
could help all parties identify unusual
conditions of the land, time-sensitive
issues, and potential areas of conflict.
The BLM and the FS recognize the
advantages of early notification, but the
same level of resource protection will be
applied whether there is early
notification or not. There is no statutory
requirement for early notification and
we do not believe that it is necessary in
all cases. Therefore, we did not change
the Order based on this comment.
One commenter suggested that the
wording ‘‘wildlife inventory’’ in Section
III.B. be changed to ‘‘biological
inventory’’ to cover flora as well as
fauna. We adopted the commenter’s
suggestion and revised Section III.B.,
accordingly.
One commenter asked how early
notification relates to the Notice of
Staking Option. We amended the
wording in the Early Notification
section based on this comment to make
it clear that early notification is different
from and precedes the Notice of Staking,
that neither option is required, and that
one may be used without the other.
One commenter suggested that we
revise the Order to make it clear that the
operator is not required to conduct
surveys or studies under Section III.B.
We believe that the Order is clear on the
subject of inventories, surveys, and
studies; they are the responsibility of
the agencies and are not required as part
of the APD. However, in the final rule
we added language in Section III.B. to
clarify that they are not the
responsibility of the operator.
A few commenters stated that the
BLM must recognize in Section III.B.,
Early Notification, that in some cases it
may be impossible to contact all private
surface owners. Consistent with existing

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practice, the Order requires the operator
to make a good faith effort to contact
private surface owners. However, a good
faith effort does not mean that there is
an absolute requirement to make contact
with the surface owner. Section VI. of
the Order provides procedures for
operations on private surface.
One commenter stated that even if a
categorical exclusion is used, the 30-day
posting is required. We agree. Posting is
an existing requirement under the
Reform Act, even for actions covered by
a statutory categorical exclusion. We did
not revise the proposed Order because
we do not discuss categorical exclusions
in the Order.
Several commenters stated that they
opposed the requirement that an APD be
reposted for an additional 30 days when
the operator subsequently moves the
proposed well location. They further
state that this 30-day reposting time
period should not be required when the
new location is covered by an existing
NEPA document or if the new location
is for an in-fill well within a developed
field. One commenter said that posting
for public notice was duplicative of
NEPA requirements for soliciting public
comments. We disagree. The 30-day
public posting period is required by the
Reform Act and is distinct from NEPA
related public participation. However,
we have revised proposed Section
III.C.1. (final Section III.E.1.) to provide
clarity and conform with regulations at
43 CFR 3162.3–1 and 36 CFR 228.115
that require posting. As previously
discussed, we adopted a 660 feet
criterion for reposting where no Public
Land Survey exists because that would
mean the well could be relocated in a
different quarter-quarter section if the
survey did exist. The 660 feet criterion
would apply the same standard for
reposting where Public Lands Survey
descriptions are not available. We also
retained the criterion of ‘‘substantial’’ to
assure that the authorized officer can
notify the public of changes that create
essentially ‘‘new’’ proposals within the
existing APD in the same quarterquarter section.
Many commenters stated that the
Order requires an agency to give at least
30 days public notice before approval of
an APD. They suggested that the BLM
inform the surface owner and any other
Federal lease or permit holders directly.
We did not amend the Order as a result
of this comment. We are required by the
Reform Act to post APDs for public
notification. In the final rule we
modified Section III. of the Order to
require the operator to certify that they
have provided to the private surface
owner copies of the Surface Use Plan of
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changes. We believe that this provides
ample notification to the surface owner.
We addressed notification of other
Federal permittees in the Section II.
discussion above.
One commenter said it is unclear
whether APD notices must be posted by
the BIA and/or the affected Indian tribe,
in addition to such notices being posted
by the BLM, or whether only the BLM
will post APD notices. The final rule
requires that other Federal Surface
Managing Agencies, including the BIA
where Indian lands overlie Federal
minerals, post the APD information for
Federal leases. Posting is not required
for an APD on an Indian oil and gas
lease, since there is no requirement in
the Indian leasing statutes similar to
that in Section 17 of the Mineral Leasing
Act.
One commenter stated that the Order
needs to be revised to recognize the
timeframes specified in the Energy
Policy Act of 2005. The further
proposed rule published in the Federal
Register on March 13, 2006,
incorporated the specified timeframes in
Section III.C.2. (Section III.E.2. in the
final Order), APD Posting and
Processing, for APD processing as does
the final rule.
One commenter stated that the Order
should be revised to recognize the need
to issue permits within 30 days of the
BLM’s receipt of a complete APD as the
Energy Policy Act of 2005 requires. We
recognize the importance of this
comment, but also recognize that the
Energy Policy Act does not relieve the
BLM or the FS from complying with
other applicable laws. Section 366 of the
Act clearly states that the BLM cannot
approve a permit without first
complying with other applicable laws.
One commenter stated that the
proposed timeframe in Section III. is so
short as to be impractical and
unrealistic, and encourages sloppy
processing. They believe that no matter
how much increased funding is
channeled to the budgets, neither the
BLM nor the FS could be sufficiently
staffed to be able to competently handle
the turnaround time in Section III. of the
Order. Further, they believe there is no
justification for expediting permits. The
timeframe for processing APDs is
mandated by the Energy Policy Act of
2005. As such, the agencies must
comply with this timeframe. However,
neither the Energy Policy Act nor this
Order requires a final decision on an
APD prior to compliance with nondiscretionary statutes.
One commenter stated that the BLM
must establish timelines for ‘‘outside
agencies and surveyors’’ to act on pain
of waiver of their participation.

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Regulation of other Federal, state, or
local agencies or of their contractors is
beyond the scope of this Order.
One commenter noted that there is no
time limit for completion of a NEPA
analysis nor is there a definitive time
limit for approval of the APD once
NEPA is completed. The commenter is
correct; there is no time limit for the
completion of the NEPA analysis but
there is a requirement to comply with
NEPA. The Order states (proposed
Order Section III.C.2.c.1. and final rule
Section III.E.2.c.1.) that the BLM should
make the decision on whether to
approve the APD within 10 days of the
operator submitting the information or
actions identified in the deferral notice
(required by Section 366 (2)(B) of the
Energy Policy Act), unless other legal
requirements such as NEPA have not yet
been met. When these requirements are
met, the BLM will make the final
decision on the APD. These
requirements are consistent with
Section 366 of the Act. The Energy
Policy Act requires that the BLM
comply with NEPA and other applicable
laws, it does not set a time limit for
compliance. The BLM and the FS
understand the urgency for approving
APDs, but cannot establish a regulatory
time limit for complying with
applicable law.
A few commenters noted that the
operator is given 45 days after receiving
notice from the BLM to provide any
additional information requested before
the APD is returned to the operator. The
commenter stated that the data the BLM
requests could take longer than 45 days
to accumulate (e.g., an endangered
species survey); therefore, a rigid 45-day
deadline may not be possible to meet.
The commenter seems to misunderstand
what is included in a ‘‘Complete APD’’
determination. The definition of a
complete APD is very specific and does
not include things such as endangered
species surveys and therefore any
information that the BLM requires to
make a complete APD determination
should be easily provided within 45
days; however, the authorized officer
has the discretion to extend the 45-day
limit especially if the operator so
requests.
One commenter stated that the
operator has 2 years and 45 days after
receiving notice of a request for
additional information from the BLM to
provide the additional information or
the BLM may return the APD to the
operator. Under the proposed rule
Section III.C.2.a. (final Section III.E.2.a.),
the operator has 45 days (non-statutory)
from the BLM’s request at the onsite
inspection to provide missing
information that will make the APD

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complete. The BLM has 30 days
(Section 366 (2) of the Act) from the
date that the APD is complete to
approve the APD or to notify the
operator that the decision must be
deferred pending compliance with
NEPA and other laws. The notice must
also tell the operator what specific
steps, if any, that the operator could
take for the permit to be issued (Section
366 (2)(B) of the Act). Consistent with
the Act, the operator has 2 years
(Section 366 (3)(A) of the Act) to
complete the steps specified in the
notice. Without a complete APD the 30day timeframe and, therefore, the 2-year
timeframe do not begin. If the operator
has not taken the specific steps within
2 years, the BLM must deny the APD
(Section 366 (3)(C) of the Act).
One commenter stated that the phrase
‘‘Within 7 days of the onsite inspection,
BLM, and the FS if appropriate, will
notify the operator that the APD is
complete or that additional information
is required to make the APD complete’’
in Section III.C.2.b. of the proposed
Order, should be deleted because it is
inconsistent with paragraph (a) of the
Order. We agree and in the final Order
we moved Section III.C.2. to III.E.2. and
revised the statement to state that
‘‘deficiencies will be identified at the
onsite’’ and deleted the wording cited
above. In the final Order we retained the
7-day timeframe for Notices of Staking
because agencies typically would not
have had a detailed proposal to review
prior to an onsite inspection associated
with a Notice of Staking (final Section
III.C.).
Many commenters stated it is clear
that no final decisions will be made
until the regulatory requirements of the
Endangered Species Act, National
Historic Preservation Act, and NEPA
have been satisfied. The commenters
said that the Order should not violate
the opinion of the two 1988 solicitor’s
memos. The commenter said that the
memos required the BLM to consider
and adopt landowner suggestions and
concerns to the extent they do not
violate the statutory requirements of the
cited acts. We believe that the intent of
the 1988 solicitor’s memorandum was to
emphasize that these statutes apply to
private surface overlying Federal
minerals and nothing in the memos
preclude consideration of surface owner
concerns and suggestions that do not
conflict with Federal statutes or
implementing regulations. We
emphasize that we invite the surface
owner to the onsite inspection (Section
VI.) to facilitate surface owner input and
to ensure consideration of their
suggestions and concerns. As discussed
earlier, we have added a requirement

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that the operators certify that they have
provided a copy of the Surface Use Plan
of Operations to the private surface
owner so that the surface owner has the
clearest possible understanding of the
proposed action. The BLM will explain
the statutory requirements of NEPA,
National Historic Preservation Act, and
Endangered Species Act to the surface
owners and will discuss any concerns
that the surface owner may have about
compliance with these statutes. We
believe that any substantive request of
the surface owner can be accommodated
within these statutory requirements.
One commenter referred to Section
III.C.2.c., which states that no final
decision is made pending regulatory
compliance with Federal statutes and
suggested that this provision should be
revised to recognize the actions that
have been categorically excluded from
NEPA analysis pursuant to the Energy
Policy Act of 2005. We did not modify
the Order as a result of this comment.
It is not the intent of this Order to make
determinations on whether or not NEPA
applies in a given situation.
One commenter requested that we
revise Section III.C.2.c. to state that the
BLM and the FS must be sure that the
NEPA and Endangered Species Act
analysis are current prior to approving
the APD, especially in cases where there
is a lengthy delay in APD approval. We
did not modify the Order as a result of
this comment. Nothing in this Order
relieves the BLM or the FS from
compliance with these statutes. Nor is it
our intent to provide in this Order
detailed procedures for compliance with
other laws and regulations.
One commenter recommended that
APDs should be effective within 60 days
if no action is taken by the BLM within
that time. We emphasize that the Energy
Policy Act of 2005 establishes
timeframes for APD approvals, but it
also requires that all applicable
environmental laws be complied with
prior to APD approval (Section 366
(2)(A) and (3)(A) and (B)).
A few commenters referred to Section
III.C.2.d. dealing with the FS Appeal
procedures applicable to APDs on NFS
lands and stated that they oppose
having the FS appeal procedures apply
to oil and gas operations on NFS lands.
The commenter suggested that the FS
conform its administrative appeals
process to the BLM timeframes. We did
not modify the Order as a result of this
comment because the FS appeal
timeframes contained in 36 CFR part
215 are consistent with timeframes in
the Appeals Reform Act (P.L. 102–381)
and therefore we did not make the
suggested change.

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Several commenters suggested that
the BLM should continue reviewing the
drilling plan while FS reviews the
Surface Use Plan of Operations. One
commenter stated that evaluation of the
application should continue while
waiting for the onsite inspection to be
held. We agree. Our existing processes
and those in the final Order are
consistent with what the commenter
suggests. Furthermore, the Order states
that the application will be processed
up to the point that missing information
or actions makes it impractical
(proposed Section III.C.2.a.). This
statement will be moved to the lead
paragraph for final Section III.E.2. so
that it pertains to all of this section.
Several commenters noted that an
APD approval is valid for 1 year from
the date of approval and commented
that this does not provide adequate
flexibility for operators, particularly
given the high demand for, and limited
availability of, drill rigs. They suggested
that the valid period should be
expanded to at least 2 years to allow
operator’s more operating flexibility
(i.e., drill rig availability). Another
commenter stated that the shortest
timeframe of either 1 year or lease
expiration is too long a period for an
APD to remain valid and requested that
an extension not be automatically
granted. We considered these comments
and in the final Order will allow an
APD to be valid for 2 years with an
option to extend for an additional 2
years. This takes into account the
narrow drilling windows created by
seasonal conditions, wildlife habitat
needs, and the availability of drilling
rigs. We considered the adequacy of the
information and analysis from the
perspective of timeliness in this
decision. We believe that NEPA
documentation and cultural and
wildlife surveys will be adequate for at
least the 2 year term and potential 2
year extension. Our decision is
consistent with the Energy Policy Act of
2005 in that the categorical exclusions
in Section 390 are based on NEPA
documents that are up to 5 years in age,
which is longer than the initial APD
term and extension in the final Order.
One commenter asked how we can
require diligent drilling, continue the
APD, and potentially extend a lease.
The commenter also asked that we add
a deadline for reclamation, especially on
private surface. We did not modify the
final Order as a result of these
comments. We are not certain what the
commenter meant by diligent drilling. If
the commenter is asking how we will
require the operator to commence
drilling soon after the APD is approved,
we do not believe this to be an issue of

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concern. In fact, we are concerned that
seasonal restrictions and drill rig
availability may cause delays and we
have extended the valid period for the
APD to accommodate this potential
problem. If the comment concerned
environmental obligations (43 CFR
3162.5–1(b)), we believe that involving
the surface owner in the onsite
inspection, the environmental review
process done before approving the APD,
and the periodic inspection conducted
by the BLM personnel are adequate to
assure surface protection, compliance
with lease terms and reclamation. Lease
extension is beyond the scope of this
Order and is covered in other
regulations (43 CFR subpart 3107).
Reclamation properly begins as soon as
the drilling operation ends. We typically
require interim reclamation of that
portion of the site that is no longer
needed once a producing well is
established. We believe that interim
reclamation can best be handled by
attaching Conditions of Approval and
by compliance with lease terms rather
than by regulation.
One commenter recommended that
the BLM develop a standard checklist of
required information for processing an
APD. This checklist should include
NEPA, National Historic Preservation
Act, and Endangered Species Act
requirements applicable to the APD that
have been, or still need to be,
completed. The commenter said that
this form would aid operators in
ensuring that they submit to the BLM a
complete APD and aid the BLM in
efficiently ascertaining items that may
be missing from the APD submission.
We did not modify the rule as a result
of this comment. Section III.D. of the
final Order lists all of the components
of a complete APD. The Order clearly
states that the operator may voluntarily
provide cultural and wildlife survey
data, but the responsibility to comply
with NEPA, Endangered Species Act,
National Historic Preservation Act, and
other applicable laws, is the
responsibility of the agencies and not a
requirement of the applicant and,
therefore, is not listed as being part of
a complete APD.
Many commenters stated that Best
Management Practices should be strictly
voluntary and not constitute a new set
of stipulations or Conditions of
Approval for every future Federal lease
or APD. These commenters believe that
while Best Management Practices may
be innovative and dynamic, they must
be considered for their economic
viability and be applied to site specific
projects only when necessary to mitigate
adverse environmental, cultural, or
social impacts. Other commenters stated

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that Best Management Practices should
be mandatory to ensure protection from
resource abuse. One commenter asked
that operators be required to explain
what Best Management Practices they
intend to use in their Surface Use Plan
of Operations. While the BLM
encourages the use of Best Management
Practices, they are voluntary unless after
specific analysis during the APD
processing, the BLM includes them as
Conditions of Approval to mitigate
impacts. In the cases where Best
Management Practices are included as
Conditions of Approval, costs of the
Best Management Practices will be
considered in the environmental review,
but may not determine the final
decision if the BLM finds that the
Conditions of Approval are necessary to
mitigate environmental, cultural, or
social impacts. If an operator proposes
using Best Management Practices, they
should be included in the Surface Use
Plan of Operations. We added a
definition of ‘‘Best Management
Practices’’ and we modified the
definition of ‘‘Conditions of Approval’’
for clarity.
One commenter recommended
deleting the paragraph about Best
Management Practices that leads the
discussion of components of a complete
APD package because they should not
be required. We agree that Best
Management Practices are not a required
component of a complete APD and we
revised the final rule to make it clear
that Best Management Practices are not
mandatory unless they have been
analyzed as a mitigation measure in the
environmental review, but that we
encourage their use.
One commenter asked why the BLM
should be notified prior to entering
private lands for surveying, staking, and
inventories. The final rule does not
require, but only encourages, operators
to notify the BLM or the FS prior to
entering private lands. In general, early
BLM notification is encouraged
regardless of surface ownership so that
applicants are aware of lease specific
issues (such as the presence of
endangered species) before an operator
commits to a particular course of action
or completes an inventory that does not
address all relevant issues.
A few commenters recommend that
we revise the sentence that states, ‘‘No
entry on private lands for surveying,
staking, and inventories should occur
without the operator first making an
effort to notify the surface owner.’’
Commenters said that requiring
approval from a surface owner prior to
entry could impair rights under their
mineral lease. The BLM and the FS
believe that it is important to involve

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the surface owner in the process as soon
as possible. However, the final rule
makes it clear that the Order only
requires an operator to attempt to obtain
approval from the surface owner, but
after such effort, surveying and staking
may proceed.
Many commenters noted that the level
of effort required of the operators to
notify the surface owners prior to
staking is not clearly defined. We agree.
We cannot add a requirement to contact
the surface owner because in some
circumstances such contact may not be
possible. Such a requirement could
negate lease rights. In the final rule we
added language requiring the operator to
certify that they have made a good faith
effort to provide a copy of the Surface
Use Plan of Operations to the surface
owner but that plan may not have been
prepared at the staking stage. One
commenter disagreed with our
statement that staking on private lands
is casual use. We agree with this
comment. The statement that staking is
a casual use refers only to staking on
public lands for which casual use is a
defined term. Therefore, casual use does
not apply to private surface. We
understand that this is a sensitive issue,
but the BLM cannot make an absolute
requirement that the operator obtain
surface owner consent prior to entering
private land, because the Stockraising
Homestead Act offers the option of
bonding to the lessee. However, we do
require that the operator make a good
faith effort to contact the surface owner
and enter into a Surface Access
Agreement at the earliest possible time.
One commenter noted that not all
access permits for Indian lands are
granted by the area offices of the BIA,
now known as regional offices. We agree
and have replaced ‘‘Area Offices’’ with
‘‘appropriate office.’’ Further discussion
of access to Indian lands is in Section
VII. of the Order.
Many commenters asked that we
delete the following language in
paragraph (d) of Section III.E.2.: ‘‘The
operator must include the minimum
design criteria, including casing loading
assumptions and corresponding safety
factors for burst, collapse, and tensions
(body yield, and joint strength).’’ These
commenters recommend that this
provision be deleted because it is too
detailed and no rationale for requiring
such additional specificity in the APD
has been given. We did not delete the
language in the final rule because we
believe that the information is necessary
to ensure compliance with minimum
standards defined in Onshore Orders
Number 2, Drilling Operations (53 FR
46790) and Number 6, Hydrogen Sulfide
Operations (55 FR 48958) and to meet

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other regulatory requirements in 43 CFR
3161.2.
One commenter asked that all aspects
of a Drilling Plan be made available to
the surface owners at or before
submission of the APD. The commenter
believes that the surface owners are
entitled to review the plan in order to
assess the necessity and extent of the
disturbance proposed. We believe that
the Surface Use Plan of Operations is
more useful to the surface owner and
that the Drilling Plan would provide no
useful information to the surface owner
because it primarily contains technical
information about the drilling of a well
and down-hole issues. Although we did
not amend the Order to require
operators to provide drilling plans to
surface owners, we amended the Order
to require operators to certify that they
have attempted to provide a copy of the
Surface Use Plan of Operations to the
surface owner. In addition, the complete
APD is available for public review at the
approving BLM office, with the
exception of proprietary information
under the provisions of the Freedom of
Information Act—43 CFR part 2.
A few commenters stated that the
proposed rule is unclear as to whether
roads associated with an APD that cross
Indian surface must meet the standards
of the pertinent tribe or the standards of
the BIA, or in the case of tribal Indian
surface, both. If the roads are on the
lease, the BLM will consult with the
other Surface Managing Agencies (BIA)
to obtain the appropriate road standards
and route. After this consultation, in
order to comply with the standards that
the BIA provided to the BLM, the BLM
may add Conditions of Approval. For
off-lease roads the operator must contact
the appropriate Surface Managing
Agency or tribe.
A commenter suggested we add ‘‘map
or’’ after ‘‘include’’ to the phrase, ‘‘the
operator must include a plat diagram
and geospatial database of facilities
planned either on or off the well pad
that shows, to the extent known or
anticipated, the location of all
production facilities and lines likely to
be installed if the well is successfully
completed for production.’’ We agree
with the commenter and we added the
phrase because a map may in some
cases provide sufficient detail rather
than requiring a detailed survey in all
cases.
One commenter stated that the
information called for in Section
III.E.3.d. (Location of Existing and
Proposed Production Facilities) is
usually provided before construction.
We agree with the commenter. That
section refers to existing production
facilities within the general area of the

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proposed well and, therefore, no change
is necessary.
One commenter says that they may
not know where they will obtain water
if they intend to buy it at the time they
submit their APD. We did not modify
the Order as a result of this comment.
The BLM and the FS need the
information to ascertain the impacts
associated with operations and the need
for any mitigation applicable to public
lands. Under this provision, we don’t
require specific contract information,
just the location of the water supply and
transportation method proposed so that
we can complete the NEPA analysis. If
the water source is unknown at the time
the APD is filed, the information can be
submitted as a Sundry Notice once it is
identified.
One commenter suggested that we
add language to the Order to direct
operators to obtain appropriate state
agency water permits to avoid
misunderstanding regarding jurisdiction
in permitting water source wells. We
did not modify the Order as a result of
this comment since the Order is not
intended to enforce regulations or
requirements of other governing
agencies and those rules stand on their
own authority.
One commenter suggested deleting
the last sentence of the Section III.E.3.f.
on construction materials described in
the Surface Use Plan of Operations. The
provision requires that the operator
contact the Surface Managing Agency or
owner of construction materials before
those materials are used. We believe
that the operator should make
arrangements with the owner prior to
use; however, it is not necessary for the
Order to regulate private agreements.
Therefore, we removed the final
sentence of that section.
Many commenters noted that an
operator may amend his plan for surface
reclamation at the time of abandonment,
yet no notice must be given to a surface
owner then or at any stage of the
reclamation process. These commenters
ask that the operator be required to
notify and at least attempt discussing
reclamation needs with the surface
owners. We agree with the commenters.
Changes to reclamation plans are not
unusual because final reclamation may
not occur for several years after the
original plan was approved, especially if
the well is productive or because
reclamation standards or techniques
change. We added language to the
reclamation part of the abandonment
section to require the operator to notify
the surface owner and consider their
views when an operator submits a
reclamation plan for wells not having an
approved plan. The surface owner will

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have an opportunity to express their
views regarding all issues including
reclamation before APDs for new wells
are approved.
Several commenters recommended
that the APD should only require a basic
reclamation plan that meets current
standards and then require a more
detailed, site appropriate final
reclamation plan when the notice of
intent to abandon is filed. We disagree.
The reclamation plan must be
sufficiently detailed at the APD stage to
facilitate analysis and identification of
needed Conditions of Approval to
ensure adequate reclamation. If changes
are proposed prior to abandonment,
they may be submitted with a Sundry
Notice.
A few commenters suggested that
‘‘when obtainable’’ or ‘‘to the best of his
ability’’ (regarding surface owner
contact information) be added to the
first sentence in proposed Section
III.E.3.k. and in the last paragraph of
proposed Section III.F. to recognize that
some surface owners are difficult to
locate. We believe the phrase ‘‘if
known’’ already in that sentence
addresses this concern and additional
wording would be redundant (see
Section III.D.4.k. in the final rule).
Some commenters supported the use
of Master Development Plans and a few
recommended that the BLM encourage
their use. The commenters note that
Master Development Plans are an
effective method to address the impacts
associated with Surface Use Plans of
Operation in a comprehensive manner,
especially the development of access
roads and pipeline systems for wells
that are to be developed under a
common drilling plan. However, they
note, because of the unique
environmental impacts that each well
site may pose, specific environmental
assessments are imperative for each well
pad location. We agree with the
comment concerning the advantages
gained by using Master Development
Plans. Subsequent APDs will be
reviewed in light of the Master
Development Plan when such a Plan is
in place. Any new environmental
concerns that are identified will be
addressed before any subsequent APD is
approved. This is existing practice and
no change in the Order is necessary.
One commenter suggested that the
BLM should clarify whether all APDs
submitted as part of the Master
Development Plan will be approved at
the same time. The commenter said that
if all the APDs associated with the Plan
were approved at one time, there may be
a problem with validity (we assume this
means difficulty in timely drilling
because of the 1-year term). Under this

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section the BLM will analyze all APDs
proposed with the Plan and subsequent
APDs that are anticipated in the Plan
and make a decision on whether to
approve the Master Development Plan.
Subsequent phased implementation of
that decision will involve approval of
individual APDs. The operator should
work with the BLM and the FS to assure
that APDs are phased according to the
operator’s schedule. We believe that this
can be achieved without changing the
text of the Order. However, we have for
other reasons extended the term of the
APD to 2 years (see the discussion of
Section III.D. above).
One commenter wanted master APDs
to be included in a Master Development
Plan. We agree and view a master APD
to be the part of the proposed Master
Development Plan that addresses
proposed and anticipated future wells.
Master APDs contain common details of
multiple wells. The master APD can be
approved by the BLM and then in
subsequent APDs the operator
references the master APD and makes
any appropriate changes such that the
material referenced in the master APD
or Master Development Plan and the
changes or new material constitute a
complete APD. Our environmental
review, including NEPA analysis, would
then focus on the new or changed
information and rely on the existing
analysis of the referenced material in
the master APD or Master Development
Plan. We did not amend the Order as a
result of this comment because we
believe that the existing provisions
allow for master APDs.
Several commenters expressed
concerns about having to provide both
state and Federal bonds in varying
amounts. We understand the
commenter’s concerns, but operators are
required by statute (30 U.S.C 226(g)) and
our regulations to have a Federal bond
(see 43 CFR subpart 3104). The Order
cannot regulate bonds that may be
required by states. The BLM
requirements and procedures may be
different than those of any given state.
For example, states may have different
criteria for releasing bonds than our
criteria or they may release bonds
without informing us and that could
lead to insufficient bond coverage. State
bonds cannot replace Federal bonds, but
the BLM may, under certain
circumstances, consider state bonds in
setting Federal bond amounts. However,
we did not modify the rule as a result
of these comments.
A few commenters pointed out that
several references in the bonding
section were incorrect and related to
coal leases rather than oil and gas. The
commenters are correct. We did not

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intend to limit the regulatory
requirements to only those in 25 CFR
part 200 and those specific references
have been deleted. The FS is required to
consider the cost of reclamation and, if
deemed necessary, require additional
bonding. The operator has the option to
either increase the bond held by the
BLM or file a separate bond with the FS
(36 CFR 228.109).
Many commenters expressed concern
that the bond amounts are inadequate
and do not address the concerns of the
surface owners or consider other surface
uses. They asked why the BLM and the
FS do not have the ability to increase
bond amounts. One commenter
referenced the sentence in Section
III.E.5. that states ‘‘In determining the
bond amount, the BLM may consider
impacts of activities on both Federal
and non-Federal lands required to
develop the lease that impact lands,
waters, and other resources off the
lease’’ and they requested that the BLM
clarify what they may or may not
consider in determining the bond
amount under this rule. Lease bonds
under 43 CFR 3104.1 ensure
performance of the operator in the
drilling, production, and reclamation of
the well and compliance with lease
terms and the approved APD. If lease
operations adversely affect off lease
lands or surface waters, these impacts
may be covered by the bond. The
preamble for the proposed rule (see 70
FR 43354) discussed the authority for
considering the costs of restoration of
any lands or surface waters that are
adversely affected by lease operations in
setting the bond amount, citing 30
U.S.C. 226(g). The Order does not, as the
commenter requested, provide a
comprehensive list of what may or may
not be considered in setting the bond
amount. However, existing regulations
at 43 CFR 3104.5 as well as Section
III.E.5.a. of the final Order provide
criteria for that purpose.
Section III.E.5.a. of this Order and 43
CFR 3104.5 state the criteria for setting
bond amounts. The regulation and our
policy to require less than the full bond
amounts have shown to be greatly
effective in managing risk without
excessive costs. We have not modified
the Order as a result of these comments.
Surface owner compensation is not
provided by lease bonds under 43 CFR
subpart 3104 or this section of the
Order. Bonds for the benefit of the
surface owner are addressed in Section
VI. of this Order and are addressed later
in the discussion of that section of this
preamble.
One commenter asked why the bond
number was included in the self
certification when it is required on

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Form 3160–3. We agree with the
commenter and since it is duplicative
we eliminated it from being a
requirement in the self certification
clause in the final rule.
One commenter stated that the
requirement to stake the outer limits of
the pad, pit, etc., should not be required
for the Notice of Staking option. We
agree. Complete staking is not required
for the Notice of Staking option, but is
required for final staking when the APD
is filed (see Section III.F. of the
proposed rule (Section III.C. of the final
Order)).
Many commenters noted that before
filing an APD, the operator ‘‘may file a
Notice of Staking with BLM’’ who will
then inform the surface owner.
Commenters asked why notice to those
directly affected by operations is only
voluntary, implying that the notice to
surface owners should be mandatory.
We did not modify the final rule as a
result of this comment. It should be
noted that the Notice of Staking is a
voluntary process. The BLM will notify
the surface owner if possible and invite
them to the onsite inspection.
One commenter expressed concern
that surveying and related requirements
are scattered between the APD and
Notice of Staking sections of the Order
and are confusing. In the final rule we
rearranged Section III. of the Order so
that the provisions are in a more logical
sequence and to make the process
clearer.
One commenter suggested that the
bottom-hole location should not be a
requirement of the Notice of Staking
option. We disagree. The bottom hole
location is key in identifying the lease
involved and the associated permitting
requirements. The sooner this is known,
the less likely there will be delays.
Because of this importance, Attachment
I, Sample Format for Notice of Staking,
has been edited to eliminate the ‘‘if
known’’ wording associated with the
bottom hole location component.
One commenter stated that it is
inconsistent to have the BLM as the lead
agency for NEPA compliance and the
BIA the lead for Right-of-Way approval.
We disagree. Sections III.G.a. and III.G.c.
refer to different, discrete actions, APD
approval and Right-of-Way approval,
respectively, and therefore may require
separate NEPA analysis.
A few commenters stated that the
proposed Order is inconsistent with 25
CFR 211.7 and 225.4, which gives the
BIA environmental review authority.
The commenters also note that our
statement that the BIA has
responsibility for approving Rights-ofWay on Indian lands is partially
incorrect. The commenters stated that

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Rights-of-Way on Indian lands are
granted by the Secretary of the Interior,
but only with the consent of the Indian
landowner (see U.S.C. 323–328 and 25
CFR 169.3(a) and (b)). The BIA is
responsible for NEPA analysis for
actions that it approves, similarly, the
BLM is responsible for NEPA analysis
for actions that it approves. The BLM
approves all lease operations that occur
on the lease or under Indian Minerals
Development Act of 1982 (IMDA), 25
U.S.C. 2101–2108. This includes
drilling, access to drilling, flowlines to
or from the wells, construction of onlease facilities for oil and gas
development, and other well operations.
The BIA’s role for on-lease activities is
to consult with the BLM on those
actions if the minerals or the surface are
Indian trust.
Section IV. General Operating
Requirements
Purpose: This section summarizes
general requirements of the operator
such as conducting operations to
minimize impacts to surface and
subsurface resources. It also summarizes
responsibilities for protecting cultural
and biological resources and briefly
describes safety issues. It requires the
operator to submit a Completion Report
after it completes a well. This section
identifies some key operating
requirements without details that might
limit or unnecessarily constrain
operations based on site specific
proposals.
Summary of Changes: No substantive
changes have been made to this section.
However, we changed ‘‘Watershed
Protection’’ to ‘‘Surface Protection’’
because the term ‘‘watershed’’ has legal
implications that are not intended and
are beyond the scope of this Order. We
also amended the Endangered Species
Act language in this section to more
accurately reflect the statutory language
and existing policy.
Comments and Responses: One
commenter stated that under the
heading of ‘‘Operator Responsibilities,’’
the proposed rule states that an
‘‘operator must conduct operations to
minimize adverse effects to surface and
subsurface resources and prevent
unnecessary surface disturbance.’’ The
commenter suggested that to avoid
vague and ambiguous language, the
phrase ‘‘unnecessary surface
disturbance’’ should be precisely and
narrowly defined or explained. We
disagree that narrowly defining
‘‘unnecessary surface disturbance’’
would be useful. We purposefully use
broad language in the Order to cover the
many different circumstances and
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drilling. Also, we carefully review
surface use plans and limit surface
disturbance to that which we think is
necessary for the proposed operation.
We limit the size of drill pads and
require interim reclamation of the area
no longer needed after drilling is
complete.
One commenter stated that when
third party contractors are used, the
operator needs to have assurances that
the work will be accepted by the BLM
if established standards or procedures
have been followed. We disagree.
Products and services supplied by third
party contractors will be reviewed on
their own merits and, as with any
operations on public lands, the BLM
approval will not occur until we are
sure that operations or reclamation is
consistent with the APD, Orders, and
regulations. Operators and third party
contractors should contact the local
BLM office if they are not clear what is
expected of them.
A few commenters suggested that the
sentence referring to 43 CFR
3163.1(b)(2) be corrected. They believe
that sentence is partially incorrect as the
regulatory language specifies ‘‘For
drilling without approval or for causing
surface disturbance on Federal or Indian
surface preliminary to drilling without
approval, $500 per day for each day that
the violation existed, including days the
violation existed prior to discovery, not
to exceed $5,000.’’ We believe that it is
not necessary to include in the final
Order all of the regulatory language in
43 CFR 3163.1(b)(2) since that provision
is already a regulatory requirement.
However, we removed from the final
rule the text regarding the immediate
daily assessment because it is not in 43
CFR 3163.1.
One commenter stated that cultural
resource, endangered species, and
watershed protection requirements are
better addressed in Conditions of
Approval, rather than imposing a broad
requirement in this Order. In addition,
the commenter stated that the proposed
rule does not recognize the authority of
the State Historic Preservation Officer
with respect to cultural resources. With
regard to the State Historic Preservation
Office, we believe that failure to
establish national procedures could
potentially cause substantial delays and
wide variation in procedures. Therefore,
we believe it is advantageous to define
a uniform process in this Order rather
than to allow each BLM and FS office
to develop unique procedures. With
regard to the requirements in Section
IV., we believe that the requirements in
this section are broad and apply to every
APD. Only specific requirements that
apply to the actual conditions at the site

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are appropriate for Conditions of
Approval.
A few commenters stated that the
proposed language that requires
recording of historical or archeological
sites that the operator avoids is not
appropriate. One commenter suggested
changing ‘‘recording’’ to ‘‘reporting.’’
We disagree. The operator is responsible
for recording the site (Section 106 of the
National Historic Preservation Act).
Recordation means those routine
procedures adopted by the BLM or the
FS, as appropriate, and the State
Historic Preservation Officer to record
any cultural site inventoried or
discovered during earthwork and are
part of compliance with the
requirements of 36 CFR part 800
regulations governing Section 106
compliance and many State Historic
Preservation Officer protocols.
Recordation is a routine part of any
cultural survey provided by third party
cultural contractors and does not refer
to extensive data recovery or other site
mitigation techniques that are necessary
if the site is not avoided. Recordation is
the least complicated method of
reporting a site that is required under
Section 106 regulations and most
protocols.
One commenter stated that Section
IV.a. of the Order (describing what an
operator must do if cultural resources
are uncovered during construction and
the operator chooses to avoid further
impacts to the site) does not provide
adequate protection of cultural
resources. They asked that the rule be
amended to state that when an operator
encounters cultural or historic resources
during the conduct of operations, they
would be immediately shut down and
required to relocate, rather than to
produce a report that potentially
minimizes the impacts and allows the
operator to proceed. We disagree. We
believe that the process in the Order,
which is consistent with existing
practice, will provide and has provided
adequate protection to cultural
resources. A report intentionally
falsified would likely result in
revocation of permits and possible
penalties, including revocation of
authorizations to conduct cultural
surveys.
One commenter requested clarity as to
who is defined as the Surface Managing
Agency in various scenarios relative to
Indian lands. The final Order makes it
clear that for tribal or allotted lands held
in trust, the BIA is the Surface Managing
Agency. The final Order also recognizes
that surface owners have rights and
responsibilities with respect to trust
lands.

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One commenter requested that the
Order address the protection of
vertebrate fossil materials. We did not
modify the Order as a result of this
comment. It is existing policy that will
continue under this Order to address the
protection of fossils through Conditions
of Approval.
One commenter asked for an
explanation of procedures for tribal
involvement should cultural resources
be encountered on lands covered by the
APD. We did not modify the final rule
as a result of this comment. Cultural
resource compliance under the National
Historical Preservation Act is covered
by the implementing regulations for
Section 106 of the National Historic
Preservation Act along with various
local agreements with State (and Tribal)
Historical Preservation Officers. Since
those procedures are defined elsewhere
and are subject to protocols and
agreements that differ depending on
locale, we did not address them in this
Order.
One commenter stated that in order to
protect watersheds, an operator ‘‘must
take measures to minimize or prevent
erosion and sediment production.’’ The
commenter said that the agency should
be much more specific and careful in
protecting water values. Section IV.c. of
the Order and 36 CFR 228.108(j) address
watershed protection. In addition, it is
existing policy that will continue under
the Order to require site specific
mitigation for each approved APD.
Effective protective measures can be
developed only after an actual proposed
action is evaluated and this must be
done on a case-by-case basis. Therefore,
we did not modify the Order to address
this comment. Many commenters
wanted more specific protection of
municipal watersheds and water
resources. Protection of municipal
watersheds and water resources is
outside the scope of this Order.
Measures to protect resources such as
water are included in oil and gas leases,
are addressed in Resource Management
Plans, and are developed by site specific
NEPA analysis, as appropriate.
One commenter requested that we
remove the word, ‘‘may’’ from the
sentence, ‘‘Such measures may include,
but are not limited to: Avoiding steep
slopes and excessive land clearing
* * *’’ in the watershed protection
provisions of the Order. The commenter
believes that these measures should be
mandatory, not discretionary. A few
commenters suggested that this
requirement should be reworded to say,
‘‘Construction with frozen material is
prohibited and surface disturbance may
be suspended during periods when the
soil material is saturated or when

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watershed damage is likely to occur
(from Wyoming BLM Surface
Disturbance Mitigation Guidelines).’’
We did not accept these comments
because the list is intended to illustrate
conditions to be avoided and is not
intended to be comprehensive. Detailed
mitigation measures are best developed
on a case-by-case basis or in guidance
documents such as the one the
commenters quoted.
A few commenters asked whether an
operator is required to notify the
affected tribe, the BIA, or both for
operations on split estate lands
containing Indian surface and Federal
oil and gas when there are ‘‘emergency
situations.’’ We replaced ‘‘surface
management entity’’ with ‘‘Surface
Managing Agency’’ and revised the
definition. As a result, it is now clear
that in the emergency situation the
commenter described, an operator
should notify the BLM and Surface
Managing Agency (BIA in this case).
Section V. Rights-of-Way and Special
Use Authorization
Purpose: This section describes the
requirements for obtaining a Right-ofWay (BLM) or Special Use
Authorization (FS) for activities that are
attendant to but not part of the APD.
Summary of Changes: No substantive
changes were made to this section and
comments focused on the desire or need
to have both the Rights-of-Way and APD
approved at the same time to avoid
operating delays.
Comments and Responses: A few
commenters suggested that the BLM
should combine Right-of-Way filing and
approval with the APD process because
it would allow approval of the access
road Right-of-Way at the same time as
the APD approval. They also suggested
that the BLM standardize the Right-ofWay process for all BLM offices. One
commenter suggested that we not
approve an APD until any associated
Right-of-Way or other authorizations
were also approved. We did not amend
the Order as a result of these comments.
There is no need to address these issues
in regulation. Given the limited time of
an APD, no operator would want to start
the term running before it has access to
the well site. While it is the intent of
this Order and BLM policy to ensure
uniformity in approval processes, local
conventions sometimes evolve to
accommodate local needs.
A few commenters said it was not
clear whether to file a Right-of-Way
application with the BIA for allotted
Indian lands and to the tribe for tribal
Indian lands for split estate easements,
or whether the operator should file in
accordance with the rules in 25 CFR

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part 169. The operator should comply
with BIA regulations which define the
appropriate tribal/Indian owner role in
approving Rights-of-Way where Indian
land is involved.
Section VI. Operating on Lands With
Private/State Surface and Federal or
Indian Oil and Gas
Purpose: This section discusses the
requirements and procedures for
operating on split estate lands. It
describes:
(A) The requirement of the operator to
contact the surface owner before entry,
including entry to stake the location;
(B) Surface Access Agreements that
are made with the surface owner for
access to the private surface; and
(C) Compensation for damage to the
surface estate that are provided by law
and the bond for the benefit of the
surface owner if a good faith effort to
reach agreement fails.
The BLM will also make a good faith
effort to contact the surface owner to
assure that they understand their rights
and to invite them to any onsite
inspection that may be conducted.
Summary of Changes: We made
several changes to this section that are
as a result of public comment. Those
changes include: (A) Adding a
requirement of the operator to provide
a copy of the Surface Use Plan of
Operations, the Conditions of Approval,
and any emergency notices to the
surface owner; and (B) Removing from
the rule the universal use of the
Stockraising Homestead Act standard to
define the damages covered.
We also clarified the section regarding
access to Federal minerals underlying
Indian surface. The new language makes
clear that the operator must make a good
faith effort to obtain a surface access
agreement with a majority of the Indian
surface owners who can be located with
the assistance and concurrence of the
BIA or with the tribe in the case of
tribally owned surface. This is
consistent with existing practice and 25
CFR 169.3.
Comments and Responses: One
commenter complains that the Order
would give new rights to surface
owners. We disagree. The Order only
formalizes the existing practice of
making a good faith effort to notify the
surface owners. The surface owners’
participation and input is welcome, but
the Order gives them no veto over
development of Federal oil and gas.
Several commenters were uncertain
whether or not privately owned surface
includes tribal surface estates owned in
fee simple. When tribal lands are held
in trust or are subject to Federal
restrictions against alienation the BIA is

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the Surface Managing Agency, but if
lands are held in unrestricted fee, those
lands are treated the same as private
surface.
Many commenters expressed
concerns that the Order changed current
procedures for operations on private
surface with Federal oil and gas. We
disagree. The Order does not change the
existing legal relationship between the
surface and mineral estates or the
relationship between the surface owner
and the operator, but clarifies the
relationship between operators and
surface owners.
Many commenters wanted the Order
to support state laws that address split
estate operations. Existing policy and
this final rule are based on a strict
interpretation of existing law. The
authority of states with respect to
reserved Federal minerals is established
in statutes dating back to the early
twentieth century and is not altered by
this Order. Therefore, we did not amend
the final rule as a result of this
comment.
Some commenters wanted the policy
stated in BLM’s Instruction
Memorandum 2003–131, Permitting Oil
and Gas on Split Estate Lands and
Guidance for Onshore Oil and Gas
Order No. 1 (IM 2003–131), to be
included in the final rule. Section VI. of
the proposed and final rule is based on
IM 2003–131. However, we addressed
an inaccuracy in the existing 1983
version of the Order and IM 2003–131.
The existing Order and the Instruction
Memorandum extends the Stockraising
Homestead Act (43 U.S.C. 299)
limitation on compensation to all split
estate. The Stockraising Homestead Act
(and our regulations at 43 CFR
3814.1(c)) clearly limit compensation to
grazing and associated tangible
improvements. Other laws that created
split estates may not have this same
limitation. The final rule states that
compensation is based on the law that
reserved the mineral estate.
One commenter said that the Order
and the BLM are biased toward surface
owners in violation of law. The final
rule incorporates the split estate policy
that has been in effect since 2003 which
is based on a strict interpretation of
existing law. It adds nothing new with
the exception that it bases compensation
on the patenting act rather than
extending the terms of the Stockraising
Homestead Act to all split estate. As
explained elsewhere, surface owners
have only the substantive rights
provided by statute, especially the laws
under which the surface was patented.
A procedural requirement of a good
faith attempt to notify the surface owner
and attempt to reach an agreement does

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not change the dominant character of
the federally owned oil and gas or the
rights of Federal lessees. The Order
reflects no bias; it includes the lessee’s
right to post a bond if a good faith
attempt to reach a Surface Access
Agreement with the surface owner fails.
This Order does not require
compensation to surface owners beyond
that which is required by the patenting
act.
Several commenters objected to the
surface owner compensation limitations
in the Stockraising Homestead Act and
wanted us to eliminate them. The BLM
cannot modify a statute through
rulemaking.
Several commenters want a clear
definition of ‘‘good faith’’ as that term
pertains to negotiations with a surface
owner and a definition of what an
operator must do to contact and
negotiate with a surface owner. We did
not modify the Order as a result of these
comments. We believe that a good faith
effort can be demonstrated in too many
ways to be codified. For example, a
single phone call does not demonstrate
a good faith effort while in similar
circumstances an extensive log of
unanswered phone calls or evidence of
numerous returned unopened properly
addressed letters would. Therefore, the
final Order does not contain such a
definition. In response to the second
comment, we believe that once contact
has been made, negotiations are private
and methods of negotiation are not
easily codified. Some commenters
oppose disclosing the terms of the
Surface Access Agreements since the
agreements are private contracts.
Therefore, we have chosen to not
address contract negotiations or terms of
agreements in the Order. We have,
however, eliminated the requirement
that the operator provide the BLM with
those terms of the Surface Access
Agreement that could impact surface
operations. We believe that the Surface
Use Plan of Operations will contain
sufficient detail to make this
requirement redundant.
Several commenters want the BLM to
devise reasonable bonding requirements
and provide guidelines for setting
surface values rather than rely on the
Stockraising Homestead Act. Bonds are
used in lieu of a Surface Access
Agreement to assure surface owner
compensation for damages as prescribed
by the appropriate law. Bonds can only
be used when the operator certifies that
a Surface Access Agreement could not
be reached and the BLM confirms that
fact with the surface owner, if possible.
Bonds are not required when a Surface
Access Agreement has been made. A
commenter expressed concern that an

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operator may take the easy way out and
merely post a bond rather than to
negotiate an agreement with the surface
owner. The final rule states that bonds
are in lieu of a Surface Access
Agreement only when the operator
certifies that a Surface Access
Agreement could not be reached and the
BLM confirms this fact with the surface
owner, if possible. The bond amount
will be reviewed by the BLM to assure
that it is sufficient based on the
appropriate law. Some commenters said
that these bonds would constitute
‘‘double bonding.’’ We disagree. Bonds
for the benefit of the surface owner are
for a different purpose than the
reclamation bonds required for all
APDs. When both bonds are required,
they satisfy the requirements of different
statutes, protect different parties, and
assure performance of different
obligations, i.e., surface restoration
versus damage to structures.
One commenter alleged that the BLM
managers actively dissuade surface
owners from participating in the
bonding process, thus somehow
rendering the Order illegal. Any such
conduct would be improper under the
existing Order. No change to the Order
is necessary based on this comment.
One commenter asked why we require
the operator to enter into an agreement
with the surface owner prior to approval
of the APD since the agreement may
need to be revised to comply with
changes that the BLM may make to the
proposed action. We did not revise the
Order as a result of this comment.
Under the terms of the patenting
statutes, the BLM cannot approve entry
onto the land for drilling until either
agreement is reached or a bond is
posted. Each party should anticipate
that changes to a proposed action may
occur during the APD approval process
and negotiate accordingly.
Another commenter suggested that
the Order should set minimum
standards for Surface Access
Agreements and suggested language for
an agreement. The BLM and the FS
believe that most surface owners and
operators would object to such a
requirement. In most split estate cases
surface owners and operators do reach
an agreement. This is evidenced by the
very few bonds that we hold for the
benefit of the surface owner. Also, there
appears to be a general reluctance from
both surface owners and operators alike
to divulge the terms of these agreements
and we take that to indicate that they
would object to required terms for such
agreements. We did not set minimum
standards for Surface Access
Agreements. However, the BLM and the
FS are always willing to discuss

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concerns with surface owners and
operators.
Some commenters asked for more
involvement of the surface owner in
review of the proposed action and asked
why the BLM will not include all
surface owner requests in the approved
APD. We emphasize that the BLM will
always invite the surface owner to the
onsite inspection if they can be located.
The BLM will consider any input that
the surface owner may have and will
make adjustments to the operator’s
plans that are reasonable. These changes
may include road realignment and other
similar adjustments. They would not
include terms of a Surface Access
Agreement that are not directly related
to the proposed action in the APD. A
private contract may include an
agreement to provide benefits that are
not related to development of the oil
and gas. These items would not be
enforceable by the BLM and cannot be
included in the Conditions of Approval
of the APD. To avoid confusion, we
removed the statement that suggested
we would only consider the surface
owner concerns to the extent that they
are consistent with Federal land
management policy.
One commenter asked why the BLM
and the FS would only require
reclamation and not restoration, but did
not provide a distinction between the
two terms. We define reclamation in the
Order to mean ‘‘returning disturbed
land as near to its predisturbed
condition as is reasonably practical or as
specified in an approved APD.’’ Section
XI.B. of the Order requires the BLM to
contact the surface owner and involve
them in determining reclamation
requirements, any changes to
reclamation plans, and the final
approval of reclamation operations.
A few commenters stated that the
private surface owner should be
provided with notices of oil and gas
lease sales and be allowed to provide
input into the leasing process. The
commenters also wanted improved
involvement in decisions that affect
their private surface. The BLM’s leasing
processes are outside the scope of this
Order. However, under current rules
and processes, diligent landowners have
ample opportunities to make themselves
aware of decisions to lease lands. The
BLM makes decisions regarding areas to
be made available for leasing and lease
stipulations during the land use
planning process. The land use
planning process is open to public
participation and comment and the
BLM encourages private landowners to
make their views known through this
process. Also, lease sales are posted on
the BLM’s Web sites and the details are

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also available through individual BLM
offices.
Several commenters stated that the
BLM does not have the authority to
require a private landowner to submit to
cultural and biological surveys on
privately owned surface. One
commenter stated that it is incumbent
upon the BLM to respect the wishes of
the private landowner with respect to
these surveys. We disagree. The Federal
mineral estate is the dominant estate
and the BLM and its lessees may enter
the lands to perform such operations as
are necessary to develop the minerals.
The BLM and the FS are required to
comply with Section 106 of the National
Historic Preservation Act and Section 7
of the Endangered Species Act prior to
approving the lease operations on
Federal minerals regardless of surface
ownership. Satisfying statutory
requirements may include conducting
specific inventories. To the extent that
these inventories are a necessary
prerequisite to developing the minerals,
they are within the rights reserved to the
United States in the patent. We
modified Section VI. of the Order to
make this clear.
One commenter wanted the Order to
adopt language in proposed Federal
legislation pending before Congress that
provides more protections for surface
owners. The final rule is consistent with
existing law pertaining to split estate
and the rights possessed by the holders
of outstanding leases that limit what the
BLM can do under current law.
Therefore, we did not modify the Order
as requested by the commenter.
Section VII. Leases for Indian Oil and
Gas
Purpose: This section discusses the
requirements and procedures for
operating on Indian oil and gas leases.
It also discusses the process for
approval of APDs, Master Development
Plans, and Sundry Notices on Indian
tribal and allotted oil and gas leases
held in trust and Indian Mineral
Development Trust mineral agreements.
Summary of Changes: In the final rule
we clarified the relationship of the BIA
as the Surface Managing Agency and the
Indian mineral owners relative to the
BLM approvals under the Order.
Comments and Responses: A few
commenters stated that the reference to
Indian oil and gas does not clearly
address the issues surrounding the
relationship between the BLM and the
tribal management with respect to
APDs. They encouraged the BLM to
approve APDs on tribal lands within 30
days of receipt of a complete APD. The
final rule reduces the confusion caused
by using the term ‘‘Surface Management

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Entity’’ that included both the BIA and
the Indian mineral owner. The final rule
refers to the ‘‘Surface Managing
Agency,’’ which is the BIA and not the
tribe. The BLM cannot approve an APD
until all non-discretionary actions are
completed and other Surface Managing
Agencies, including the BIA in these
cases, are consulted. The BLM must
seek BIA input for Indian oil and gas
leases and will strive to issue permits in
a timely manner.
One commenter asked for an
explanation of the procedure to be used
for processing APDs on tribal lands. The
final rule makes it clear that on tribal
lands held in trust or subject to Federal
restrictions against alienation, the BLM
will review and process APDs in the
same manner as on BLM lands, but will
consult and consider recommendations
for the Surface Use Plan of Operations
from the Surface Managing Agency
(BIA) and surface owners (the tribe). We
modified the provisions on surface
access of Indian lands to make them
consistent with BIA regulations.
Decisions on APD approval are subject
to State Director Review and the BLM’s
appeal procedures.
Section VIII. Subsequent Operations
and Sundry Notices
Purpose: This section describes
approval of operations that occur after
the APD has been approved, including
changes to the drilling plan. The
additional operations occasionally
include additional surface disturbance.
Summary of Changes: In the final rule
we added a requirement that the
operator must make a good faith effort
to provide a copy of any Sundry Notice
that requires additional surface
disturbance to the private surface owner
in the case of split estate. This is
consistent with the requirement in the
final rule to make a good faith effort to
provide the Surface Use Plan of
Operations to the split estate surface
owner and is a result of comments that
we received.
Comments and Responses: One
commenter suggested that operators be
allowed to use e-mail and voice
messages for notification of emergency
repair. We agree. In the final rule the
form of the contact is not specified, but
the BLM will allow any form of contact
as long as it is reasonable. The BLM and
the FS contact information is listed on
the approved APD.
Section IX. Well Conversion
Purpose: This section describes the
process of converting an existing well
into either an injection well or water
well.

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Summary of Changes: We added
language to the final rule to clarify that
if a Surface Managing Agency or surface
owner acquires a water supply well,
they assume liability for that well.
Comments and Responses: One
commenter noted that the proposed
Order requires application to both the
BLM and the Surface Managing Agency
to convert a production well to an
injection well. The commenter stated
that actual approval to inject rests with
either the Environmental Protection
Agency (EPA) or a state to which
primacy has been granted by the EPA.
The BLM recognizes the EPA’s (and the
primacy states’) role in the Underground
Injection Control program. However,
that does not mean that the BLM does
not have a role to play in the approval
of the conversion of a well to an
injection well on Federal lands. The
BLM approves underground injection
on Federal and Indian oil and gas leases
under existing regulations at 43 CFR
3162.3–4(b) (see also Onshore Order
Number 7, Disposal of Produced Water,
58 FR 47354).
Several commenters questioned the
authority given to the Surface Managing
Agency regarding approval of injection
well conversions. One commenter asked
if the Surface Managing Agency has veto
authority over the approval. Under
existing procedures and this final rule,
if another Federal agency other than the
FS manages the surface, the decision
will be made by the BLM in
consultation with that agency if
additional surface disturbance is
involved. The FS approves surface use
on NFS lands. The commenters also
asked if the disapproval is the result of
the position of the Surface Managing
Agency, whether such disapproval is
subject to appeal under Section XIII.
The commenters pointed out that
Interior Board of Land Appeals (IBLA)
has no authority over BIA decisions.
There are no decisions by other agencies
to appeal. All BLM decisions under this
rule are appealable to the IBLA. The
FS’s decisions are appealable under
Title 36 of the CFR. One cannot appeal
a recommendation from another agency.
One commenter stated that it is
inappropriate to request that operators
file the listed applications with Surface
Managing Agencies that do not have any
regulatory authority over conversions.
The requirement to submit a Sundry
Notice to a Surface Managing Agency
other than the BLM has been eliminated
from the Order if no additional surface
disturbance is required.
One commenter mentioned that in
addition to the BLM approval, notice to
the state agency with authority for
conversion to a water well will also be

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required. They suggested that including
a reference to the appropriate state
agency with authority over groundwater
would help avoid failing to meet any
state requirements. We did not revise
the Order as a result of this comment
because such a list would be extensive
and would have the potential to change
periodically. Also, the Order only
covers Federal approvals and, therefore,
the suggested list is outside the scope of
this rule.
Section X. Variances
Purpose: This section provides
guidance and requirements for obtaining
a variance from the requirements of the
Order or Notice to Lessee. A request for
variance must show how the operator
expects to meet the intent of the Order
with the variance.
Summary of Changes: In the final rule
we moved the discussion of waiver,
exceptions, and modifications to a new
section. We also explain that operators
must demonstrate in their request for a
variance that they will still meet the
intent of the Order. This is based on
comments requesting that we clarify the
variance process (see the discussion in
Section II. of this rule).
Comments and Responses: One
commenter asked why the BIA’s
concurrence is not needed for variances.
The BIA’s concurrence is not necessary
to grant a variance because it is a
request to vary from the provisions of
this Order for which the BLM and the
FS have responsibility.
Section XI. Waivers, Exceptions, or
Modifications
We added this section to the final rule
to distinguish variances, which concern
requirements of the Order, from
waivers, exceptions, and modifications
which concern lease terms. We did not
add a definition for these three terms in
Section II.; however, we did add
language that clarifies the differences
between the waivers, exceptions, and
modifications. The text in this section
was moved from the variance section in
the proposed rule.
One commenter asked whether the
BIA has authority to approve or deny
waivers, exceptions, or modifications to
lease stipulations. We did not amend
the final rule as a result of this
comment. On Indian oil and gas leases,
where the surface is held in trust, the
BIA is the sole authority for approval of
waivers, exceptions, or modifications to
lease stipulations.
One commenter pointed out that a 30day posting is not always necessary
when a waiver, exception, or
modification of lease terms is requested
because these are often addressed in the

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planning document. We agree. A 30-day
posting is only required if the waiver,
exception, or modification is
substantial. The granting of a waiver,
exception, or modification would not be
considered substantial if the
circumstances warranting a waiver,
exception, or modification were
prescribed in the planning document
and the associated impacts were
disclosed in the environmental impact
statement for the Resource Management
Plan.
One commenter was concerned that
the requirement for concurrence from
the Surface Managing Agency for
waiver, exception, or modification will
result in unnecessary delays. The BLM
is required by the Reform Act to provide
public notice whenever a waiver,
exception, or modification is substantial
(Section 5102(d) of the Federal Onshore
Oil and Gas Leasing Reform Act of 1987,
101 Stat. 1330–256, P.L. 100–203). The
reason the BLM consults with the
Surface Managing Agency is because the
agency developed the lease stipulations
and therefore any associated waivers,
exceptions, or modifications must be
based on that agency’s concurrence as
well.
Section XII. Abandonment
Note: Since the final rule adds a separate
section for waivers, exceptions, and
modifications, the abandonment section has
been renumbered from XI. to XII.

Purpose: This section describes the
requirements for notification of intent to
abandon a well and reclaim the site. It
describes requirements for providing
notice of intended change in
reclamation. Some of the comments
related to this section dealt with timing
of reclamation and involvement of a
private surface owner (also see Section
VI.).
Summary of Changes: In the final rule
we moved from this section to Section
IX. the statements about the BLM and
the FS approving complete
abandonment of the well if the Surface
Managing Agency or surface owner
commits to acquiring it as a water well
and the acquiring party’s assumption of
liability. We also modified this section
to require the operator to notify and
consider the views of the private surface
owner prior to a Notice of Abandonment
being filed.
Comments and Responses: One
commenter asked that we add to the
final rule a deadline for reclamation,
especially on private surface.
Reclamation properly begins as soon as
the drilling operation ends. We typically
require interim reclamation of that
portion of the site that is no longer

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needed when a producing well is
established. We believe that this can
best be handled in Conditions of
Approval and by lease terms rather than
in the Order. We made no change based
on this comment.
XIII. Appeal Procedures
Note: With the addition of a separate
section for waivers, exceptions, and
modifications the appeal procedures section
has been renumbered from XII. to XIII.

Purpose: This section describes the
process of appealing decisions of the
agencies and statutory basis for appeal
procedures.
Summary of Changes: The only
change to this section was to change the
term ‘‘are subject to’’ to ‘‘may be subject
to’’ as that phrase applies to appeals of
FS decisions. We made this change
because some decisions based on
categorical exclusions may not be
subject to 36 CFR part 215.
Comments and Responses: Comments
received on this section are discussed
earlier in previous section discussions
of this preamble.

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XIV. Procedural Matters
Executive Order 12866, Regulatory
Planning and Review
The final rule will not have an annual
economic effect of $100 million or
adversely affect an economic sector,
productivity, jobs, the environment, or
other units of government. A costbenefit and economic analysis has not
been prepared. The final rule primarily
involves changes to the BLM’s and the
FS’s administrative processes. The
revision to the definition of ‘‘Complete
APD’’ requiring onsite inspections
would have no impact on operators
since onsite inspections are currently
required as part of the APD approval
process. The provisions are consistent
with existing policy and practice when
operating on split estate lands with
Indian surface ownership, and therefore
would have no economic impact. Other
changes, such as adding a provision for
the use of Master Development Plans,
may improve processing and
predictability of operations due to better
advance planning of field development.
Clarifying that our authority to require
additional bond applies to off-lease
facilities would have no economic
impact since the BLM already has the
authority under the existing regulatory
scheme to require this bond. The other
revisions this final rule makes to the
Order primarily involve changing the
BLM and the FS’s administrative
processes. Because of clearer rules,
operators will have a better
understanding of the BLM and the FS

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requirements, processes, and timelines,
and thus the result may be a reduction
in delays when processing APDs. The
BLM and operators should both see
administrative cost savings realized
from implementing the final rule.
The final rule will not create
inconsistencies with other agency
actions. The BLM has worked closely
with the FS in assuring the maximum
consistency between the policies of the
two agencies. In fact, the Forest Service
will adopt the final rule under their
regulations at 36 CFR 228.105.
The final rule will not materially
affect entitlements, grants, user fees,
loan programs, or the rights and
obligations of their recipients. As stated
above, the final rule primarily revises
administrative processes for APD
approvals and should not impact any of
the above listed items.
The final rule does not raise novel
legal or policy issues. Legal and policy
issues addressed by the final rule are
already addressed in the existing Order,
existing regulations, existing policy, or
existing law.
Regulatory Flexibility Act
Congress enacted the Regulatory
Flexibility Act of 1980 (RFA), as
amended, 5 U.S.C. 601–612, to ensure
that Government regulations do not
unnecessarily or disproportionately
burden small entities. The RFA requires
a regulatory flexibility analysis if a rule
would have a significant economic
impact, either detrimental or beneficial,
on a substantial number of small
entities. For the purposes of this
analysis, we will assume that all entities
(all lessees and operators) that may be
impacted by these regulations are small
entities.
The final rule deals mainly with the
requirements necessary for the approval
of all proposed oil and gas exploratory,
development, or service wells on all
Federal and Indian (other than those of
the Osage Tribe) onshore oil and gas
leases. These changes are not
significantly different from the existing
Order and primarily consist of changes
to the BLM’s and the FS’s
administrative processes. As a result of
clearer rules, operators will have a
better understanding of the BLM’s and
the FS’s requirements, processes, and
timelines. This will likely reduce delays
in processing and both the BLM and
operators should see some
administrative cost savings. The
provision(s) for operating on split estate
lands with Indian surface ownership is
consistent with existing policy and
practice and therefore would have no
economic impact. Therefore, the BLM
has determined under the RFA that the

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final rule would not have a significant
economic impact on a substantial
number of small entities.
The use of Best Management Practices
in Conditions of Approval for a permit
to drill is not new. The BLM currently
uses them as Conditions of Approval
and therefore this provision will have
no economic impact on small entities.
The bonding provision in the rule will
not impact small entities since the
provision merely clarifies the existing
regulations. As stated earlier, an
Assistant Solicitor’s Opinion of July 19,
2004, concluded that under the current
regulation the BLM has the authority to
require additional bond for off-site
facilities and to require either a separate
bond or an increase in the required
amount of an existing bond.
Accordingly, the rule does not represent
a change in the regulatory scheme.
Small Business Regulatory Enforcement
Fairness Act
These final regulations are not a
‘‘major rule’’ as defined at 5 U.S.C.
804(2). For the reasons stated in the
RFA and Executive Order 12866
discussions, this rule would not have an
annual effect on the economy greater
than $100 million; it would not result in
major cost or price increases for
consumers, industries, government
agencies, or regions; and it would not
have significant adverse effects on
competition, employment, investment,
productivity, innovation, or the ability
of U.S.-based enterprises to compete
with foreign-based enterprises.
Unfunded Mandates Reform Act
These final regulations do not impose
an unfunded mandate on State, local, or
tribal governments or the private sector
of more than $100 million per year; nor
do these proposed regulations have a
significant or unique effect on State,
local, or tribal governments or the
private sector. The final rule codifies
certain decisions made by the Congress
in the Energy Policy Act of 2005. The
discretionary provisions primarily
involve changes to the BLM’s and the
FS’s administrative processes and
would not have any significant effect
monetarily, or otherwise, on the entities
listed and therefore would not add to
any burden imposed by the final rule.
Therefore, the BLM is not required to
prepare a statement containing the
information required by the Unfunded
Mandates Reform Act (2 U.S.C. 1531 et
seq.).

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Executive Order 12630, Governmental
Actions and Interference With
Constitutionally Protected Property
Rights (Takings)
In accordance with Executive Order
12630, the final rule does not have
significant takings implications. A
takings implication assessment in not
required. This final rule identifies the
procedural requirements necessary for
approval of proposed exploratory,
development of service wells, and most
subsequent well operations. All such
actions are subject to lease terms which
expressly require that subsequent least
activities must be approved in
compliance with applicable Federal
laws and regulations, including NEPA,
ESA, and NHPA. The final rule carefully
conforms to the terms of those Federal
leases and regulations and as such the
rule is not a governmental action
capable of interfering with
constitutionally protected property
rights. Furthermore, this final rule has
no potential to affect property rights
because the changes reduce the burdens
on regulated parties. Therefore, the final
rule will not cause a taking of private
property or require further discussion of
takings implications under this
Executive Order.
Executive Order 13132, Federalism
In accordance with Executive Order
13132, the final rule does not have
significant Federalism effects. A
Federalism assessment is not required
because the rule does not have a
substantial direct effect on the states, on
the relationship between the national
government and the states, or on the
distribution of power and
responsibilities among the various
levels of government. The final rule will
not have any effect on any of the items
listed. The final rule affects the
relationship between operators, lessees,
and the BLM and the FS, but would not
impact states. Therefore, in accordance
with Executive Order 13132, the BLM
has determined that the final rule does
not have sufficient Federalism
implications to warrant preparation of a
Federalism Assessment.

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Executive Order 13175, Consultation
and Coordination With Indian Tribal
Governments
In accordance with the President’s
memorandum of April 29, 1994,
‘‘Government-to-Government Relations
with Native American Tribal
Governments’’ (59 FR 22951) and 512
Departmental Manual 2, the BLM
evaluated possible effects on federally
recognized Indian tribes. The BLM
approves proposed operations on all

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Indian (other than those of the Osage
Tribe) onshore oil and gas leases and
agreements and therefore the final rule
has the potential to impact Indian tribes.
The BLM has consulted with the tribes
on the proposed revisions to the Order.
Executive Order 12988, Civil Justice
Reform
In accordance with Executive Order
12988, the Office of the Solicitor has
determined that the final rule does not
unduly burden the judicial system and
meets the requirements of Sections 3(a)
and 3(b)(2) of the Order. We have
reviewed the final rule to eliminate
drafting errors and ambiguity. It has
been written to minimize litigation,
provide clear legal standards for affected
conduct rather than general standards,
and promote simplification and burden
reduction. The final rule was written in
plain language and legal counsel
assisted in all of these areas.
Paperwork Reduction Act
These regulations contain information
collection requirements. As required by
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), we submitted
a copy of the proposed information
collection requirements to the Office of
Management and Budget for review. The
OMB approved the information
collection requirements under Control
Number 1004–0137, which expires on
March 31, 2007.
National Environmental Policy Act
We have analyzed this final rule in
accordance with the criteria of the
NEPA and 516 Departmental Manual.
The revisions to the existing Order will
not impact the environment
significantly. For the most part, the
revisions would involve changes to the
BLM’s administrative processes. For
example, changes to the meaning of
‘‘Complete APD’’ only pertain to the
application and the process the BLM
will use to review APD packages and
would have no impact on the
environment. Other changes, such as
adding provisions for the use of Master
Development Plans, should provide
improved environmental protection due
to better advance planning of field
development. The clarification as to the
BLM’s obligation under the National
Historic Preservation Act and the
Endangered Species Act on split estate
lands should reduce effects on cultural
resources and protected species and
their habitats. The clarification of the
BLM’s authority to increase bond
requirements to cover off-site facilities
should also reduce potential effects on
the environment. Also, procedural and
clarifying changes will have no

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meaningful impact on the environment.
The use of Best Management Practices
as Conditions of Approval can lead to
reduced environmental damage.
Furthermore, environmental effects of
proposed operations on public and
Federal lands are analyzed on a case-bycase basis. The BLM and the FS have
prepared an environmental assessment
and have found that this final rule
would not constitute a major Federal
action significantly affecting the quality
of the human environment under
Section 102(2)(C) of the NEPA, 42
U.S.C. 4332(2)(C). A detailed statement
under NEPA is not required. The BLM
has placed the EA and the Finding of No
Significant Impact on file in the BLM
Administrative Record at the address
specified in the ADDRESSES section.
Data Quality Act
In developing this rule, we did not
conduct or use a study, experiment, or
survey requiring peer review under the
Data Quality Act (Pub.L. 106–554).
Executive Order 13211, Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use
In accordance with Executive Order
13211, the BLM has determined that the
proposed rule will not have substantial
direct effects on the energy supply,
distribution or use, including a shortfall
in supply or price increase. This rule
would clarify the administrative
processes involved in approving an APD
and more clearly lay out the timeline for
processing applications. It is not clear to
what extent clarification of the rules
will save the BLM, the FS, or operators’
administrative cost, but we anticipate
that the cost savings will be minimal, as
will any direct effects on the energy
supply, distribution or use.
Executive Order 13352, Facilitation of
Cooperative Conservation
In accordance with Executive Order
13352, the BLM has determined that the
final rule primarily involves changes to
the BLM and Forest Service
administrative processes. This rule does
not impede facilitating cooperative
conservation; takes appropriate account
of and considers the interests of persons
with ownership or other legally
recognized interests in land or other
natural resources; has no effect on local
participation in the Federal decisionmaking process except to enhance the
opportunities for surface owners; and
provides that the programs, projects,
and activities are consistent with
protecting public health and safety.

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Authors

PART 228 —MINERALS

The principal authors of this rule are:
James Burd of the BLM Washington
Office; Bo Brown of the BLM Alaska
State Office; Brian Pruiett and Jennifer
Spegon of the BLM Buffalo, Wyoming
Field Office; Gary Stephens of the BLM
New Mexico State Office; Hank
Szymanski of the BLM Colorado State
Office; Al McKee of the BLM Utah State
Office; Howard Clevinger of the BLM
Vernal, Utah Field Office; Roy Swalling
of the Montana State Office; Greg Noble
of the Alaska State Office; Steve Hansen
of the BLM Arizona State Office; and
Barry Burkhardt of the FS
Intermountain Regional Office, Ogden,
Utah, and assisted by the staff of the
BLM ’s Division of Regulatory Affairs
and the Department of the Interior ’s
Office of the Solicitor.

1. The authority citation for part 228
continues to read as follows:

List of Subjects
36 CFR Part 228
Environmental protection; Mines;
National forests; Oil and gas
exploration; Public lands-mineral
resources; Public lands-rights-of-way;
Reporting and recordkeeping
requirements; Surety bonds; Wilderness
areas.
43 CFR Part 3160
Administrative practice and
procedure; Government contracts;
Indians-lands; Mineral royalties; Oil and
gas exploration; Penalties; Public landsmineral resources; Reporting and
recordkeeping requirements.
36 CFR Chapter II

ycherry on PROD1PC64 with RULES2

For the reasons set out in the joint
preamble, the FS amends 36 CFR part
228 as follows:

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Authority: 30 Stat. 35 and 36, as amended
(16 U.S.C. 478, 551); 41 Stat. 437, as
amended, Sec. 5102(d), 101 Stat. 1330
–256
(30 U.S.C. 226); 61 Stat. 681, as amended (30
U.S.C. 601); 61 Stat. 914, as amended (30
U.S.C. 352); 69 Stat. 368, as amended (30
U.S.C. 611); and 94 Stat. 2400.

2. Revise § 228.105(a)(1) to read as
follows:
§ 228.105 Issuance of onshore orders and
notices to lessees

(a) * * *
(1) Surface Use Plans of Operations
and Master Development Plans.
Operators shall submit Surface Use
Plans of Operations or Master
Development Plans in accordance with
Onshore Oil and Gas Order No. 1.
Approval of a Master Development Plan
constitutes a decision to approve
Surface Use Plans of Operations
submitted as a part of the Master
Development Plan. Subsequently
submitted Surface Use Plans of
Operations shall be reviewed to verify
that they are consistent with the
approved Master Development Plan and
whether additional NEPA
documentation or consultation pursuant
to the National Historic Preservation Act
or the Endangered Species Act is
required. If the review determines that
additional documentation is required,
the Forest Service will review the
additional documentation or consult as
appropriate and make an independent
decision regarding the subsequently
submitted Surface Use Plan of
Operations, and notify the BLM and the
operator whether the Surface Use Plan
of Operations is approved.
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3. Revise § 228.107(c) to read as
follows:
§ 228.107 Review of surface use plan of
operations.

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(c) Public notice. The authorized
Forest Service officer will give public
notice of the decision regarding a
surface use plan of operations and
include in that notice whether the
decision is appealable under the
applicable Forest Service appeal
procedures.
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Appendix A to subpart E of part 228
[Removed]
4. Remove Appendix A to subpart E
of part 228.
Dated: February 9, 2007.
David P. Tenny,
Deputy Under Secretary, Natural Resources
Environment, Forest Service.

43 CFR Chapter II
For the reasons set out in the joint
preamble, the Bureau of Land
Management amends 43 CFR part 3160
as follows:
PART 3160 —ONSHORE OIL AND GAS
OPERATIONS
1. The authority citation for part 3160
continues to read as follows:
Authority: 25 U.S.C. 396d and 2107; 30
U.S.C. 189, 306, 359, and 1751; and 43 U.S.C.
1732(b), 1733, and 1740.

2. Amend § 3164.1(b) by revising the
first entry in the table as follows:
§ 3164.1

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Onshore Oil and Gas Orders.

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(b) * * *

07MRR2

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