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Title 30: Mineral Resources

PART 582—OPERATIONS IN THE OUTER CONTINENTAL
SHELF FOR MINERALS OTHER THAN OIL, GAS, AND SULPHUR

Contents

Subpart
A—General
§ 582.0   Authority
for information collection.
§ 582.1   Purpose
and authority.
§ 582.2   Scope.
§ 582.3   Definitions.
§ 582.4   Opportunities
for review and comment.
§ 582.5   Disclosure
of data and information to the public.
§ 582.6   Disclosure
of data and information to an adjacent State.
§ 582.7   Jurisdictional
controversies.

Subpart
B—Jurisdiction and Responsibilities of Director
§ 582.10   Jurisdiction
and responsibilities of Director.
§ 582.11   Director's
authority.
§ 582.12   Director's
responsibilities.
§ 582.13   [Reserved]
§ 582.14   Noncompliance,
remedies, and penalties.
§ 582.15   Cancellation
of leases.

Subpart
C—Obligations and Responsibilities of Lessees
§ 582.20   Obligations
and responsibilities of lessees.
§ 582.21   Plans,
general.
§ 582.22   Delineation
Plan.
§ 582.23   Testing
Plan.
§ 582.24   Mining
Plan.
§ 582.25   Plan
modification.
§ 582.26   Contingency
Plan.
§ 582.27   Conduct
of operations.
§ 582.28   Environmental
protection measures.
§ 582.29   Reports
and records.
§ 582.30   Right
of use and easement.
§ 582.31   [Reserved]

Subpart
D—Payments
§ 582.40   Bonds.
§ 582.41   Method
of royalty calculation.
§ 582.42   Payments.

Subpart
E—Appeals
§ 582.50   Appeals.

Authority: 43
U.S.C. 1334.

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

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Subpart A—General

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§ 582.0   Authority for
information collection.

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

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§ 582.1   Purpose and
authority.

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

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

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§ 582.2   Scope.

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

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§ 582.3   Definitions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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§ 582.4   Opportunities
for review and comment.

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

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

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

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

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

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

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

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

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

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

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

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§ 582.5   Disclosure of
data and information to the public.

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

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

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

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§ 582.6   Disclosure of
data and information to an adjacent State.

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

(b) Disclosure shall occur only after the Governor has entered into an
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
for failure to protect the confidentiality of proprietary information, the
Federal Government or the State, as the case may be, may not raise as a
defense any claim of sovereign immunity or any claim that the employee who
revealed the proprietary information, which is the basis of the suit, was
acting outside the scope of the person's employment in revealing the
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
protect the confidentiality of proprietary data, information, and samples;
and

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

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§ 582.7   Jurisdictional
controversies.

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

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Subpart B—Jurisdiction and Responsibilities of
Director

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§ 582.10   Jurisdiction
and responsibilities of Director.

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

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§ 582.11   Director's
authority.

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

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

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

(3) Ensure the public a fair and equitable return on OCS minerals
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
resource data and all environmental data acquired by the lessee or holder
of a right of use and easement in the course of operations on a lease or
right of use and easement and may require a lessee or holder to obtain
additional environmental data when deemed necessary to assure adequate
protection of the human, marine, and coastal environments.

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

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

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

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

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

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

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§ 582.12   Director's
responsibilities.

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

(b)(1) In the evaluation of a Delineation Plan, the Director shall
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
safety.

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

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

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

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

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

(c)(1) In the evaluation of a Testing Plan, the Director shall 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;

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

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

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

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

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

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

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

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

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

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

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

(B) That the threat of harm or damage will not disappear or decrease to
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)
for disapproving a Mining Plan or for requiring modification of a Mining
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
collection of all rents, royalties, and other payments due the Federal
Government in accordance with terms of the leasing notice, the lease, and
the applicable Royalty Management regulations listed in § 581.26(i)
of this chapter.

(h) [Reserved]

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§ 582.13   [Reserved]

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§ 582.14   Noncompliance,
remedies, and penalties.

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

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

(b) A notice of noncompliance shall specify in what respect(s) the
lessee has failed to comply with the provisions of applicable law;
regulations; the lease; the requirements of an approved Delineation,
Testing, or Mining Plan; or the Director's orders or instructions, and
shall specify the action(s) which must be taken to correct the
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
noncompliance within the time limit specified shall be grounds for a
suspension of operations and other appropriate actions, including but not
limited to the assessment of a civil penalty of up to $10,000 per day for
each violation that is not corrected within the time period specified (43
U.S.C. 1350(b)).

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

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

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§ 582.15   Cancellation
of leases.

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

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

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

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

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

(i) Continued activity pursuant to such lease would probably cause
serious harm or damage to life (including fish and other aquatic life), to
property, to any mineral (in areas leased or not leased), to the National
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
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
lease shall have been under suspension or temporary prohibition by the
Secretary, with due extension of any lease term continuously for a period
of 5 years or for a lesser period upon request of the lessee;

(3) Cancellation shall entitle the lessee to receive such compensation
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
cancellation, taking account of both anticipated revenues from the lease
and anticipated costs, including costs of compliance with all applicable
regulations and operating orders, liability for cleanup costs or damages,
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
interest thereon from the date of receipt to date of reimbursement) of all
consideration paid for the lease and all direct expenditures made by the
lessee after the date of issuance of such lease and in connection with
exploration or development, or both, pursuant to the lease (plus interest
on such consideration and such expenditures from date of payment to date
of reimbursement), except that in the case of joint leases which are
canceled due to the failure of one or more partners to exercise due
diligence, the innocent parties shall have the right to seek damages for
such loss from the responsible party or parties and the right to acquire
the interests of the negligent party or parties and be issued the lease in
question.

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

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

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

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

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Subpart C—Obligations and Responsibilities of
Lessees

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§ 582.20   Obligations
and responsibilities of lessees.

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

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

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

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

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

(g) A lessee shall submit reports and maintain records in accordance
with § 582.29 of this part.

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

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

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§ 582.21   Plans,
general.

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

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

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

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

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

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§ 582.22   Delineation
Plan.

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

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

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

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

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

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

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

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

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

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

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

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

(l) A detailed description of the cycle of all materials, the method
for discharge and disposal of waste and refuse, and the chemical and
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
disposal facilities and affected environment (e.g., maps, land use, and
layout);

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

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

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

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

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

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§ 582.23   Testing
Plan.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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§ 582.24   Mining
Plan.

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

(3) Anticipated annual production;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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§ 582.25   Plan
modification.

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

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§ 582.26   Contingency
Plan.

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

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

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§ 582.27   Conduct of
operations.

(a)-(h) [Reserved]

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

(j)-(m) [Reserved]

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§ 582.28   Environmental
protection measures.

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

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

(c)(1) [Reserved]

(2) Monitoring of environmental effects shall include determination of
the spatial and temporal environmental changes induced by the exploration,
testing, development, production, and processing activities on the flora
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
monitoring strategy for assessing the impacts of the testing activities
and for developing a strategy for monitoring commercial-scale recovery and
mitigating the impacts of commercial-scale recovery more effectively. At a
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
needed data and information;

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

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

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

(d) [Reserved]

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

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§ 582.29   Reports and
records.

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

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

(1) A summary of activities conducted;

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

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

(4) Identification of samples analyzed.

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

(1) A description of work performed;

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

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

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

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

(6) Records of all samples from core drilling or other tests made on
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
shall include logs of all strata penetrated and conditions encountered,
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
activities required in § 582.28 of this part and shall submit such
other environmental data as the Director may require to conform with the
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
level. When required by the Director, vertical projections and cross
sections shall accompany plan views. The maps shall be kept current and
submitted to the Director annually, or more often when required by the
Director. The accuracy of maps furnished shall be certified by a
professional engineer or land surveyor.

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

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

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

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

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

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

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§ 582.30   Right of use
and easement.

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

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

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§ 582.31   [Reserved]

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Subpart D—Payments

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§ 582.40   Bonds.

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

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

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

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

(e) A bond in the minimum amount of $50,000 to cover the lessee's
obligations under the lease shall be submitted prior to the commencement
of any activity on a leasehold. A $50,000 bond shall not be required on a
lease if the lessee already maintains or furnishes a $300,000 bond
conditioned on compliance with the terms of leases for OCS minerals other
than oil, gas, and sulphur held by the lessee on the OCS for the area in
which the lease is located. A bond submitted pursuant to § 556.58(a)
of this chapter may be amended to include the aforementioned condition for
compliance. Prior to approval of a Delineation, Testing, or Mining Plan,
the bond amount shall be adjusted, if appropriate, to cover the operations
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,
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
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
States of an obligation incurred under a lease, the face amount of the
surety bond and the surety's liability thereunder shall be reduced by the
amount of such payment.

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

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

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§ 582.41   Method of
royalty calculation.

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

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§ 582.42   Payments.

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

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Subpart E—Appeals

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§ 582.50   Appeals.

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

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