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Title 30: Mineral Resources

PART 582=E2=80=94OPERATIONS IN THE = OUTER CONTINENTAL=20 SHELF FOR MINERALS OTHER THAN OIL, GAS, AND SULPHUR

Contents

Subpart=20 A=E2=80=94General

=C2=A7 582.0  = Authority=20 for information collection.
=C2=A7 582.1  = Purpose=20 and authority.
=C2=A7 582.2  = Scope.
=C2=A7 582.3  = Definitions.
=C2=A7 582.4  = Opportunities=20 for review and comment.
=C2=A7 582.5  = Disclosure=20 of data and information to the public.
=C2=A7 582.6  = Disclosure=20 of data and information to an adjacent State.
=C2=A7 582.7  = Jurisdictional=20 controversies.

Subpart=20 B=E2=80=94Jurisdiction and Responsibilities of Director

=C2=A7 582.10  = ; Jurisdiction=20 and responsibilities of Director.
=C2=A7 582.11  = ; Director's=20 authority.
=C2=A7 582.12  = ; Director's=20 responsibilities.
=C2=A7 582.13  = ; [Reserved]
=C2=A7 582.14  = ; Noncompliance,=20 remedies, and penalties.
=C2=A7 582.15  = ; Cancellation=20 of leases.

Subpart=20 C=E2=80=94Obligations and Responsibilities of Lessees

=C2=A7 582.20  = ; Obligations=20 and responsibilities of lessees.
=C2=A7 582.21  = ; Plans,=20 general.
=C2=A7 582.22  = ; Delineation=20 Plan.
=C2=A7 582.23  = ; Testing=20 Plan.
=C2=A7 582.24  = ; Mining=20 Plan.
=C2=A7 582.25  = ; Plan=20 modification.
=C2=A7 582.26  = ; Contingency=20 Plan.
=C2=A7 582.27  = ; Conduct=20 of operations.
=C2=A7 582.28  = ; Environmental=20 protection measures.
=C2=A7 582.29 &nbs= p; Reports=20 and records.
=C2=A7 582.30 &nbs= p; Right=20 of use and easement.
=C2=A7 582.31 &nbs= p; [Reserved]

Subpart=20 D=E2=80=94Payments

=C2=A7 582.40  = ; Bonds.
=C2=A7 582.41  = ; Method=20 of royalty calculation.
=C2=A7 582.42  = ; Payments.

Subpart=20 E=E2=80=94Appeals

=C2=A7 582.50 = ; Appeals.

Authority: 43=20 U.S.C. 1334.

Source: 76=20 FR 64623, Oct. 18, 2011, unless otherwise noted.

= Back to=20 Top

Subpart A=E2=80=94General

= Back to=20 Top

=C2=A7 582.0 Authority for=20 information collection.

The information collection requirements in this part have been = approved=20 by the Office of Management and Budget under 44 U.S.C. 3507 and = assigned=20 clearance number 1010-0081. The information is being collected to = inform=20 the Bureau of Ocean Energy Management (BOEM) of general mining = operations=20 in the Outer Continental Shelf (OCS). The information will be used = to=20 ensure that operations are conducted in a safe and environmentally = responsible manner in compliance with governing laws and = regulations. The=20 requirement to respond is mandatory.

= Back to=20 Top

=C2=A7 582.1 Purpose and=20 authority.

(a) The Act authorizes the Secretary to prescribe such rules = and=20 regulations as may be necessary to carry out the provisions of the = Act (43=20 U.S.C. 1334). The Secretary is authorized to prescribe and amend=20 regulations that the Secretary determines to be necessary and = proper in=20 order to provide for the prevention of waste, conservation of the = natural=20 resources of the OCS, and the protection of correlative rights = therein. In=20 the enforcement of safety, environmental, and conservation laws = and=20 regulations, the Secretary is authorized to cooperate with = adjacent States=20 and other Departments and Agencies of the Federal Government.

(b) Subject to the supervisory authority of the Secretary, and = unless=20 otherwise specified, the regulations in this part shall be = administered by=20 the Director of BOEM.

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=C2=A7 582.2 Scope.

The rules and regulations in this part apply as of their = effective date=20 to all operations conducted under a mineral lease for OCS minerals = other=20 than oil, gas, or sulphur issued under the provisions of section = 8(k) of=20 the Act.

= Back to=20 Top

=C2=A7 582.3 Definitions.

When used in this part, the following terms shall have the = meaning=20 given below:

Act means the OCS = Lands Act, as=20 amended (43 U.S.C. 1331 et = seq.=20 ).

Adjacent State means = with=20 respect to any activity proposed, conducted, or approved under = this part,=20 any coastal State:

(1) That is, or is proposed to be, receiving for processing, = refining,=20 or transshipment OCS mineral resources commercially recovered from = the=20 seabed;

(2) That is used, or is scheduled to be used, as a support base = for=20 prospecting, exploration, testing, or mining activities; or

(3) In which there is a reasonable probability of significant = effect on=20 land or water uses from such activity.

Contingency Plan = means a plan=20 for action to be taken in emergency situations.

Data means geological = and=20 geophysical (G&G) facts and statistics or samples which have = not been=20 analyzed, processed, or interpreted.

Development means = those=20 activities which take place following the discovery of minerals in = paying=20 quantities including geophysical activities, drilling, = construction of=20 offshore facilities, and operation of all onshore support = facilities,=20 which are for the purpose of ultimately producing the minerals=20 discovered.

Director means the = Director of=20 BOEM of the U.S. Department of the Interior or an official = authorized to=20 act on the Director's behalf.

Exploration means the = process=20 of searching for minerals on a lease including:

(1) Geophysical surveys where magnetic, gravity, seismic, or = other=20 systems are used to detect or imply the presence of minerals;

(2) Any drilling including the drilling of a borehole in which = the=20 discovery of a mineral other than oil, gas, or sulphur is made and = the=20 drilling of any additional boreholes needed to delineate any = mineral=20 deposits; and

(3) The taking of sample portions of a mineral deposit to = enable the=20 lessee to determine whether to proceed with development and=20 production.

Geological sample = means a=20 collected portion of the seabed, the subseabed, or the overlying = waters=20 (when obtained for geochemical analysis) acquired while conducting = postlease mining activities.

Governor means the = Governor of=20 a State or the person or entity designated by, or pursuant to, = State law=20 to exercise the power granted to a Governor.

Information means = G&G data=20 that have been analyzed, processed, or interpreted.

Lease means one of = the=20 following, whichever is required by the context: Any form of = authorization=20 which is issued under section 8 or maintained under section 6 of = the Acts=20 and which authorizes exploration for, and development and = production of,=20 specific minerals; or the area covered by that authorization.

Lessee means the = person=20 authorized by a lease, or an approved assignment thereof, to = explore for=20 and develop and produce the leased deposits in accordance with the = regulations in this chapter. The term includes all parties holding = that=20 authority by or through the lessee.

Major Federal action = means any=20 action or proposal by the Secretary which is subject to the = provisions of=20 section 102(2)(C) of the National Environmental Policy Act (NEPA) = ( i.e., an action which will = have a=20 significant impact on the quality of the human environment = requiring=20 preparation of an Environmental Impact Statement (EIS) pursuant to = section=20 102(2)(C) of NEPA).

Marine environment = means the=20 physical, atmospheric, and biological components, conditions, and = factors=20 which interactively determine the productivity, state, condition, = and=20 quality of the marine ecosystem, including the waters of the high = seas,=20 the contiguous zone, transitional and intertidal areas, salt = marshes, and=20 wetlands within the coastal zone and on the OCS.

Minerals include oil, = gas,=20 sulphur, geopressured-geothermal and associated resources, and all = other=20 minerals which are authorized by an Act of Congress to be produced = from=20 =E2=80=9Cpublic lands=E2=80=9D as defined in section 103 of the = Federal Land Policy and=20 Management Act of 1976.

OCS mineral means any = mineral=20 deposit or accretion found on or below the surface of the seabed = but does=20 not include oil, gas, or sulphur; salt or sand and gravel intended = for use=20 in association with the development of oil, gas, or sulphur; or = source=20 materials essential to production of fissionable materials which = are=20 reserved to the United States pursuant to section 12(e) of the = Act.

Operator means the = individual,=20 partnership, firm, or corporation having control or management of=20 operations on the lease or a portion thereof. The operator may be = a=20 lessee, designated agent of the lessee, or holder of rights under = an=20 approved operating agreement.

Outer Continental = Shelf means=20 all submerged lands lying seaward and outside of the area of lands = beneath=20 navigable waters as defined in section 2 of Submerged Lands Act = (43 U.S.C.=20 1301) and of which the subsoil and seabed appertain to the United = States=20 and are subject to its jurisdiction and control.

Person means a = citizen or=20 national of the United States; an alien lawfully admitted for = permanent=20 residency in the United States as defined in 8 U.S.C. 1101(a)(20); = a=20 private, public, or municipal corporation organized under the laws = of the=20 United States or of any State or territory thereof; an association = of such=20 citizens, nationals, resident aliens or private, public, or = municipal=20 corporations, States, or political subdivisions of States; or = anyone=20 operating in a manner provided for by treaty or other applicable=20 international agreements. The term does not include Federal = Agencies.

Secretary means the = Secretary=20 of the Interior or an official authorized to act on the = Secretary's=20 behalf.

Testing means = removing bulk=20 samples for processing tests and feasibility studies and/or the = testing of=20 mining equipment to obtain information needed to develop a = detailed Mining=20 Plan.

= Back to=20 Top

=C2=A7 582.4 Opportunities=20 for review and comment.

(a) In carrying out BOEM's responsibilities under the Act and=20 regulations in this part, the Director shall provide opportunities = for=20 Governors of adjacent States, State/Federal task forces, lessees = and=20 operators, other Federal Agencies, and other interested parties to = review=20 proposed activities described in a Delineation, Testing, or Mining = Plan=20 together with an analysis of potential impacts on the environment = and to=20 provide comments and recommendations for the disposition of the = proposed=20 plan.

(b)(1) For Delineation Plans, the adjacent State Governor(s) = shall be=20 notified by the Director within 15 days following the submission = of a=20 request for approval of a Delineation Plan. Notification shall = include a=20 copy of the proposed Delineation Plan and the accompanying = environmental=20 information. The adjacent State Governor(s) who wishes to comment = on a=20 proposed Delineation Plan may do so within 30 days of the receipt = of the=20 proposed plan and the accompanying information.

(2) In cases where an Environmental Assessment is to be = prepared, the=20 Director's invitation to provide comments may allow the adjacent = State=20 Governor(s) more than 30 days following receipt of the proposed = plan to=20 provide comments.

(3) The Director shall notify Federal Agencies, as appropriate, = with a=20 copy of the proposed Delineation Plan and the accompanying = environmental=20 information within 15 days following the submission of the = request.=20 Agencies that wish to comment on a proposed Delineation Plan shall = do so=20 within 30 days following receipt of the plan and the accompanying=20 information.

(c)(1) For Testing Plans, the adjacent State Governor(s) shall = be=20 notified by the Director within 20 days following submission of a = request=20 for approval of a proposed Testing Plan. Notification shall = include a copy=20 of the proposed Testing Plan and the accompanying environmental=20 information. The adjacent State Governor(s) who wishes to comment = on a=20 proposed Testing Plan may do so within 60 days of the receipt of a = plan=20 and the accompanying information.

(2) In cases where an EIS is to be prepared, the Director's = invitation=20 to provide comments may allow the adjacent State Governor(s) more = than 60=20 days following receipt of the proposed plan to provide = comments.

(3) The Director shall notify Federal Agencies, as appropriate, = with a=20 copy of the proposed Testing Plan and the accompanying = environmental=20 information within 20 days following the submission of the = request.=20 Agencies that wish to comment on a proposed Testing Plan shall do = so=20 within 60 days following receipt of the plan and the accompanying=20 information.

(d)(1) For Mining Plans, the adjacent State Governor(s) shall = be=20 notified by the Director within 20 days following the submission = of a=20 request for approval of a proposed Mining Plan. Notification shall = include=20 a copy of the proposed Mining Plan and the accompanying = environmental=20 information. The adjacent State Governor(s) who wishes to comment = on a=20 proposed Mining Plan may do so within 60 days of the receipt of a = plan and=20 the accompanying information.

(3) The Director shall notify Federal Agencies, as appropriate, = with a=20 copy of the proposed Mining Plan and the accompanying = environmental=20 information within 20 days following the submission of the = request.=20 Agencies that wish to comment on a proposed Mining Plan shall do = so within=20 60 days following receipt of the plan and the accompanying=20 information.

(e) When an adjacent State Governor(s) has provided comments = pursuant=20 to paragraphs (b), (c), and (d) of this section, the Governor(s) = shall be=20 given, in writing, a list of recommendations which are adopted and = the=20 reasons for rejecting any of the recommendations of the = Governor(s) or for=20 implementing any alternative means identified during consultations = with=20 the Governor(s).

= Back to=20 Top

=C2=A7 582.5 Disclosure of=20 data and information to the public.

(a) The Director shall make data, information, and samples = available in=20 accordance with the requirements and subject to the limitations of = the=20 Act, the Freedom of Information Act (5 U.S.C. 552), and the = implementing=20 regulations (43 CFR part 2).

(b) Geophysical data, processed G&G information, = interpreted=20 G&G information, and other data and information submitted = pursuant to=20 the requirements of this part shall not be available for public = inspection=20 without the consent of the lessee so long as the lease remains in = effect,=20 unless the Director determines that earlier limited release of = such=20 information is necessary for the unitization of operations on two = or more=20 leases, to ensure proper Mining Plans for a common orebody, or to = promote=20 operational safety. When the Director determines that early = limited=20 release of data and information is necessary, the data and = information=20 shall be shown only to persons with a direct interest in the = affected=20 lease(s), unitization agreement, or joint Mining Plan.

(c) Geophysical data, processed geophysical information, and=20 interpreted geophysical information collected on a lease with high = resolution systems (including, but not limited to, bathymetry, = side-scan=20 sonar, subbottom profiler, and magnetometer) in compliance with=20 stipulations or orders concerning protection of environmental = aspects of=20 the lease may be made available to the public 60 days after = submittal to=20 the Director, unless the lessee can demonstrate to the = satisfaction of the=20 Director that release of the information or data would unduly = damage the=20 lessee's competitive position.

= Back to=20 Top

=C2=A7 582.6 Disclosure of=20 data and information to an adjacent State.

(a) Proprietary data, information, and samples submitted to = BOEM=20 pursuant to the requirements of this part shall be made available = for=20 inspection by representatives of adjacent State(s) upon request by = the=20 Governor(s) in accordance with paragraphs (b), (c), and (d) of = this=20 section.

(b) Disclosure shall occur only after the Governor has entered = into an=20 agreement with the Secretary providing that:

(1) The confidentiality of the information shall be = maintained;

(2) In any action commenced against the Federal Government or = the State=20 for failure to protect the confidentiality of proprietary = information, the=20 Federal Government or the State, as the case may be, may not raise = as a=20 defense any claim of sovereign immunity or any claim that the = employee who=20 revealed the proprietary information, which is the basis of the = suit, was=20 acting outside the scope of the person's employment in revealing = the=20 information;

(3) The State agrees to hold the United States harmless for any = violation by the State or its employees or contractors of the = agreement to=20 protect the confidentiality of proprietary data, information, and = samples;=20 and

(c) The data, information, and samples available for inspection = by=20 representatives of adjacent State(s) pursuant to an agreement = shall be=20 related to leased lands.

= Back to=20 Top

=C2=A7 582.7 Jurisdictional=20 controversies.

In the event of a controversy between the United States and a = State as=20 to whether certain lands are subject to Federal or State = jurisdiction,=20 either the Governor of the State or the Secretary may initiate=20 negotiations in an attempt to settle the jurisdictional = controversy. With=20 the concurrence of the Attorney General, the Secretary may enter = into an=20 agreement with a State with respect to OCS mineral activities and = to=20 payment and impounding of rents, royalties, and other sums and = with=20 respect to the issuance or nonissuance of new leases pending = settlement of=20 the controversy.

= Back to=20 Top

Subpart B=E2=80=94Jurisdiction and = Responsibilities of=20 Director

= Back to=20 Top

=C2=A7 582.10 Jurisdiction=20 and responsibilities of Director.

Subject to the authority of the Secretary, the following = activities are=20 subject to the regulations in this part and are under the = jurisdiction of=20 the Director: Exploration, testing, and mining operations together = with=20 the associated environmental protection measures needed to permit = those=20 activities to be conducted in an environmentally responsible = manner;=20 handling, measurement, and transportation of OCS minerals; and = other=20 operations and activities conducted pursuant to a lease issued = under 30=20 CFR part 581, or pursuant to a right of use and easement granted = under=20 this part, by or on behalf of a lessee or the holder of a right of = use and=20 easement.

= Back to=20 Top

=C2=A7 582.11 Director's=20 authority.

(a) In the exercise of jurisdiction under =C2=A7 582.10, = the Director=20 is authorized and directed to act upon the requests, applications, = and=20 notices submitted under the regulations in this part; to issue = either=20 written or oral orders to govern lease operations; and to require=20 compliance with applicable laws, regulations, and lease terms so = that all=20 operations conform to sound conservation practices and are = conducted in a=20 manner which is consistent with the following:

(1) Make such OCS minerals available to meet the nation's needs = in a=20 timely manner;

(2) Balance OCS mineral resource development with protection of = the=20 human, marine, and coastal environments;

(3) Ensure the public a fair and equitable return on OCS = minerals=20 leased on the OCS; and

(4) Foster and encourage private enterprise.

(b)(1) The Director is to be provided ready access to all OCS = mineral=20 resource data and all environmental data acquired by the lessee or = holder=20 of a right of use and easement in the course of operations on a = lease or=20 right of use and easement and may require a lessee or holder to = obtain=20 additional environmental data when deemed necessary to assure = adequate=20 protection of the human, marine, and coastal environments.

(2) The Director is to be provided an opportunity to inspect, = cut, and=20 remove representative portions of all samples acquired by a lessee = in the=20 course of operations on the lease.

(c) In addition to the rights and privileges granted to a = lessee under=20 any lease issued or maintained under the Act, on request, the = Director may=20 grant a lessee, subject to such conditions as the Director may = prescribe,=20 a right of use and easement to construct and maintain platforms,=20 artificial islands, and/or other installations and devices which = are=20 permanently or temporarily attached to the seabed and which are = needed for=20 the conduct of leasehold exploration, testing, development, = production,=20 and processing activities or other leasehold related operations = whether on=20 or off the lease.

(d)(1) The Director may approve the consolidation of two or = more OCS=20 mineral leases or portions of two or more OCS mineral leases into = a single=20 mining unit requested by lessees, or the Director may require such = consolidation when the operation of those leases or portions of = leases as=20 a single mining unit is in the interest of conservation of the = natural=20 resources of the OCS or the prevention of waste. A mining unit may = also=20 include all or portions of one or more OCS mineral leases with all = or=20 portions of one or more adjacent State leases for minerals in a = common=20 orebody. A single unit operator shall be responsible for = submission of=20 required Delineation, Testing, and Mining Plans covering OCS = mineral=20 operations for an approved mining unit.

(2) Operations such as exploration, testing, and mining = activities=20 conducted in accordance with an approved plan on any lease or = portion of a=20 lease which is subject to an approved mining unit shall be = considered=20 operations on each of the leases that is made subject to the = approved=20 mining unit.

(3) Minimum royalty paid pursuant to a Federal lease, which is = subject=20 to an approved mining unit, is creditable against the production = royalties=20 allocated to that Federal lease during the lease year for which = the=20 minimum royalty is paid.

(4) Any OCS minerals produced from State and Federal leases = which are=20 subject to an approved mining unit shall be accounted for = separately=20 unless a method of allocating production between State and Federal = leases=20 has been approved by the Director and the appropriate State = official.

= Back to=20 Top

=C2=A7 582.12 Director's=20 responsibilities.

(a) The Director is responsible for the regulation of = activities to=20 assure that all operations conducted under a lease or right of use = and=20 easement are conducted in a manner that protects the environment = and=20 promotes orderly development of OCS mineral resources. Those = activities=20 are to be designed to prevent serious harm or damage to, or waste = of, any=20 natural resource (including OCS mineral deposits and oil, gas, and = sulphur=20 resources in areas leased or not leased), any life (including fish = and=20 other aquatic life), property, or the marine, coastal, or human=20 environment.

(b)(1) In the evaluation of a Delineation Plan, the Director = shall=20 consider whether the plan is consistent with:

(i) The provisions of the lease;

(ii) The provisions of the Act;

(iii) The provisions of the regulations prescribed under the = Act;

(iv) Other applicable Federal law; and

(v) Requirements for the protection of the environment, health, = and=20 safety.

(2) Within 30 days following the completion of an environmental = assessment or other NEPA document prepared pursuant to the = regulations=20 implementing NEPA or within 30 days following the comment period = provided=20 in =C2=A7 582.4(b) of this part, the Director shall:

(i) Approve any Delineation Plan which is consistent with the = criteria=20 in paragraph (b)(1) of this section;

(ii) Require the lessee to modify any Delineation Plan that is=20 inconsistent with the criteria in paragraph (b)(1) of this = section; or

(iii) Disapprove a Delineation Plan when it is determined that = an=20 activity proposed in the plan would probably cause serious harm or = damage=20 to life (including fish and other aquatic life); to property; to = natural=20 resources of the OCS including mineral deposits (in areas leased = or not=20 leased); or to the marine, coastal, or human environment, and the = proposed=20 activity cannot be modified to avoid the conditions.

(3) The Director shall notify the lessee in writing of the = reasons for=20 disapproving a Delineation Plan or for requiring modification of a = plan=20 and the conditions that must be met for plan approval.

(c)(1) In the evaluation of a Testing Plan, the Director shall = consider=20 whether the plan is consistent with:

(i) The provisions of the lease;

(ii) The provisions of the Act;

(iii) The provisions of the regulations prescribed under the = Act;

(iv) Other applicable Federal law;

(v) Environmental, safety, and health requirements; and

(vi) The statutory requirement to protect property, natural = resources=20 of the OCS, including mineral deposits (in areas leased or not = leased),=20 and the National security or defense.

(2) Within 60 days following the release of a final EIS = prepared=20 pursuant to NEPA or within 60 days following the comment period = provided=20 in =C2=A7 582.4(c) of this part, the Director shall:

(i) Approve any Testing Plan which is consistent with the = criteria in=20 paragraph (c)(1) of this section;

(ii) Require the lessee to modify any Testing Plan which is=20 inconsistent with the criteria in paragraph (c)(1) of this = section; or

(iii) Disapprove any Testing Plan when the Director determines = the=20 existence of exceptional geological conditions in the lease area,=20 exceptional resource values in the marine or coastal environment, = or other=20 exceptional circumstances and that (A) implementation of the = activities=20 described in the plan would probably cause serious harm and damage = to life=20 (including fish and other aquatic life), to property, to any = mineral=20 deposit (in areas leased or not leased), to the National security = or=20 defense, or to the marine, coastal, or human environments; (B) = that the=20 threat of harm or damage will not disappear or decrease to an = acceptable=20 extent within a reasonable period of time; and (C) the advantages = of=20 disapproving the Testing Plan outweigh the advantages of = development and=20 production of the OCS mineral resources.

(3) The Director shall notify the lessee in writing of the = reason(s)=20 for disapproving a Testing Plan or for requiring modification of a = Testing=20 Plan and the conditions that must be met for approval of the = plan.

(d)(1) In the evaluation of a Mining Plan, the Director shall = consider=20 whether the plan is consistent with:

(i) The provisions of the lease;

(ii) The provisions of the Act;

(iii) The provisions of the regulations prescribed under the = Act;

(iv) Other applicable Federal law;

(v) Environmental, safety, and health requirements; and

(vi) The statutory requirements to protect property, natural = resources=20 of the OCS, including mineral deposits (in areas leased or not = leased),=20 and the National security or defense.

(2) Within 60 days following the release of a final EIS = prepared=20 pursuant to NEPA or within 60 days following the comment period = provided=20 in =C2=A7 582.4(d) of this part, the Director shall:

(i) Approve any Mining Plan which is consistent with the = criteria in=20 paragraph (d)(1) of this section;

(ii) Require the lessee to modify any Mining Plan which is = inconsistent=20 with the criteria in paragraph (d)(1) of this section; or

(iii) Disapprove any Mining Plan when the Director determines = the=20 existence of exceptional geological conditions in the lease area,=20 exceptional resource values in the marine or coastal environment, = or other=20 exceptional circumstances, and that:

(A) Implementation of the activities described in the plan = would=20 probably cause serious harm and damage to life (including fish and = other=20 aquatic life), to property, to any mineral deposit (in areas = leased or not=20 leased), to the National security or defense, or to the marine, = coastal,=20 or human environments;

(B) That the threat of harm or damage will not disappear or = decrease to=20 an acceptable extent within a reasonable period of time; and

(C) The advantages of disapproving the Mining Plan outweigh the = advantages of development and production of the OCS mineral = resources.

(3) The Director shall notify the lessee in writing of the = reason(s)=20 for disapproving a Mining Plan or for requiring modification of a = Mining=20 Plan and the conditions that must be met for approval of the = plan.

(e)-(f) [Reserved]

(g) The Director shall establish practices and procedures to = govern the=20 collection of all rents, royalties, and other payments due the = Federal=20 Government in accordance with terms of the leasing notice, the = lease, and=20 the applicable Royalty Management regulations listed in = =C2=A7 581.26(i)=20 of this chapter.

(h) [Reserved]

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=C2=A7 582.13 [Reserved]

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=C2=A7 582.14 Noncompliance,=20 remedies, and penalties.

(a)(1) If the Director determines that a lessee has failed to = comply=20 with applicable provisions of law; the regulations in this part; = other=20 applicable regulations; the lease; the approved Delineation, = Testing, or=20 Mining Plan; or the Director's orders or instructions, and the = Director=20 determines that such noncompliance poses a threat of immediate, = serious,=20 or irreparable damage to the environment, the mine or the deposit = being=20 mined, or other valuable mineral deposits or other resources, the = Director=20 shall order the lessee to take immediate and appropriate remedial = action=20 to alleviate the threat. Any oral orders shall be followed up by = service=20 of a notice of noncompliance upon the lessee by delivery in person = to the=20 lessee or agent, or by certified or registered mail addressed to = the=20 lessee at the last known address.

(2) If the Director determines that the lessee has failed to = comply=20 with applicable provisions of law; the regulations in this part; = other=20 applicable regulations; the lease; the requirements of an approved = Delineation, Testing, or Mining Plan; or the Director's orders or=20 instructions, and such noncompliance does not pose a threat of = immediate,=20 serious, or irreparable damage to the environment, the mine or the = deposit=20 being mined, or other valuable mineral deposits or other = resources, the=20 Director shall serve a notice of noncompliance upon the lessee by = delivery=20 in person to the lessee or agent or by certified or registered = mail=20 addressed to the lessee at the last known address.

(b) A notice of noncompliance shall specify in what respect(s) = the=20 lessee has failed to comply with the provisions of applicable law; = regulations; the lease; the requirements of an approved = Delineation,=20 Testing, or Mining Plan; or the Director's orders or instructions, = and=20 shall specify the action(s) which must be taken to correct the=20 noncompliance and the time limits within which such action must be = taken.

(c) Failure of a lessee to take the actions specified in the = notice of=20 noncompliance within the time limit specified shall be grounds for = a=20 suspension of operations and other appropriate actions, including = but not=20 limited to the assessment of a civil penalty of up to $10,000 per = day for=20 each violation that is not corrected within the time period = specified (43=20 U.S.C. 1350(b)).

(d) Whenever the Director determines that a violation of or = failure to=20 comply with any provision of the Act; or any provision of a lease, = license, or permit issued pursuant to the Act; or any provision of = any=20 regulation promulgated under the Act probably occurred and that = such=20 apparent violation continued beyond notice of the violation and = the=20 expiration of the reasonable time period allowed for corrective = action,=20 the Director shall follow the procedures concerning remedies and = penalties=20 in subpart N, Remedies and Penalties, of 30 CFR part 550 to = determine and=20 assess an appropriate penalty.

(e) The remedies and penalties prescribed in this section shall = be=20 concurrent and cumulative, and the exercise of one shall not = preclude the=20 exercise of the other. Further, the remedies and penalties = prescribed in=20 this section shall be in addition to any other remedies and = penalties=20 afforded by any other law or regulation (43 U.S.C. 1350(e)).

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=C2=A7 582.15 Cancellation=20 of leases.

(a) Whenever the owner of a nonproducing lease fails to comply = with any=20 of the provisions of the Act, the lease, or the regulations issued = under=20 the Act, and the default continues for a period of 30 days after = mailing=20 of notice by registered or certified letter to the lease owner at = the=20 owner's record post office address, the Secretary may cancel the = lease=20 pursuant to section 5(c) of the Act, and the lessee shall not be = entitled=20 to compensation. Any such cancellation is subject to judicial = review as=20 provided by section 23(b) of the Act.

(b) Whenever the owner of any producing lease fails to comply = with any=20 of the provisions of the Act, the lease, or the regulations issued = under=20 the Act, the Secretary may cancel the lease only after judicial=20 proceedings pursuant to section 5(d) of the Act, and the lessee = shall not=20 be entitled to compensation.

(c) Any lease issued under the Act, whether producing or not, = may be=20 canceled by the Secretary upon proof that it was obtained by fraud = or=20 misrepresentation and after notice and opportunity to be heard has = been=20 afforded to the lessee.

(d) The Secretary may cancel a lease in accordance with the=20 following:

(1) Cancellation may occur at any time if the Secretary = determines=20 after a hearing that:

(i) Continued activity pursuant to such lease would probably = cause=20 serious harm or damage to life (including fish and other aquatic = life), to=20 property, to any mineral (in areas leased or not leased), to the = National=20 security or defense, or to the marine, coastal, or human = environment;

(ii) The threat of harm or damage will not disappear or = decrease to an=20 acceptable extent within a reasonable period of time; and

(iii) The advantages of cancellation outweigh the advantages of = continuing such lease in force.

(2) Cancellation shall not occur unless and until operations = under such=20 lease shall have been under suspension or temporary prohibition by = the=20 Secretary, with due extension of any lease term continuously for a = period=20 of 5 years or for a lesser period upon request of the lessee;

(3) Cancellation shall entitle the lessee to receive such = compensation=20 as is shown to the Secretary as being equal to the lesser of:

(i) The fair value of the canceled rights as of the date of=20 cancellation, taking account of both anticipated revenues from the = lease=20 and anticipated costs, including costs of compliance with all = applicable=20 regulations and operating orders, liability for cleanup costs or = damages,=20 or both, and all other costs reasonably anticipated on the lease, = or

(ii) The excess, if any, over the lessee's revenue from the = lease (plus=20 interest thereon from the date of receipt to date of = reimbursement) of all=20 consideration paid for the lease and all direct expenditures made = by the=20 lessee after the date of issuance of such lease and in connection = with=20 exploration or development, or both, pursuant to the lease (plus = interest=20 on such consideration and such expenditures from date of payment = to date=20 of reimbursement), except that in the case of joint leases which = are=20 canceled due to the failure of one or more partners to exercise = due=20 diligence, the innocent parties shall have the right to seek = damages for=20 such loss from the responsible party or parties and the right to = acquire=20 the interests of the negligent party or parties and be issued the = lease in=20 question.

(iii) The lessee shall not be entitled to compensation where = one of the=20 following circumstances exists when a lease is canceled:

(A) A producing lease is forfeited or is canceled pursuant to = section=20 (5)(d) of the Act;

(B) A Testing Plan or Mining Plan is disapproved because the = lessee's=20 failure to demonstrate compliance with the requirements of = applicable=20 Federal law; or

(C) The lessee of a nonproducing lease fails to comply with a = provision=20 of the Act, the lease, or regulations issued under the Act, and = the=20 noncompliance continues for a period of 30 days or more after the = mailing=20 of a notice of noncompliance by registered or certified letter to = the=20 lessee.

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Subpart C=E2=80=94Obligations and = Responsibilities of=20 Lessees

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=C2=A7 582.20 Obligations=20 and responsibilities of lessees.

(a) The lessee shall comply with the provisions of applicable = laws;=20 regulations; the lease; the requirements of the approved = Delineation,=20 Testing, or Mining Plans; and other written or oral orders or = instructions=20 issued by the Director when performing exploration, testing, = development,=20 and production activities pursuant to a lease issued under 30 CFR = part=20 581. The lessee shall take all necessary precautions to prevent = waste and=20 damage to oil, gas, sulphur, and other OCS mineral-bearing = formations and=20 shall conduct operations in such manner that does not cause or = threaten to=20 cause harm or damage to life (including fish and other aquatic = life); to=20 property; to the National security or defense; or to the marine, = coastal,=20 or human environment (including onshore air quality). The lessee = shall=20 make all mineral resource data and information and all = environmental data=20 and information acquired by the lessee in the course of = exploration,=20 testing, development, and production operations on the lease = available to=20 the Director for examination and copying at the lease site or an = onshore=20 location convenient to the Director.

(b) In all cases where there is more than one lease owner of = record,=20 one person shall be designated payor for the lease. The payor = shall be=20 responsible for making all rental, minimum royalty, and royalty=20 payments.

(c) In all cases where lease operations are not conducted by = the sole=20 lessee, a =E2=80=9Cdesignation of operator=E2=80=9D shall be = submitted to and accepted by=20 the Director prior to the commencement of leasehold operations. = This=20 designation when accepted will be recognized as authority for the = designee=20 to act on behalf of the lessees and to fulfill the lessees' = obligations=20 under the Act, the lease, and the regulations of this part. All = changes of=20 address and any termination of a designation of operator shall be = reported=20 immediately, in writing, to the Director. In the case of a = termination of=20 a designation of operator or in the event of a controversy between = the=20 lessee and the designated operator, both the lessee and the = designated=20 operator will be responsible for the protection of the interests = of the=20 lessor.

(d) When required by the Director or at the option of the = lessee, the=20 lessee shall submit to the Director the designation of a local=20 representative empowered to receive notices, provide access to OCS = mineral=20 and environmental data and information, and comply with orders = issued=20 pursuant to the regulations of this part. If there is a change in = the=20 designated representative, the Director shall be notified = immediately.

(e) Before beginning operations, the lessee shall inform the = Director=20 in writing of any designation of a local representative under = paragraph=20 (d) of this section and the address of the mine office responsible = for the=20 exploration, testing, development, or production activities; the = lessee's=20 temporary and permanent addresses; or the name and address of the=20 designated operator who will be responsible for the operations, = and who=20 will act as the local representative of the lessee. The Director = shall=20 also be informed of each change thereafter in the address of the = mine=20 office or in the name or address of the local representative.

(f) The holder of a right-of-use and easement shall exercise = its rights=20 under the right of use and easement in accordance with the = regulations of=20 this part.

(g) A lessee shall submit reports and maintain records in = accordance=20 with =C2=A7 582.29 of this part.

(h) When an oral approval is given by BOEM in response to an = oral=20 request under these regulations, the oral request shall be = confirmed in=20 writing by the lessee or holder of a right of use and easement = within 72=20 hours.

(i) The lessee is responsible for obtaining all permits and = approvals=20 from BOEM, BSEE or other Agencies needed to carry out exploration, = testing, development, and production activities under a lease = issued under=20 30 CFR part 581 of this title.

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=C2=A7 582.21 Plans,=20 general.

(a) No exploration, testing, development, or production = activities,=20 except preliminary activities, shall be commenced or conducted on = any=20 lease except in accordance with a plan submitted by the lessee and = approved by the Director. Plans will not be approved before = completion of=20 comprehensive technical and environmental evaluations to assure = that the=20 activities described will be carried out in a safe and = environmentally=20 responsible manner. Prior to the approval of a plan, the Director = will=20 assure that the lessee is prepared to take adequate measures to = prevent=20 waste; conserve natural resources of the OCS; and protect the = environment,=20 human life, and correlative rights. The lessee shall demonstrate = to the=20 satisfaction of the Director that the lease is in good standing, = the=20 lessee is authorized and capable of conducting the activities = described in=20 the plan, and that an acceptable bond has been provided.

(b) Plans shall be submitted to the Director for approval. The = lessee=20 shall submit the number of copies prescribed by the Director. Such = plans=20 shall describe in detail the activities that are to be conducted = and shall=20 demonstrate that the proposed exploration, testing, development, = and=20 production activities will be conducted in an operationally safe = and=20 environmentally responsible manner that is consistent with the = provisions=20 of the lease, applicable laws, and regulations. The Governor of an = affected State and other Federal Agencies shall be provided an = opportunity=20 to review and provide comments on proposed Delineation, Testing, = and=20 Mining Plans and any proposal for a significant modification to an = approved plan. Following review, including the technical and = environmental=20 evaluations, the Director shall either approve, disapprove, or = require the=20 lessee to modify its proposed plan.

(c) Lessees are not required to submit a Delineation or Testing = Plan=20 prior to submittal of a proposed Testing or Mining Plan if the = lessee has=20 sufficient data and information on which to base a Testing or = Mining Plan=20 without carrying out postlease exploration and/or testing = activities. A=20 Mining Plan may include proposed exploration or testing activities = where=20 those activities are needed to obtain additional data and = information on=20 which to base plans for future mining activities. A Testing Plan = may=20 include exploration activities when those activities are needed to = obtain=20 additional data or information on which to base plans for future = testing=20 or mining activities.

(d) Preliminary activities are bathymetric, geological, = geophysical,=20 mapping, and other surveys necessary to develop a comprehensive=20 Delineation, Testing, or Mining Plan. Such activities are those = which have=20 no significant adverse impact on the natural resources of the OCS. = The=20 lessee shall give notice to the Director at least 30 days prior to = initiating the proposed preliminary activities on the lease. The = notice=20 shall describe in detail those activities that are to be conducted = and the=20 time schedule for conducting those activities.

(e) Leasehold activities shall be carried out with due regard = to=20 conservation of resources, paying particular attention to the wise = management of OCS mineral resources, minimizing waste of the = leased=20 resource(s) in mining and processing, and preventing damage to = unmined=20 parts of the mineral deposit and other resources of the OCS.

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=C2=A7 582.22 Delineation=20 Plan.

All exploration activities shall be conducted in accordance = with a=20 Delineation Plan submitted by the lessee and approved by the = Director. The=20 Delineation Plan shall describe the proposed activities necessary = to=20 locate leased OCS minerals, characterize the quantity and quality = of the=20 minerals, and generate other information needed for the = development of a=20 comprehensive Testing or Mining Plan. A Delineation Plan at a = minimum=20 shall include the following:

(a) The OCS mineral(s) or primary interest.

(b) A brief narrative description of the activities to be = conducted and=20 how the activities will lead to the discovery and evaluation of a=20 commercially minable deposit on the lease.

(c) The name, registration, and type of equipment to be used, = including=20 vessel types as well as their navigation and mobile communication = systems,=20 and transportation corridors to be used between the lease and = shore.

(d) Information showing that the equipment to be used = (including the=20 vessel) is capable of performing the intended operation in the = environment=20 which will be encountered.

(e) Maps showing the proposed locations of test drill holes, = the=20 anticipated depth of penetration of test drill holes, the = locations where=20 surficial samples were taken, and the location of proposed = geophysical=20 survey lines for each surveying method being employed.

(f) A description of measures to be taken to avoid, minimize, = or=20 otherwise mitigate air, land, and water pollution and damage to = aquatic=20 and wildlife species and their habitats; any unique or special = features in=20 the lease area; aquifers; other natural resources of the OCS; and = hazards=20 to public health, safety, and navigation.

(g) A schedule indicating the starting and completion dates for = each=20 proposed exploration activity.

(h) A list of any known archaeological resources on the lease = and=20 measures to assure that the proposed exploration activities do not = damage=20 those resources.

(i) A description of any potential conflicts with other uses = and users=20 of the area.

(j) A description of measures to be taken to monitor the = effects of the=20 proposed exploration activities on the environment in accordance = with=20 =C2=A7 582.28(c) of this part.

(k) A detailed description of practices and procedures to = effect the=20 abandonment of exploration activities, e.g., plugging of test = drill holes.=20 The proposed procedures shall indicate the steps to be taken to = assure=20 that test drill holes and other testing procedures which penetrate = the=20 seafloor to a significant depth are properly sealed and that the = seafloor=20 is left free of obstructions or structures that may present a = hazard to=20 other uses or users of the OCS such as navigation or commercial=20 fishing.

(l) A detailed description of the cycle of all materials, the = method=20 for discharge and disposal of waste and refuse, and the chemical = and=20 physical characteristics of waste and refuse.

(m) A description of the potential environmental impacts of the = proposed exploration activities including the following:

(1) The location of associated port, transport, processing, and = waste=20 disposal facilities and affected environment (e.g., maps, land = use, and=20 layout);

(2) A description of the nature and degree of environmental = impacts and=20 the domestic socioeconomic effects of construction and operation = of the=20 associated facilities, including waste characteristics and = toxicity;

(3) Any proposed mitigation measures to avoid or minimize = adverse=20 impacts on the environment;

(4) A certificate of consistency with the federally approved = State=20 coastal zone management program, where applicable; and

(5) Alternative sites and technologies considered by the lessee = and the=20 reasons why they were not chosen.

(n) Any other information needed for technical evaluation of = the=20 planned activity, such as sample analyses to be conducted at sea, = and the=20 evaluation of potential environmental impacts.

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=C2=A7 582.23 Testing=20 Plan.

All testing activities shall be conducted in accordance with a = Testing=20 Plan submitted by the lessee and approved by the Director. Where a = lessee=20 needs more information to develop a detailed Mining Plan than is=20 obtainable under an approved Delineation Plan, to prepare = feasibility=20 studies, to carry out a pilot program to evaluate processing = techniques or=20 technology or mining equipment, or to determine environmental = effects by a=20 pilot test mining operation, the lessee shall submit a = comprehensive=20 Testing Plan for the Director's approval. Any OCS minerals = acquired during=20 activities conducted under an approved Testing Plan will be = subject to the=20 payment of royalty pursuant to the governing lease terms. A = Testing Plan=20 at a minimum shall include the following:

(a) The nature and purpose of the proposed testing program.

(b) A comprehensive description of the activities to be = performed=20 including descriptions of the proposed methods for analysis of = samples=20 taken.

(c) A narrative description and maps showing water depths and = the=20 locations of the proposed pilot mining or other testing = activities.

(d) A comprehensive description of the method and manner in = which=20 testing activities will be conducted and the results the lessee = expects to=20 obtain as a result of those activities.

(e) The name, registration, and type of equipment to be used, = including=20 vessel types together with their navigation and mobile = communication=20 systems, and transportation corridors to be used between the lease = and=20 shore.

(f) Information showing that the equipment to be used = (including the=20 vessel) is capable of performing the intended operation in the = environment=20 which will be encountered.

(g) A schedule specifying the starting and completion dates for = each of=20 the testing activities.

(h) A list of known archaeological resources on the lease and = measures=20 to be used to assure that the proposed testing activities do not = damage=20 those resources.

(i) A description of any potential conflicts with other uses = and users=20 of the area.

(j) A description of measures to be taken to avoid, minimize, = or=20 otherwise mitigate air, land, and water pollution and damage to = aquatic=20 and wildlife species and their habitat; any unique or special = features in=20 the lease area, other natural resources of the OCS; and hazards to = public=20 health, safety, and navigation.

(k) A description of the measures to be taken to monitor the = impacts of=20 the proposed testing activities in accordance with = =C2=A7 582.28(c) of=20 this part.

(l) A detailed description of the cycle of all materials = including=20 samples and wastes, the method for discharge and disposal of waste = and=20 refuse, and the chemical and physical characteristics of such = waste and=20 refuse.

(m) A detailed description of practices and procedures to = effect the=20 abandonment of testing activities, e.g., abandonment of a pilot = mining=20 facility. The proposed procedures shall indicate the steps to be = taken to=20 assure that mined areas do not pose a threat to the environment = and that=20 the seafloor is left free of obstructions and structures that may = present=20 a hazard to other uses or users of the OCS such as navigation or=20 commercial fishing.

(n) A description of potential environmental impacts of testing = activities including the following:

(1) The location of associated port, transport, processing, and = waste=20 disposal facilities and affected environment (e.g., maps, land = use, and=20 layout);

(2) A description of the nature and degree of potential = environmental=20 impacts of the proposed testing activities and the domestic = socioeconomic=20 effects of construction and operation of the proposed testing = facilities,=20 including waste characteristics and toxicity;

(3) Any proposed mitigation measures to avoid or minimize = adverse=20 impacts on the environment;

(4) A certificate of consistency with the federally approved = State=20 coastal zone management program, where applicable; and

(5) Alternate sites and technologies considered by the lessee = and the=20 reasons why they were not selected.

(o) Any other information needed for technical evaluation of = the=20 planned activities and for evaluation of the impact of those = activities on=20 the human, marine, and coastal environments.

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=C2=A7 582.24 Mining=20 Plan.

All OCS mineral development and production activities shall be=20 conducted in accordance with a Mining Plan submitted by the lessee = and=20 approved by the Director. A Mining Plan shall include = comprehensive=20 detailed descriptions, illustrations, and explanations of the = proposed OCS=20 mineral development, production, and processing activities and = accurately=20 present the lessee's proposed plan of operation. A Mining Plan at = a=20 minimum shall include the following:

(a) A narrative description of the mining activities = including:

(1) The OCS mineral(s) or material(s) to be recovered;

(2) Estimates of the number of tons and grade(s) of ore to be=20 recovered;

(3) Anticipated annual production;

(4) Volume of ocean bottom expected to be disturbed (area and = depth of=20 disruption) each year; and

(5) All activities of the mining cycle from extraction through=20 processing and waste disposal.

(b) Maps of the lease showing water depths, the outline of the = mineral=20 deposit(s) to be mined with cross sections showing thickness, and = the=20 area(s) anticipated to be mined each year.

(d) Information showing that the equipment to be used = (including the=20 vessel) is capable of performing the intended operation in the = environment=20 which will be encountered.

(e) A description of equipment to be used in mining, = processing, and=20 transporting of the ore.

(f) A schedule indicating the anticipated starting and = completion dates=20 for each activity described in the plan.

(g) For onshore processing, a description of how OCS minerals = are to be=20 processed and how the produced OCS minerals will be weighed, = assayed, and=20 royalty determinations made.

(h) For at-sea processing, additional information including = type and=20 size of installation or structures and the method of tailings=20 disposal.

(i) A list of known archaeological resources on the lease and = the=20 measures to be taken to assure that the proposed mining activities = do not=20 damage those resources.

(j) Description of any potential conflicts with other uses and = users of=20 the area.

(k) A detailed description of the nature and occurrence of the = OCS=20 mineral deposit(s) in the leased area with adequate maps and = sections.

(l) A detailed description of development and mining methods to = be=20 used, the proposed sequence of mining or development, the expected = production rate, the method and location of the proposed = processing=20 operation, and the method of measuring production.

(m) A detailed description of the method of transporting the = produced=20 OCS minerals from the lease to shore and adequate maps showing the = locations of pipelines, conveyors, and other transportation = facilities and=20 corridors.

(n) A detailed description of the cycle of all materials = including=20 samples and wastes, the method of discharge and disposal of waste = and=20 refuse, and the chemical and physical characteristics of the waste = and=20 refuse.

(o) A description of measures to be taken to avoid, minimize, = or=20 otherwise mitigate air, land, and water pollution and damage to = aquatic=20 and wildlife species and their habitats; any unique or special = features in=20 the lease area, aquifers, or other natural resources of the OCS; = and=20 hazards to public health, safety, and navigation.

(p) A detailed description of measures to be taken to monitor = the=20 impacts of the proposed mining and processing activities on the=20 environment in accordance with =C2=A7 582.28(c) of this = part.

(q) A detailed description of practices and procedures to = effect the=20 abandonment of mining and processing activities. The proposed = procedures=20 shall indicate the steps to be taken to assure that mined areas on = tailing=20 deposits do not pose a threat to the environment and that the = seafloor is=20 left free of obstructions and structures that present a hazard to = other=20 users or uses of the OCS such as navigation or commercial = fishing.

(r) A description of potential environmental impacts of mining=20 activities including the following:

(1) The location of associated port, transport, processing, and = waste=20 disposal facilities and the affected environment (e.g., maps, land = use,=20 and layout);

(2) A description of the nature and degree of potential = environmental=20 impacts of the proposed mining activities and the domestic = socioeconomic=20 effects of construction and operation of the associated = facilities,=20 including waste characteristics and toxicity;

(3) Any proposed mitigation measures to avoid or minimize = adverse=20 impacts on the environment;

(4) A certificate of consistency with the federally approved = State=20 coastal zone management program, where applicable; and

(5) Alternative sites and technologies considered by the lessee = and the=20 reasons why they were not chosen.

(s) Any other information needed for technical evaluation of = the=20 proposed activities and for the evaluation of potential impacts on = the=20 environment.

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=C2=A7 582.25 Plan=20 modification.

Approved Delineation, Testing, and Mining Plans may be modified = upon=20 the Director's approval of the changes proposed. When = circumstances=20 warrant, the Director may direct the lessee to modify an approved = plan to=20 adjust to changed conditions. If the lessee requests the change, = the=20 lessee shall submit a detailed, written statement of the proposed=20 modifications, potential impacts, and the justification for the = proposed=20 changes. Revision of an approved plan whether initiated by the = lessee or=20 ordered by the Director shall be submitted to the Director for = approval.=20 When the Director determines that a proposed revision could result = in=20 significant change in the impacts previously identified and = evaluated or=20 requires additional permits, the proposed plan revision shall be = subject=20 to the applicable review and approval procedures of = =C2=A7=C2=A7 582.21,=20 582.22, 582.23, and 582.24 of this part.

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=C2=A7 582.26 Contingency=20 Plan.

(a) When required by the Director, a lessee shall include a = Contingency=20 Plan as part of its request for approval of a Delineation, = Testing, or=20 Mining Plan. The Contingency Plan shall comply with the = requirements of=20 =C2=A7 582.28(e) of this part.

(b) The Director may order or the lessee may request the = Director's=20 approval of a modification of the Contingency Plan when such a = change is=20 necessary to reflect any new information concerning the nature, = magnitude,=20 and significance of potential equipment or procedural failures or = the=20 effectiveness of the corrective actions described in the = Contingency=20 Plan.

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=C2=A7 582.27 Conduct of=20 operations.

(a)-(h) [Reserved]

(i) Any bulk sampling or testing that is necessary to be = conducted=20 prior to submission of a Mining Plan shall be in accordance with = an=20 approved Testing Plan. The sale of any OCS minerals acquired under = an=20 approved Testing Plan shall be subject to the payment of the = royalty=20 specified in the lease to the United States.

(j)-(m) [Reserved]

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=C2=A7 582.28 Environmental=20 protection measures.

(a) Exploration, testing, development, production, and = processing=20 activities proposed to be conducted under a lease will only be = approved by=20 the Director upon the determination that the adverse impacts of = the=20 proposed activities can be avoided, minimized, or otherwise = mitigated. The=20 Director shall take into account the information contained in the=20 sale-specific environmental evaluation prepared in association = with the=20 lease offering as well as the site- and operational-specific = environmental=20 evaluations prepared in association with the review and evaluation = of the=20 approved Delineation, Testing, or Mining Plan. The Director's = review of=20 the air quality consequences of proposed OCS activities will = follow the=20 practices and procedures specified in 30 CFR 250.194, = =C2=A7=C2=A7 550.194,=20 550.218, 550.249, and 550.303.

(b) If the baseline data available are judged by the Director = to be=20 inadequate to support an environmental evaluation of a proposed=20 Delineation, Testing, or Mining Plan, the Director may require the = lessee=20 to collect additional environmental baseline data prior to the = approval of=20 the activities proposed.

(c)(1) [Reserved]

(2) Monitoring of environmental effects shall include = determination of=20 the spatial and temporal environmental changes induced by the = exploration,=20 testing, development, production, and processing activities on the = flora=20 and fauna of the sea surface, the water column, and/or the = seafloor.

(3)-(4) [Reserved]

(5) When prototype test mining is proposed, the lessee shall = include a=20 monitoring strategy for assessing the impacts of the testing = activities=20 and for developing a strategy for monitoring commercial-scale = recovery and=20 mitigating the impacts of commercial-scale recovery more = effectively. At a=20 minimum, the proposed monitoring activities shall address specific = concerns expressed in the lease-sale environmental analysis.

(6) When required, the monitoring plan shall specify:

(i) The sampling techniques and procedures to be used to = acquire the=20 needed data and information;

(ii) The format to be used in analysis and presentation of the = data and=20 information;

(iii) The equipment, techniques, and procedures to be used in = carrying=20 out the monitoring program; and

(iv) The name and qualifications of person(s) designated to be=20 responsible for carrying out the environmental monitoring.

(d) [Reserved]

(e) In the event that equipment or procedural failure might = result in=20 significant additional damage to the environment, the lessee shall = submit=20 a Contingency Plan which specifies the procedures to be followed = to=20 institute corrective actions in response to such a failure and to = minimize=20 adverse impacts on the environment. Such procedures shall be = designed for=20 the site and mining activities described in the approved = Delineation,=20 Testing, or Mining Plan.

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=C2=A7 582.29 Reports and=20 records.

(a) A report of the amount and value of each OCS mineral = produced from=20 each lease shall be made by the payor for the lease for each = calendar=20 month, beginning with the month in which approved testing, = development, or=20 production activities are initiated and shall be filed in = duplicate with=20 the Director on or before the 20th day of the succeeding month, = unless an=20 extension of time for the filing of such report is granted by the=20 Director. The report shall disclose accurately and in detail all=20 operations conducted during each month and present a general = summary of=20 the status of leasehold activities. The report shall be submitted = each=20 month until the lease is terminated or relinquished unless the = Director=20 authorizes omission of the report during an approved suspension of = production. The report shall show for each calendar month the = location of=20 each mining and processing activity; the number of days operations = were=20 conducted; the identity, quantity, quality, and value of each OCS = mineral=20 produced, sold, transferred, used or otherwise disposed of; = identity,=20 quantity, and quality of an inventory maintained prior to the = point of=20 royalty determination; and other information as may be required by = the=20 Director.

(b) The lessee shall submit a status report on exploration = and/or=20 testing activities under an approved Delineation or Testing Plan = to the=20 Director within 30 days of the close of each calendar quarter = which shall=20 include:

(1) A summary of activities conducted;

(2) A listing of all geophysical and geochemical data acquired = and=20 developed such as acoustic or seismic profiling records;

(3) A map showing location of holes drilled and where bottom = samples=20 were taken; and

(4) Identification of samples analyzed.

(c) Each lessee shall submit to the Director a report of = exploration=20 and/or testing activities within 3 months after the completion of=20 operations. The final report of exploration and/or testing = activities=20 conducted on the lease shall include:

(1) A description of work performed;

(2) Charts, maps, or plats depicting the area and leases in = which=20 activities were conducted specifically identifying the lines of=20 geophysical traverses and/or the locations where geological = activity was=20 conducted and/or the locations of other exploration and testing=20 activities;

(3) The dates on which the actual operations were = performed;

(4) A narrative summary of any mineral occurrences; = environmental=20 hazards; and effects of the activities on the environment, aquatic = life,=20 archaeological resources, or other uses and users of the area in = which the=20 activities were conducted;

(5) Such other descriptions of the activities conducted as may = be=20 specified by the Director; and

(6) Records of all samples from core drilling or other tests = made on=20 the lease. The records shall be in such form that the location and = direction of the samples can be accurately located on a map. The = records=20 shall include logs of all strata penetrated and conditions = encountered,=20 such as minerals, water, gas, or unusual conditions, and copies of = analyses of all samples analyzed.

(d) The lessee shall report the results of environmental = monitoring=20 activities required in =C2=A7 582.28 of this part and shall = submit such=20 other environmental data as the Director may require to conform = with the=20 requirements of these regulations.

(e)(1) All maps shall be appropriately marked with reference to = official lease boundaries and elevations marked with reference to = sea=20 level. When required by the Director, vertical projections and = cross=20 sections shall accompany plan views. The maps shall be kept = current and=20 submitted to the Director annually, or more often when required by = the=20 Director. The accuracy of maps furnished shall be certified by a=20 professional engineer or land surveyor.

(2) The lessee shall prepare such maps of the leased lands as = are=20 necessary to show the geological conditions as determined from = G&G=20 surveys, bottom sampling, drill holes, trenching, dredging, or = mining. All=20 excavations shall be shown in such manner that the volume of OCS = minerals=20 produced during a royalty period can be accurately = ascertained.

(f) Any lessee who acquires rock, mineral, and core samples = under a=20 lease shall keep a representative split of each geological sample = and a=20 quarter longitudinal segment of each core for 5 years during which = time=20 the samples shall be available for inspection at the convenience = of the=20 Director who may take cuts of such cores, cuttings, and = samples.

(g)(1) The lessee shall keep all original data and information=20 available for inspection or duplication, by the Director at the = expense of=20 the lessor, as long as the lease continues in force. Should the = lessee=20 choose to dispose of original data and information once the lease = has=20 expired, said data and information shall be offered to the lessor = free of=20 costs and shall, if accepted, become the property of the = lessor.

(2) Navigation tapes showing the location(s) where samples were = taken=20 and test drilling conducted shall be retained for as long as the = lease=20 continues in force.

(h) Lessees shall maintain records in which will be kept an = accurate=20 account of all ore and rock mined; all ore put through a mill; all = mineral=20 products produced; all ore and mineral products sold, transferred, = used,=20 or otherwise disposed of and to whom sold or transferred, and the=20 inventory weight, assay value, moisture content, base sales price, = dates,=20 penalties, and price received. The percentage of each of the = mineral=20 products recovered and the percentages lost shall be shown. The = records=20 associated with activities on a lease shall be available to the = Director=20 for auditing.

(i) When special forms or reports other than those referred to = in the=20 regulations in this part may be necessary, instructions for the = filing of=20 such forms or reports will be given by the Director.

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=C2=A7 582.30 Right of use=20 and easement.

(a) A right of use and easement that includes any area subject = to a=20 lease issued or maintained under the Act shall be granted only = after the=20 lessee has been notified by the requestor and afforded the = opportunity to=20 comment on the request. A holder of a right under a right of use = and=20 easement shall exercise that right in accordance with the = requirements of=20 the regulations in this part. A right of use and easement shall be = exercised only in a manner which does not interfere unreasonably = with=20 operations of any lessee on its lease.

(b) Once a right of use and easement has been exercised, the = right=20 shall continue, beyond the termination of any lease on which it = may be=20 situated, as long as it is demonstrated to the Director that the = right of=20 use and easement is being exercised by the holder of the right and = that=20 the right of use and easement continues to serve the purpose = specified in=20 the grant. If the right of use and easement extends beyond the = termination=20 of any lease on which the right may be situated or if it is = situated on an=20 unleased portion of the OCS, the rights of all subsequent lessees = shall be=20 subject to such right. Upon termination of a right of use and = easement,=20 the holder of the right shall abandon the premises in the same = manner that=20 a lessee abandons activities on a lease to the satisfaction of the = Director.

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=C2=A7 582.31 [Reserved]

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Subpart D=E2=80=94Payments

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=C2=A7 582.40 Bonds.

(a) Pursuant to the requirements for a bond in = =C2=A7 581.33 of this=20 title, prior to the commencement of any activity on a lease, the = lessee=20 shall submit a surety or personal bond to cover the lessee's = royalty and=20 other obligations under the lease as specified in this = section.

(b) All bonds furnished by a lessee or operator must be in a = form=20 approved by the Associate Director for Offshore Energy and = Minerals=20 Management. A single copy of the required form is to be executed = by the=20 principal or, in the case of surety bonds, by both the principal = and an=20 acceptable surety.

(c) Only those surety bonds issued by qualified surety = companies=20 approved by the Department of the Treasury shall be accepted (see=20 Department of Treasury Circular No. 570 and any supplemental or=20 replacement circulars).

(d) Personal bonds shall be accompanied by a cashier's check, = certified=20 check, or negotiable U.S. Treasury bonds of an equal value to the = amount=20 specified in the bond. Negotiable Treasury bonds shall be = accompanied by a=20 proper conveyance of full authority to the Director to sell such=20 securities in case of default in the performance of the terms and=20 conditions of the lease.

(e) A bond in the minimum amount of $50,000 to cover the = lessee's=20 obligations under the lease shall be submitted prior to the = commencement=20 of any activity on a leasehold. A $50,000 bond shall not be = required on a=20 lease if the lessee already maintains or furnishes a $300,000 bond = conditioned on compliance with the terms of leases for OCS = minerals other=20 than oil, gas, and sulphur held by the lessee on the OCS for the = area in=20 which the lease is located. A bond submitted pursuant to = =C2=A7 556.58(a)=20 of this chapter may be amended to include the aforementioned = condition for=20 compliance. Prior to approval of a Delineation, Testing, or Mining = Plan,=20 the bond amount shall be adjusted, if appropriate, to cover the = operations=20 and activities described in the proposed plan.

(f) For the purposes of this section there are three areas:

(1) The Gulf of Mexico and the area offshore the Atlantic = Ocean;

(2) The area offshore the Pacific Coast States of California, = Oregon,=20 Washington, and Hawaii; and

(3) The area offshore the coast of Alaska.

(g) A separate bond shall be required for each area. An = operator's bond=20 may be submitted for a specific lease(s) in the same amount as the = lessee's bond(s) applicable to the lease(s) involved.

(h) Where, upon a default, the surety makes a payment to the = United=20 States of an obligation incurred under a lease, the face amount of = the=20 surety bond and the surety's liability thereunder shall be reduced = by the=20 amount of such payment.

(i) After default, the principal shall, within 6 months after = notice or=20 within such shorter period as may be fixed by the Director, either = post a=20 new bond or increase the existing bond to the amount previously = held. In=20 lieu thereof, the principal may, within that time, file separate = or=20 substitute bonds for each lease. Failure to meet these = requirements may=20 result in a suspension of operations including production on = leases=20 covered by such bonds.

(j) The Director shall not consent to termination of the period = of=20 liability of any bond unless an acceptable alternative bond has = been filed=20 or until all the terms and conditions of the lease covered by the = bond=20 have been met.

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=C2=A7 582.41 Method of=20 royalty calculation.

In the event that the provisions of royalty management = regulations in=20 part 1206 of chapter XII do not apply to the specific commodities = produced=20 under regulations in this part, the lessee shall comply with = procedures=20 specified in the leasing notice.

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=C2=A7 582.42 Payments.

Rentals, royalties, and other payments due the Federal = Government on=20 leases for OCS minerals shall be paid and reports submitted by the = payor=20 for a lease in accordance with =C2=A7 581.26.

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Subpart E=E2=80=94Appeals

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=C2=A7 582.50 Appeals.

See 30 CFR part 590 for instructions on how to appeal any order = or=20 decision that we issue under this part.

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