05-20150. Leasing in Special Tar Sand Areas

AGENCY:

Bureau of Land Management, Department of the Interior.

ACTION:

Interim final rule with request for comments.

SUMMARY:

The Bureau of Land Management (BLM or “we”) is issuing this interim final rule to amend regulations for the leasing of hydrocarbons, except coal, gilsonite and oil shale, in special tar sand areas. In this rule, BLM amends our regulations to respond to provisions of the Energy Policy Act of 2005 that allow separate oil and gas leases and tar sand leases in special tar sand areas, specify several oil and gas leasing practices that apply to tar sand leases, increase the maximum size for combined hydrocarbon leases and tar sand leases, and set the minimum acceptable bid for tar sand leases at $2.00 per acre. The law requiring these changes also requires that this rule be published as a final rule within 45 days of enactment.

This is an interim final rule. Although the rule is effective upon publication, there is a 60-day comment period that starts on the date of publication. After the comment period, we will review the comments and may issue a further final rule making any necessary changes.

DATES:

The interim final rule is effective October 7, 2005.

Comments

You should submit your comments on or before December 6, 2005. The BLM will not necessarily consider any comments received after the above date during its decision-making on the interim final rule.

ADDRESSES:

Comments

You may mail comments to Director (630), Bureau of Land Management, Eastern States Office, 7450 Boston Boulevard, Springfield, Virginia 22153. Hand delivery: 1620 L Street NW., Suite 401, Washington, DC 20036. For information about filing comments electronically, see the SUPPLEMENTARY INFORMATION section under “Electronic access and filing address.”

FOR FURTHER INFORMATION CONTACT:

Ron Teseneer in the Solid Minerals Group at [phone]. For assistance in reaching Mr. Teseneer, 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. Public Comment Procedures

II. Background

III. Discussion of Interim Final Rule

IV. Procedural Matters

I. Public Comment Procedures

Electronic Access and Filing Address

You may view an electronic version of this interim final rule at BLM's Internet home page: http://www.blm.gov. Internet e-mail: [e-mail]. Please also include “Attention: 1004-AD76” and your name and return address in your message. If you do not receive a confirmation from the system that we have received your Internet message, contact us by phone at [phone].

Federal eRulemaking Portal: http://www.regulations.gov.

Written Comments

Written comments on the interim final rule should be specific, should be confined to issues pertinent to the interim final rule, and should explain the reason for any recommended change. Where possible, comments should reference the specific section or paragraph of the proposal which the commenter is addressing. The BLM may not necessarily consider or include in the Administrative Record for the final rule comments which BLM receives after the close of the comment period (See DATES) or comments delivered to an address other than those listed above (See ADDRESSES).

Comments, including names, street addresses, and other contact information of respondents, will be available for public review at 1620 L Street, NW., Suite 401, Washington, DC, during regular business hours (7:45 a.m. to 4:15 p.m.), Monday through Friday, except Federal holidays. Individual respondents may request confidentiality. If you wish to request that BLM consider withholding your name, street address, and other contact information (such as: Internet address, FAX or phone number) from public review or from disclosure under the Freedom of Information Act, you must state this prominently at the beginning of your comment. The BLM will honor requests for confidentiality on a case-by-case basis to the extent allowed by law. The BLM will make available for public inspection in their entirety all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses.

II. Background

The Combined Hydrocarbon Leasing Act of 1981 (Pub. L. 97-78) amended the Mineral Leasing Act to authorize the Secretary of the Interior (Secretary) to issue combined hydrocarbon leases in areas containing substantial deposits of tar sand, which were to be designated as special tar sand areas. This Act further specified that combined hydrocarbon leases were the only type of lease that could be offered in these special tar sand areas. The BLM published regulations implementing the leasing provisions of this Act on February 18, 1983 (see 48 FR 7422).

Section 350 of the Energy Policy Act of 2005 further amended the Mineral Leasing Act to authorize the Secretary to issue separate oil and gas leases and tar sand leases, in addition to combined hydrocarbon leases, in special tar sand areas. Section 350 of the Act also specified several oil and gas leasing practices that will apply to tar sand leases and set the minimum acceptable bid for tar sand leases at $2.00 per acre.

Section 350(a) also authorizes the waiver of diligence requirements in tar sands prospecting permits. Because the Mineral Leasing Act does not provide for prospecting permits for this mineral, no provisions to implement this part of the new statute are included in this rule.

Section 369(j)(1)(D) of the Energy Policy Act of 2005 also amended the Mineral Leasing Act to increase the maximum acreage of combined hydrocarbon leases and tar sand leases in a special tar sand area to 5,760 acres.

The terms of section 350 are very clear and leave BLM no room for interpretation. Therefore, the BLM finds good cause to omit the general notice of proposed rulemaking as required by 5 U.S.C. 553(b) because the statutorily prescribed directions make notice and comment unnecessary. Section 350(c) of the Act requires BLM to amend these regulations in order to implement the changes directed by Congress in the Act. The BLM has little discretion in this matter and is merely making minor technical amendments and other revisions directly related to implementing the Act. For the same reasons, BLM finds good cause under 5 U.S.C. 553(d) to make the rule effective immediately upon publication. However, we will accept comments on the rule for 60 days after the date of publication (see DATES). If there are no substantive comments on the interim final rule, we will publish another in the Federal Register stating that the rule will stand as published. If there are substantive comments on the interim final rule, we will issue a further final rule which addresses those comments and makes any necessary changes.

III. Discussion of Interim Final Rule

This interim final rule implements the changes to the 43 CFR part 3140 regulations that are required by Section 350 and 369 of the Energy Policy Act of 2005. A detailed, section-by-section discussion of the changes follows:

Part 3140—Leasing in Special Tar Sand Areas

The title is changed from COMBINED HYDROCARBON LEASING, to reflect that oil and gas leases and tar sand leases are now available in special tar sand areas.

The title of subpart 3141 in the index is revised to read “Subpart 3141—Leasing in Special Tar Sand Areas.” This is done because in certain circumstances oil and gas leases in special tar sand areas may be obtained noncompetitively.

The authority citation for Part 3140 is amended to add the Energy Policy Act of 2005.

Section 3140.0-5 Definitions

This section is revised to correct references to 43 CFR 3572.1, which no longer exists. The new references are 43 CFR 3592 and 43 CFR 3593.

Section 3140.1-4 Other Provisions

This section is revised to show the new statutory maximum lease size within special tar sand areas, and to indicate that the lease referred to in this section is a combined hydrocarbon lease.

Section 3140.4-2 Issuance of the Combined Hydrocarbon Lease

Paragraph (b) of this section is amended to correct a typographical error. Paragraph (d)(2) is amended to reflect the revised maximum lease size.

Subpart 3141—Leasing in Special Tar Sand Areas

The title of this subpart is changed by removing the word competitive. This is because under some circumstances, oil and gas leases in special tar sand areas may be leased noncompetitively. The authority citation for this subpart is changed to include the Energy Policy Act of 2005.

Section 3141.0-1 Purpose

This section is revised to indicate that subpart 3141 now includes oil and gas leasing and tar sand leasing in special tar sand areas.

Section 3141.0-3 Authority

This section is revised to include the Energy Policy Act of 2005 as one of the authorities for subpart 3141.

Section 3141.0-5 Definitions

This section is amended to include the definitions of an oil and gas lease and a tar sand lease for the purposes of this subpart.

Section 3141.0-8 Other Applicable Regulations

This section is amended to specify that the other regulations referenced in the current regulations apply to combined hydrocarbon leases only. Two new paragraphs were added to indicate which other regulations apply to oil and gas leases and which other regulations apply to tar sand leases.

Section 3141.1 General

This section is amended to allow the authorized officer to issue tar sand leases by competitive leasing only. This section also is revised to allow the authorized officer to issue oil and gas leases by competitive leasing, or if no qualifying bids are received, by noncompetitive leasing. This is the same procedure used to lease other oil and gas resources under the Mineral Leasing Act. Although it is possible to construe the changes made by the Energy Policy Act as allowing only competitive leasing of oil and gas in tar sand areas, we believe that Congress intended to use the same procedures for all oil and gas. There is no reason to treat oil and gas resources in special tar sand areas differently.

Furthermore, it is more efficient to administer the oil and gas leasing program of the Utah State BLM Office if the same procedures apply to all oil and gas parcels offered in its sales, since BLM conducts oil and gas leasing on a statewide basis.

The revisions to this section also clarify that oil and gas resources may be leased by either a combined hydrocarbon lease or by an oil and gas lease, and that tar sands may be leased by either a combined hydrocarbon lease or by a tar sand lease. The revisions also reiterate that an oil and gas lease does not include rights to explore for or develop tar sands and that a tar sand lease does not include rights to explore for or develop oil and gas.

This section is revised to specify which oil and gas leasing regulations apply to tar sand leasing, and to indicate that the minimum acceptable bid for tar sand leases is $2.00 per acre.

This section is further revised to indicate that tar sand leases are not charged against the acreage limitations is found at 30 U.S.C. Section 184(d) and 43 CFR 3101.2 for holding oil and gas leases.

Section 3141.2-2 Exploration Licenses

Paragraph (b)(5) of this section is revised to reflect the new maximum lease size for special tar sand areas.

Section 3141.4-2 Consultation With Others

Several revisions are made in paragraph (b) of this section to reflect the availability of oil and gas leases and tar sand leases in special tar sand areas.

Section 3141.5-1 Economic Evaluation

This section is revised to indicate that an economic evaluation is required for combined hydrocarbon leases only.

Section 3141.5-2 Term of Lease

This section is modified to describe the term of lease for tar sand leases.

Section 3141.5-3 Royalties and Rentals

Paragraph (a) of this section is modified to indicate that the royalty rate specified applies to tar sand leases.

Paragraph (c) of this section is modified to indicate that the rental rate specified applies to tar sand leases.

Section 3541.5-4 Lease Size

This section is amended to reflect the statutory maximum lease size of 5,760 acres for combined hydrocarbon leases or tar sand leases.

Section 3141.5-5 Dating of Lease

This paragraph is modified to specify that it also applies to tar sand leases.

Section 3141.6-2 Publication of a Notice of Competitive Lease Offering

This section is amended to specify the publication procedures for tar sand leases as directed by the Energy Policy Act of 2005.

For Tar Sand Leases or Oil and Gas Leases, at least 45 days prior to conducting a competitive auction, lands to be offered for a competitive lease sale shall be posted in the proper BLM office having jurisdiction over the lands as specified in Section 1821.2-1(d) of this title, and shall be made available for posting to surface managing agencies having jurisdiction over any of the included lands.

Section 3141.6-3 Conduct of Sales

This section is amended to specify the bidding procedures for oil and gas leases and tar sand leases. This is one of the specific directives in the Energy Policy Act of 2005.

Oil and Gas Leases will be conducted using the procedures for oil and gas leases in Section 3120.5 of this title.

Tar sand lease parcels shall be offered by oral bidding, the winning bid shall be the highest oral bid by a qualified bidder, equal to or exceeding $2.00 per acre, and payments shall be made as provide in Section 3120.5-2 of this title.

Section 3141.6-5 Fair Market Value for Combined Hydrocarbon Leases

This section is revised to clarify that it applies only to combined hydrocarbon leases.

Subpart 3142—Paying Quantities/Diligent Development for Combined Hydrocarbon Leases

The title of this subpart is revised to clarify that it applies only to combined hydrocarbon leases.

Section 3142.0-5 Definitions

This section is revised to correct a typographical error.

The revisions in this section reiterate that the bidding procedures for oil and gas leases in special tar sand areas are the same as for oil and gas leases elsewhere.

IV. Procedural Matters

Executive Order 12866, Regulatory Planning and Review

These interim 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 interim final regulations will not have an effect of $100 million or more on the economy. See further the discussion under the Regulatory Flexibility Act. 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 interim final regulations will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency. These interim 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 rule changes the types of leases that may be issued in special tar sand areas, specifies which of the oil and gas leasing regulations will apply to tar sand leasing, sets the minimum acceptable bid for tar sand leases at $2 per acre, changes the maximum lease size in special tar sand areas, corrects some typographical errors and erroneous cross references in the existing regulations, and makes some cosmetic changes to make the remainder of the part consistent.

The only provision of this rule with the potential to have an economic impact is the regulation setting the minimum acceptable bid at $2 per acre. The $2 per acre minimum bid for tar sand leases will not have an effect on productivity, jobs, the environment, or other units of government, nor will it have an effect of $100 million. The $2 per acre minimum bid may have an effect on the oil and gas industry, but we anticipate that the effect will be minimal. The requirement that leasing occur competitively will ensure that fair market value will be paid for leases issued. In addition, the $2 minimum is a statutory requirement of the Energy Policy Act of 2005 and is not discretionary on the part of the Secretary of the Interior.

Clarity of the Regulations

Executive Order 12866 requires each agency to write regulations that are simple and easy to understand. We invite your comments on how to make these interim final regulations easier to understand, including answers to questions such as the following:

1. Are the requirements in the interim final regulations clearly stated?

2. Do the interim final regulations contain technical language or jargon that interferes with their clarity?

3. Does the format of the interim final regulations (grouping and order of sections, use of headings, paragraphing, etc.) aid or reduce their clarity?

4. Would the regulations be easier to understand if they were divided into more (but shorter) sections? (A “section” appears in bold type and is preceded by the symbol “§ ” and a numbered heading, for example § 3141.5-4 Lease size.)

5. Is the description of the interim final regulations in the SUPPLEMENTARY INFORMATION section of this preamble helpful in understanding the interim final regulations? How could this description be more helpful in making the interim final regulations easier to understand?

Please send any comments you have on the clarity of the regulations to the address specified in the ADDRESSES section.

National Environmental Policy Act

The BLM has determined that this interim final rule is essentially administrative in nature and that a National Environmental Policy Act (NEPA) analysis must be completed prior to any leasing. This qualifies as 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 NEPA, pursuant to 516 DM, Chapter 2, Appendix 1. In addition, the interim 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.

Furthermore, in the Energy Policy Act of 2005, Congress directed that this final rule be published within 45 days exactly. Therefore, there is no time to complete a NEPA analysis of the rule and meet the prescribed deadline.

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 interim final regulations will have no effect on any small entities. The interim final regulation is incorporating a decision already made by Congress. The interim final regulation allows separate leases for two resources that formerly were only offered jointly in special tar sand areas, specifies which of the oil and gas leasing regulations apply to tar sand leases, and sets the minimum acceptable bid for tar sand leases. Therefore, BLM has determined under the RFA that this interim final rule would not have a significant economic impact on a substantial number of small entities. The $2 per acre fixed minimum bid for tar sand leases will not have an effect on the economy of $100 million. The competitive bidding process should ensure that a tar sand lease is sold at fair market value and therefore the statutory $2 minimum bid should have no impact on small entities.

Small Business Regulatory Enforcement Fairness Act

These interim final regulations are not a “major rule” as defined at 5 U.S.C. 804(2). The interim final regulation is essentially administrative in nature, changing only the types of leases that may be offered in special tar sand areas, specifying which of the oil and gas leasing regulations apply to tar sand leases, and setting the minimum acceptable bid for tar sand leases.

Unfunded Mandates Reform Act

These interim 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 interim final regulations have a significant or unique effect on State, local, or tribal governments or the private sector. The interim 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. The interim final regulation is essentially administrative in nature, changing only the types of leases that may be offered in special tar sand areas, specifying which of the oil and gas leasing regulations apply to tar sand leases, and setting the minimum acceptable bid for tar sand leases. Therefore, 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 interim final rule does not represent a government action capable of interfering with constitutionally protected property rights. The interim final rule has no effects that could be considered a taking. This rule change is administrative in nature. It changes the types of leases that may be issued in special tar sand areas, specifies which of the oil and gas leasing regulations will apply to tar sand leasing, sets the minimum acceptable bid for tar sand leases at $2 per acre, changes the maximum lease size in special tar sand areas, corrects some typographical errors and erroneous CFR references in the existing regulations and erroneous CFR references in the existing regulations, and makes some conforming changes to make the remainder of the part consistent. 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 interim 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 interim 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. This rule change is administrative in nature. It changes the types of leases that may be issued in special tar sand areas, specifies which of the oil and gas leasing regulations will apply to tar sand leasing, sets the minimum acceptable bid for tar sand leases at $2 per acre, changes the maximum lease size in special tar sand areas, corrects some typographical errors and erroneous cross references in the existing regulations, and makes some conforming changes to make the remainder of the part consistent. Therefore, in accordance with Executive Order 13132, BLM has determined that this interim 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 interim 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 we have identified no potential effects on Indian trust resources; however, it does affect split estate lands involving Indian surface and federal minerals. Accordingly, we are in the process of preparing a letter to the potentially affected tribes to inform them of the procedural changes that will take place in special tar sands areas and seeking their comments on the rule.

Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use

In accordance with Executive Order 13211, BLM has determined that the interim 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 offer oil and gas leasing and tar sand leasing, separately, in special tar sand areas may result in an increase in oil and gas production of unknown amounts. It does not impose a regulatory burden on any lessee.

Paperwork Reduction Act

BLM has determined that these regulations do not contain information collection requirements that the Office of Management and Budget must approve under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq.

Author

The principal author of this rule is Ron Teseneer, Solid Minerals Group (WO320). Jim Kohler, Utah State Office, BLM, Dennis Daugherty, Office of the Solicitor, Department of the Interior, and Frank Bruno, Regulatory Affairs provided assistance during this effort.

List of Subjects in 43 CFR Part 3140

• Government contracts
• Hydrocarbons
• Mineral royalties
• Oil and gas exploration
• Public lands—mineral resources
• Reporting and recordkeeping requirements

Dated: September 29, 2005.

Rebecca W. Watson,

Assistant Secretary, Land and Minerals Management.

Accordingly, BLM amends 43 CFR part 3140, as set forth below:

PART 3140—COMBINED HYDROCARBON LEASING

1. Amend part 3140 by revising the part heading to read as follows:

PART 3140—LEASING IN SPECIAL TAR SAND AREAS

2-3.The authority citation for part 3140 is revised to read as follows:

Authority: 30 U.S.C. 181 et seq.; 30 U.S.C. 351-359; 95 Stat. 1070; 43 U.S.C. 1701 et seq.; the Energy Policy Act of 2005 (Pub. L. 109-58), unless otherwise noted.

Subpart 3140—Conversion of Existing Oil and Gas Leases and Valid Claims Based on Mineral Locations

4. Remove the authority citation for subpart 3140.

5. Amend § 3140.0-5 by revising paragraph (b) to read as follows:

§ 3140.0-5

Definitions.

* * * * *

(b) A complete plan of operations means a plan of operations that is in substantial compliance with the information requirements of 43 CFR 3592 for both exploration plans and mining plans, as well as any additional information required in this part and under 43 CFR 3593, as may be appropriate.

* * * * *

6. Amend § 3140.1-4 by revising paragraph (a) to read as follows:

§ 3140.1-4

Other provisions.

(a) A combined hydrocarbon lease shall be for no more than 5,760 acres. Acreage held under a combined hydrocarbon lease in a Special Tar Sand Area is not chargeable to State oil and gas limitations allowable in § 3101.2 of this title.

* * * * *

7. Amend § 3140.4-2 by revising paragraphs (b) and (d)(2) to read as follows:

§ 3140.4-2

Issuance of the combined hydrocarbon lease.

* * * * *

(b) The authorized officer shall not sign the combined hydrocarbon lease until it has been executed by the conversion applicant and the lease or claim to be converted has been formally relinquished to the United States.

* * * * *

(d) * * *

(2) To the extent necessary to promote the development of the resource, the authorized officer may issue, upon the request of the applicant, one combined hydrocarbon lease that does not exceed 5,760 acres, which shall be as nearly compact as possible, to cover non-contiguous oil and gas leases or valid claims which have been approved for conversion.

Subpart 3141—Competitive Leasing in Special Tar Sand Areas

8. Revise the subpart heading for subpart 3141 to read as follows:

Subpart 3141—Leasing in Special Tar Sand Areas

9. Remove the authority citation for subpart 3141.

10. Revise § 3141.0-1 to read as follows:

§ 3141.0-1

Purpose.

The purpose of this subpart is to provide for the competitive leasing of lands and issuance of Combined Hydrocarbon Leases, Oil and Gas Leases, or Tar Sand Leases within special tar sand areas.

11. Revise § 3141.0-3 to read as follows:

§ 3141.0-3

Authority.

The regulations in this subpart are issued under the authority of the Mineral Leasing Act of February 25, 1920 (30 U.S.C. 181 et seq.), the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.), the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et seq.), the Combined Hydrocarbon Leasing Act of 1981 (95 Stat. 1070), and the Energy Policy Act of 2005 (Pub. L. 109-58).

12. Amend § 3141.0-5 by redesignating paragraphs (b) and (c) as paragraphs (d) and (e), respectively, and adding new paragraphs (b) and (c) to read as follows:

§ 3141.0-5

Definitions.

* * * * *

(b) For purposes of this subpart, “oil and gas lease” means a lease issued in a Special Tar Sand Area for the exploration and development of oil and gas resources except for tar sand.

(c) Tar sand lease means a lease issued in a Special Tar Sand area exclusively for the exploration for and extraction of tar sand.

* * * * *

13. Amend § 3141.0-8 by:

A. Revising the section heading;

B. Redesignating paragraphs (a), (a)(1), (a)(2), (a)(3), (a)(4), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9), and (a)(10) as paragraphs (a)(1), (a)(1)(i), (a)(1)(ii), (a)(1)(iii), (a)(1)(iv), (a)(1)(v), (a)(1)(vi), (a)(1)(vii), (a)(1)(viii), (a)(1)(ix), and (a)(1)(x), respectively;

C. Redesignating paragraphs (b) and (c) as paragraphs (a)(2) and (a)(3), respectively;

D. Adding new paragraph (a) introductory text;

E. Revising newly redesignated paragraph (a)(3); and

F. Adding new paragraphs (b), and (c), to read as follows:

§ 3141.0-8

Other Applicable Regulations.

(a) Combined hydrocarbon leases.

* * * * *

(3) The provisions of 43 CFR part 3180 shall serve as general guidance to the administration of combined hydrocarbon leases issued under this part to the extent they may be included in unit or cooperative agreements.

(b) Oil and gas leases. (1) All of the provisions of parts 3100, 3110, and 3120 of this title apply to the issuance and administration of oil and gas leases issued under this part.

(2) All of the provisions of part 3160 apply to operations on an oil and gas lease issued under this part.

(3) The provisions of 43 CFR part 3180 apply to the administration of oil and gas leases issued under this part.

(c) Tar sand leases. (1) The following provisions of part 3100 of this title, as they relate to competitive leasing, apply to the issuance of tar sand leases issued under this part.

(i) All of subpart 3102;

(ii) All of subpart 3103 with the exception of sections 3103.2-1, 3103.2-2(d), and 3103.3;

(iii) All of section 3120.4; and

(iv) All of section 3120.5.

(2) Prior to commencement of operations, the lessee shall develop a plan of operations as described in 43 CFR 3592.1 which ensures reasonable protection of the environment.

14. Amend § 3141.1 by:

A. Revising paragraph (a);

B. Redesignating paragraphs (b) and (c) as paragraphs (h) and (i), respectively;

C. Adding new paragraphs (b), (c), (d), (e), (f), and (g); and

D. Revising newly redesignated paragraph (h) to read as follows:

§ 3141.1

General.

(a) Combined hydrocarbons or tar sands within a Special Tar Sand Area shall be leased only by competitive bonus bidding.

(b) Oil and gas within a Special Tar Sand Area shall be leased by competitive bonus bidding as described in 43 CFR part 3120 or if no qualifying bid is received during the competitive bidding process, the area offered for competitive lease may be leased noncompetitively as described in 43 CFR part 3110.

(c) The authorized officer may issue either combined hydrocarbon leases, or oil and gas leases for oil and gas within such areas.

(d) The rights to explore for or develop tar sand deposits in a Special Tar Sand Area may be acquired through either a combined hydrocarbon lease or a tar sand lease.

(e) An oil and gas lease in a Special Tar Sand Area does not include the rights to explore for or develop tar sand.

(f) A tar sand lease in a Special Tar Sand Area does not include the rights to explore for or develop oil and gas.

(g) The minimum acceptable bid for a lease issued for tar sand shall be $2 per acre.

(h) The acreage of combined hydrocarbon leases or tar sand leases held within a Special Tar Sand Area shall not be charged against acreage limitations for the holding of oil and gas leases as provided in section 3101.2-1 of this title.

* * * * *

15. Amend § 3141.2-2 by revising paragraph (b)(5) to read as follows:

§ 3141.2-2

Exploration licenses.

* * * * *

(b) * * *

(5) An application shall cover no more than 5,760 acres, which shall be as compact as possible. The authorized officer may grant an exploration license covering more than 5,760 acres only if the application contains a justification for an exception to the normal limitation.

* * * * *

16. Amend § 3141.4-2 by revising paragraph (b) to read as follows.

§ 3141.4-2

Consultation with others.

* * * * *

(b) The issuance of combined hydrocarbon leases, oil and gas leases, and tar sand leases within special tar sand areas in units of the National Park System shall be allowed only where mineral leasing is permitted by law and where the lands are open to mineral resource disposition in accordance with any applicable Minerals Management Plan. In order to consent to any issuance of a combined hydrocarbon lease, oil and gas lease, tar sand lease, or subsequent development of hydrocarbon resources within a unit of National Park System, the Regional Director of the National Park Service shall find that there will be no resulting significant adverse impacts to the resources and administration of the unit or other contiguous units of the National Park System in accordance with § 3109.2 (b) of this title.

17. Revise § 3141.5-1 to read as follows:

§ 3141.5-1

Economic evaluation.

Prior to any lease sale for a combined hydrocarbon lease, the authorized officer shall request an economic evaluation of the total hydrocarbon resource on each proposed lease tract exclusive of coal, oil shale, or gilsonite.

18. Revise § 3141.5-2 to read as follows:

§ 3141.5-2

Term of lease.

(a) Combined hydrocarbon leases or oil and gas leases shall have a primary term of 10 years and shall remain in effect so long thereafter as oil or gas is produced in paying quantities.

(b) Tar Sand leases shall have a primary term of 10 years and shall remain in effect so long thereafter as tar sand is produced in paying quantities.

19. Amend § 3141.5-3 by revising paragraph (a), redesignating paragraph (d) as (e), and adding new paragraph (d), to read as follows.

§ 3141.5-3

Royalties and rentals.

(a) The royalty rate on all combined hydrocarbon leases or tar sand leases is 121/2 percent of the value of production removed or sold from a lease. The Minerals Management Service shall be responsible for collecting and administering royalties.

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(d) The rental rate for a tar sand lease shall be $1.50 per acre for the first 5 years and $2.00 per acre for each year thereafter.

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20. Revise § 3141.5-4 to read as follows:

§ 3141.5-4

Lease size.

Combined hydrocarbon leases or tar sand leases in Special Tar Sand Areas shall not exceed 5,760 acres.

21. Revise § 3141.6-2 to read as follows:

§ 3141.6-2

Publication of a notice of competitive lease offering.

(a) Combined Hydrocarbon Leases. Where a determination to offer lands for competitive leasing is made, a notice shall be published of the lease sale in the Federal Register and a newspaper of general circulation in the area in which the lands to be leased are located. The publication shall appear once in the Federal Register and at least once a week for 3 consecutive weeks in a newspaper, or for other such periods deemed necessary. The notice shall specify the time and place of sale; the manner in which the bids may be submitted; the description of the lands; the terms and conditions of the lease, including the royalty and rental rates; the amount of the minimum bid; and shall state that the terms and conditions of the leases are available for inspection and designate the proper BLM office where bid forms may be obtained.

(b) Tar Sand Leases or Oil and Gas Leases. At least 45 days prior to conducting a competitive auction, lands to be offered for a competitive lease sale shall be posted in the proper BLM office having jurisdiction over the lands as specified in § 1821.2-1(d) of this title, and shall be made available for posting to surface managing agencies having jurisdiction over any of the included lands.

22. Amend § 3141.6-3 by redesignating paragraphs (a) through (f) as paragraphs (a)(1) through (a)(6), respectively; and by adding new paragraphs (a) introducing text, (b), and (c) to read as follows:

§ 3141.6-3

Conduct of sales.

(a) Combined Hydrocarbon Leases.

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(b) Oil and Gas Leases. Lease sales for oil and gas leases will be conducted using the procedures for oil and gas leases in § 3120.5 of this title.

(c) Tar Sand Leases. (1) Parcels shall be offered by oral bidding.

(2) The winning bid shall be the highest oral bid by a qualified bidder, equal to or exceeding $2.00 per acre.

(3) Payments shall be made as provided in § 3120.5-2 of this title.

23. Amend § 3141.6-5 by revising the section heading to read as follows:

§ 3141.6-5

Fair market value for combined hydrocarbon leases.

Subpart 3142—Paying Quantities/Diligent Development

24. Revise the heading of subpart 3142 to read as follows:

Subpart 3142—Paying Quantities/Diligent Development for Combined Hydrocarbon Leases

25. Amend § 3142.0-5 by revising paragraph (a) to read as follows:

§ 3142.0-5

Definitions.

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(a) Production, in compliance with an approved plan of operations and by nonconventional methods, of oil and gas which can be marketed; or

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