[Federal Register: March 24, 2006 (Volume 71, Number 57)]
[Rules and Regulations]
[Page 14821-14823]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24mr06-12]
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DEPARTMENT OF THE INTERIOR
Bureau of Land Management
43 CFR Part 3100
[WO-310-1310-PP-241A]
RIN 1004-AD83
Oil and Gas Lease Acreage Limitation Exemptions and Reinstatement
of Oil and Gas Leases
AGENCY: Bureau of Land Management, Department of the Interior.
ACTION: Final rule.
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SUMMARY: The Bureau of Land Management (BLM) is issuing this final rule
to amend its regulations to conform to provisions of the Energy Policy
Act of 2005 (EPAct) that changed oil and gas lease acreage limitations
and oil and gas lease reinstatement provisions. Section 352 of the
EPAct expands the types of lease holdings that are exempt from the
lease acreage holding limitations. Section 371 of the EPAct extends the
time to file a lease reinstatement petition from 15 months to 24
months.
DATES: This final rule is effective March 24, 2006.
FOR FURTHER INFORMATION CONTACT: Jay Douglas in the Fluid Minerals
Group at (202) 452-0336. For assistance in reaching Mr. Douglas,
persons who use a telecommunications device for the deaf (TDD) may call
the Federal Information Relay Service (FIRS) at 1-800-877-8339, 24
hours a day, 7 days a week.
SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion of the Final Rule
III. Procedural Matters
I. Background
Section 184(d) of the Mineral Leasing Act of 1920 limited the
amount of acreage a Federal oil and gas lessee may hold in any one
state to 246,080 acres. That section also provides that certain types
of acreage holdings are exempt from those limitations. Section 352 of
the EPAct amended the Mineral Leasing Act to expand the types of
acreage holdings that are exempt from the limitations imposed by the
Act.
Section 188(d) of the Mineral Leasing Act of 1920 provides for
reinstatement, under certain circumstances, of Federal oil and gas
leases that were terminated for nonpayment of rental. Section 371 of
the EPAct amended that section of the Act by extending the maximum time
for a lessee to submit a petition for reinstatement to the BLM.
The BLM finds good cause to omit the general notice of proposed
rulemaking required by 5 U.S.C. 553(b). The notice and comment are
unnecessary because the terms of the EPAct are very clear and provide
no room for interpretation. Both changes are required by the EPAct, are
not discretionary on the part of the Secretary of the Interior, and
would implement clear and mandatory provisions of a recently enacted
statute. For all the reasons noted above, the BLM further finds good
cause to waive the delay in effectiveness in 5 U.S.C. 553(d). In
addition, the provisions of the revised regulations do not require any
change in conduct by the public and have been known to the public since
the EPAct's enactment in August 2005.
II. Discussion of the Final Rule
This final rule will implement the changes to the 43 CFR Part 3100
regulations that are required because of amendments Sections 352 and
371 of the EPAct made to the Mineral Leasing Act. A section-by-section
discussion of the changes follows:
Section 3101.2-3 Excepted Acreage
This section is revised to add the following to the list of acreage
that will
[[Page 14822]]
not be included in computing accountable acreage:
(A) Communitization agreements; and
(B) Acreage in leases for which royalty (including compensatory
royalty or royalty in-kind) was paid in the preceding calendar year.
This section previously stated that acreage in a communitization
agreement should not be exempted and the section did not include leases
for which royalty (including compensatory royalty or royalty in-kind)
was paid in the preceding calendar year. The other categories of
excepted acreage, such as acreage subject to an operating, drilling, or
development contract, are renumbered but not changed.
Section 3108.2-3 Reinstatement at Higher Rental and Royalty Rates:
Class II Reinstatements
Paragraph (b)(1) of this section is revised by limiting its
application to leases that terminated on or before August 8, 2005, the
date of enactment of EPAct. Under this new section, if a lease
terminated on or before August 8, 2005, any form of actual notice,
including a return of a check, constitutes notice of termination. The
provisions of this paragraph are not changed except as to the period to
which it applies, i.e. leases that terminated for underpayment of
rental, before August 8, 2005.
This section is further revised by adding a new paragraph (b)(2)
that addresses the timing of submission of petitions for reinstatement
for leases that terminated after August 8, 2005. Under this new
section, if a lease terminated after August 8, 2005, the BLM can
reinstate the lease if the lessee submitted a petition for
reinstatement and the required back rental and royalty at the increased
rate accruing from the date of termination by the earlier of:
(A) Sixty days after the last date that any lessee of record
received Notice of Termination by certified mail; or
(B) Twenty four months after termination of the lease.
This provision is similar to previous section 3108.2-3(b)(1) except
that it increases the maximum amount of time to submit a petition for
reinstatement from 15 months to 24 months.
III. Procedural Matters
Executive Order 12866, Regulatory Planning and Review
These final regulations are not a significant regulatory action and
are not subject to review by Office of Management and Budget under
Executive Order 12866. These final regulations will not have an effect
of $100 million or more on the economy. They will not adversely affect
in a material way the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities. These final regulations will not create a
serious inconsistency or otherwise interfere with an action taken or
planned by another agency. These final regulations do not alter the
budgetary effects of entitlements, grants, user fees, or loan programs
or the right or obligations of their recipients; nor do they raise
novel legal or policy issues.
This final rule expands the types of lease holdings that are exempt
from the lease acreage holding limitations and extends the time to file
a lease reinstatement petition from 15 months to 24 months. These
provisions are administrative in nature and have the potential for only
minor economic impacts, however, the economic impact is not a result of
this rulemaking, as both changes are required by the EPAct and are not
discretionary on the part of the Secretary of the Interior.
National Environmental Policy Act
The BLM has determined that this final rule is essentially
administrative in nature. This qualifies for a categorical exclusion
under 516 Departmental Manual (DM) Chapter 2, Appendix 1.10. Therefore,
it is categorically excluded from environmental review under section
102(2)(C) of the National Environmental Policy Act (NEPA), pursuant to
516 DM, Chapter 2, Appendix 1. In addition, the final rule does not
meet any of the 10 criteria for exceptions to categorical exclusions
listed in 516 DM, Chapter 2, Appendix 2. Pursuant to Council on
Environmental Quality regulations (40 CFR 1508.4) and the environmental
policies and procedures of the Department of the Interior, the term
``categorical exclusions'' means a category of actions which do not
individually or cumulatively have a significant effect on the human
environment and that have been found to have no such effect in
procedures adopted by a Federal agency and for which neither an
environmental assessment nor an environmental impact statement is
required.
Regulatory Flexibility Act
Congress enacted the Regulatory Flexibility Act (RFA) of 1980, as
amended, 5 U.S.C. 601-612, to ensure that Government regulations do not
unnecessarily or disproportionately burden small entities. The RFA
requires a regulatory flexibility analysis if a rule would have a
significant economic impact, either detrimental or beneficial, on a
substantial number of small entities. The final regulations will have
no effect on any small entities. These provisions are administrative in
nature and have the potential for only minor economic impacts, however,
the economic impact is not a result of this rulemaking, as both changes
are required by the EPAct and are not discretionary on the part of the
Secretary of the Interior. Therefore, the BLM has determined under the
RFA that this final rule would not have a significant economic impact
on a substantial number of small entities.
Small Business Regulatory Enforcement Fairness Act
These final regulations are not a ``major rule'' as defined at 5
U.S.C. 804(2). These provisions are administrative in nature and have
the potential for only minor economic impacts, however, the economic
impact is not a result of this rulemaking, as both changes are required
by the EPAct and are not discretionary on the part of the Secretary of
the Interior.
Unfunded Mandates Reform Act
These final regulations do not impose an unfunded mandate on State,
local, or tribal governments or the private sector of more than $100
million per year; nor do these final regulations have a significant or
unique effect on State, local, or tribal governments or the private
sector. The final rule will not impose any mandate on State, local, or
tribal governments or the private sector. The regulations implement
clear and mandatory provisions of a recently enacted statute. These
provisions are administrative in nature and have the potential for only
minor economic impacts, however, the economic impact is not a result of
this rulemaking, as both changes are required by the EPAct and are not
discretionary on the part of the Secretary of the Interior. Therefore,
the BLM is not required to prepare a statement containing the
information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531
et seq.).
Executive Order 12630, Governmental Actions and Interference With
Constitutionally Protected Property Rights (Takings)
The final rule does not represent a government action capable of
interfering with constitutionally protected property rights. The final
rule has no effects that could be considered a taking. The final
regulation is essentially administrative in nature, and assists rather
than restricts the continued holding of leases by their current private
owners, by relaxing acreage holding limitations and
[[Page 14823]]
giving a longer period of time to seek reinstatement of lapsed leases.
Therefore, the Department of the Interior has determined that the rule
would not cause a taking of private property or require further
discussion of takings implications under this Executive Order.
Executive Order 13132, Federalism
The final rule will not have a substantial direct effect on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. The final rule will have no effect on the
States, on the relationship between the national government and the
states, or on the distribution of power and responsibilities among the
various levels of government. The final regulation is essentially
administrative in nature, merely expanding the types of lease holdings
that are exempt from the lease acreage holding limitations and
extending the maximum time to file a lease reinstatement petition from
15 months to 24 months. Therefore, in accordance with Executive Order
13132, the BLM has determined that this final rule does not have
sufficient Federalism implications to warrant preparation of a
Federalism Assessment.
Executive Order 12988, Civil Justice Reform
Under Executive Order 12988, the Office of the Solicitor has
determined that this final rule would not unduly burden the judicial
system and that it meets the requirements of sections 3(a) and 3(b)(2)
of the Order.
Executive Order 13175, Consultation and Coordination With Indian Tribal
Governments
In accordance with Executive Order 13175, the BLM has determined
that this rule has no impact on Tribal lands because the BLM's part
3100 regulations do not apply to Tribal lands.
Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
In accordance with Executive Order 13211, the BLM has determined
that the final rule will not have substantial direct effects on the
energy supply, distribution or use, including a shortfall in supply or
price increase. This rule does not represent the exercise of agency
discretion. Congress' mandate to expand the types of holdings that are
exempt from the acreage holding limitations and to increase the maximum
amount of time to petition for lease reinstatement in certain
circumstances may result in an increase in oil and gas production of
unknown amounts. It does not impose a regulatory burden on any lessee.
Executive Order 13352, Facilitation of Cooperative Conservation
In accordance with Executive Order 13352, the BLM has determined
that this final rule is administrative in nature, merely expanding the
types of lease holdings that are exempt from the lease acreage holding
limitations and extending the maximum time to file a lease
reinstatement petition from 15 months to 24 months. This rule does not
impede facilitating cooperative conservation; takes appropriate account
of and considers the interests of persons with ownership or other
legally recognized interests in land or other natural resources; has no
effect on local participation in the Federal decision-making process;
and does not affect programs, projects, and activities having to do
with protecting public health and safety.
Paperwork Reduction Act
The BLM has determined that this rulemaking does not contain any
new information collection requirements that the Office of Management
and Budget (OMB) must approve under the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.). The OMB has approved the information
collection requirements in the regulations under OMB control number
1004-0185 which expires June 30, 2006.
Author
The principal author of this rule is Jay Douglas of BLM's Fluid
Minerals Group (WO320) assisted by Ian Senio of BLM's Regulatory
Affairs Group and Dennis Daugherty, Office of the Solicitor, Department
of the Interior.
List of Subjects in 43 CFR Part 3100
Government contracts; Mineral royalties; Oil and gas exploration;
Public lands--mineral resources; Reporting and recordkeeping
requirements; Surety bonds.
Dated: March 10, 2006.
Chad Calvert,
Acting, Assistant Secretary, For Land and Minerals Management.
0
Accordingly, BLM amends 43 CFR part 3100, as set forth below:
PART 3100--OIL AND GAS LEASING
0
1. Revise the authority citation for part 3100 to read as follows:
Authority: 30 U.S.C. 189 and 359; 43 U.S.C. 1732(b), 1733, and
1740; and the Energy Policy Act of 2005 (Pub. L. 109-58).
0
2. Amend Sec. 3101.2-3 by designating the first sentence of the
section as paragraph (a) and the second sentence of the section as
paragraph (b) and by revising newly designated paragraph (a) to read as
follows:
Sec. 3101.2-3 Excepted acreage.
(a) The following acreage shall not be included in computing
accountable acreage:
(1) Acreage under any lease any portion of which is committed to
any Federally approved unit or cooperative plan or communitization
agreement;
(2) Acreage under any lease for which royalty (including
compensatory royalty or royalty in-kind) was paid in the preceding
calendar year; and
(3) Acreage under leases subject to an operating, drilling or
development contract approved by the Secretary.
* * * * *
0
3. Amend Sec. 3108.2-3 by redesignating paragraph (b)(1) and (b)(2) as
paragraphs (b)(2) and (b)(3), respectively, adding a new paragraph
(b)(1), and revising newly designated paragraph (b)(2) to read as
follows:
Sec. 3108.2-3 Reinstatement at higher rental and royalty rates: Class
II reinstatements.
* * * * *
(b)(1) Leases that terminate on or before August 8, 2005, may be
reinstated if the required back rental and royalty at the increased
rates accruing from the date of termination, together with a petition
for reinstatement, are filed on or before the earlier of:
(i) Sixty days after the receipt of the Notice of Termination sent
to the lessee of record, whether by return of check or any form of
actual notice; or
(ii) Fifteen months after termination of the lease.
(2) Leases that terminate after August 8, 2005 may be reinstated if
the required back rental and royalty at the increased rates accruing
from the date of termination, together with a petition for
reinstatement, are filed on or before the earlier of:
(i) Sixty days after the last date that any lessee of record
received Notice of Termination by certified mail; or
(ii) Twenty four months after termination of the lease.
* * * * *
[FR Doc. 06-2848 Filed 3-23-06; 8:45 am]
BILLING CODE 4310-84-P