[Federal Register Volume 61, Number 196 (Tuesday, October 8, 1996)]
[Proposed Rules]
[Pages 52736-52767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25254]
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DEPARTMENT OF THE INTERIOR
Bureau of Land Management
43 CFR Parts 3200, 3210, 3220, 3240, 3250, and 3260
RIN: 1004-AB18
[AA-610-08-4141-02]
Geothermal Resources Leasing and Operations
AGENCY: Bureau of Land Management, Interior.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would amend regulations which implement the
Geothermal Steam Act of 1970, (Steam Act). This proposed rulemaking
addresses leasing, permitting and operational and unitization
requirements for geothermal exploration, drilling, and utilization
operations. The proposed rulemaking proposes no additional permit
requirements. The proposed regulations would put all the geothermal
regulations in a plain English format; reduce and streamline permitting
and information requirements; provide BLM the maximum possible
flexibility regarding permit issuance and thereby accommodate the full
range of potential geothermal operations and development scenarios; and
reorganize the regulations and provide specific permit application
informational requirements to allow more consistent interpretation of
requirements by BLM and its industrial customers.
DATES: Any comments must be received by BLM on or before Janaury 6,
1997. Comments received which are postmarked after this date will not
necessarily be considered in the decisionmaking process on the final
rule.
ADDRESSES: If you wish to comment, you may hand-deliver comments to the
Bureau of Land Management, Administrative Record, Room 401, 1620 L
Street, NW., Washington, DC; or mail comments to the Bureau of Land
Management, Administrative Record, Room 401LS, 1849 C Street, NW.,
Washington, DC 20240. You also may transmit comments electronically via
the Internet to [email protected] Please include ``attn:
RIN 1004AB18'' in your message. If you do not receive a confirmation
from the system that we have received your internet message, contact us
directly during regular business hours. You will be able to review
comments at BLM's Regulatory Management Team office, Room 401, 1620 L
Street, NW., Washington, DC, during regular business hours (7:45 a.m.
to 4:15 p.m.) Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Richard Hoops, (702) 785-6568.
SUPPLEMENTARY INFORMATION:
I. Public Comment Procedures
II. Background and Discussion of Proposed Rule
III. Procedural Matters
I. Public Comment Procedures
Written Comments
Written comments on the proposed rule should be specific, should be
confined to issues pertinent to the 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 comment
addresses. BLM may not necessarily consider or include in the
Administrative Record for the 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'').
[[Page 52737]]
II. Background and Discussion of Proposed Rule
This proposed rule would revise 43 CFR parts 3200, 3210, 3220,
3240, 3250, and 3260 which implement the classification, leasing,
exploration, drilling, and utilization, requirements of the Geothermal
Steam Act of 1970 and the Geothermal Steam Act Amendments of 1988 (the
Steam Act). The new rule would eliminate existing parts 3210, 3220,
3240, 3250 and 3260, rewrite corresponding subparts under part 3200,
and reorganize the existing regulations so that all permitting
requirements and operator responsibilities for each phase of
development may be found in a specific subpart. The proposed rule would
more clearly delineate the existing permitting and informational
requirements.
The existing part 3280, concerning unit agreements, will not be
affected by this proposed rule. BLM intends to revise part 3280 in
harmony with this general revision of the 3200 regulations, but in a
separate rulemaking in the very near future.
Existing parts 3200, 3210, 3220 and 3240 are consolidated and
placed in order corresponding to the sequence in which leasing
procedures occur. The exploration regulations are moved from subparts
3209 and 3264 and redesignated as subpart 3250. Existing part 3260 is
revised to describe only the requirements for drilling operations. The
existing part 3250, Site License, and the existing portions of part
3260 addressing geothermal resource utilization are revised and
redesignated as subpart 3270, Utilization of Geothermal Resources.
The following table lists how each subpart is reorganized:
------------------------------------------------------------------------
Current regulations Proposed regulations
------------------------------------------------------------------------
3200--Geothermal Resources Leasing: 3200--Geothermal Resources
General. Leasing.
3201--Available Lands; Limitations; 3201--Available Lands.
Unit Agreements.
3202--Qualifications of Lessees........ 3202--Qualifications of
Lessees.
3203--Leasing Terms.................... 3206--Lease Issuance.
3207--Additional Lease Term.
3208--Extended Lease Term.
3209--Additional Lease
Information.
3204--Surface Management Requirements.. [deleted].
3205--Fees, Rentals and Royalties...... 3210--Fees, Rentals and
Royalties.
3206--Lease Bonds...................... 3213--Personal and Surety
Bonds.
3214--Bonding and Lease
Operations.
3215--Certificate of Deposit
and Letter of Credit.
3216--Bond Collection After
Default.
3207--Leases for a Fractional or Future 3206--Lease Issuance.
Interest.
3208--(Reserved)
3209--Geothermal Resources Exploration 3250--Geothermal Exploration.
Operations.
3210--Noncompetitive Leases: General... 3204--Noncompetitive Leasing.
3220--Competitive Leases: General...... 3205--Competitive Leasing.
3241--Transfers........................ 3217--Transfers, Interest and
Qualifications.
3218--Requirements for Filing
Transfers.
3242--Production and Use of Byproducts. 3272--The Contents and Review
of a Plan of Utilization.
3243--Cooperative Conservation 3219--Cooperative Conservation
Provisions. Provisions.
3244--Terminations and Expirations..... 3212--Relinquishment,
Termination, Cancellation, and
Expiration.
3250--Utilization of Geothermal 3273--Applying for and
Resources. Obtaining a Site License.
3274--Joint utilization
Agreements.
3260--Geothermal Resources Operations: 3260--Geothermal Drilling
General. Operation--General.
3270--Utilization of Geothermal
Resources General.
3261--Jurisdiction and Responsibility.. 3260--Geothermal Drilling
Operation--General.
3262--Conducting Drilling
Operations.
3263--Well Abandonment.
3270--Utilization of Geothermal
Resources General.
3262--Requirements for Operating Rights 3261--Permitting (drilling).
Owners.
3262--Conducting Drilling
Operations.
3271--Permitting Utilization
Operations.
3272--Contents and Review of a
Plan of Utilization.
3276--Conducting Utilization
Operations.
3263--Measurement of Production........ 3276--Conducting Utilization
Operations.
3264--Reports to be Made by All Lessees 3261--Permitting (drilling).
3266--Reports (drilling).
3274--Submitting a Utilization
Permit.
3275--Submitting a Production
Permit.
3265--Procedure in Case of Violation of 3268--Inspection, Enforcement,
the Regulations. and Noncompliance (drilling).
3277--Inspection, Enforcement,
and Noncompliance
(utilization).
3266--Appeals.......................... 3255--Relief and Appeals
(exploration).
3269--Relief and Appeals
(drilling).
3278--Relief and Appeals
(utilization).
------------------------------------------------------------------------
Parts 3200--Geothermal Resources Leasing: General, 3210 Noncompetitive
Leases, 3220--Competitive Leases, and 3240 Rules Governing Leasing
Firstly, the new rule would restructure the definitions section,
retaining many of the existing terms but also removing several
technical terms (such as ``the Secretary'' and ``the Service'') which
no longer fit within the plain English style, and adding new terms
(such as ``MMS'') which play a significant role in the new rule.
Furthermore, some existing terms which have narrow applicability, such
as ``significant thermal features within units of the National Park
System'' would be relocated to the specific
[[Page 52738]]
sections to which they apply. To this extent, the new definitions
section contains only terms which are used repeatedly throughout the
regulations. Also, the definition of commercial quantities is expanded
to address the difference between commercial quantities of individual
lease and unit production. Finally, the terms would be alphabetized,
and the designations markers (a), (b), (c) and so forth, removed, in
keeping with Federal Register guidance.
Next, the section describing lands subject to geothermal leasing
would be condensed and rewritten into 43 CFR 3201.10. Nothing in the
new section alters what lands are available for geothermal leasing;
rather, this section would just be streamlined and rewritten into plain
English. Subpart 3202 would contain the qualifications for a lessee
which, likewise, are intended to retain all substantive provisions from
the existing regulations, streamlined and rewritten into plain English.
The proposed rule would completely restructure existing regulations
concerning the general leasing processes. Firstly, proposed subpart
3203 would introduce the term Known Geothermal Resource Area (KGRA) and
briefly describes how this designation determines whether an area can
be leased through noncompetitive bidding or solely through the
competitive bidding process. Subpart 3204 would then revise the manner
in which noncompetitive leases become available. BLM will no longer
prepare an availability list of relinquished or terminated leases;
instead, lands will become available for noncompetitive leasing as soon
as BLM closes each case. An offeror could apply for these lands at any
time, and instead of collecting applications in one-month application
periods, BLM would open each application upon submission and
immediately begin processing.
This new process would substantially improve the way BLM handles
noncompetitive lease applications. By eliminating the one-month delay,
BLM would create a rolling application review process which would
approve or deny an application much sooner than under the current
process. BLM could determine at any time prior to issuing the lease
that the land is a known geothermal resource area (KGRA), either as a
result of overlapping applications for the same land or due to evidence
indicating threshold geothermal activity (see the definition in 43 CFR
3203.11); which would mean that the area is subject to competitive
leasing. Otherwise, once BLM approves a noncompetitive lease
application, no KGRA designation would apply and any later overlapping
applications would be rejected.
If overlapping applications were filed prior to approval of the
first application, this competitive interest would prompt BLM to
examine the land for further evidence that might warrant a KGRA
designation. If the designation were approved, all noncompetitive
applications would be rejected and the lands would be made available
under the competitive leasing provisions. If no KGRA designation were
warranted, then the lease would be offered to the first qualified
applicant, i.e., the first person to submit an application which meets
all requirements.
Under the proposed regulations BLM would continue to issue
competitive leases as in the past, relying on published notices of
available lands and a sealed bidding process. The regulations for
competitive leasing would be relocated to subpart 3205, condensed and
written into plain English. BLM would make no substantive changes to
the manner in which we review applications, select the winning bid,
notify the successful bidder, issue the lease, revoke offers when the
successful bidder fails to respond, and so forth.
Most of the leasing terms at subpart 3203 of the existing
regulations would be retained in condensed, plain English form in
proposed subparts 3206 through 3210. However, some substantive and
organizational changes are proposed. For example, BLM would change the
requirements for diligent exploration under a lease. The current
regulation (43 CFR 3203.5) requires that diligent exploration occur
during lease years 11 through 15, but BLM proposes to remove this
requirement since these lease years are not part of the primary period.
Rather, the new regulations add a requirement at 43 CFR 3208.10(a) that
a lease be extended due to diligent drilling over the end of the
primary period. To qualify, the operator must diligently strive to
reach a reasonable drilling target, which BLM will define based on
local geology and the type of development proposed by the operator.
Under 43 CFR 3208.10 (b) and (c) of the proposed regulations leases
would be eligible for extensions in two new, additional situations:( 1)
when committed to a unit, lease terms expiring prior to the unit could
be extended to match the unit terms as long as diligent unit
development is occurring; and (2) any lease not part of a participating
area is eligible for two successive five-year extensions when it is
eliminated from a unit by contraction or unit review. These extensions
address industry concerns that leases adjacent to producing areas may
be terminated, regardless of diligence, due to the lack of electrical
sales contracts or poor energy market lasting for extended periods.
The proposed rule would enact a few other minor substantive changes
to lease terms. For example, BLM would delete the special requirements
at 43 CFR 3203.4(d) for describing unsurveyed public lands adjacent to
tidal waters in southern Louisiana and in Alaska, since this part is
rarely used, and since the general regulations for describing
unsurveyed lands are adequate. Several other portions of existing
subpart 3203 have been merged into other sections: section 3203.6,
concerning plans of development and operation, has been incorporated
into various sections within new subparts 3260 and 3270; 43 CFR 3203.7,
concerning oil, gas and helium reservations, is covered by 43 CFR
3210.17. The 43 CFR 3203.1-6 concerning converting leases to a mineral
lease would be relocated to 43 CFR 3209.10.
The provisions on fees, rentals and royalties in subpart 3205 would
be replaced by subpart 3211 in streamlined, plain English form. Except
as noted, BLM does not intend to change any of these existing
substantive provisions, but merely to make the existing ones more
readily understood by the public, and more manageable for BLM. The only
notable change is that the existing provision at 43 CFR 3205.3-7(a),
concerning waivers and suspensions of payments, would be relocated to
43 CFR 3212.14, grouping it with the regulations on suspension of
operations or operations and production leases. Finally, subparts 3206-
Lease Bonds, 3207--Leases for a Fractional or Future Interest, and
3209-Geothermal Resources Exploration Operations would be relocated to,
respectively, subparts 3214, 3206, and 3250. In each case, except as
otherwise discussed in this preamble, the changes enacted by the
proposed regulation would be limited to consolidation and plain English
rewrites.
Part 3250--Utilization of Geothermal Resources
In order to separate operational regulations from the leasing
provisions, the geothermal resources utilization regulations currently
found in part 3250 would be relocated to subpart 3270, and the new
subpart 3250 would contain the geophysical exploration operation
regulations currently found in subpart 3209. The permitting and
operational responsibilities for geophysical exploration operations
occurring on either unleased public lands, Indian
[[Page 52739]]
lands, or lands leased for geothermal resources activities conducted by
a lessee or permittee are consolidated here into a single set of
standards. An exploration permit application would consist of the
permit form and any operational and environmental information necessary
for BLM to provide a timely review and decision.
These flexible informational requirements would adequately cover
the level of detail necessary to provide sufficient information for
applications to drill shallow temperature gradient wells (up to 500
feet deep), temperature gradient wells (with depths of 4000 feet or
more), or any exploratory drilling in areas of increased environmental
concern. Currently, Geothermal Resources Operational Order 1 limits the
depth of temperature gradient wells to 500 feet unless BLM grants
specific authorization to drill deeper, but the proposed regulations at
43 CFR 3252.30 will allow an operator to propose a temperature gradient
well to any depth necessary to adequately measure temperature
gradients. Sections would be added for inspection, enforcement and
noncompliance, and appeals, and the current exploration bond
requirements would be retained.
Part 3260--Geothermal Resource Operations: General
In order to consolidate drilling operations regulations in one
location, subpart 3260 as proposed would address only the drilling
permit application, approval, and reporting requirements. Regulations
addressing permits for utilization facilities and information
requirements related to the utilization of geothermal resources would
be moved to a new subpart 3270. To address concerns often expressed by
the public as well as other regulatory agencies, the Jurisdiction and
Responsibility section (current subpart 3261) would be amended to
clarify BLM's existing authority to take post-permit actions, such as
requiring modifications to or shutting down operations that are in
noncompliance or pose an immediate threat to the public, the
environment or private property.
Under proposed subpart 3260, a drilling application would consist
of a plan of operation, geothermal drilling permit and drilling
program, and all three documents could be submitted for review
simultaneously. The plan of operation information requirements would be
reduced to cover only specific drilling activities, eliminating the
current requirement that applicants also address resource utilization.
The plan of operation and drilling program could be written to apply to
more than one well, though separate geothermal drilling permits would
be required for each proposed well. Pad construction could commence
once BLM approved the plan of operation or a sundry notice specifically
requesting authorization for the site construction, while the drilling
program and geothermal drilling permit could be submitted later. The
well location plat, as currently required, would need to be certified
by a licensed surveyor.
A geothermal sundry notice would be necessary for actions such as
casing program changes, well stimulation, or plugging and abandoning a
well, but BLM could waive the sundry notice requirement for specific
routine well work, surveys, or downhole maintenance. For activities
that would result in an environmental impact not already described in
the plan of operation, the applicant would be required to submit a
geothermal sundry notice to amend the plan of operation, which would
result in subsequent environmental review.
These permit review options would provide both BLM and resource
users the maximum flexibility and the best opportunity to address the
broad range of operational and environmental issues encountered during
geothermal development. BLM would be able, as a result, to respond to
industry requests more efficiently and ensure all environmental
requirements are met.
Several other sections have been modified to improve the way in
which BLM oversees existing operations. In new 43 CFR 3266.50, BLM
would reduce the current requirements of notification or reports for
all accidents occurring on federal lands (current 43 CFR 3262.7) to
require notification and reports only when the accident affects
operations or causes environmental hazards. Per the authority under
section 5 of the lease terms, BLM can conduct inspections to ensure
compliance with the permit, lease terms, regulations and the Steam Act.
When the lessee submits information it regards as confidential, it
would be clearly marked with the words ``confidential information,''
although BLM would ultimately determine whether such information is
exempt from public disclosure under the Freedom of Information Act
regulations set forth in 43 CFR part 2.
The noncompliance subsection is revised to more clearly define what
BLM can do when an operator fails to promptly commence or complete a
required remedial action. This would include modification of project
operations, temporary or permanent shut down of operations, or lease
termination.
Because the requirements specified in some of the current
Geothermal Resources Operational Orders have become out of date, BLM
will revise the requirements and incorporate them into new regulations
in 1997. This proposed action changes some standards and requirements
from current Orders, and when finalized these changes will have
precedence over the Orders standards.
A new subpart 3270 makes several changes to the existing permitting
procedures and operator responsibilities for producing and utilizing
geothermal resources. Several related definitions would be transferred
to this part from existing part 3260, and adding a new definition for
commercial operations that would specifically identify when the
production permit is required. To gain a permit to construct and
operate a utilization facility under this part, an operator would
submit in an application a plan of utilization, utilization permit,
production permit, site license and joint utilization agreement, where
applicable. The applicant would need to submit the plan of utilization
and the utilization permit together, while the remaining items could be
submitted together or separately, although BLM will not approve the
utilization permit until receiving a site license and related bond.
These changes to the permitting process are intended to provide the
operator increased flexibility in submitting the necessary information
as it becomes available. The same process would apply to all types of
utilization facility proposals, rather than using separate procedures
for permitting research and demonstration facilities and individual
well facilities, as the current regulations do.
Before any surface disturbing activities associated with
utilization facility construction and testing could begin, BLM would
have to approve the plan of utilization, utilization permit and site
license. An approved utilization permit would authorize the site
preparation, construction and testing of a facility located on lands
leased for federal geothermal resources or Indian land. Production
permit approval would then be needed to begin commercial operation
(defined as delivering any form of geothermal resources for sale or for
use by the operator) of the facility or the utilization of federal
resources. By contrast, only the production permit would be needed to
locate a proposed utilization facility on unleased public lands
receiving production allocated to or from wells located on federal
leases or Indian lands.
The plan of utilization would describe the proposed facility and
its
[[Page 52740]]
environmental protection measures, and the operator could begin
building the facility according to this plan once BLM approves the
utilization permit. Those portions of the plan of operation, as
described in the existing regulations, that involve requirements
related to utilization would become requirements of the plan of
utilization. However, instead of requiring the operator in all cases to
collect baseline environmental data prior to the initiation of
production, BLM would determine which, if any, specific environmental
parameters should be addressed, and begin degradation monitoring. BLM
could also require monitoring of facility operations as a condition of
approval of the permit to ensure environmental compliance.
The site license requirements would be moved from part 3250 to
proposed subpart 3270 and directly incorporated into the utilization
permitting process. At the time of application, the site license area
must be on federally leased lands, although the license term would not
be based on the lease term. Applicants would be required to submit a
site license bond with their license application. Other requirements,
such as the minimum utilization bond amount of $100,000 for any
electrical generation facility and the current bonding requirement for
direct use facilities, would remain unchanged. A site bond may not be
required for a direct use facility.
The proposed regulations would eliminate the requirement that a
lessee or unit operator pay a minimum annual rent of $100 per acre for
the site license area, because the lease already grants the right to
utilize a reasonable amount of surface for utilization and the lessee
has already paid either rental or royalties. However, if an entity
other than a lessee or unit operator owns the utilization facility, the
site license rental would still be required. Furthermore, should the
location of a site license area occur on a federal lease which has
terminated, the license could remain in effect with facility siting
authorized by BLM under FLPMA for BLM-managed lands, or by the
appropriate surface management agency (in coordination with BLM) for
all other lands.
When the facility is owned by someone other than the lessee or unit
operator, a joint utilization agreement would be required as part of
the site license approval process. This document constitutes the
agreement between a lessee or unit operator and a third party siting a
unitization facility on their land. The third party, as the facility
operator, would then assume full responsibility for all phases of
facility permitting and operations.
The production permit authorizes the sale and/or use of federal
geothermal resources, and BLM must approve this permit before a
utilization facility starts commercial operation. For this permit, the
applicant must provide specific information about the proposed
facility's operations, particularly its production and royalty
metering. The new rules would reduce the current requirement for
detailed engineering drawings to require only generalized schematics of
the facility. BLM could attach conditions of approval to the production
permit, such as monitoring of the facility to ensure compliance with
environmental and/or operational standards, and BLM could modify or
shut down the facility operation were it in noncompliance with
environmental or operational standards.
The new regulations would incorporate and add greater detail to
Geothermal Resource Operational Order 7, containing standards for the
types and accuracy of meters used to measure production or utilization
or to determine royalties. The proposed regulations would identify the
following for both electrical generation and direct use facilities: (1)
where the operator must locate the various types of meters (43 CFR
3276.41); (2) meter accuracy standards which vary depending on the
volume of resource measures (43 CFR 3276.42); and (3) meter accuracy
standards for installation and measurement.
Several issues regarding the site license and joint utilization
agreements remain open questions, and BLM is seeking the public's input
regarding these questions. First, BLM believes that the provisions for
a site license should be eliminated, as a site license does not grant
any additional authority to utilize the surface beyond that already
granted by an approved utilization plan. BLM is therefore contemplating
removing this provision in the future. If you believe the site license
performs a necessary function, are there any alternatives to the
current system that would serve the same purpose?
BLM is also seeking comments regarding whether the public believes
BLM should continue to require a rental for a site license if the site
licensee is other than a geothermal lessee.
Some final matters: editorial changes have been made to correct
several cross-references; and BLM will modify its forms to accommodate
the numerous changes in the proposed regulations, as well as to account
for existing forms which have expired.
III. Procedural Matters
National Environmental Policy Act
BLM has prepared an environmental assessment (EA), and has found
that the proposed rule would not constitute a major federal action
significantly affecting the quality of the human environment under
section 102(2)(C) of the National Environmental Policy Act of 1969
(NEPA), 42 U.S.C. 4332(2)(C). BLM has placed the EA and the Finding of
No Significant Impact (FONSI) on file in the BLM Administrative Record
at the address specified previously. BLM invites the public to review
these documents by contacting us at the addresses listed above (see
ADDRESSES), and suggests that anyone wishing to submit comments in
response to the EA and FONSI do so in accordance with the Written
Comments section above, or contact us directly.
Paperwork Reduction Act
The collection of information contained in this rule has been
approved by the Office of Management and Budget under 44 U.S.C. 3501 et
seq. and assigned clearance numbers 1004-0034, 1004-0074, 1004-0132 and
1004-0160.
Regulatory Flexibility Act
Congress enacted the Regulatory Flexibility Act of 1980 (RFA), 5
U.S.C. 601 et seq., 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. BLM has determined under the RFA
that this proposed rule would not have a significant economic impact on
a substantial number of small entities.
Executive Order 12866
According to the criteria listed in section 3(f) of Executive Order
12866, BLM has determined that the proposed rule is not a significant
regulatory action. As such, the rule is not subject to Office of
Management and Budget review under section 6(a)(3) of the order.
Unfunded Mandates Reform Act
Revision of 43 CFR group 3200 will not result in any unfunded
mandate to state, local or tribal governments in the aggregate, or to
the private sector, of $100,000,000 or more in any one year.
Executive Order 12612
The proposed rule would not have sufficient federalism implications
to
[[Page 52741]]
warrant BLM preparation of a Federalism Assessment (FA).
Executive Order 12630
The proposed rule does not represent a government action capable of
interfering with constitutionally protected property rights. Section
2(a)(1) of Executive Order 12630 specifically excludes actions
abolishing regulations or modifying regulations in a way that lessens
interference with private property use from the definition of
``policies that have takings implications.'' Since the primary function
of the proposed rule is to abolish unnecessary regulations and rewrite
existing ones, there will be no private property rights impaired as a
result. Therefore, BLM 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 12988
The Department of the Interior has determined that this rule meets
the applicable standards provided in sections 3(a) and 3(b)(2) of
Executive Order 12988.
Author
The principal authors of this proposed rule are Richard Hoops and
Jack Lewis of the Nevada State Office, Sean Hagerty and Sonia
Santillian of the California State Office, Richard Estabrook of the
Ukiah District Office, Jack Feuer and Donna Kauffman of the Oregon
State Office, Dennis Davis of the Prineville District Office, and
Robert Henricks and Connie Seare of the Utah State Office, all of the
Bureau of Land Management.
List of Subjects
43 CFR Part 3200
Environmental protection, geothermal energy, government contracts,
public lands-mineral resources, reporting and recordkeeping
requirements, surety bonds.
43 CFR Part 3210
Geothermal energy, government contracts, land management bureau,
public lands-mineral resources, reporting and recordkeeping
requirements.
43 CFR Part 3220
Geothermal energy, government contracts, land management bureau,
public lands-mineral resources, reporting and recordkeeping
requirements.
43 CFR Part 3240
Geothermal energy, government contracts, land management bureau,
mineral royalties, public lands-mineral resources, reporting and record
keeping requirements, water resources.
43 CFR Part 3250
Geothermal energy, geothermal exploration, land management bureau,
public lands-mineral resources, reporting and recordkeeping
requirements, surety bonds.
43 CFR Part 3260
Environmental protection, geothermal energy, government contracts,
land management bureau, public lands-mineral resources, reporting and
recordkeeping requirements.
Dated: September 27, 1996.
Sylvia V. Baca,
Acting Assistant Secretary of the Interior.
For the reasons set forth above in the preamble, and under the
authority of the Geothermal Steam Act of 1970, as amended (30 U.S.C.
1001-1027), The Freedom of Information Act (5 U.S.C. 552), and the
Federal Land Policy and Management Act (43 U.S.C. 1701 et seq.), 43 CFR
chapter II is amended as set forth below:
PARTS 3210, 3220, 3240, 3250 AND 3260--[REMOVED]
1. Parts 3210, 3220, 3240, 3250 and 3260 are removed.
2. The heading ``GROUP 3200--GEOTHERMAL RESOURCES LEASING'' and the
accompanying note is removed.
3. Part 3200 is revised to read as follows:
PART 3200--GEOTHERMAL RESOURCE LEASING
Subpart 3200--Geothermal Resource Leasing--General
Sec.
3200.1 What are the meanings of terms I need to know to understand
the regulations in this part?
3200.2 Information collection.
3200.3 What are my rights of appeal?
Subpart 3201--Available Lands
3201.10 What lands are available for geothermal leasing?
3201.11 What lands are not subject to geothermal leasing?
Subpart 3202--Lessee Qualifications
3202.10 Who can hold a geothermal lease?
3202.11 Must I prove I can hold a lease when filing a lease offer?
3202.12 Are other persons allowed to act in my behalf?
3202.13 What happens if the offeror dies before the lease is
issued?
Subpart 3203--Obtaining a Lease
3203.10 How can I obtain a geothermal lease?
3203.11 How is a KGRA determined?
Subpart 3204--Noncompetitive Leasing
3204.10 How do I file an offer to lease?
3204.11 How do I describe the lands in my lease offer?
3204.12 What fees must accompany my offer?
3204.13 May I combine acquired and public domain lands on the same
offer?
3204.14 What are the minimum and maximum acreage requirements for
my offer?
3204.15 What happens when two or more applicants apply for a
noncompetitive lease for the same land?
3204.16 How does BLM determine the first qualified applicant?
3204.17 May I withdraw my offer?
3204.18 May I amend my offer?
Subpart 3205--Competitive Leasing
3205.10 How does BLM lease competitive lands?
3205.11 How do I obtain information on the terms and conditions of
leases being offered through competitive bidding?
3205.12 How do I bid for a parcel?
3205.13 What is the minimum acceptable bid?
3205.14 How does BLM conduct the sale?
3205.15 To whom does BLM issue the lease?
3205.16 How will I know if my bid is accepted?
3205.17 How will I know if my bid is not accepted?
Subpart 3206--Lease Issuance
3206.10 Are there any additional requirements prior to lease
issuance?
3206.11 What is the maximum acreage I may hold?
3206.12 How does BLM compute acreage holdings?
3206.13 Am I charged for acreage if the United States owns only a
fractional interest in the geothermal resources?
3206.14 Are there any acreages which are not chargeable?
3206.15 What procedures does BLM follow when a party holds or
controls excess accountable acreage?
3206.16 What is the primary term of my lease?
3206.17 When will BLM issue my lease?
Subpart 3207--Additional Lease Term
3207.10 Under what circumstances is my lease eligible for an
additional term beyond its primary term?
Subpart 3208--Extending the Current Lease Term
3208.10 Under what circumstances is my lease eligible for an
extension of the primary term?
3208.11 What procedures must I follow to obtain an extension of my
lease?
3208.12 What information must I include in the report to document
that I have made bona fide efforts?
[[Page 52742]]
3208.13 What will BLM do if I choose to make payments in lieu of
commercial operation?
3208.14 What will BLM do if I choose to make significant
expenditures?
3208.15 May I change my election of making payments in lieu of
commercial quantities or making significant expenditures during the
extension?
Subpart 3209--Conversion of a Lease Producing Byproducts
3209.10 May I convert my geothermal lease to a mineral lease?
Subpart 3210--Additional Lease Information
3210.10 When does lease segregation occur?
3210.11 Is a lease segregated from an agreement or plan eligible
for an extension?
3210.12 May I consolidate leases?
3210.13 What is the diligent exploration requirement?
3210.14 How do I meet the diligent exploration requirement?
3210.15 Is there an option to performing diligent exploration?
3210.16 What happens if I don't meet the diligence requirement or
pay the additional rental?
3210.17 Can leases or locations for other mineral commodities occur
on the same lands that my geothermal lease is located?
3210.18 May BLM readjust the terms and conditions of my lease?
3210.19 How will BLM readjust the terms and conditions of my lease?
3210.20 May BLM readjust the rental and royalty rates of my lease?
3210.21 What happens if I object to the proposed readjusted terms
and conditions or rental and royalty rates?
3210.22 What lease obligations am I accountable for during
readjustment negotiations?
3210.23 When do the readjusted terms become effective?
3210.24 Must I prevent the drainage of geothermal resources from my
lease?
Subpart 3211--Fees, Rentals, and Royalties
3211.10 What are the filing fees, rentals, and royalties for
leases?
3211.11 When is my annual rental payment due?
3211.12 How and where do I submit my rental payment?
3211.13 Is there a different rental or minimum royalty amount for a
fractional interest lease?
3211.14 Prior to production, am I expected to pay rental if my
lease is committed to an approved cooperative or unit plan?
3211.15 When unit production starts, am I expected to pay rental if
my lease is committed to an approved cooperative or unit plan?
3211.16 Will I always pay rental on my lease?
3211.17 What are the possible royalty rates of my lease?
Subpart 3212--Suspension of Operations or Operations and Production
3212.10 May I obtain a suspension of operations or operations and
production on my lease, and if so, for what reasons?
3212.11 When is a lease suspension effective or terminated?
3212.12 How does a suspension affect the lease terms?
3212.13 What happens when the suspension is lifted or removed?
3212.14 May BLM reduce or suspend the royalty or rental rate of my
lease?
3212.15 What information must I submit when requesting a reduction
or suspension of the royalty or rental rate of my lease?
Subpart 3213--Relinquishment, Termination, Cancellation, and Expiration
3213.10 Who may relinquish a lease?
3213.11 What form must I submit to relinquish a lease?
3213.12 Can BLM accept a partial relinquishment resulting in less
than 640 acres?
3213.13 When does my relinquishment take effect?
3213.14 How does a lease terminate?
3213.15 What if I don't pay the entire amount of rental due?
3213.16 Will BLM notify me if my lease terminates?
3213.17 Can my lease be reinstated? If so, how?
3213.18 Who may petition to reinstate a lease?
3213.19 What must I do to obtain a reinstatement?
3213.20 Are there reasons why BLM would not approve a
reinstatement?
3213.21 When will my lease expire?
3213.22 Will BLM notify me when my lease expires if it is in an
extended term?
3213.23 May BLM cancel my lease?
3213.24 When is a cancellation effective?
Subpart 3214--Personal and Surety Bonds
3214.10 Who must post a geothermal bond?
3214.11 Who is covered by the bond?
3214.12 What does my bond cover?
3214.13 What is the minimum dollar amount required under each type
of operation bond?
3214.14 What kind of financial guarantee will BLM accept to back my
bond?
3214.15 Is there a special bond form I must use?
3214.16 Where must I submit my bond?
3214.17 Who will BLM hold liable under the bond and what are they
liable for?
3214.18 What are my bonding requirements when a lease interest is
transferred to me?
3214.19 How do I modify the terms and conditions of my bond?
3214.20 Can BLM ever increase the bond amount above the minimums?
3214.21 Where must I get a certificate of deposit or a letter of
credit?
3214.22 What special requirements are there if I want to use a
certificate of deposit to back my bond?
3214.23 What special requirements are there if I want to use a
letter of credit to back my bond?
Subpart 3215--Bond Collection After Default
3215.10 In what circumstances does BLM collect on a bond?
3215.11 As the principal on the bond, may BLM require me to restore
the face amount of my bond or require me to replace my bond after
BLM collects on default?
3215.12 What if I do not restore the face amount or file a new
bond?
3215.13 When will BLM cancel or terminate my bond?
Subpart 3216--Transfers
3216.10 What types of lease interests can I transfer?
3216.11 Where and when am I required to file a transfer of
interest?
3216.12 When does a transferee assume responsibility for lease
obligations?
3216.13 What are the responsibilities of the transferor?
3216.14 Are there required filing fees and forms associated with
filing my transfer?
3216.15 Is there a required time frame for filing requests for
approval of transfers?
3216.16 Must I file separate requests for approval of transfers for
each lease?
3216.17 Where must I file estate transfers, corporate mergers and
name changes?
3216.18 How do I describe the lands in my lease transfer?
3216.19 Can I transfer record title interest for less than 640
acres?
3216.20 When does an assignment segregate a lease?
3216.21 When is my assignment/transfer effective?
3216.22 Does BLM grant all requests for approval of transfer?
Subpart 3217--Cooperative Conservation Provisions
3217.10 What is the purpose of unit agreements and cooperative
plans?
3217.11 What is the purpose for communitization or drilling
agreements?
3217.12 What information regarding a proposed communitization or
drilling agreement must you submit to BLM?
3217.13 When is a communitization or drilling agreement effective?
3217.14 Under what conditions will BLM approve operating, drilling
or development contracts?
3217.15 What information must I submit to BLM regarding proposed
operating, drilling or development contracts?
Subpart 3250--Exploration Operations--General
3250.10 What is the purpose, scope and authority of the subparts
pertaining to exploration operations?
Subpart 3251--Permitting of Exploration Operations
3251.10 What types of operations may I propose when submitting an
application for an exploration permit?
3251.11 May I conduct exploration operations on my lease, someone
else's lease or unleased land?
3251.12 Do I need a permit prior to conducting exploration
operations?
[[Page 52743]]
3251.13 What information must I submit with my application for an
exploration permit?
3251.14 What action will BLM take on my permit?
3251.15 How do I receive BLM approval to change permitted
exploration operations?
3251.16 Must I submit data obtained through exploration operations
to BLM?
3251.17 Are there any bonding requirements for conducting
exploration operations?
3251.18 When will the bond be released?
Subpart 3252--Conducting Exploration Operations
3252.10 What operational requirements must I meet when conducting
exploration operations?
3252.11 What environmental requirements must I meet when conducting
exploration operations?
3252.12 How deep may I drill a temperature gradient well?
3252.13 How long may I collect information from my temperature
gradient well?
3252.14 What are the requirements for completing and abandoning a
temperature gradient well?
3252.15 Must I notify BLM when I have completed my exploration
operations?
Subpart 3254--Inspection, Enforcement, and Noncompliance
3254.10 Will BLM inspect my exploration operations?
3254.11 What action may BLM take if my exploration operations are
not in compliance?
Subpart 3255--Exploration Operations Relief and Appeals
3255.10 May I request variances from notices to lessees, permit
conditions of approval, and operational or other orders issued by
the BLM?
3255.11 How may I appeal a BLM decision regarding my exploration
operations?
Subpart 3260--Geothermal Drilling Operation--General
3260.10 What types of geothermal operations are covered under this
subpart?
3260.11 What standards apply to my drilling operations?
3260.12 Can BLM issue additional orders or instructions?
Subpart 3261--Permitting of Drilling Operations
3261.10 What approval must I obtain prior to well pad construction
drilling?
3261.11 What information must I submit to get approval for drilling
operations or well pad construction?
3261.12 What is a plan of operations?
3261.13 When must I have an approved plan of operations?
3261.14 Must I submit my drilling permit application and plan of
operations at the same time?
3261.15 Can a plan of operations and drilling permit apply to more
than one well?
3261.16 How do I amend a plan of operations or a drilling permit
application?
3261.17 Do I need a bond before I build a well pad or drill a well?
3261.18 How will BLM review my application documents and notify me
of their status?
3261.19 How do I get approval to change an approved drilling
operation?
3261.20 How do I get approval for subsequent well operations?
Subpart 3262--Conducting Drilling Operations
3262.10 What operational requirements must I meet when drilling a
well?
3262.11 What environmental requirements must I meet when drilling a
well?
3262.12 Must I post a sign at every well?
3262.13 Can BLM require well spacing?
3262.14 Can BLM require me to take samples or perform tests and
surveys?
Subpart 3263--Well Abandonment
3263.10 May I abandon a well without notifying BLM?
3263.11 What information must I submit to get my sundry notice for
abandonment approved?
3263.12 How will BLM review my sundry notice for abandonment and
notify me of its status?
3263.13 What must I do to restore the site?
3263.14 Can BLM require me to abandon a well?
3263.15 Can I abandon a producible well?
Subpart 3266--Reports
3266.10 What information must I submit after completing a well?
3266.11 What information must I submit after completing subsequent
well operations?
3266.12 What information must I submit after abandoning a well?
3266.13 What well records must I maintain for each well?
3266.14 Must I notify BLM of accidents occurring on my lease?
Subpart 3267--Confidential, Proprietary Information
3267.10 Must I identify confidential information that I submit to
BLM?
3267.11 Will BLM treat information marked as confidential, as such?
3267.12 How long will confidential information I submit to BLM
remain confidential?
Subpart 3268--Inspection, Enforcement, and Noncompliance
3268.10 What part of my drilling operation can BLM inspect?
3268.11 What action can BLM take if my operations are in
noncompliance?
Subpart 3269--Geothermal Drilling Operations Relief and Appeals
3269.10 May I request a variance from notices to lessees, permit
conditions of approval, and operational and other orders issued by
BLM?
Subpart 3270--Utilization of Geothermal Resources--General
3270.10 What types of geothermal operations are permitted under
this part?
3270.11 What standards apply to my utilization operations?
3270.12 What are my responsibilities for utilizing geothermal
resources on a lease?
Subpart 3271--Permitting of Utilization Operations
3271.10 How do I obtain authorization to construct and test a
utilization facility?
3271.11 How do I obtain authorization to begin commercial
operations?
Subpart 3272--The Contents and Review of a Plan of Utilization and
Utilization Permit
3272.10 What must I do prior to commencing site preparation,
construction and testing of the facility?
3272.11 What information must I submit in a plan of utilization?
3272.12 How should I describe the proposed facility?
3272.13 How should I describe the environmental protection measures
I intend to take?
3272.14 How will BLM review my plan of utilization and notify me of
its status?
3272.15 How do I obtain authorization to construct and test my
facility?
Subpart 3273--Applying for and Obtaining a Site License
3273.10 When do I need a site license?
3273.11 Are there any situations in which I do not need a site
license?
3273.12 What if the lands I want a license for are not administered
by BLM?
3273.13 Are any lands not available for geothermal site licenses?
3273.14 What area does a site license include?
3273.15 What information must I include in my site license
application?
3273.16 What is the annual rental for a site license or direct use
facility?
3273.17 Can BLM reassess the annual rental for my site license?
3273.18 Must all facility operators pay the annual site license
rental?
3273.19 What are the bonding requirements for a site license?
3273.20 What are my obligations under the site license?
3273.21 How long will my site license remain in effect?
3273.22 May BLM terminate my site license?
3273.23 May I relinquish my site license?
3273.24 May I assign or transfer my site license?
3273.25 What if my site license application involves lands under
the jurisdiction of another agency?
[[Page 52744]]
Subpart 3274--Submitting a Joint Utilization Agreement
3274.10 What is the purpose of a joint utilization agreement?
3274.11 Which parties must sign the joint utilization agreement?
Subpart 3275--Applying for and Obtaining a Production Permit
3275.10 What information must I include in my application for a
production permit?
3275.11 How will BLM review my application for a production permit?
3275.12 Can I get an authorization even if I cannot prove I can
operate within required standards?
Subpart 3276--Conducting Utilization Operations
3276.10 Can I change my approved plan of utilization or production
permit?
3276.11 What are the facility operator's obligations?
3276.12 Are there environmental and safety requirements for lease
operations?
3276.13 Are there reporting requirements for lease operations?
3276.14 What information must be included for each well in monthly
well reports?
3276.15 What information must be included in the monthly report for
generation facilities?
3276.16 What additional information must be submitted in the
monthly report for flash and dry facilities?
3276.17 What information must be included in the monthly report for
direct use facilities?
3276.18 Does the facility operator have to measure the geothermal
resources?
3276.19 What aspects of my geothermal operations must I measure?
3276.20 How accurately must I measure my production and
utilization?
3276.21 To what standards must I install and maintain my meters?
3276.22 What must I do if I find an error in a meter?
3276.23 May BLM require me to test for byproducts associated with
the production of geothermal resources?
3276.24 May I commingle production?
3276.25 What action will BLM take if I waste geothermal resources?
3276.26 Can BLM order me to drill and produce wells on my lease?
Subpart 3277--Inspection, Enforcement, and Noncompliance
3277.10 Will BLM inspect my operations?
3277.11 What records must I keep available for inspection?
3277.12 What actions may BLM take if I am in noncompliance?
Subpart 3278--Utilization Relief and Appeals
3278.10 May I request a variance from notices of lessees, permit
conditions of approval, and operational and other orders issued by
BLM?
3278.11 Can I appeal a BLM decision regarding my utilization
operations?
Authority: 5 U.S.C. 552; 30 U.S.C. 1001-1027; 43 U.S.C. 1733,
1740.
Subpart 3200--Geothermal Resource Leasing
Sec. 3200.1 What are the meanings of terms I need to know to
understand the regulations in this part?
Act means the Geothermal Steam Act of 1970, as amended (30 U.S.C.
1001 et seq.).
Additional term means the 40 years beyond the primary term of a
producing lease. The additional term is granted when geothermal steam
is produced or utilized in commercial quantities within the primary
term. This differs from an extended term because additional terms
constitute a new lease term; whereas extensions lengthen the primary
term without creating a new term. See the procedures in subpart 3207 of
this part.
Assignment means a transfer of all or a portion of the lessee's
record title interest in a lease.
Byproducts are minerals (exclusive of oil, hydrocarbon gas, and
helium) which are found in solution or in association with geothermal
steam that are not of sufficient value to warrant extraction and
production by themselves because they have a value of less than 75% of
the value of the geothermal steam or because of technical difficulties
in extraction and production.
Casual use means activities that ordinarily lead to no more than
negligible disturbance or damage to lands, resources, or improvements.
Commercial quantities means either:
(1) For production from a lease, a sufficient volume (in terms of
flow and temperature) of the resource to provide a reasonable return
after all variable costs of production are met; or
(2) For production from a unit, a sufficient volume of the resource
to provide a reasonable return after all variable costs of production
and drilling are met.
Cooperative agreement means an agreement for the production and
utilization of separately owned interests in the geothermal resources
in which separate ownership units are independently operated without
allocation of production.
Development contract means an agreement between one or more lessees
and one or more entities which, when approved by BLM, facilitates
resource exploration and serves to protect the public interest.
Exploration operations means any activity relating to the search
for evidence of geothermal resources. This activity requires physical
presence on the land and may result in damage to public lands or
resources. Exploration includes, but is not limited to, geophysical
operations such as drilling shallow temperature gradient wells or holes
used for explosive charges for seismic exploration. It also includes
related construction of roads and trails, and cross-country transit by
vehicles over public land. Exploration operations do not include the
production or utilization of geothermal resources, which may only be
conducted under a lease and in accordance with the regulations of this
part (see subparts 3260 and 3270 of this part).
Extended term means an initial and any successive 5-year period
beyond the primary term of a lease during which BLM will grant the
lessee the right to continue activities under the existing lease.
Extensions differ from an additional term because they serve to extend
the primary term, rather than creating a new one. See the procedures in
subpart 3208 of this part.
Facility operator means the entity receiving authorization from BLM
to site, construct, test and/or operate a utilization facility. A
facility operator may be a lessee, a unit operator, or a third party.
Geothermal exploration permit is an application you submit
describing proposed exploration operations and which, when approved by
BLM, authorizes geothermal exploration operations and associated
surface disturbance.
Geothermal resources operational order means a formal, numbered
order, issued by BLM, that implements or enforces the regulations in
this Part.
Geothermal steam and associated geothermal resources are products
of geothermal steam or hot water and hot brines, including those
resulting from water, gas, or other fluids artificially introduced into
geothermal formations, heat or other associated energy found in
geothermal formations, and byproducts derived from these.
Geothermal sundry notice is a written request submitted by an
operator for permission to deviate from operations in a previously
approved permit or sundry notice. A geothermal sundry notice may also
be submitted to obtain permission to perform work not otherwise covered
in a permit or sundry notice.
Joint utilization agreement means an agreement between a facility
operator and a Federal lessee or unit operator, if the two entities are
different, which permits a facility operator to construct a utilization
facility on Federal lands leased for geothermal resources. The
agreement must provide for the construction, testing and operation of a
utilization facility on the lease.
Known geothermal resource area (KGRA) is an area where BLM
determines that persons knowledgeable
[[Page 52745]]
in geothermal development would expend money to develop geothermal
resources. For more information on how BLM determines KGRAs, see 43 CFR
3203.11.
MMS means the Minerals Management Service.
Notice to lessees means a written notice issued by BLM that
implements the regulations in this part or geothermal resource
operational orders, and provides more specific instructions on
geothermal issues within a state, district or resource area.
Operating rights owner means a person or entity holding operating
rights in a lease. A lessee is also an operating rights owner if the
operating rights or a portion of them have not been severed from record
title.
Operator means any person or entity who has assumed responsibility
for the operations conducted on the leased lands.
Plan of utilization means a plan which fully describes the
utilization facility, including measures for environmental protection
and mitigation. An approved plan of utilization permits the siting of a
utilization facility on federal lands.
Primary term means the first 10 years of a lease, not including any
periods of suspension.
Produced or utilized in commercial quantities means a well
producing geothermal resources in commercial quantities, or the
completion of a well capable of producing geothermal resources in
commercial quantities when BLM determines the lessee is diligently
attempting to utilize the geothermal steam.
Production permit means authorization from BLM allowing for the
production of geothermal resources from federal lands.
Public domain lands or public lands means lands, including mineral
estates, that never left the ownership of the United States, were
obtained in exchange, reverted to the ownership of the United States
through the operation of the public land laws, or have been identified
by Congress as part of the public domain.
Record title means an interest in a lease which includes the
responsibility for paying rent and the right to assign and relinquish
the lease.
Relinquishment means action taken by the lessee to voluntarily end
the lease in whole or in part.
Shallow temperature gradient wells means a well drilled up to 500
feet deep for the purpose of obtaining information on the change in
temperature over the depth of the well in order to extrapolate
temperatures at a greater depth.
Site license means authorization from BLM allowing the construction
of a utilization facility on leased Federal lands.
Stipulation means a condition attached by BLM to a lease or permit.
Temperature gradient wells means a well drilled to a depth of 4000
feet or more for the purpose of obtaining information on the change in
temperature over the depth of the well in order to extrapolate
temperatures at a greater depth.
Termination means the cancellation of a lease due to nonpayment of
annual rental, cessation of production, or other action by the lessee
which breaches the contract.
Transfer means conveyance of any interest a party may have in a
Federal lease. This definition includes the terms assignment and
sublease.
Unit agreement means an agreement for the exploration, production
and utilization of separately owned interests in geothermal resources
as a single consolidated unit without regard to separate ownerships and
which provides for the allocation of costs and benefits on a basis
defined in the agreement.
Unit area means all tracts committed to an approved unit agreement.
Unit operator means any person or entity that has stated in writing
to BLM that it is responsible for the operations conducted under the
unit agreement and is so designated in the unit agreement.
Unitized substances means geothermal resources recovered from lands
committed to a unit agreement.
Utilization permit means authorization from BLM allowing site
preparation, construction, and testing of a utilization facility.
Waste means:
(1) Physical waste, including refuse; and/or
(2) Improper use or unnecessary dissipation of geothermal resources
through inefficiency in drilling, production, transmission, or
utilization.
Working Interest means an interest granted by a lease, operating
agreement or other authorizing document in geothermal resources
conveying the right to explore for, develop, produce, and use
geothermal resources, except that such rights delegated to a unit
operator by a unit agreement are not working interests.
Sec. 3200.2 Information collection.
(a) The collection of information contained in this part has been
approved by the Office of Management and Budget under 44 U.S.C. 3501 et
seq. and assigned clearance numbers 1004-0034, 1004-0074, 1004-0132 and
1004-0160. The information will be used to maintain an orderly program
for leasing, development and production of Federal geothermal
resources, to evaluate technical feasibility and environmental impacts
of geothermal operations on Federal and Indian lands, and to determine
whether exploration expenditures meet the requirements for diligence
credit under 43 CFR 3202.5. The public must respond to the requests for
information in order to obtain a benefit.
(b) Public reporting burden for this information is estimated to
average 1.6 hours per response, including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. Send comments regarding this burden
estimates or any other aspects of this collection of information,
including suggestions for reducing the burden, to Administrative
Record, Bureau of Land Management, Room 401 LS, 1849 C Street, NW.,
Washington, DC 20240; and the Paperwork Reduction Project (1004-0160),
Office of Management and Budget, Washington, DC 20503.
(c) There are many leases and agreements currently in effect, and
which will remain in effect, involving Federal geothermal resources
leases that specifically refer to the United States Geological Survey,
USGS, Minerals Management Service, MMS, or Conservation Division. These
leases and agreements may also specifically refer to various officers
such as Supervisor, Conservation Manager, Deputy Conservation Manager,
Minerals Manager, and Deputy Minerals Manager. In addition, many leases
and agreements specifically refer to 30 CFR part 270 or a specific
section thereof. Those references must now be read to mean either the
Bureau of Land Management or the Minerals Management Service as
appropriate.
Sec. 3200.3 What are my rights of appeal?
You may appeal any decision made by BLM under this part in
accordance with 43 CFR parts 4 and 1840.
Subpart 3201--Available Lands
Sec. 3201.10 What lands are available for geothermal leasing?
(a) BLM may issue leases on:
(1) Lands administered by the Department of the Interior, including
public, withdrawn and acquired lands;
(2) Lands administered by the Department of Agriculture with its
concurrence;
[[Page 52746]]
(3) Lands conveyed by the United States where the geothermal
resources were reserved to the United States; and
(4) Lands subject to section 24 of the Federal Power Act, as
amended (16 U.S.C. 818), with concurrence from the Secretary of Energy.
(b) BLM will not issue, extend, review or modify a lease that would
result in a significant adverse effect on a significant thermal feature
within a unit of the National Park system. If BLM determines such a
potential exists, we will include in any lease action all stipulations
required by law and necessary to protect such features.
Sec. 3201.11 What lands are not subject to geothermal leasing?
BLM will not issue leases for:
(a) Lands where the Secretary has determined that issuance of the
lease would cause unnecessary or undue degradation;
(b) Lands that are contained within a unit of the National Park
System, or are otherwise administered by the National Park Service;
(c) Lands within a national recreation area;
(d) Lands where the Secretary determines that geothermal operations
are reasonably likely to result in a significant adverse effect on a
significant thermal feature within a unit of the National Park System;
(e) Fish hatcheries or wildlife management areas administered by
the Secretary;
(f) Indian trust or restricted lands within or without the
boundaries of Indian reservations;
(g) The Island Park Geothermal Area; and
(h) Lands where section 43 of the Mineral Leasing Act (30 U.S.C.
226-3) prohibits leasing which includes:
(1) Wilderness areas or wilderness study areas administered by BLM
or other surface management agencies;
(2) Lands designated by Congress as wilderness study areas, except
where leasing is specifically allowed to continue by the statute
designating the study area; and
(3) Lands within areas allocated for wilderness or further planning
in Executive Communication 1504, Ninety-Sixth Congress (House Document
numbered 96-119), unless such lands are allocated to uses other than
wilderness by a land and resource management plan or are released to
uses other than wilderness by an act of Congress.
Subpart 3202--Lessee Qualifications
Sec. 3202.10 Who can hold a geothermal lease?
You may hold a geothermal lease if you are:
(a) A citizen of the United States who has reached the age of
majority;
(b) An association, including a partnership, of United States
citizens;
(c) A corporation organized under the laws of the United States,
any state or the District of Columbia; or
(d) Any domestic governmental unit.
Sec. 3202.11 Must I prove I can hold a lease when filing a lease
offer?
Ordinarily you do not need to submit proof at the same time you
submit the offer, but BLM has the right to request information
regarding your qualifications at any time, including when you submit
your offer. If BLM requires additional information, you have 30 days
from your receipt of the request to submit the information.
Sec. 3202.12 Are other persons allowed to act in my behalf?
Yes, one person may act on behalf of another, provided he or she
notifies BLM. The person taking the action must sign the document, note
his or her title, identify the person on whose behalf he or she is
acting, and be qualified to hold a lease under 43 CFR 3202.10. BLM may
require the person to provide written proof of his or her
qualifications and authority to take such action.
Sec. 3202.13 What happens if the offeror dies before the lease is
issued?
If the offeror dies before the lease is issued, BLM will issue the
lease to either the administrator or executor of the estate or the
heirs. If the heirs are minors, BLM will issue the lease to either a
legal guardian or trustee, provided that the legal guardian or trustee
is also qualified to hold a lease under 43 CFR 3202.10.
Subpart 3203--Obtaining a Lease
Sec. 3203.10 How can I obtain a geothermal lease?
You must first determine if the lands are located in a known
geothermal resource area (KGRA). BLM leases lands within a KGRA through
a competitive sale. If the lands you wish to lease are within a KGRA,
you must follow the procedures for submitting a bid set out in subpart
3205 of this part. BLM issues a competitive lease to the person or
entity submitting the highest qualified bid. BLM leases available lands
outside a KGRA noncompetitively. You may lease lands outside a KGRA by
submitting an offer following the procedures set out in subpart 3204 of
this part. BLM issues noncompetitive leases to the first qualified
applicant. BLM may issue a lease for a fractional interest if we
determine the public interest is well served by doing so.
Sec. 3203.11 How is a KGRA determined?
BLM determines the boundaries of a KGRA based on the following
indicators:
(a) Geologic and technical evidence that indicates persons
knowledgeable in geothermal resource development would spend money
developing the area;
(b) Lands within 5 miles of a well capable of production in
commercial quantities, or all lands in the same geologic structure,
regardless of the distance from the well capable of production in
commercial quantities; and
(c) Where competitive interest exists. Competitive interest exists
where more than one person expresses interest in leasing an area for
geothermal resources.
Subpart 3204--Noncompetitive Leasing
Sec. 3204.10 How do I file an offer to lease?
You or your authorized agent must submit three (3) executed copies
of current Form 3200-24 to BLM. At least one form must have an original
signature. We will accept only exact copies of the form on one two-
sided page, to match the original. The application must accurately
describe the lands covered by your application. You may obtain this
form (and other BLM forms) by contacting the nearest BLM Office.
Sec. 3204.11 How do I describe the lands in my lease offer?
You must describe the lands as follows:
(a) For lands surveyed under the public land rectangular survey
system, describe the lands by legal subdivision, section, township, and
range;
(b) For unsurveyed lands, describe the lands by metes and bounds,
giving courses and distances, and tie this information to an official
corner of the public land surveys, or to a prominent topographic
feature;
(c) For approved protracted surveys, include an entire section,
township, and range. Do not divide protracted sections into aliquot
parts;
(d) Discuss offers for unsurveyed lands in Louisiana and Alaska
that have water boundaries with BLM prior to submission; and
(e) For fractional interest lands, identify the United States
mineral ownership by percentage.
[[Page 52747]]
Sec. 3204.12 What fees must accompany my offer?
You must submit a nonrefundable filing fee of $75 for each offer
and advance rental in the amount of $1 per acre, or fraction of an
acre. BLM will refund the advance rental if we reject the offer, or you
withdraw the offer before BLM accepts it. If your advance rental is
deficient by more than 10 percent, BLM will reject the offer.
Sec. 3204.13 May I combine acquired and public domain lands on the
same offer?
Yes, as long as you clearly identify both the acquired lands and
the public domain lands.
Sec. 3204.14 What are the minimum and maximum acreage requirements for
my offer?
The minimum size of a lease is 640 acres. Your offer must include
all available lands in the section. If the section contains lands not
available for leasing, the lease must include all the available lands
in the section, which is then the minimum size of the lease. The
maximum size of a lease is 2560 acres, although BLM will make an
exception to this requirement when an offer includes an irregular
subdivision. Leases must not extend outside a 6 mile square area.
Sec. 3204.15 What happens when two or more applicants apply for a
noncompetitive lease for the same land?
BLM begins processing applications as soon as they are received.
Once BLM approves a noncompetitive lease application, any later
applications received for the same land are rejected. However, if BLM
receives additional applications for the same land while the original
application is still pending, BLM must determine if the overlapping
applications warrant converting the land at issue to a KGRA.
(a) If BLM determines that the land should be considered a KGRA,
then all noncompetitive applications are rejected, and applicants must
follow the procedures for competitive bidding to obtain a lease.
(b) If BLM determines that KGRA status is not warranted despite the
multiple applications, then the lease will be awarded to the first
qualified applicant.
Sec. 3204.16 How does BLM determine the first qualified applicant?
BLM determines the first qualified applicant by the priority in
which the application is filed. BLM issues a noncompetitive lease to
the offeror who is first to file an application that meets all the
application requirements.
Sec. 3204.17 May I withdraw my offer?
Yes, you may withdraw your offer in whole or in part prior to lease
issuance, provided the remaining lands in a partial withdrawal comply
with the acreage requirements.
Sec. 3204.18 May I amend my offer?
Yes, you may amend your offer prior to lease issuance provided your
amended offer complies with all the lease offer requirements. BLM will
give your amended offer a new priority based on the date we receive it.
Subpart 3205--Competitive Leasing
Sec. 3205.10 How does BLM lease competitive lands?
BLM leases Federal lands within KGRAs through a sealed bid,
competitive sale process. BLM generally establishes parcels of lands
available for competitive leasing from terminated, expired, or
relinquished leases and from public expressions of interest. BLM lists
these parcels, with stipulations, if applicable, in a sale notice,
posts the notice in an appropriate BLM office and publishes the notice
for 3 consecutive weeks in a newspaper of general circulation in the
area of the lands. The sale notice will tell you which lands are
offered, and where and when to submit your bids. BLM can request you to
pay the cost of publication, if you are awarded the lease.
Sec. 3205.11 How do I obtain information on the terms and conditions
of the leases being offered through competitive bidding?
BLM will post a statement which will include the terms and
conditions of the lease(s), including the rental and royalty rates. The
statement will also tell you where you may obtain a form on which to
submit your bid.
Sec. 3205.12 How do I bid for a parcel?
Unlawful combination or intimidation of bidders is prohibited by 18
U.S.C. 1860. You must follow these procedures:
(a) Submit your bid to the BLM office indicated in the notice prior
to the date and time specified in the sale notice;
(b) Submit your bid on Form 3000-2 (or exact copy);
(c) Submit a bid in a separate, sealed envelope for each full
parcel;
(d) Include in each bid a certified or cashier's check, bank draft,
or money order equal to one-fifth of the amount bid, payable to the
``Department of the Interior, Bureau of Land Management;'' and
(e) Label each envelope with the parcel number and the statement
``Not to be opened before (date posted in the sale notice).''
Sec. 3205.13 What is the minimum acceptable bid?
BLM will not accept bids which do not meet or exceed the fair
market value as determined by BLM in accordance with generally
acceptable appraisal methods. BLM determines the fair market value
prior to the sale, but does not disclose it to the public.
Sec. 3205.14 How does BLM conduct the sale?
On the date, and at the place and time set out in the sale notice,
BLM opens, announces, and records bids. BLM does not accept or reject
any bid at that time. Bidders are not required to attend the sale.
Sec. 3205.15 To whom does BLM issue the lease?
BLM will issue the lease to the highest responsible qualified
bidder within 30 days. If BLM determines that the highest bid is
inadequate, BLM will reject the bid. BLM reserves the right to reject
any and all bids.
Sec. 3205.16 How will I know if my bid is accepted?
(a) BLM will send you a letter accepting your bid. The letter will
be accompanied by 3 copies of the lease. Upon receipt of the letter and
lease forms, you have 15 days in which to submit:
(1) The signed lease forms;
(2) The remaining four-fifths of the bonus bid;
(3) The first year's advance rental; and
(4) Signed stipulations, if applicable.
(b) If you fail to comply with these requirements BLM will revoke
acceptance of your bid and you will forfeit one-fifth of your bonus
bid.
Sec. 3205.17 How will I know if my bid is not accepted?
BLM will send a letter rejecting your bid. At that time, BLM will
return the one-fifth of the bonus bid that you submitted with your
application.
Subpart 3206--Lease Issuance
Sec. 3206.10 Are there any additional requirements prior to lease
issuance?
Yes.
(a) You must:
(1) Accept all lease stipulations;
(2) Sign a unit joinder or waiver, if applicable; and
(3) Comply with the maximum limits on acreage holdings.
(b) BLM must:
(1) Make a determination of land availability;
(2) Make a determination that development on your lease will not
significantly impact any significant
[[Page 52748]]
thermal feature within any of the following units of the National Park
System:
(i) Mount Rainier National Park;
(ii) Crater Lake National Park;
(iii) Yellowstone National Park;
(iv) John D. Rockefeller, Jr. Memorial Parkway;
(v) Bering Land Bridge National Preserve;
(vi) Gates of the Arctic National Park and Preserve;
(vii) Katmai National Park;
(viii) Aniakchak National Monument and Preserve;
(ix) Wrangell-St. Elias National Park and Preserve;
(x) Lake Clark National Park and Preserve;
(xi) Hot Springs National Park;
(xii) Big Bend National Park (including that portion of the Rio
Grande National Wild Scenic River within the boundaries of Big Bend
National Park);
(xiii) Lassen Volcanic National Park;
(xiv) Hawaii Volcanoes National Park;
(xv) Haleakala National Park;
(xvi) Lake Mead National Recreation Area; and
(xvii) Any other significant thermal features within National Park
System Units which the Secretary may, after notice and public comment,
in accordance with the criteria set out in 30 U.S.C. 1026(a)(3), add to
the list of significant thermal features.
Sec. 3206.11 What is the maximum acreage I may hold?
You may not hold, either directly or indirectly, more than 51,200
acres in any one state, including any leases acquired under the
provisions of sections 4(a)-4(f) of the Act. You are also not permitted
to convert mineral leases, permits, applications for permits, or mining
claims, pursuant to the provision of sections 4(a)-4(f) of the Act,
into geothermal leases totaling more than 10,240 acres.
Sec. 3206.12 How does BLM compute acreage holdings?
BLM will compute acreage holdings in the following manner:
(a) If you own an undivided interest in a lease, your accountable
acreage will be your proportionate part of the total lease acreage.
(b) If you own stock in a corporation or a beneficial interest in
an association which holds a geothermal lease, your accountable acreage
will be your proportionate part of the corporation's or association's
acreage; except no one will be charged with a pro rata share of any
acreage holdings of any association or corporation unless the person is
a beneficial owner of more than 10% of the stock of the corporation or
the beneficial interest of the association.
(c) If you own a royalty interest, record title, or operating
rights, you will be charged with your proportionate percentage of the
total lease acreage only. You will not be charged twice for the same
lease or for different interests in the same lease. For example, if you
own a 2% overriding royalty, 10% of the operating rights and 50% of the
record title in a lease, you will be charged with 50% of the total
lease acreage.
Sec. 3206.13 Am I charged for acreage if the United States owns only
a fractional interest in the geothermal resources?
Yes, you are charged with the same proportion as the United States
owns of the mineral estate. For example, if you own 100% of record
title in a 100 acre lease, and the United States owns 50% of the
mineral estate, you are charged with 50 acres.
Sec. 3206.14 Are there any acreages which are not chargeable?
BLM does not count acreage in any approved unit or cooperative plan
or acreage subject to an operating, drilling or development contract
other than communitization or drilling agreements, in determining
accountable acreage of the lessees or operators.
Sec. 3206.15 What procedures does BLM follow when a party holds or
controls excess accountable acreage?
BLM will notify you of an excess acreage situation, and give you 90
days to divest yourself of the excess acreage. If you fail to comply
BLM will cancel your leases, beginning with the lease most recently
issued, until your chargeable acreage is within the maximum allowable.
Sec. 3206.16 What is the primary term of my lease?
Leases have a primary term of 10 years.
Sec. 3206.17 When will BLM issue my lease?
Leases are issued the day they are signed by BLM, and are effective
the first day of the month following the issue date.
Subpart 3207--Additional Lease Term
Sec. 3207.10 Under what circumstances is my lease eligible for an
additional term beyond its primary term?
A lease is eligible to be renewed for an additional term under the
following conditions:
(a) If you produce or use geothermal steam in commercial quantities
within the primary term, the lease will continue for as long as
geothermal steam is produced or used in commercial quantities. However,
the additional term may not exceed forty years beyond the primary term
unless the provisions of paragraph (c) of this section apply.
(b) If, prior to the end of the primary term, you have a well
capable of producing geothermal steam in commercial quantities, BLM may
decide to continue the lease for an additional forty-year period, if we
determine that you are making diligent efforts to commence production.
You must submit to BLM a written description of the efforts completed
for the lease year and the efforts planned for the next lease year 60
days before the lease expires. Your submission should include
descriptions of negotiations for sales contract, marketing
arrangements, and electrical generating and transmission agreements and
any other information you believe supports a finding of diligent
efforts.
(c) If at the end of the additional 40-year term, BLM does not need
the lands for another purpose and you are producing geothermal steam in
commercial quantities, you will have preferential right to renew the
lease for an additional 40-year term under terms and conditions
determined by BLM.
Subpart 3208--Extending the Current Lease Term
Sec. 3208.10 Under what circumstances is my lease eligible for an
extension of the primary term?
(a) A lease is eligible for an extension under the following
circumstances:
(1) If you commence drilling before the end of the primary term and
diligently pursue drilling to a reasonable drilling target, as
determined by BLM based on the local geology and type of development
proposed by the operator, the lease will be extended for a 5-year
period. If geothermal steam is produced or utilized during this 5-year
period, the lease will be extended for a further period not to exceed
35 years. If at the end of that 35-year period you are producing or
utilizing geothermal steam in commercial quantities and the lands are
not needed for other purposes, you will have a preferential right to
renew the lease for an additional 40-year period under such terms and
conditions as BLM determines are appropriate.
(2) If the term of any lease committed to a unit agreement would
expire prior to the term of the unit expiring, BLM will extend the term
of the lease to match the term of the unit.
(3) BLM may extend any lease which at the end of its primary term
or at the end of an extension provided by either
[[Page 52749]]
paragraphs (a)(1) or (a)(2) of this section is not producing geothermal
steam, for up to 10 years in successive five-year extensions.
(4) If you have a lease which produced geothermal steam, and BLM
determines that it is no longer capable of commercial production, BLM
may extend the lease for a 5-year period. This extension will only
continue if you are producing one or more valuable byproducts in
commercial quantities. You should consult 43 CFR 3209.10 if you wish to
convert your lease to a mineral lease for the byproduct.
(b) For an explanation of the difference between an ``additional
term'' and an ``extended term'' please see the definitions in 43 CFR
3200.1.
Sec. 3208.11 What procedures must I follow to obtain an extension of
my lease?
(a) If you are obtaining an extension under 43 CFR 3208.10 (a)(2)
or (a)(4), you need not take any action. BLM will grant your lease the
applicable extension. If your lease is eligible for the extension under
43 CFR 3208.10(a)(1), you should notify BLM of your drilling activities
so we may document that you conducted the required drilling at the end
of the primary term of your lease.
(b) If you are requesting an extension under 43 CFR 3208.10(a)(3),
you must:
(1) Submit a written request to BLM for lease extension 60 days
prior to the end of the primary or extended term of your lease;
(2) Include a report documenting that you have made bona fide
efforts to produce or utilize geothermal resources in commercial
quantities given the current economic conditions for marketing
geothermal steam; and
(3) Indicate whether you choose to make payments in lieu of
commercial quantities production or to make significant expenditures
during the period of extension.
(c) Within 30 days of receipt of your request for extension, BLM
will notify you whether the request is approved or disapproved, or we
will request additional information from you, if necessary.
Sec. 3208.12 What information must I include in the report to
document that I have made bona fide efforts?
The report must include a description of:
(a) Operations conducted during the primary term of the lease and
currently in progress to identify and define the geothermal resource on
the lease;
(b) A summary of the results of those operations;
(c) Actions taken in support of operations such as obtaining
permits, conducting environmental studies, meeting permit requirements
or other related activities;
(d) Actions taken during the primary term of the lease and
currently in progress to negotiate marketing arrangements, sales
contracts, drilling agreements, financing for electrical generation and
transmission projects, or other related actions; and
(e) Current economic factors and conditions which affect your
efforts to produce or utilize geothermal resources in commercial
quantities on the lease.
Sec. 3208.13 What will BLM do if I choose to make payments in lieu of
commercial operation?
If you elect to make payments in lieu of commercial quantities
production and BLM approves the extension, BLM will modify the lease to
require that you make an annual payment in lieu of production in the
amount specified by BLM, but not less than $3.00 per acre or fraction
of an acre of the lands under lease during an initial extension, or
$6.00 per acre or fraction of an acre for a subsequent extension. The
actual payment per acre is fixed for the period of the extension. If
you request it, BLM will inform you of the rate before you submit your
petition for extension. You must submit in lieu payments to MMS at the
same time you pay the lease rental. The lease is subject to
cancellation if you do not make these payments.
Sec. 3208.14 What will BLM do if I choose to make significant
expenditures?
If you elect to make significant expenditures, and BLM approves the
extension, we modify the lease to require you to make annual
expenditures of at least $15.00 per acre or fraction of an acre for
lands under lease during an initial extension. You must have
expenditures of $18.00 per acre or fraction of an acre during a
subsequent extension. BLM credits expenditures you make in excess of
the minimum required to subsequent years within the same period of
extension. Expenditures that qualify as significant expenditures are
limited to those involving actual drilling operations on the lease,
geochemical or geophysical surveys for exploratory or development
wells, road or generating facility construction on the lease,
architectural or engineering services procured for the design of
generating facilities located on the lease, and environmental studies
required by State or Federal law. To obtain credit toward meeting the
significant expenditure requirement, you must submit to BLM a report of
qualifying expenditures no later than 60 days after the end of the
lease year in which the expenditures were made. BLM may cancel your
lease if you fail to make such expenditures.
Sec. 3208.15 May I change my election of making payments in lieu of
commercial quantities or making significant expenditures during the
extension?
No. You may not change election during a period of extension, but
must continue either to make payments in lieu of production or make
significant expenditures until you drill a well that is capable of
producing geothermal resources in commercial quantities.
Subpart 3209--Conversion of Lease Producing Byproducts
Sec. 3209.10 May I convert my geothermal lease to a mineral lease?
Yes, you may under the following conditions:
(a) If you have received a 5-year extension under subpart 3208 and
the byproducts being produced are leasable under the Mineral Leasing
Act of February 25, 1920, as amended (30 U.S.C. 181 et seq.), or under
the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351-358), and the
lease is primarily valuable for the production of that mineral, you are
entitled to convert your geothermal lease to a mineral lease, provided
you convert your lease prior to the end of the 5-year period. You will
be subject to all the terms and conditions of the act permitting
leasing of the mineral.
(b) If the minerals are not leasable but are locatable and would be
considered a byproduct if geothermal steam production were to continue,
you are entitled to locate these minerals under the mining laws. To
acquire these rights, you must complete the location of the mining
claim within 90 days after the termination of the geothermal lease, as
long as there has been no intervening location and the lands are open
to entry under the mining laws.
(c) If leases converted under either paragraphs (a) or (b) of this
section affect lands withdrawn or acquired in aid of a function of a
federal department or agency, including the Department of the Interior,
you may be subject to additional terms and conditions as prescribed by
the appropriate agency.
Subpart 3210--Additional Lease Information
Sec. 3210.10 When does lease segregation occur?
(a) Lease segregation occurs when:
(1) A portion of a lease is committed to a unit agreement,
communitization agreement, drilling agreement, or
[[Page 52750]]
cooperative plan, and a portion of the lease is not committed; or
(2) Only a portion of a lease is located in a participating area
and the unit contracts. The portion of the lease outside the
participating area is eliminated from the unit agreement and segregated
as of the effective date of the unit agreement.
(b) The portion of the lease within the plan or agreement will keep
the same serial number. BLM will give the portion outside the plan or
agreement a new serial number with the same lease terms as the original
lease.
Sec. 3210.11 Is a lease segregated from an agreement or plan eligible
for an extension?
No. The new lease will stand alone, and will not receive any of the
benefits provided to the original lease by virtue of the agreement or
plan. The eliminated portion of the lease is not eligible for extension
due to production in commercial quantities, or the existence of a
producible well on the lands remaining in the agreement or plan, or by
virtue of the segregation.
Sec. 3210.12 May I consolidate leases?
BLM may approve the consolidation of two or more contiguous leases
that have the same ownership and same lease terms, as long as the
combined leases do not exceed 2,560 acres in size.
Sec. 3210.13 What is the diligent exploration requirement?
Diligent exploration is a lease requirement to perform activities
which derive new geologic information regarding the lease or related
lands. You must conduct diligent exploration beginning in the sixth
year of the primary term until there is a well capable of commercial
production. Some examples of activities that would qualify as diligent
exploration are geochemical surveys, heat flow measurement, core
drilling or drilling of test drill wells.
Sec. 3210.14 How do I meet the diligent exploration requirement?
(a) During the first 5 years of the primary term, you only need to
pay your rentals. If you conduct activities during these first five
years that would otherwise qualify as diligent exploration
expenditures, and BLM approves them as such during those five years,
BLM will count them toward the requirements of future years.
(b) To qualify as diligent exploration expenditures in lease years
6 through 10, you must make expenditures equal to the minimum amounts
set forth in the table below. BLM will apply approved expenditures in
excess of the requirement in any one year to subsequent years.
------------------------------------------------------------------------
Expenditure
Lease year per acre
------------------------------------------------------------------------
6.......................................................... $4
7.......................................................... 6
8.......................................................... 8
9.......................................................... 10
10......................................................... 12
------------------------------------------------------------------------
(c) To obtain credit for the expenditures you must submit a report
to BLM no later than 60 days after the end of the lease year in which
you made the expenditures. You must include the following information
in your report:
(1) The types of operations conducted;
(2) The location of the operations;
(3) When the operations occurred;
(4) The amount of money spent conducting those operations; and
(5) All geologic information obtained from your operations.
(d) After BLM reviews your report, we will notify you in writing
whether you have met the diligent expenditure requirement. BLM must
approve the type of work done and the expenditures claimed in your
report before they will be credited toward your diligent exploration
requirements.
Sec. 3210.15 Is there an option to performing diligent exploration?
Yes. If you do not wish to conduct diligent exploration or if your
total expenditures do not fully meet the requirement for any lease
year, you may meet the diligent exploration requirement by paying an
additional rental of $3 per acre or fraction of an acre. If you choose
this option, you must submit the additional rental to MMS prior to the
end of the lease year.
Sec. 3210.16 What happens if I don't meet the diligence requirement or
pay the additional rental?
BLM will cancel your lease if you fail to perform and report the
necessary operations and expenditures or pay the additional rental for
each lease year prior to the end of that lease year.
Sec. 3210.17 Can leases or locations for other mineral commodities
occur on the same lands that my geothermal lease is located?
Yes. The United States reserves the ownership of and the right to
extract helium, oil and hydrocarbon gas from all geothermal steam and
associated geothermal resources. In addition, mineral leasing or
location is allowed on the same lands that are leased for geothermal
resources, provided that operations under the mineral leasing or mining
laws do not unreasonably interfere with or endanger geothermal
operations, and the lands are not withdrawn.
Sec. 3210.18 May BLM readjust the terms and conditions of my lease?
Yes. Ten years after the commencement of production from your lease
and at not less than 10-year intervals thereafter, BLM may readjust the
terms and conditions of your lease as they pertain to stipulations and
surface disturbance requirements. If the readjustment pertains to use,
protection or restoration of the surface and the lands are managed by
another federal agency, that agency must approve the adjustments.
Sec. 3210.19 How will BLM readjust the terms and conditions of my
lease?
BLM will provide you with a written proposal for adjustment of the
terms and conditions of your lease. You have 30 days to object to the
new terms or relinquish your lease. If BLM does not receive an
objection, these terms will become part of your lease.
Sec. 3210.20 May BLM readjust the rental and royalty rates of my
lease?
Yes. Your lease rates are subject to readjustment at not less than
20-year intervals beginning thirty-five years after BLM determines that
your lease is producing. Your rental and royalty will not be increased
by more than 50 percent of what was paid during the preceding period.
In no case will BLM raise the royalty rate beyond 22\1/2\ percent. You
will be provided with written notice of BLM's proposed adjustments. If
you do not object to the adjustment or relinquish your lease within 30
days of receipt of the notice, the new rate will become a part of your
lease.
Sec. 3210.21 What happens if I object to the proposed readjusted terms
and conditions or rental and royalty rates?
BLM will issue a decision responding to your objections. If we
cannot reach an agreement within a 60-day period, either party may
terminate the lease.
Sec. 3210.22 What lease obligations am I accountable for during
readjustment negotiations?
If you object to the proposed terms and conditions of your lease,
you are still bound by the current lease terms. To avoid termination of
the lease, you must pay the proposed rentals and royalties timely,
under protest. If we reach an agreement on rentals that differs from
BLM's proposal, BLM will refund the difference.
[[Page 52751]]
Sec. 3210.23 When do the readjusted terms become effective?
The new terms and conditions will be effective at the end of the
prior term.
Sec. 3210.24 Must I prevent the drainage of geothermal resources from
my lease?
Yes. You must prevent the drainage of geothermal resources from
your lease by either:
(a) Diligently drilling and producing wells which will protect the
Federal geothermal resource from loss caused by production from other
properties; or
(b) Paying a sum determined by BLM as adequate compensation for
failure to drill and produce any wells necessary to protect the Federal
resource. BLM must agree to your use of this option.
Subpart 3211--Fees, Rentals, and Royalties
Sec. 3211.10 What are the filing fees, rentals, and royalties for
leases?
Rental and royalty payments are calculated based on the acreage
amount. Therefore, prior to calculating rental and minimum royalty
payments, you must determine the acreage amount. You must round up
partial acreage to the next whole acre. You would then multiply the
rounded acreage by the appropriate amount set out in the following
chart to determine the amount you owe. Example: Rental on a lease
containing 2,456.39 acres is calculated based on 2,457.00 acres.
Filing Fees, Rentals, and Royalties
------------------------------------------------------------------------
Type Competitive Non competitive
------------------------------------------------------------------------
Lease Filing Fee............ N/A................. $75.00.
Lease Rental................ $2.00 per acre...... $1.00 per acre.
Lease Assignment Filing Fee. $50.00.............. $50.00.
Royalties:
steam, heat, or energy.. between 10% and 15%. between 10% and 15%.
demineralized water..... 5%.................. 5%
byproducts.............. 5% a................ 5% a.
minimum royalty......... $2.00 per acre...... $2.00 per acre.
Additional rental/In lieu of $3.00 per acre in $3.00 per acre in
diligent exploration. addition to regular addition to regular
lease rental. lease rental.
Additional rental/In lieu of $3.00 per year/first $3.00 per year/first
commercial quantities 5 years, $6.00 per 5 years, $6.00 per
production. year/second 5 years. year/second 5
years.
------------------------------------------------------------------------
a Note the exception stated in 43 CFR 3211.17(b).
Sec. 3211.11 When is my annual rental payment due?
(a) You must submit your annual rental payments so they are
received by BLM or MMS, as appropriate, on or before the anniversary
date of each lease year. There is no grace period for rental payments.
If the rental for your lease is not timely paid, the lease will
automatically terminate by operation of law, unless you meet the
conditions of 43 CFR 3213.15 of this part. Rental payments are
considered timely received if they are postmarked by the United States
Postal Service, common carrier, or their equivalent, on or before the
anniversary of the lease. This does not include private postal meters.
If less than a full year remains on a lease, you are still responsible
for paying a full year's rental on or before the anniversary date of
the lease.
(b) When BLM terminates a lease suspension (see subpart 3212 of
this part) and you had paid rent in advance, BLM applies a prorated
amount to the annual rental or minimum royalty to complete the lease
year requirement and return to the next anniversary date. BLM applies
any remaining monies to the next year's rental. You must pay the
balance due on or before the next anniversary date to fulfill your
rental obligation for the next year. If you relinquish the lease, or
fail to pay the balance due on or before the next anniversary date, BLM
will refund the outstanding monies. If there is insufficient rental to
complete payment on the lease year (i.e., to return the next
anniversary date), BLM will notify you of payment due and grant you 30
days from receipt of the notification to remit the balance.
(c) If payment is due on a day in which the designated payment
office is closed, payment received on the next official working day is
considered timely.
Sec. 3211.12 How and where do I submit my rental payment?
You must pay BLM the first year's advance rental. You must pay
subsequent rentals, royalties, and in lieu payments to MMS. Payments
may be made to the BLM in the form of personal or cashier's check or
money order and should be made payable to the Department of the
Interior--Bureau of Land Management. You may also make payments by
credit card or electronic funds transfer when specifically authorized
by BLM. Payments to the MMS by personal or cashier's check, money
order, or electronic funds transfer, should be made payable to the
Department of the Interior--Minerals Management Service.
Sec. 3211.13 Is there a different rental or minimum royalty amount for
a fractional interest lease?
BLM will not prorate rentals and minimum royalties payable under
leases for lands in which the United States owns only a fractional
mineral interest. You must pay for the full acreage in the lease.
Sec. 3211.14 Prior to production, am I expected to pay rental if my
lease is committed to an approved cooperative or unit plan?
Yes. You are expected to pay rental in accordance with 43 CFR
3211.10.
Sec. 3211.15 When unit production starts, am I expected to pay rental
if my lease is committed to an approved cooperative or unit plan?
As soon as production is established on your lease, lands included
in an approved cooperative or unit plan, which are within the
participating area, are subject to royalties in accordance with 43 CFR
3211.17. All other unitized lands remain subject to rental in
accordance with 43 CFR 3211.10.
Sec. 3211.16 Will I always pay rental on my lease?
No, you are required to pay rentals only until you achieve
production in commercial quantities. At that time the lease converts to
royalty status.
[[Page 52752]]
Sec. 3211.17 What are the possible royalty rates of my lease?
(a) BLM will set out the royalty rate in the lease. BLM will
determine the royalty rate based on the following:
(1) The royalty rate for heat or energy derived from lease
production may range from 10-15% of the heat or energy value.
(2) The royalty rate for the value of byproducts derived from
production under the lease and sold or utilized or reasonably
susceptible to sale or utilization may not exceed 5%, except that the
royalty rate for minerals listed in section 1 of the Mineral Leasing
Act (MLA), 30 U.S.C. 181, will be the same as that provided in the MLA.
(3) The royalty rate for demineralized water produced on a lease
may not exceed 5%, except that BLM will not charge a royalty for water
used in the operations of a utilization facility.
(4) The minimum royalty rate on a producing lease is $2.00 per
acre.
(b) Occasions when the minimum royalty rate might apply are when an
initial positive well commerciality determination is made but actual
production has not yet begun, or when the value of actual production is
so low that royalty due under the applicable schedule (in paragraphs
(a)(1) through (a)(3) of this section) is less than $2.00 per acre.
Subpart 3212--Suspension of Operations or Operations and Production
Sec. 3212.10 May I obtain a suspension of operations or operations and
production on my lease, and if so, for what reasons?
The operator may request in writing that BLM place a producing
lease in suspension. Your request must fully describe the need for the
suspension. BLM, on its own, may suspend operations on any lease in the
interest of conservation. The suspension may include leases committed
to an approved unit agreement. Suspending the leases in a unit does not
affect unit obligations.
Sec. 3212.11 When is a lease suspension effective or terminated?
(a) A suspension will take effect and will last for the period
specified by BLM. Prior to the expiration of the time specified, you
may request in writing that BLM lift the suspension. If BLM agrees to
lift the suspension and permit you to resume operations, you must also
resume payment of rentals and royalty, as applicable.
(b) BLM may, upon information obtained by or furnished to BLM,
order the resumption of operations, if BLM determines that the
operations are necessary to protect the interests of the United States.
Sec. 3212.12 How does a suspension affect the lease terms?
An approved suspension stays all lease obligations. You do not have
to conduct drilling, produce thermal steam or pay rents or royalties.
The time during which the suspension is effective does not count toward
the lease term.
Sec. 3212.13 What happens when the suspension is lifted or removed?
When BLM lifts a suspension, we extend the lease term by adding the
number of days the lease was under suspension to the term. BLM suspends
rental or minimum royalty payments the first day of the lease month
following the effective date of the suspension. Your obligation to
resume these payments begins on the first day of the lease month in
which BLM lifts the suspension.
Sec. 3212.14 May BLM reduce or suspend the royalty or rental rate of
my lease?
Yes, if you submit an application requesting a waiver, suspension
or reduction of your rent or royalty, BLM may grant the request if it
determines the following:
(a) It is in the interests of conservation;
(b) Doing so will encourage the greatest ultimate recovery of
resources;
(c) It is necessary to promote development; or
(d) The lease cannot be successfully operated under the current
lease terms.
Sec. 3212.15 What information must I submit when requesting a
reduction or suspension of the royalty or rental rate of my lease?
(a) Your request must include:
(1) The type of reduction being requested;
(2) The serial number of the lease;
(3) The name of the lessee and operator;
(4) The number, location, and status of each well;
(5) A summary of monthly production from the lease during the last
6 months;
(6) A detailed statement of expenses and costs, and all facts
necessary for BLM to determine if the well can be operated under its
current terms; and
(7) Any other information requested by BLM.
(b) If the application is for a reduction in royalty, you must also
submit a list of names and amounts of royalties or payments out of
production paid to each individual, and every effort you have made to
reduce these payments.
Subpart 3213--Relinquishment, Termination, Cancellation, and
Expiration
Sec. 3213.10 Who may relinquish a lease?
The record title holder or its authorized agent may relinquish a
lease in full or in part, and must sign the relinquishment. If there is
more than one record title holder to a lease, all record title holders
or their authorized agents must sign the relinquishment.
Sec. 3213.11 What form must I submit to relinquish a lease?
You must submit a written request to BLM that includes the serial
number of each lease you are relinquishing. If you are relinquishing
the entire lease, no legal description of the land is required. If you
are relinquishing part of the lease, you must describe the lands
relinquished.
Sec. 3213.12 Can BLM accept a partial relinquishment resulting in less
than 640 acres?
BLM may not accept a partial relinquishment that reduces the lease
acreage to less than 640 acres or all of the land in the section if
less than 640 acres is available. BLM may waive the minimum acreage
provision found at 43 CFR 3204.14, if BLM determines that an exception
is justified to further development of the resource.
Sec. 3213.13 When does my relinquishment take effect?
Once approved by BLM, your relinquishment takes effect as of the
date it is filed, provided that you and your surety have fulfilled your
obligations to:
(a) Pay all rentals and royalties due prior to relinquishment;
(b) Plug and abandon all wells on the relinquished land; and
(c) Restore the surface resources and comply with environmental
stipulations in accordance with all applicable laws and regulations and
lease terms.
Sec. 3213.14 How does a lease terminate?
A lease terminates under the following conditions:
(a) If you fail to produce or commence production prior to the end
of the primary term or obtain an extension, the lease terminates at the
end of that period; or
(b) If you fail to pay the rental on or before the anniversary
date, the lease automatically terminates by operation of law, unless
you meet the conditions of 43 CFR 3213.15.
Sec. 3213.15 What if I don't pay the entire amount of rental due?
If your payment is received timely, but is deficient by a nominal
amount,
[[Page 52753]]
your lease will not automatically terminate. A nominal amount is not
more than $100 or 5% of the total payment due, whichever is less. BLM
will notify you if your payment is deficient and will set a date by
which the deficient payment must be made. Failure to submit the
deficiency in the time allowed will result in lease termination as of
its anniversary date.
Sec. 3213.16 Will BLM notify me if my lease terminates?
Yes, BLM will send a notice by certified mail, return receipt
requested.
Sec. 3213.17 Can my lease be reinstated? If so, how?
Yes, if the lease was terminated for failure to timely pay your
rentals. You will be given 30 days to petition for reinstatement.
Sec. 3213.18 Who may petition to reinstate a lease?
Every record title holder of the lease must sign a petition for
reinstatement.
Sec. 3213.19 What must I do to obtain a reinstatement?
You must submit a petition to BLM requesting reinstatement. The
petition should include the serial number for each lease and state your
reason for late payment. You must also submit the rental, including any
back rental which has accrued from the date of termination with your
petition, if you have not already paid it to MMS. You must also include
an explanation of why the delay in payment was justifiable and not due
to a lack of diligence.
Sec. 3213.20 Are there reasons why BLM would not approve a
reinstatement?
Yes, BLM will not approve a reinstatement if:
(a) You do not prove that failure to pay rent on or before the
anniversary date was justifiable or was not due to a lack of diligence
on the part of the lessee;
(b) A valid lease has been issued for any of the lands prior to the
filing of a petition for reinstatement (BLM will not issue another
lease for at least 90 days after the date of termination); or
(c) The land has become unavailable for leasing.
Sec. 3213.21 When will my lease expire?
A lease expires at the end of its primary term (10 years) unless it
meets requirements for an extended or additional term. BLM will not
notify you when your lease expires at the end of the primary term.
Sec. 3213.22 Will BLM notify me when my lease expires if it is in an
extended term?
BLM will notify the lessee by decision that BLM has determined that
diligent efforts are not being made to use the geothermal resources.
The lease will expire 30 days after you receive the decision. During
those 30 days, you may request reconsideration of the decision by
submitting information detailing why you believe you have made diligent
efforts to use the resource.
Sec. 3213.23 May BLM cancel my lease?
BLM may cancel a lease after 30 days notice if we determine that
you violated the laws and regulations governing geothermal leases and
operations or you violated the lease terms. BLM may also cancel a lease
that was issued in error.
Sec. 3213.24 When is a cancellation effective?
(a) If cancellation is due to a violation of the laws, regulations
or lease terms, the cancellation is effective 30 days from your receipt
of notification of the violation. The cancellation of a lease issued in
error is effective upon issuance of the notice of cancellation. BLM
will not cancel the lease if:
(1) You have corrected the violation; or
(2) BLM determines that the violation can not be corrected during
the 30 day period and BLM determines you are making a good faith
attempt to timely correct the violation.
(b) You may request an evidentiary hearing regarding the violation
or proposed lease cancellation within 30 days from receipt of the
violation notification, in accordance with 43 CFR parts 4 and 1840. If
a hearing occurs and the administrative law judge decides a violation
occurred, you will have 30 days from receipt of the decision to
commence or complete any corrective action.
Subpart 3214--Personal and Surety Bonds
Sec. 3214.10 Who must post a geothermal bond?
The lessee, operating rights owner, or operator must file a bond
prior to the commencement of exploration operations, drilling
operations or whenever the operator is changed.
Sec. 3214.11 Who is covered by the bond?
The principals named on the bond and any other parties the
principal or surety has consented to cover are covered by the bond.
Sec. 3214.12 What does my bond cover?
Your bond covers all surface disturbing and down hole activities
related to drilling and associated operations on a Federal lease,
reclamation, payment of rentals and royalties, performance of all other
lease terms and conditions, and compliance with all applicable laws and
regulations.
Sec. 3214.13 What is the minimum dollar amount required under each
type of operation bond?
(a) For exploration activities, the bond may not be less than
$5,000 for each operation;
(b) For an individual lease, the bond may not be less than $10,000
for each lease;
(c) For a statewide bond which covers all of your leases and
operations in any one state, the amount may not be less than $50,000;
or
(d) For a nationwide bond which covers all of your leases and
operations nationwide, the amount may not be less than $150,000.
Sec. 3214.14 What kind of financial guarantee will BLM accept to back
my bond?
BLM will accept:
(a) Corporate surety bonds, provided that the surety company is
approved by the Department of Treasury (see Department of the Treasury
Circular No. 570 which is published in the Federal Register every year
on or about July 1); and
(b) Personal bonds, which are guaranteed by a cashier's check,
certified check, certificate of deposit, negotiable securities such as
Treasury notes, or irrevocable letter of credit (see 43 CFR 3214.22).
BLM will not accept cash to back a bond.
Sec. 3214.15 Is there a special bond form I must use?
You must use a bond Form (Form 3000-4, June 1988 or later editions)
approved by BLM for either a corporate surety bond or a personal bond.
Sec. 3214.16 Where must I submit my bond?
You must file personal or corporate surety bonds and statewide
bonds in the BLM State Office having jurisdiction over your lease or
operations. You may file nationwide bonds in any BLM State Office. You
must file bond riders in the BLM State Office where your bond is
located. For personal or corporate surety bonds you must file a single,
originally signed copy of the bond.
Sec. 3214.17 Who will BLM hold liable under the bond and what are
they liable for?
All interest owners in a lease assume full liability, jointly and
severally, from the effective date of the lease for compliance with all
applicable laws, regulations, lease terms and conditions. Among other
things, all interest owners are liable for:
[[Page 52754]]
(a) Well plugging and abandonment;
(b) Surface reclamation;
(c) Outstanding rental or royalty payments;
(d) Assessed royalties to compensate for drainage; and
(e) Other requirements related to operations on the lease.
Sec. 3214.18 What are my bonding requirements when a lease interest
is transferred to me?
(a) If the lands transferred to you contain a well or any other
surface disturbing activity which was not reclaimed by the original
lessee, you must post a bond. The bond must cover all of the
transferee's liability, and those holding an interest or engaging in
operations on the lease.
(b) If you previously furnished a statewide or nationwide bond, you
do not need to post an additional bond.
(c) If the operator provided the original bond, and the operator
does not change, you do not need to post a new bond.
(d) If the original lessee does not transfer all interest in the
lease to you, you may become a co-principal on the original bond.
Sec. 3214.19 How do I modify or extend the terms and conditions of my
bond?
You may modify your bond by submitting a rider to the BLM State
Office where your bond is held. There is no special form required.
Sec. 3214.20 Can BLM ever increase the bond amount above the
minimums?
Yes. BLM may increase the bond amount beyond the minimums set out
in 43 CFR 3214.13, if those amounts will not cover the estimated costs
of plugging and abandoning wells, abandoning utilization facilities,
and/or performing surface reclamation. BLM may also increase the amount
of your bond if BLM determines that:
(a) The liability on the lease exceeds the amount of the bond; or
(b) The operator has a history of noncompliance.
Sec. 3214.21 Where can I get a certificate of deposit or a letter of
credit?
You must obtain a certificate of deposit or letter of credit
through a Federally insured financial institution authorized to do
business in the United States.
Sec. 3214.22 What special requirements are there if I want to use a
certificate of deposit to back my bond?
Your certificate of deposit must:
(a) Be issued by a federally insured financial institution;
(b) Include on its face the statement, ``The Secretary of the
Interior or his delegate must approve redemption of this certificate by
any party'';
(c) Not expire;
(d) Automatically renew; and
(e) Show it is payable to the Department of the Interior--Bureau of
Land Management.
Sec. 3214.23 What special requirements are there if I want to use a
letter of credit to back my bond?
Your letter of credit must:
(a) Be issued by a federally insured financial institution
authorized to do business in the United States;
(b) Be payable to the Department of the Interior--BLM;
(c) Be irrevocable during its term and have an initial expiration
date of not less than one year following the date BLM receives it;
(d) Be automatically renewable for a period of not less than one
year, unless the issuing financial institution provides BLM with
written notice that it will no longer be renewed at least 90 days
before the letter of credit expires; and
(e) Include a clause that grants the Secretary authority to demand
immediate payment, if you fail to meet your obligations under the
regulations and lease terms.
Subpart 3215--Bond Collection After Default
Sec. 3215.10 In what circumstances does BLM collect on a bond?
If you fail to meet your obligations under the regulations or the
lease terms, BLM may collect up to the face amount of the bond.
Examples of some activities that may result in forfeiture of the bond
are failure to:
(a) Properly plug and abandon a well;
(b) Reclaim the lease area;
(c) Pay outstanding rental and royalty payments;
(d) Pay assessed royalties to compensate for drainage; and,
(e) Meet other requirements related to lease operations.
Sec. 3215.11 As the principal on the bond, may BLM require me to
restore the face amount of my bond or require me to replace my bond
after BLM collects on default?
Yes. If the bond is reduced or fully depleted, you must either:
(a) Post a new bond of equal value; or
(b) Restore the existing bond to the amount previously held, before
continuing any operations on the lease.
Sec. 3215.12 What if I do not restore the face amount or file a new
bond?
BLM may initiate action to shut-in any well(s) and proceed to
cancel all of your leases covered by the subject bond.
Sec. 3215.13 When will BLM cancel or terminate my bond?
(a) BLM does not cancel or terminate bonds. However, BLM will:
(1) Terminate the period of liability of a surety or other provider
of a bond at any time. The bond provider must provide 30 days' notice
to BLM and to the principals whose obligations are secured. You may not
conduct any operations after a bond is terminated, without providing a
new bond satisfactory to BLM. BLM will also terminate the period of
liability on an old bond once a new bond has been filed and BLM accepts
it; and
(2) Release your bond when we have determined, after the passage of
a reasonable period of time, that you have paid all royalties, rentals,
penalties, and assessments, satisfied all permit or lease obligations,
reclaimed the site, and taken effective measures to ensure that the
mineral prospecting or development activities will not have an adverse
effect on surface or subsurface resources.
(b) Any release of the bond does not release or waive any claim the
BLM may have against any person under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.
9601 et seq., or under any other applicable laws or any regulations.
Subpart 3216--Transfers
Sec. 3216.10 What types of lease interests can I transfer?
You can transfer record title, operating rights, or overriding
royalty interests.
Sec. 3216.11 Where and when am I required to file a transfer of
interest?
You must file your transfer in the BLM State Office in which your
lease is located if:
(a) You are conveying any interest in your lease;
(b) An interest holder dies; or
(c) A corporate merger or name change occurs.
Sec. 3216.12 When does a transferee assume responsibility for lease
obligations?
Upon BLM's approval of your transfer, the transferee assumes full
liability for performance of all lease obligations incurred after the
date of the transfer.
Sec. 3216.13 What are the responsibilities of the transferor?
The transferor remains responsible for payment of rents and
royalties accrued prior to the transfer, payment due to any drainage,
and all lease obligations that accrued prior to the transfer.
[[Page 52755]]
Sec. 3216.14 Are there required filing fees and forms associated with
filing my transfer?
Yes. The following table identifies filing requirements:
----------------------------------------------------------------------------------------------------------------
Type of transfer Form required Form number Number of copies Filing fee
----------------------------------------------------------------------------------------------------------------
Record Title.................... Yes............... 3000-3............ 3 executed copies. $50.00
Operating Rights................ Yes............... 3000-3(a)......... 3 executed copies. $50.00
Overriding Royalty.............. No................ Form 3000-3 or in 2 executed copies. $50.00
letter form.
Estate Transfers................ No................ N/A............... 1 List of Leases.. None
Corporate Mergers............... No................ N/A............... 1 List of Leases.. None
Name Changes.................... No................ N/A............... 1 List of Leases.. None
----------------------------------------------------------------------------------------------------------------
Sec. 3216.15 Is there a required time frame for filing requests for
approvals of transfers?
Yes.
(a) You must file a request for approval of transfers of record
title, operating rights, and overriding royalty within 90 days from the
date the transferor signs the document. If you do not file the request
within the 90 days, BLM may require you to recertify that the transfer
is still in force and effect.
(b) No specific time frame is required for filing estate transfers,
corporate mergers, and name changes. However, such documents must be
filed within a reasonable time.
Sec. 3216.16 Must I file separate requests for approval of transfers
for each lease?
Yes. You must file a separate request for approval of transfer for
each lease involving transfers of record title or operating rights,
unless you are transferring rights on more than one lease to the same
entity. In that case, you may file just one transfer application.
Sec. 3216.17 Where must I file estate transfers, corporate mergers and
name changes?
(a) If you hold a bond for any Federal lease, you must file estate
transfers, corporate mergers, and name changes in the BLM State Office
that maintains your bond.
(b) If you do not hold a bond, you must file estate transfer,
corporate merger and name change documents in the State Office having
jurisdiction over the lease.
Sec. 3216.18 How do I describe the lands in my lease transfer?
(a) If you are transferring the entire lease, a legal description
of the land is not required.
(b) If you are transferring a portion of the lease, describe the
lands in the same manner as they are described on the lease.
Sec. 3216.19 Can I transfer record title interest for less than 640
acres?
BLM will not approve a record title assignment in whole or in part
if the lease size is reduced to less than 640 acres, unless the total
acreage in the lease includes an irregular subdivision. BLM may make an
exception to the minimum acreage provision found at 43 CFR 3204.14, if
it is necessary to conserve the resource.
Sec. 3216.20 When does an assignment segregate a lease?
If you assign 100% of the record title interest in a portion of
your lease, BLM segregates the assigned portion from the original lease
and gives it a new serial number with the same terms and conditions as
those in the original lease.
Sec. 3216.21 When is my assignment/transfer effective?
Your transfer or assignment becomes effective the first day of the
month following its approval by BLM.
Sec. 3216.22 Does BLM grant all requests for approval of transfer?
No. BLM will not approve a transfer if the lease account is not in
good standing or the transferee does not qualify to hold a lease under
this part.
Subpart 3217--Cooperative Conservation Provisions
Sec. 3217.10 What is the purpose of unit agreements and cooperative
plans?
Lessees enter into a unit agreement or a cooperative plan to
conserve the resources of any geothermal field or area. Conservation of
the resource is achieved by collectively developing and operating a
geothermal field or area. BLM will not approve unit agreements which
BLM determines are not in the public interest. Unit agreement
application procedures are provided in 43 CFR part 3280.
Sec. 3217.11 What is the purpose for communitization or drilling
agreements?
Communitization or drilling agreements provide for resource
development when operators cannot independently develop separate tracts
due to established well spacing or well development programs. Lessees
may request approval of communitization or drilling agreements or BLM
may require the lessees to enter into such agreements.
Sec. 3217.12 What information regarding a proposed communitization or
drilling agreement must you submit to BLM?
You must provide the following information:
(a) The location of the separate tracts comprising the drilling or
spacing unit;
(b) The apportionment of production or royalties to each separate
tract;
(c) The name of each tract operator; and
(d) Provisions for the protection of the interests of all parties,
including the United States.
Sec. 3217.13 When is a communitization or drilling agreement
effective?
A communitization or drilling agreement is effective when it is
signed by BLM. BLM will not approve the agreement unless all involved
parties sign the agreement, and BLM determines that the tracts cannot
be independently developed.
Sec. 3217.14 Under what conditions will BLM approve operating,
drilling or development contracts?
BLM may approve an operating, drilling or development contract
when:
(a) The contract is entered into by one or more geothermal lessees
with one or more persons or partnerships;
(b) The contract is necessary for large scale operations and
financing related to the discovery, development, production, or
transmission, transportation or utilization of geothermal resources;
and
(c) BLM determines that the contract is required for the
conservation of the resource, or public convenience, or the interest of
the United States would be served by the approval.
[[Page 52756]]
Sec. 3217.15 What information must I submit to BLM regarding proposed
operating, drilling or development contracts?
You must submit:
(a) The contract and a statement of its need;
(b) All the interests held by the contractor in the area or field;
(c) The types and scheduling of operations to be conducted under
the contract;
(d) Indication that approval of the contract will not result in any
concentration of control over the production or sale of geothermal
resources which would violate the antimonopoly laws of the United
States;
(e) Copies of all contracts held by the same contractor in the area
or field; and
(f) Any other information BLM may require to make a decision
regarding the proposed contract or to attach any conditions of
approval.
Subpart 3250--Exploration Operations--General
Sec. 3250.10 What is the purpose, scope and authority of the subparts
pertaining to exploration operations?
(a) The regulations in this subpart establish procedures for
conducting geothermal exploration operations:
(1) On BLM administered public lands, whether leased or unleased
for geothermal resources, and covers lessees and nonlessees; and
(2) On any Federally owned lands leased for geothermal resources.
(b) The regulations in this subpart do not apply to:
(1) Unleased land when the surface is administered by an agency
other than the Bureau of Land Management, unless the surface management
agency decides to apply them;
(2) Privately owned land; or
(3) Casual use activities.
Subpart 3251--Permitting of Exploration Operations
Sec. 3251.10 What types of operations may I propose when submitting
an application for an exploration permit?
You may propose any activity fitting the definition of
``exploration operations''.
Sec. 3251.11 May I conduct exploration operations on my lease,
someone else's lease or unleased land?
Yes. You may conduct exploration operations on any public lands
open to geothermal leasing regardless of whether or not the lands are
leased. The right to conduct exploration operations under an approved
permit is nonexclusive. If the lands are already leased for geothermal
resources or other minerals, your operations may not unreasonably
interfere with or endanger other operations. In addition, you must not
unreasonably interfere with or endanger other authorized uses, or cause
unnecessary or undue degradation of the lands.
Sec. 3251.12 Do I need a permit prior to conducting exploration
operations?
Yes. You must have an approved exploration permit prior to
beginning any exploration operations, whether you have a geothermal
lease covering the lands or not.
Sec. 3251.13 What information must I submit with my application for
an exploration permit?
(a) For any exploration operation other than temperature gradient
wells, you must fully describe your exploration plans and procedures,
and include the approximate commencement and termination dates.
(b) For temperature gradient wells, you must fully describe your
drilling and completion procedures. You must submit the following
information submitted for a single well or for several wells proposed
to be drilled in an area of geologic and environmental similarity:
(1) A detailed description of the equipment, materials, and
procedures you will use;
(2) The depth of the well;
(3) The casing and cementing program;
(4) The circulation media (mud, air, foam, etc.);
(5) A description of the logs that you will run;
(6) A description and diagram of the blowout prevention equipment
you will use during each phase of drilling;
(7) The expected depth and thickness of fresh water zones;
(8) Anticipated lost circulation zones;
(9) Anticipated temperature gradient in the area;
(10) Well site layout and design;
(11) Existing and planned access roads or ancillary facilities;
(12) Source of drill pad and road building material and water
supply; and
(13) Any other information BLM may require.
(c) For both (a) and (b) above, you must provide:
(1) Evidence of bond coverage;
(2) Estimates of how much surface disturbance your exploration may
cause;
(3) A narrative statement describing the proposed measures to be
taken for the protection of the environment;
(4) Methods for reclamation of the surface; and
(5) All other information or data that BLM may require.
Sec. 3251.14 What action will BLM take on my permit?
BLM will notify you if additional information is needed to process
your permit. You will also be notified as to whether your permit has
been approved or denied.
Sec. 3251.15 How do I receive BLM approval to change permitted
exploration operations?
You may request a change to an approved exploration permit by
submitting a sundry notice. The sundry notice must fully describe the
requested changes. You may not proceed with the change until you
receive approval from BLM.
Sec. 3251.16 Must I submit data obtained through exploration
operations to BLM?
Yes. When you conduct exploration operations on your lease(s), you
must submit all data obtained as a result of the operations with the
notice of completion of exploration operations, unless BLM approves a
later submission.
Sec. 3251.17 Are there any bonding requirements for conducting
exploration operations?
(a) Yes. Before you start any operation BLM must receive and
approve one of the following:
(1) A surety or personal bond for the individual permit or lease
for at least $5,000;
(2) A statewide exploration bond of at least $25,000 covering all
exploration operations in the state in which the exploration is being
conducted;
(3) A nationwide exploration bond of at least $50,000 or
(4) A rider to an existing nationwide or statewide oil and gas
exploration bond to include geothermal resources exploration
operations.
(b) These bond amounts are minimums. BLM may require an increase if
you have a history of noncompliance or if the minimum amounts will not
cover the estimated costs of reclamation, or performance of other
permit terms.
Sec. 3251.18 When will the bond be released?
BLM will not release any bond until we are satisfied that you have
complied with the terms and conditions of the exploration permit,
including reclamation, associated sundry notices, and all applicable
requirements.
[[Page 52757]]
Subpart 3252--Conducting Exploration Operations
Sec. 3252.10 What operational requirements must I meet when
conducting exploration operations?
(a) You must comply with BLM orders and other standards and
procedures found in the applicable laws, regulations, geothermal
resources operational orders, notice to lessees, conditions to the
approved plan or permit, and lease terms.
(b) You must also:
(1) Take all necessary precautions to keep all exploration
operations under control at all times;
(2) Use trained and competent personnel;
(3) Use properly maintained equipment and materials;
(4) Use operating practices which ensure the safety of life and
property;
(5) Prevent the unnecessary waste of or damage to geothermal or
other energy and mineral resources; and
(6) Prevent injury.
Sec. 3252.11 What environmental requirements must I meet when
conducting exploration operations?
(a) You must conduct all operations performed under this part in a
workmanlike manner to:
(1) Protect the quality of surface and subsurface waters, air, and
other natural resources, including wildlife, soil, vegetation, and
natural history;
(2) Protect the quality of cultural, scenic and recreational
resources;
(3) Accommodate, as much as possible, other land uses; and
(4) Protect human and wildlife resources from unacceptable noise
level.
(b) You must remove or, with BLM's permission, properly store all
equipment and materials not in use.
(c) You must provide and use pits, tanks and sumps of adequate
capacity. They must be designed to retain all materials and fluids
resulting from drilling of temperature gradient wells or other
operations, unless otherwise specified by BLM. When no longer needed,
you must properly abandon pits and sumps.
(d) BLM may require you to submit a contingency plan describing
procedures to protect life, property, and the environment.
Sec. 3252.12 How deep may I drill a temperature gradient well?
You may drill a temperature gradient well to any depth approved by
BLM in your exploration permit or sundry notice. Regardless of depth,
you are not permitted to produce or inject geothermal resources. BLM
may modify your permitted depth at any time before or during drilling,
when the bottom hole temperature or other information indicates that
drilling to the original permitted depth could create risks to human
health, safety or the environment.
Sec. 3252.13 How long may I collect information from my temperature
gradient well?
You may collect information from your temperature gradient well for
as long as approved by BLM. BLM will require you to abandon a well when
BLM determines it is necessary to protect the environment or to meet
operational standards.
Sec. 3252.14 What are the requirements for completing and abandoning a
temperature gradient well?
You must submit a sundry notice to obtain BLM approval before
abandoning a well and conducting surface reclamation. You must complete
temperature gradient wells in a manner which will allow for abandonment
and which will prevent interzonal migration of fluids. Tubing must be
capped when not in use. You must also reclaim the surface to BLM
specifications.
Sec. 3252.15 Must I notify BLM when I have completed my exploration
operations?
Yes. You must file with BLM a notice of completion of exploration
operations describing the exploration operations, well history,
completion, abandonment procedures, and site reclamation measures
within 30 days after:
(a) Completion of any geophysical exploration operations;
(b) Completion of the drilling of temperature gradient wells;
(c) Abandonment of a temperature gradient well; and
(d) When all exploration sites are abandoned.
Subpart 3253--Inspection, Enforcement, and Noncompliance
Sec. 3253.10 Will BLM inspect my exploration operations?
Yes. BLM may inspect all exploration operations to ensure
compliance with all applicable laws, regulations, permit terms and
conditions of approval, lease terms, if applicable, orders, and notices
to lessees. BLM may require additional measures to be taken to correct
any unnecessary or undue damage to the lands. BLM will notify you of
the nature and extent of any required measures and the time during
which they must be completed.
Sec. 3253.11 What action may BLM take if my exploration operations are
not in compliance?
(a) If BLM finds your operation to be in noncompliance, BLM may
take one or both of the following actions:
(1) Issue you a written Incident of Noncompliance, directing you to
correct any deficiencies within a specific time period;
(2) Require you to mitigate unnecessary and undue degradation
caused by your operations; or
(3) Revoke or suspend your exploration permit, after notice and a
hearing in accordance with 43 CFR parts 4 and 1840.
(b) If the noncompliance continues or is of a serious nature, BLM
will take one or more of the following actions:
(1) Correct any operational deficiencies at your expense;
(2) Forfeit all or part of your bond;
(3) Direct modification or shutdown of your operations;
(4) Temporarily suspend your exploration permit if necessary to
protect public health, safety, or the environment. This temporary
suspension will go into effect immediately and will remain in effect
while appeals are pending; or
(5) Initiate cancellation of the lease, if applicable.
Subpart 3255--Exploration Operations Relief and Appeals
Sec. 3255.10 May I request variances from notices to lessees, permit
conditions of approval, and operational or other orders issued by the
BLM?
Yes. BLM may approve variances which:
(a) Continue to accomplish the purpose of a requirement; and
(b) Are necessary for the proper control of:
(1) Exploration operations;
(2) Conservation of natural resources; or
(3) Protection of human health and safety, property, or the
environment.
Sec. 3255.11 How may I appeal a BLM decision regarding my exploration
operations?
(a) A party adversely affected by a decision of the BLM may appeal
that decision to the Interior Board of Land Appeals as set forth in 43
CFR parts 4 and 1840.
(b) All decisions or approvals of BLM under this subpart shall
remain effective pending appeal unless the Interior Board of Land
Appeals determines otherwise under 43 CFR part 4.
[[Page 52758]]
Subpart 3260--Geothermal Drilling Operations--General
Sec. 3260.10 What types of geothermal operations are covered under
this subpart?
(a) This subpart establishes permitting and operating procedures
for drilling wells intended to flow test or produce geothermal fluids
and related activities, or inject fluids into a geothermal reservoir.
This subpart also addresses redrilling, deepening, plugging back, and
other subsequent well operations.
(b) This subpart does not address the drilling of temperature
gradient wells, which is described in subpart 3250 of this part, or the
utilization of geothermal resources, which is described in subpart 3270
of this part.
Sec. 3260.11 What standards apply to my drilling operations?
You must conduct all drilling operations:
(a) In a prudent manner;
(b) To prevent unnecessary and undue degradation to the surface and
subsurface;
(c) To maximize ultimate recovery;
(d) To result in the beneficial utilization of geothermal resources
with minimum waste; and
(e) In a manner consistent with the principles of multiple use and
protection of the environment.
Sec. 3260.12 Can BLM issue additional orders or instructions?
(a) Yes. BLM can issue detailed procedures under this subpart, so
long as they are consistent with the regulations under this part.
Detailed procedures will be in the form of:
(1) Geothermal Resource Operational Orders, for detailed
requirements on a nationwide basis;
(2) Notices to Lessees, for detailed requirements on a statewide or
regional basis;
(3) Other orders and instructions specific to a field or area;
(4) Permit conditions of approval; and
(5) Verbal orders which will be confirmed in writing.
(b) Before issuing Geothermal Resource Operation Orders or Notices
to Lessees, BLM will consult with appropriate Federal and state
agencies, lessees, operators, and other interested parties.
Subpart 3261--Permitting of Drilling Operations
Sec. 3261.10 What approval must I obtain prior to well pad
construction drilling?
You must have either an approved geothermal drilling permit, and
sundry notice for well pad construction, prior to beginning any surface
disturbance or drilling activities.
Sec. 3261.11 What information must I submit to get approval for
drilling operations or well pad construction?
(a) You must submit a completed and signed drilling permit or
sundry notice form. The drilling permit application must include at
least the following information:
(1) A detailed description of the equipment, materials, and
procedures you will use;
(2) The depth of the well;
(3) If applicable, a directional program including:
(i) The bottom hole location and distances from the nearest section
or tract lines;
(ii) The kick-off point;
(iii) The direction of deviation;
(iiii) The angle build-up and maximum angle; and
(iiiii) Plan and cross section maps indicating the surface and
bottom hole locations;
(4) The casing and cementing program;
(5) The circulation media (mud, air, foam, etc.);
(6) A description of the logs that you will run;
(7) A description and diagram of the blowout prevention equipment
you will use during each phase of drilling;
(8) The expected depth and thickness of fresh water zones;
(9) Anticipated lost circulation zones;
(10) Anticipated reservoir temperature and pressure;
(11) Anticipated temperature gradient in the area;
(12) A plat certified by a licensed surveyor showing the surveyed
surface location and distances from the nearest section or tract lines;
and
(13) Any other information BLM may require.
(b) A sundry notice for well pad construction must include a
description of the well pad layout and design.
Sec. 3261.12 What is a plan of operations?
A plan of operation describes your plans and procedures for
production and utilization of the geothermal resources from the lease.
It contains enough information about your proposal to permit BLM to
assess the environmental impacts of your operations. This generally
includes:
(a) Well pad layout and design;
(b) A description of existing and planned access roads;
(c) A description of any ancillary facilities;
(d) The source of drill pad and road building material;
(e) The source for water;
(f) A statement of surface ownership;
(g) Plans for reclamation of the surface;
(h) A description of environmental protection measures; and
(i) Any other information BLM may require.
Sec. 3261.13 When must I have an approved plan of operations?
You must submit a plan of operations and have it approved by BLM
prior to commencing production operations on a lease. You do not need
an approved plan for subsequent well operations, the construction of
new production facilities or the alteration of existing production
facilities, unless BLM notifies you that you must submit a plan.
Sec. 3261.14 Must I submit my drilling permit application and the plan
of operations at the same time?
No.
(a) You may submit your drilling permit application and plan of
operations simultaneously or separately. If you submit them separately:
(1) You must submit the plan of operations before the drilling
permit application to allow BLM time to comply with the National
Environmental Policy Act (NEPA);
(2) You must submit a sundry notice for well pad construction when
you are ready to begin actual pad construction; and
(3) You must submit the plan of operations and drilling permit
application when you are ready to drill a well. You should submit the
plan of operations and drilling permit application at the same time.
(b) If you submit the drilling permit application and plan of
operations simultaneously, the approved drilling permit application
will authorize both the pad construction and the drilling and testing
of the well.
Sec. 3261.15 Can a plan of operations and drilling permit apply to
more than one well?
Yes.
(a) The plan of operation can apply to any number of well sites
that are in areas of similar geology and environment.
(b) A drilling permit application may apply to more than one well
if you will drill the wells in the same manner, and you expect to
encounter similar reservoir conditions.
[[Page 52759]]
Sec. 3261.16 How do I amend a plan of operations or a drilling permit
application?
------------------------------------------------------------------------
If you want to amend a plan of operations
or drilling permit application . . . Then . . .
------------------------------------------------------------------------
(a) That has not been approved............ Submit an amended plan of
operation or drilling
permit application.
(b) That has been approved................ Submit a sundry notice
describing your proposed
change.
------------------------------------------------------------------------
Sec. 3261.17 Do I need a bond before I build a well pad or drill a
well?
Before starting any operation, BLM must approve either a surety or
personal bond in the amounts identified under 43 CFR 3214.13(b), (c),
or (d).
Sec. 3261.18 How will BLM review my application documents and notify
me of their status?
(a) When BLM receives your plan of operations, BLM will begin a
review in accordance with NEPA. You will be notified if BLM needs more
information during the NEPA review process. You will also be notified
when BLM signs the Record of Decision (ROD).
(b) BLM will review your drilling permit application or sundry
notice for well pad construction for conformance with your plan of
operation and any mitigation measures developed during review of your
plan of operation. BLM will notify you if we need additional
information and will return the drilling permit application or sundry
notice to you for correction.
(c) BLM will review your drilling permit application for technical
adequacy and compliance with geothermal resource operation orders,
notices to lessees, or other orders that BLM may have issued. BLM will
notify you if we need additional information and will return the
drilling permit application to you for correction.
Sec. 3261.19 How do I get approval to change an approved drilling
operation?
(a) You must submit a sundry notice describing the proposed
changes. You may not proceed with the changes until you have received
approval from BLM. For operations such as redrilling, deepening, or
plugging back a well, we may require you to submit a new drilling
permit application (see 43 CFR 3261.20), if we determine that you are
proposing a significant change to the approved drilling permit
application. An example of a significant change would be redrilling the
well to a completely different target, especially a target in an
unknown area.
(b) For changes that will create additional surface disturbance,
BLM may also require you to submit an amendment to the plan of
operation.
(c) BLM may give you verbal approval for a change requiring
immediate action, such as those necessary to protect life or property.
In this case, you must submit a written sundry notice within 48 hours
of BLM's verbal approval.
Sec. 3261.20 How do I get approval for subsequent well operations?
(a) You must submit a sundry notice describing your proposed
operation. You may not proceed with the operation until you have
received approval from BLM.
(b) BLM may waive the requirement for a sundry notice for work we
determine to be routine such as cleanouts, surveys, or general
maintenance. You must continue to submit sundry notices for the
specific operation unless you receive a waiver from BLM. For
information on how to obtain a waiver, contact BLM.
Subpart 3262--Conducting Drilling Operations
Sec. 3262.10 What operational requirements must I meet when drilling a
well?
(a) You must:
(1) Take all necessary precautions to keep the well under control
at all times;
(2) Use trained and competent personnel;
(3) Use properly maintained equipment; and
(4) Use operating practices that ensure the safety of life and
property.
(b) You must use sound engineering principles and take into account
all pertinent data when:
(1) Selecting the types and weights of drilling fluids;
(2) Designing a system for controlling fluid temperatures;
(3) Designing a blowout prevention equipment; and
(4) Designing a casing and cementing program.
(c) You must conduct your operation in accordance with:
(1) The Act and the regulations of this part;
(2) Orders;
(3) Notices to lessees;
(4) Lease terms;
(5) Approved plans and permits;
(6) Conditions of approval;
(7) Other instructions from BLM; and
(8) Any other applicable laws and regulations.
Sec. 3262.11 What environmental requirements must I meet when drilling
a well?
(a) You must conduct operations to:
(1) Protect the quality of surface and subsurface water, air,
natural resources including wildlife, soil, vegetation, and natural
history;
(2) Protect the quality of cultural, scenic, and recreational
resources;
(3) Accommodate, as much as possible, other land uses;
(4) Minimize noise;
(5) Prevent injury; and
(6) Prevent damage to property and unnecessary or undue degradation
of the lands.
(b) You must remove or, with BLM's approval, properly store all
equipment and materials that are not in use.
(c) You must retain all fluids from drilling and testing the well
in properly designed pits, sumps, or tanks.
(d) When a pit or sump is no longer needed, you must abandon it and
restore the site as directed by BLM.
(e) BLM may require you to submit a contingency plan describing how
you will protect life, property, and the environment.
Sec. 3262.12 Must I post a sign at every well?
(a) Prior to drilling a well, you must place a sign in a
conspicuous place containing the following information:
(1) The name of the lessee or operator;
(2) Lease serial number;
(3) Well number; and
(4) Well location described by section, township, range, and
quarter quarter-section.
(b) You must maintain each well sign until the well site is
reclaimed.
Sec. 3262.13 Can BLM require well spacing?
Yes. BLM can require well spacing if we determine that it is
necessary for proper development. If BLM does require well spacing, we
will consider the following factors:
(a) Hydrologic, geologic, and reservoir characteristics of the
field minimizing well interference;
(b) Topography;
(c) Unreasonable interference with multiple use of land; and
(d) Protection of the environment, including ground water.
Sec. 3262.14 Can BLM require me to take samples or perform tests and
surveys?
Yes. We may require you to sample or test the well to determine any
or all of the following:
(a) The mechanical integrity of a well;
(b) The identity and characteristics of formations;
(c) Presence of geothermal resources, water, or reservoir energy;
(d) Quality and quantity of geothermal resources;
(e) Well bore angle and direction of deviation;
[[Page 52760]]
(f) Formation, casing, or tubing pressures;
(g) Temperatures; or
(h) Rate of heat or fluid flow.
Subpart 3263--Well Abandonment
Sec. 3263.10 May I abandon a well without notifying BLM?
No. You must have an approved sundry notice before you start
abandoning any well.
Sec. 3263.11 What information must I submit to get my sundry notice
for abandonment approved?
You must submit the following information along with the sundry
notice:
(a) All the information required in the well completion report (see
43 CFR 3266.10), unless BLM already has that information;
(b) A detailed description of the proposed work;
(c) Type, depth, length, and interval of plugs;
(d) How you will verify the plugs (tagging, pressure testing,
etc.);
(e) Mud weight and viscosity that you will use in the uncemented
portions;
(f) Plans for perforating or removing casing;
(g) Plans for surface restoration; and
(h) Any other information that BLM may require.
Sec. 3263.12 How will BLM review my sundry notice for abandonment and
notify me of its status?
(a) After BLM receives your sundry notice, we will review it for
technical and environmental adequacy. BLM will notify you if we need
more information and will send you an approved sundry notice.
(b) BLM may grant verbal approval for plugging requiring immediate
action. You must promptly submit the information required in 43 CFR
3263.11 within 48 hours of BLM's verbal approval.
Sec. 3263.13 What must I do to restore the site?
You must remove all equipment and materials and restore the site to
a condition that BLM or the surface management agency specifies.
Sec. 3263.14 Can BLM require me to abandon a well?
Yes. If BLM determines that the well is no longer necessary for
geothermal resource production, injection, or monitoring, we can
require you to abandon the well. BLM may also require you to abandon a
well if we determine that the well is not mechanically sound. In either
case, you will be given the opportunity to justify why the well should
not be abandoned before BLM issues final orders to abandon the well.
Sec. 3263.15 Can I abandon a producible well?
Yes. You must submit the information required in 43 CFR 3263.11.
BLM may also require you to submit a statement of why you want to
abandon the well. BLM may deny the request if we determine the well is
needed to protect a lease from drainage, or to protect the interests of
the United States or to protect the environment.
Subpart 3266--Reports
Sec. 3266.10 What information must I submit after completing a well?
You must submit a well completion report within 30 days after you
complete a well. Your report should include at least the following:
(a) A complete chronological well history;
(b) A copy of all logs;
(c) Copies of all directional surveys; and
(d) Copies of all mechanical, flow, reservoir, and other test data.
Sec. 3266.11 What information must I submit after completing
subsequent well operations?
(a) You must submit a report of subsequent well operations within
30 days of completing the operations. At a minimum, your report must
include:
(1) A complete chronological history of the work done;
(2) A copy of all logs;
(3) Copies of all directional surveys;
(4) Copies of all mechanical, flow, reservoir, and other test data;
and
(5) A statement of whether you accomplished the desired result. For
example, if the well was acidized to increase production, say whether
there was an increase in the production rate when you put the well back
on line.
(b) BLM may waive the requirement for a report of subsequent
operations for work we determine is routine such as cleanouts, surveys,
or general maintenance. You must submit the report unless you receive a
waiver. You may obtain a waiver by verbally requesting one from BLM at
least 24 hours prior to the planned operations.
Sec. 3266.12 What information must I submit after abandoning a well?
You must submit a report of well abandonment within 30 days of
abandoning the well. If site restoration is to be done at a later date,
you may submit a separate report within 30 days of completing site
restoration. The well abandonment report must contain the following
information:
(a) A complete chronological history of work done;
(b) A description of each plug, including:
(1) Amount of cement used;
(2) Type of cement used;
(3) Depth that the drill pipe or tubing was run to set the plug;
(4) Depth to top of plug; and
(5) If the plug was verified, was it verified by tagging or
pressure testing; and
(c) A description of surface restoration procedures.
Sec. 3266.13 What well records must I maintain for each well?
Yes. You must keep the following information for each well at a
location that is available to BLM:
(a) A complete and accurate drilling log in chronological order;
(b) All logs;
(c) Water or steam analyses;
(d) Hydrologic or heat flow tests;
(e) Directional surveys; and
(f) A complete log of all subsequent well operations such as
cementing, perforating, acidizing, and well cleanouts.
Sec. 3266.14 Must I notify BLM of accidents occurring on my lease?
Yes. You must inform BLM of all accidents within 24 hours which
affect operations or create environmental hazards. You must also submit
a report fully describing the incident, if required by BLM.
Subpart 3267--Confidential, Proprietary Information
Sec. 3267.10 Must I identify confidential, proprietary information
that I submit to BLM?
Yes. You must clearly mark every page with the words ``Confidential
Information''.
Sec. 3267.11 Will BLM treat information marked as confidential, as
such?
Not necessarily. BLM will treat information that is exempt from
release under the Freedom of Information Act as confidential. See 43
CFR part 2 for the regulations addressing privileged documents. BLM
will not treat surface location, surface elevation, or well status as
confidential.
Sec. 3267.12 How long will confidential information I submit to BLM
remain confidential?
BLM will consider the information confidential as long as it
remains exempt from release under the Freedom of Information Act (see
43 CFR part 2).
[[Page 52761]]
Subpart 3268--Inspection, Enforcement, and Noncompliance
Sec. 3268.10 What part of my drilling operations can BLM inspect?
(a) BLM can inspect all of your drilling operations on Federal and
Indian land regardless of surface ownership. We may inspect your
drilling operations for compliance with:
(1) Your approved plan of operation;
(2) Your approved drilling permit;
(3) Conditions of approval;
(4) Lease terms and conditions;
(5) Regulations and orders; and
(6) Notices to lessees.
(b) BLM can also inspect all of your maps, well logs, surveys,
records, books, and accounts relative to your drilling operation.
Sec. 3268.11 What action can BLM take if my operations are in
noncompliance?
(a) If BLM determines your operations are in noncompliance, we may
take the following action:
(1) Issue you a written Incident of Noncompliance, directing you to
correct any deficiencies within a specific time period;
(2) Require you to mitigate unacceptable environmental impacts
caused by your operation; and
(3) Revoke or suspend your plan of operations after notice and
hearing in accordance with 43 CFR parts 4 and 1840.
(b) If the noncompliance continues or is of a serious nature, BLM
will take one of the following actions:
(1) Enter your lease, and correct any deficiencies at your expense;
(2) Forfeit all or part of your bond;
(3) Direct modification or shutdown of your operations if the
operations are unsafe or have the potential to cause significant or
irrevocable harm to the environment;
(4) Temporarily suspend your exploration permit if necessary to
protect public health, safety, or the environment. This temporary
suspension will go into effect immediately and will remain in effect
while appeals are pending;
(5) Initiate cancellation of the lease; or
(6) Take action against the lessee, who is ultimately responsible
for noncompliance.
Subpart 3269--Geothermal Drilling Operations Relief and Appeals
Sec. 3269.10 May I request a variance from notices to lessees, permit
conditions of approval, and operational and other orders issued by BLM?
Yes.
(a) Your request must include enough information to explain:
(1) Why you cannot meet the provisions of the NTL, permit condition
of approval, geothermal resource operational order, or other orders
issued by BLM; and
(2) Why you need the variance to control your well, conserve
natural resources, protect human health and safety, protect property,
or protect the environment.
(b) BLM may approve your request verbally or in writing. If BLM
gives you a verbal approval, we will follow up with written
confirmation.
Subpart 3270--Utilization of Geothermal Resources--General
Sec. 3270.10 What types of geothermal operations are permitted under
this part?
The regulations in this subpart cover the permitting and operating
procedures for the utilization of geothermal resources. This includes
the following types of development on leased Federal land or Indian
land:
(a) Electrical generation facilities;
(b) Direct use facilities;
(c) Related utilization facility operations;
(d) Actual and allocated well field production and injection;
(e) Related well field operations; and
(f) Research and demonstration projects.
Sec. 3270.11 What standards apply to my utilization operations?
You must make certain that all utilization:
(a) Conforms to prudent operating practices;
(b) Is conducted in a manner that prevents unnecessary and undue
degradation to surface and subsurface resources;
(c) Results in the maximum ultimate recovery; and
(d) Results in the beneficial use of geothermal resources with
minimum waste.
Sec. 3270.12 What are my responsibilities for utilizing geothermal
resources on a lease?
(a) The facility operator must comply with:
(1) Lease terms and stipulations;
(2) The approved plan of utilization;
(3) Utilization permit and production permit conditions of
approval;
(4) All applicable laws and regulations;
(5) Geothermal resources operational orders, and
(6) Other written or oral orders that BLM may issue.
(b) The facility operator must also take all reasonable precautions
to prevent waste, injury to persons, damage to real or personal
property, and must minimize impacts to surface and subsurface resources
and the environment.
Subpart 3271--Permitting of Utilization Operations
Sec. 3271.10 How do I obtain authorization to construct and test a
utilization facility?
------------------------------------------------------------------------
If you want to construct a facility * * Then you need * * *
-------------------*----------------------------------------------------
(a) on Federal lands leased for POU, UP, and SLA.
geothermal resources and you are the
lessee and facility operator.
(b) on Federal lands leased for POU, UP, SLA, and JUA.
geothermal resources, and you are not
the lessee.
(c) on Federal lands leased for POU, UP, and SLA.
geothermal resources committed to a
unit and you are the unit operator.
(d) on Federal lands leased for POU, UP, SLA, and JUA.
geothermal resources committed to a
unit and you are not the unit operator.
(e) on private land committed to a POU and UP only addressing
Federal unit and you are the unit pipelines or other facilities
operator. on Federal land.
(f) on private land committed to a POU and UP only addressing
Federal unit and you are not the unit pipelines or other facilities
operator. on Federal land, and JUA.
(g) on private land that will utilize POU and UP only addressing
Federal goethermal resources from pipelines or other facilities
other Federal leases. on Federal land.
(h) on your Federal split estate lease. no permits required to
construct and test facility.
(i) on a Federal split estate lease and POU and UP only addressing
you are not the lessee. pieplines or other facilities
on Federal land, and JUA.
[[Page 52762]]
(j) on unleased public land............ FLPMA R-O-W.
------------------------------------------------------------------------
Note: ``POU'' is a Plan of Utilization
A``UP'' is a Utilization Permit
A``SLA'' is a Site License Agreement
A``JUA'' is a Joint Utilization Agreement
A``FLPMA'' is the Federal Land Policy and Management Act
A``ROW'' is a Right of Way
Sec. 3271.11 How do I obtain authorization to begin commercial
operations?
The lessee, operator, or third party facility operator must submit
an application for a production permit to BLM for approval if the
commercial operations involve Federal mineral resources.
Subpart 3272--The Contents and Review of a Plan of Utilization and
Utilization Permit
Sec. 3272.10 What must I do prior to commencing site preparation,
construction and testing of the facility?
You must submit a plan of utilization and a utilization permit, and
both must be approved by BLM before you begin.
Sec. 3272.11 What information must I submit in a plan of utilization?
A plan of utilization consists of a description of the proposed
facilities and anticipated environmental impacts and proposed measures
for mitigating environmental impacts.
Sec. 3272.12 How should I describe the proposed facility?
Your description of the proposed facility should include the
following information:
(a) A generalized description of all proposed structures and
facilities, including their size, location, and function;
(b) A generalized description of proposed facility operations
including estimated total production and injection rates, estimated
well flow rates, pressures, and temperatures, facility net and gross
electrical generation, and, if applicable, interconnection with other
utilization facilities. If it is a direct use facility, you must submit
information required by BLM to permit BLM to determine the amount of
resource utilized;
(c) A contour map covering the entire utilization site showing
production and injection well pads, pipeline routes, facility
locations, drainage structures, and existing and planned access and
lateral roads;
(d) A description of site preparation and associated surface
disturbance including the source for site or road building materials,
amounts of cut and fill, drainage structures; an analysis of all site
evaluation studies prepared for the site(s), and a description of any
additional tests, studies, or surveys which are planned to assess the
geologic suitability of the site(s);
(e) The source, quality, and proposed consumption rate of water
used during facility operations, and the source and quantity of water
used during facility construction;
(f) The methods for disposing of, or abating the emission of,
noncondensible gases;
(g) An estimated number of personnel needed during construction and
operation of the facility;
(h) A construction schedule;
(i) A schedule for testing of the facility and/or well equipment,
and for the start of commercial operations;
(j) A description of architectural landscaping or other measures to
minimize visual impacts; and
(k) Any additional information or data which BLM may require.
Sec. 3272.13 How should I describe the environmental protection
measures I intend to take?
(a) Your description should include, at a minimum, measures
proposed to:
(1) Prevent or control fires;
(2) Prevent soil erosion;
(3) Protect surface or ground water;
(4) Protect fish and wildlife;
(5) Protect cultural, visual, and other natural resources;
(6) Minimize air and noise pollution; and
(7) Minimize hazards to public health and safety during normal
operations.
(b) Your description should also include provisions for monitoring
facility operations to ensure continuing compliance with applicable
regulations, geothermal resources operational orders, and noise, air,
and water quality standards, and for other environmental parameters
identified by BLM.
(c) BLM may require you to collect data concerning the existing air
and water quality, noise, seismicity, subsidence, and ecological
systems, or other environmental information for a period of at least
one year prior to production. BLM will approve data collection
methodologies. BLM may reduce the data collection requirements of this
paragraph, including the duration of data collection, commensurate with
the level of potential environmental impacts from the proposed
operations.
(d) A description of the methods for the abandonment of the
utilization facilities and the site restoration procedures to comply
with applicable requirements of the regulations, lease, geothermal
resources operational orders or other BLM orders, notices to lessees,
and permit conditions of approval.
(e) You must also submit any additional information or data which
BLM may require.
Sec. 3272.14 How will BLM review my plan of utilization and notify me
of its status?
(a) BLM will review the plan of utilization for completeness,
technical soundness and environmental acceptability. In coordination
with the appropriate Federal surface management agency and in
cooperation with other concerned Federal, state, and local agencies,
BLM will comply with the National Environmental Policy Act. We will
notify you if we need additional information and when we approve,
modify or deny the Plan of Utilization.
(b) BLM will make all documents submitted as part of or in support
of a Plan of Utilization available to all appropriate Federal, state,
and local agencies, and interested members of the public for review;
except that we will not make available for public review any
information that is not releasable under the Freedom of Information
Act, and which was submitted as part of the plan. See 43 CFR 3267.11.
(c) Before approving your plan of utilization, BLM will determine
that the lease is in good standing, and you have filed an acceptable
bond in accordance with the requirements of 43 CFR 3214.13 and 3273.19.
Sec. 3272.15 How do I obtain authorization to construct and test my
facility?
You must submit a utilization permit along with your plan of
utilization. BLM must approve the permit before you construct or test
your facility.
[[Page 52763]]
Subpart 3273--Applying for and Obtaining a Site License
Sec. 3273.10 When do I need a site license?
You must have an approved site license if you plan to construct and
operate a utilization facility on Federal lands leased for geothermal
resources.
Sec. 3273.11 Are there any situations in which I do not need a site
license?
(a) You do not need a site license if your facility will be on
split estate land where the surface is not owned by the United States.
(b) You do not need a site license for installing a testing
facility or using the production of an individual well for electrical
power generation or another non-electrical beneficial use. However, you
do need a site license if your facility is for transmission or use of
more than 10 megawatt (MW) maximum output.
(c) You do not need a site license for a research and demonstration
project sited on a Federal geothermal lease, if:
(1) The project does not have more than 20 MWs electrical capacity;
and
(2) The facility does not have a projected life of more than 5
years from the date it becomes operational. If you intend to convert
your research and development facility to a permanent commercial
operation after the initial 5 year period, you must apply for a license
prior to the end of the 5 years. However, you do need a drilling permit
under subpart 3260 of this part for such facilities.
Sec. 3273.12 What if the lands I want a license for are not
administered by BLM?
(a) If you want a license for land that is withdrawn or reserved
for the use of a Federal agency other than BLM, BLM will consult with
the surface management agency before issuing the license, and include
any terms and conditions requested by the agency.
(b) Where the land is subject to section 24 of the Federal Power
Act, BLM will issue the license subject to terms and conditions
requested by the Federal Energy Regulatory Commission.
Sec. 3273.13 Are any lands not available for geothermal site licenses?
BLM may not issue a site license for lands that are not available
for geothermal leasing. A list of these lands is set out at 43 CFR
3201.11.
Sec. 3273.14 What area does a site license include?
The site license area will, as determined by BLM, be a reasonably
compact tract of Federal land limited to as much of the surface as is
necessary for the adequate utilization of geothermal resources.
Sec. 3273.15 What information must I include in my site license
application?
Your site license application must include :
(a) A description of the boundaries and the area of the land
applied for, as determined by a certified licensed surveyor, along with
a description of the land by legal subdivision, section, township and
range, or by approved protraction surveys, if applicable;
(b) A non-refundable fee of $50;
(c) A site license bond;
(d) The first year's rental, if applicable (see 43 CFR 3273.16);
(e) A copy of the joint utilization agreement, when required (see
43 CFR 3274.10);
(f) A description of the proposed facility, including any
substations, indicating whether you intend to interconnect your
proposed facility with other facilities and to sell the energy you
produce to others or use it yourself; and
(g) A statement showing the amount of merchantable timber, if any,
that you will use or destroy by constructing your facility, and a
statement agreeing to deposit with BLM, in advance of construction, the
stumpage value of the timber to be used or destroyed. BLM will
determine the value, which will not exceed fair market value.
Sec. 3273.16 What is the annual rental for a site license or direct
use facility?
The annual site license area rental will be determined by BLM and
will be set forth in your approved site license. The amount will be not
less than $100 per acre or fraction thereof for an electrical
generation facility or direct use area and not less than $10 per acre
or fraction thereof for a facility for non-electrical purposes. You
must submit the first year's rental to BLM. All subsequent rental
payments must be made to MMS.
Sec. 3273.17 Can BLM reassess the annual rental for my site license?
Yes. The site license will contain a provision permitting BLM to
reassess the rental for lands covered by the license beginning with the
tenth year and then in ten-year intervals.
Sec. 3273.18 Must all facility operators pay the annual site license
rental?
No. A lessee siting a unitization facility on his or her lease, or
a unit operator siting a utilization facility on leases committed to
his or her unit, need not pay the annual rental. Only a facility
operator other than a lessee or unit operator must pay the annual
rental.
Sec. 3273.19 What are the bonding requirements for a site license?
(a) Before BLM issues a site license for an electrical generation
facility, the facility operator must submit a surety or personal bond
of at least $100,000. BLM can waive this requirement if we determine
that any nonelectrical uses are unlikely to cause significant
environmental harm.
(b) Before BLM issues a site license for a direct use facility, the
facility operator must furnish BLM with a surety or personal bond in an
amount specified by BLM.
(c) In either case, the terms of the bond must provide for
compliance with conditions of the site license, lease terms, and the
regulations of this part.
Sec. 3273.20 What are my obligations under the site license?
As the facility operator, you:
(a) Are liable for all damages to the lands or property of the
United States caused by yourself, your employees or contractors or
employees of such contractors;
(b) Must indemnify the United States against any liability for
damages or injury to persons or property arising from the occupancy or
use of the lands authorized under the site license; and
(c) Must remove any structure(s) and restore any surface
disturbance, when no longer needed during facility construction or
operation. This will also include the utilization facility if you are
unable to operate the facility and BLM determines that you are not
diligent in your efforts to return the facility to operation.
Sec. 3273.21 How long will my site license remain in effect?
BLM will grant a site license for a primary term of 30 years,
independent of the term of the lease on which the facility is sited.
The site license will remain in effect as long as you use Federal
geothermal resources in a diligent manner and you are complying with
all provisions of the license. Should the lease on which the site
license is located expire or terminate, you may apply to convert the
authority for the facility siting to a permitted facility under the
provisions of section 501 of FLPMA, 43 U.S.C. 1761, if the lands are
located on BLM-managed lands. For all other lands, you must obtain
authorization to continue using the surface for the facility siting
from the appropriate surface management agency, unless that continuing
authorization has already been granted by the surface management
agency.
[[Page 52764]]
Sec. 3273.22 May BLM terminate my site license?
Yes, BLM may terminate your site license by written order for any
of the following reasons:
(a) BLM may terminate your site license for any violation of the
license terms and conditions, lease terms, applicable laws and
regulations, geothermal resources operational orders and conditions of
the plan of utilization, utilization permit, and/or production permit,
including any conditions, after a 30 day notice. The termination will
not take effect if, within the 30 day notice period, you correct the
violation or BLM determines the violation can not be corrected within
30 days and you initiate and continue diligent efforts to correct the
violation.
(b) BLM may also terminate your site license if we determine you
are no longer diligently utilizing Federal geothermal resources.
Sec. 3273.23 May I relinquish my site license?
Yes. You may relinquish your license by submitting a written notice
for BLM review and approval. BLM will not approve the relinquishment
until the conditions or requirements identified in 43 CFR 3273.20 are
met.
Sec. 3273.24 May I assign or transfer my site license?
Yes. You may transfer your site license in whole or in part. You
must submit any transfer to BLM for approval, along with a $50 filing
fee. Your application for transfer must include a written statement
from the person or entity to whom you are transferring the license that
they are qualified to hold a lease under 43 CFR 3201.11, and a written
statement that they will comply with all terms and conditions of the
license. The transfer is not valid until BLM approves it.
Sec. 3273.25 What if my site license application involves lands under
the jurisdiction of another agency?
BLM will consult with and obtain the consent of the appropriate
surface management agency prior to issuing the site license.
Subpart 3274--Submitting a Joint Utilization Agreement
Sec. 3274.10 What is the purpose of a joint utilization agreement?
A joint utilization agreement documents that:
(a) A lessee or unit operator is allowing a third party to occupy
the lease or unit for facility construction and operation of a
utilization facility, when the facility is located on Federal land
leased for geothermal resources.
(b) You do not need a joint utilization agreement when a site
license is not required.
Sec. 3274.11 Which parties must sign the joint utilization agreement?
Any third part facility operator must sign. Additionally,
(a) If the utilization facility is located on a Federal lease not
committed to a unit agreement, the Federal geothermal lessee must sign;
or
(b) If the utilization facility is located on a lease committed to
a unit agreement, the unit operator must sign.
Subpart 3275--Applying for and Obtaining a Production Permit
Sec. 3275.10 What information must I include in my application for a
production permit?
The facility operator must include the following information in a
production permit application:
(a) The design, specifications, observation, and calibration
schedule of production, injection, and royalty meters;
(b) A schematic diagram of the utilization site or individual well
indicating the location of each production and royalty meter. If the
sales point is located off the utilization site, then you must provide
a generalized schematic diagram of the electrical transmission or
pipeline system, including the location of meters;
(c) A copy of the sales contract for the sale and/or utilization of
geothermal resources;
(d) A description and analysis of reservoir, production, and
injection characteristics, including the flow rates, temperatures, and
pressures of each production and injection well;
(e) A schematic diagram of each production or injection well
showing the wellhead configuration including meters;
(f) A schematic flow diagram of the utilization facility including,
if applicable, interconnections with other facilities;
(g) A description of the utilization process in sufficient detail
to enable BLM to determine if the resource will be utilized in an
acceptable manner;
(h) The planned safety provisions for emergency shutdown to protect
public health and safety and for protection of the environment. This
should include a schedule for the testing and maintenance of safety
devices;
(i) The environmental and operational parameters to be monitored
during the operation of the facility and/or well(s); and
(j) Any additional information or data that BLM may require.
Sec. 3275.11 How will BLM review my application for a production
permit?
BLM will review the documents for completeness and technical
soundness and will inform you if we need additional information. BLM
will ensure that your meters meet our accuracy standards.
Sec. 3275.12 Can I get an authorization even if I cannot prove I can
operate within required standards?
Yes, but BLM may limit your authorization to operate your facility
to a specified period of time. During that time, you may obtain actual
facility and well data, or both, to verify that the facility can
operate within environmental and operational standards. BLM may extend
the permit through approval of a sundry notice.
Subpart 3276--Conducting Utilization Operations
Sec. 3276.10 Can I change my approved plan of utilization or
production permit?
Yes. You must submit a sundry notice describing your proposed
change. You may not proceed with your change until you receive BLM
approval.
Sec. 3276.11 What are the facility operator's obligations?
(a) The facility operator must comply with BLM's orders, applicable
laws and regulations, geothermal resources operational orders, notice
to lessees, lease terms, the approved plan, and conditions to the
approved plan or permit. You must use:
(1) Prudent operating practices to ensure the safety of life and
property;
(2) Trained and competent personnel; and
(3) Properly maintained equipment and materials.
(b) You must base the design of the utilization facility siting and
operation on sound engineering principles and other pertinent geologic
and engineering data.
(c) You are responsible for preventing waste of or damage to
geothermal and other energy and minerals resources, and unnecessary or
undue degradation to the lands.
(d) You are responsible for any noncompliance resulting from any
utilization related operations.
Sec. 3276.12 Are there environmental and safety requirements for lease
operations?
Yes. The facility operator must:
(a) Perform all utilization facility operations in a workmanlike
manner to:
(1) Protect the quality of surface and subsurface waters, air, and
other natural resources, including wildlife, soil, vegetation, and
natural history;
[[Page 52765]]
(2) Protect the quality of cultural, scenic and recreational
resources;
(3) Accommodate, as much as possible, other land uses;
(4) Protect human and wildlife resources from unacceptable levels
of noise;
(5) Prevent injury; and
(6) Prevent damage to property, and unnecessary or undue
degradation to the lands;
(b) Monitor facility operations to address identifiable, localized
environmental resources and concerns associated with the facility or
lease operations;
(c) Remove or, with BLM approval, properly store all equipment and
materials not in use;
(d) When no longer needed during facility construction or
operation, properly abandon and reclaim any surface disturbance, as
approved or prescribed by BLM; and
(e) When required by BLM, submit a contingency plan describing
procedures to protect life, property, and the environment.
Sec. 3276.13 Are there reporting requirements for lease operations?
(a) You must notify BLM within 5 business days of when you begin
commercial production and utilization.
(b) You must submit monthly reports to BLM as described below:
------------------------------------------------------------------------
If... Then...
------------------------------------------------------------------------
(1) you are the operator of a lease.... you must submit a monthly
report of well operations for
each well on your lease.
(2) you are a unit operator............ you must submit a monthly
report of well operations for
each well in your unit.
(3) you are a facility operator........ you must submit a monthly
report of facility operations.
(4) you are both a lease or unit you must submit a monthly
operator and the facility operator. report of well operations for
your lease or unit, and you
must submit a monthly report
of facility operations. You
may combine all the
information into one report.
------------------------------------------------------------------------
(c) You must submit monthly reports due to BLM by the end of the
month following the month that the report covers. For example, the
report covering the month of July is due by August 31.
Sec. 3276.14 What information must be included for each well in
monthly well reports?
Include the following information for each well in the monthly
report of well operations:
(a) Any drilling operations or changes made to a well;
(b) Total production or injection in thousands of pounds (klbs);
(c) Production or injection temperature in degrees Fahrenheit
( deg.F);
(d) Production or injection pressure in pounds per square inch
(psi). You must also specify whether this is gauge pressure (psig) or
absolute pressure (psia);
(e) The number of days the well was producing or injecting;
(f) The well status at the end of the month;
(g) The amount of steam or hot water lost to venting or leakage;
(h) The lease number or unit the well is located on;
(i) The month and year the report is for;
(j) Your name, title, signature, and a phone number where BLM may
contact you; and
(k) Any other information the BLM may require.
Sec. 3276.15 What information must be included in the monthly report
for generation facilities?
For all electrical generation facilities, include the following
information in your monthly facility report:
(a) Mass of steam and/or hot water into the facility in thousands
of pounds (klbs). For facilities using both steam and hot water, you
must report the mass of each;
(b) The temperature of the steam or hot water in degrees Fahrenheit
( deg.F);
(c) The pressure of the steam or hot water in pounds per square
inch (psi). You must also specify whether this is gauge pressure (psig)
or absolute pressure (psia);
(d) Gross generation in kiloWatt hours (kWh);
(e) Net generation at the tailgate of the facility in kiloWatt
hours (kWh);
(f) Amount of electricity delivered to the sales point in kiloWatt-
hours (kWh), if the sales point is different from the tailgate of the
facility;
(g) Amount of electricity lost to transmission, if applicable;
(h) Temperature in degrees Fahrenheit ( deg.F) and volume of the
steam or hot water exiting the facility;
(i) The number of hours the plant was on line; and
(j) A brief description of any outages.
Sec. 3276.16 What additional information must be submitted in the
monthly report for flash and dry facilities?
You must submit the following information in addition to that
specified in 43 CFR 3276.15 for flash and dry steam facilities:
(a) Steam flow into the turbine in thousands of pounds (klbs); for
dual flash facilities, you must separate the steam flow into high
pressure steam and low pressure steam;
(b) Condenser pressure in pounds per square inch absolute (psia);
(c) Condenser temperature in degrees Fahrenheit ( deg.F);
(d) Auxiliary steam flow used for gas ejectors, steam seals, pumps,
etc., in thousands of pounds (klbs);
(e) Flow of condensate out of the plant (after the cooling towers)
in thousands of pounds (klbs); and
(f) Any other information BLM may require.
Sec. 3276.17 What information must be included in the monthly report
for direct use facilities?
For direct use facilities, submit the following information:
(a) A daily breakdown of flow, average temperature in, and average
temperature out, in degrees Fahrenheit ( deg.F);
(b) Total monthly flow through the facility in thousands of gallons
(kgal) or thousands of pounds (klbs);
(c) Monthly average temperature in, in degrees Fahrenheit ( deg.F);
(d) Monthly average temperature out, in degrees Fahrenheit
( deg.F);
(e) Total heat used in millions of BTU's (MMBTU);
(f) Number of hours that geothermal heat was used; and
(g) Any other information BLM may require.
Sec. 3276.18 Does the facility operator have to measure the geothermal
resources?
Yes. You must:
(a) Measure all production, injection and utilization in accordance
with methods and standards approved by BLM; and
(b) Maintain and test all metering equipment, and if BLM finds the
equipment out of tolerance or defective, you must promptly recalibrate,
repair, or replace it. You must determine the amount of production and/
or utilization
[[Page 52766]]
in accordance with the methods and procedures approved and prescribed
by BLM.
Sec. 3276.19 What aspects of my geothermal operation must I measure?
(a) For all well operations, you must measure wellhead flow,
wellhead temperature, and wellhead pressure.
(b) For all electrical generation facilities, you must measure:
(1) Steam and/or hot water flow into the facility;
(2) Temperature of the water and/or steam into the facility;
(3) Pressure of the water and/or steam into the facility;
(4) Gross electricity generated;
(5) Net electricity at the facility tailgate;
(6) Electricity delivered to the sales point; and
(7) Temperature of the steam and/or hot water exiting the facility.
(c) For direct use facilities, you must measure:
(1) Flow of steam and/or hot water;
(2) Temperature into the facility; and
(3) Temperature out of the facility.
(d) BLM may also require additional measurements depending on the
type of facility, the type and quality of the resource, and the terms
of the sales contract.
Sec. 3276.20 How accurately must I measure my production and
utilization?
The meter accuracy that BLM requires depends on whether you use the
meter in calculating Federal production or royalty and what quantity of
resource you are measuring.
(a) For meters that you will use to calculate Federal royalty:
(1) If the meter measures electricity, it must have an accuracy of
0.25% or better of reading;
(2) If the meter measures steam flowing more than 100,000 lbs/hr.
on a monthly basis, it must have an accuracy of 2% or
better of reading;
(3) If the meter measures steam flowing less than 100,000 lbs/hr on
a monthly basis, it must have an accuracy of 4% or better
of reading;
(4) If the meter measures water flowing more than 500,000 lbs/hr on
a monthly basis, it must have an accuracy of 2% or better
of reading;
(5) If the meter measures water flowing 500,000 lbs/hr or less on a
monthly basis, it must have an accuracy of 4% or better of
reading;
(6) If the meter measures heat content, it must have an accuracy of
4% or better; or
(7) If the meter measures two phase flow at any rate, BLM will
determine meter accuracy requirements. However, such meters are
generally not allowable, and you must obtain the prior written approval
of BLM before installation and use.
(b) Any meters that you do not use to calculate Federal royalty are
considered production meters. Any production meter must maintain an
accuracy of 5% or better of reading.
(c) BLM may modify these requirements as necessary to protect the
interests of the United States.
Sec. 3276.21 To what standards must I install and maintain my meters?
(a) You must install and maintain all meters required by BLM
according to the manufacturer's recommendations and specifications or
BLM's requirements, whichever is more restrictive.
(b) If you use an orifice plate to calculate Federal royalty, the
orifice plate installation must comply with ``API Manual of Petroleum
Standards, Chapter 14, Section 3, Part 2, Third Edition, February,
1991''.
(c) For meters used to calculate Federal royalty, you must
calibrate the meter against a known standard as specified in paragraphs
(c) (1) through (3) of this section:
(1) Meters measuring electricity must be calibrated annually;
(2) Meters measuring steam or hot water flow with a turbine, vortex
shedder, ultrasonics, or other linear devices, must be calibrated every
six months, or as recommended by the manufacturer, whichever is more
frequent; and
(3) Meters measuring steam or hot water flow with an orifice plate,
venturi, pilot tube, or other differential device, must be calibrated
every month and you must inspect and repair the primary device (orifice
plate, venturi, pitot tube) annually.
(d) You must use calibration equipment that is more accurate than
the equipment you are calibrating.
(e) BLM may modify any of these requirements as necessary to
protect the interests of the United States.
Sec. 3276.22 What must I do if I find an error in a meter?
(a) If the meter is used to calculate Federal royalty, you must
correct the error immediately and notify BLM by the next working day of
its discovery.
(b) If the meter is not used to calculate Federal royalty, you must
correct the error and notify BLM within three days of its discovery.
(c) If correcting the error will cause a change in the sales
quantity of more than 2% for the month(s) in which the error occurred,
you must adjust the sales quantity for that month(s) and submit an
amended facility report to BLM within 3 working days.
Sec. 3276.23 May BLM require me to test for byproducts associated with
the production of geothermal resources?
Yes. You must conduct any tests required by BLM.
Sec. 3276.24 May I commingle production?
Yes, if you obtain BLM's prior approval. BLM will review your
request to commingle production from wells on your lease with
production from other leases held by you or other lessees and may grant
approval subject to conditions we prescribe.
Sec. 3276.25 What action will BLM take if I waste geothermal
resources?
BLM will make a determination on the amount of production lost
through waste of the geothermal resource. If BLM determines that you
have not taken all reasonable precautions to prevent waste of
geothermal resources, we will require compensation based on the value
of the lost production. BLM may also terminate your site license.
Sec. 3276.26 Can BLM order me to drill and produce wells on my lease?
Yes. BLM can order you to promptly drill and produce any wells
necessary to ensure that lease development and production occur in
accordance with sound operating practices.
Subpart 3277--Inspections, Enforcement, and Noncompliance
Sec. 3277.10 Will BLM inspect my operations?
Yes. All operations are subject to inspection by BLM to ensure
compliance with permit terms and conditions of approval, lease terms
and conditions, orders, and notices to lessees, applicable regulations
and laws. During normal operating hours, you must allow BLM to inspect
all facilities utilizing Federal geothermal resources.
Sec. 3277.11 What records must I keep available for inspection?
The operator or facility operator must keep all records and
information pertaining to royalty and production meters available for
BLM inspection for a period of at least six years from the time of
collection. This includes records and information from meters located
off your lease or unit when such records or information are necessary
to determine resource production to a utilization facility or the
allocation of resource production to your lease or unit.
[[Page 52767]]
Sec. 3277.12 What actions may BLM take if I am in noncompliance?
(a) If BLM finds your operation to be in noncompliance, we may take
the following action:
(1) Issue you a written Incident of Noncompliance, directing you to
correct any deficiencies within a specific time period;
(2) Require you to mitigate unacceptable environmental impacts
caused by your operation; or
(3) Revoke or suspend your utilization permit, after notice and a
hearing in accordance with 43 CFR parts 4 and 1840.
(b) If the noncompliance continues or is of a serious nature, BLM
will take one of the following actions:
(1) Enter your lease, and correct any deficiencies at your expense;
(2) Collect all or part of your bond;
(3) Direct modification or shutdown of your operations;
(4) Temporarily suspend your utilization permit if necessary to
protect public health, safety or the environment. This temporary
suspension will go into effect immediately, and remain in effect while
any appeals are pending; or
(5) Initiate cancellation of the lease.
Subpart 3278--Utilization Relief and Appeals
Sec. 3278.10 May I request a variance from notices to lessees, permit
conditions of approval, and operational and other orders issued by BLM?
Yes.
(a) Your request must include enough information to explain:
(1) Why the notice to lessees, permit condition of approval,
geothermal resource operational order, or other orders issued by BLM
cannot be met; and
(2) Why the variance is necessary to control your well, conserve
natural resources, protect human health and safety, protect property,
or protect the environment.
(b) BLM may approve your request verbally or in writing. We will
follow up a verbal approval with written confirmation.
Sec. 3278.11 Can I appeal a BLM decision regarding my utilization
operations?
You may file an appeal with BLM in accordance with the procedures
of 43 CFR parts 4 and 1840.
[FR Doc. 96-25254 Filed 10-7-96; 8:45 am]
BILLING CODE 4310-84-P
