September 13, 2023
Ms. Tracy Stone-Manning
Director, Bureau of Land Management
1849 C St. NW, Room 5646
Washington, DC 20240
Attention: 1004–AE80
Subject: BLM Proposed Rule on Fluid Minerals Leases and Leasing Process, RIN 1004–AE78
Dear Director Stone-Manning:
I am writing on behalf of the Coalition to Protect America’s National Parks (Coalition), a non-profit organization whose membership is made up of over 2,500 current, former, and retired employees and volunteers of the National Park Service (NPS). Collectively, we represent over 45,000 years of national park management and stewardship experience. Our membership includes former NPS directors, deputy directors, regional directors, and park superintendents. Recognized as the Voices of Experience, the Coalition educates, speaks, and acts for the preservation and protection of the National Park System and mission-related programs of the NPS.
We offer the following comments on the Bureau of Land Management’s (BLM’s) proposed rule on fluid mineral leases and the leasing process (RIN 1004–AE80). Our comments are generally focused on sections of the proposed rule where we have suggestions or concerns.
BACKGROUND
The preamble to the proposed provides important background information regarding the need for BLM to reform its onshore oil and gas leasing program. As described, the proposed rule would implement changes pertaining to royalty rates, rentals, and minimum bids for BLM-issued oil and gas leases and would update the bonding requirements for leasing, development, and production. The BLM has not comprehensively updated the Federal onshore oil and gas program’s regulatory framework since 1988. As a result, many of the program’s regulatory requirements are outdated, do not adequately protect the fiscal interests of the American public, and do not promote leasing practices that are consistent with diligent development requirements and multiple-use and sustained-yield principles. This proposed rule seeks to update the existing regulations accordingly.
The Federal Lands Policy and Management Act of 1976 (FLPMA) established particular land and resource management authorities for the BLM, emphasizing multiple use, sustained yield, and environmental protection as the guiding principles for public land management. FLPMA also directs the BLM to manage some areas for conservation. As of the end of Fiscal Year (FY) 2022, the BLM managed 34,409 Federal oil and gas leases covering 23.7 million acres with nearly 89,350 wells that are capable of production. Of the more than 23 million onshore acres under lease today, over 11 million (approximately 48 percent) of those acres are non-producing. In addition, Section 50262 of the Inflation Reduction Act of 2022 modernized the onshore oil and gas program’s fiscal terms; and these changes are reflected in the proposed rule.
Last but not least, over the past decade, the Government Accountability Office (GAO) and the Department of the Interior Office of the Inspector General (OIG) have repeatedly raised concerns about the fiscal soundness of the onshore program. Furthermore, in 2011, the GAO added the “Management of Federal Oil and Gas Resources” to its list of “high-risk” Federal programs after determining that DOI “does not have reasonable assurance that it is collecting its share of revenue from oil and gas produced on Federal lands.” “High-risk” programs are “vulnerable to waste, fraud, abuse, or mismanagement, or in need of transformation.” GAO reaffirmed this “high-risk” determination in 2021 and specifically recommended that DOI “needs to commit to developing policies that consistently lead towards improvements in . . . ensuring the government receives a fair return.”
GENERAL COMMENTS
- The Coalition strongly supports the intent of the proposed rule, which is to implement much needed changes in the BLM’s existing oil and gas leasing program – We have previously expressed our support for the BLM to implement extensive reforms of its onshore oil and gas leasing program that has not changed significantly since 1988. For example, in 2021 we commented extensively on the Department of the Interior’s review of its fossil fuels leasing programs. Among “core principles” identified in our comments, we advocated for the Department to:
- Curtail fossil fuel extraction on public lands and the outer continental shelf (OCS) to mitigate the effects of climate change;
- Limit future federal oil and gas leasing to high production potential / low environmental risk locations to the extent possible; stop leasing in locations, whether onshore or offshore, that are low production potential / high environmental risk;
- Onshore oil and gas leasing: Eliminate “speculative” leasing practices, such as anonymous expressions of interest (EOIs) and noncompetitive lease awards; stop leasing low production potential parcels adjacent to specially protected, nationally significant natural and cultural resources, such as units of the national park system, the national trail system, and the national wildlife refuge system; designated wilderness areas; designated critical habitat for federally-listed threatened or endangered species; areas of critical environmental concern; and significant cultural and archeological sites. These special places, not the mineral deposits on adjacent public lands, are our Nation’s heritage to hold dear, conserve, and pass on unimpaired to future generations.
- Raise leasing fees to reflect fair market value;
- There should be a minimum mandatory 30-day public comment period on all lease sale proposals; a minimum 30-day protest period; and
- Reclamation bonds for all mineral leasing activities must be based on typical costs of full restoration of drilling and mining sites; and lessees who fail to restore sites in a timely manner should be excluded from further leasing until they have fulfilled their restoration obligations.
Other conservation groups submitted similar recommendations and we note that a number of these measures were identified in the Department’s November 2021 Report on the Federal Oil and Gas Leasing Program. We greatly appreciate that the BLM continues to make progress on modernizing its onshore oil and gas leasing program, an endeavor that is more critical than ever given the intensifying impacts of climate change that are being exacerbated, in part, by the Nation’s continued heavy dependence on fossil fuel production.
- The proposed increases in lease fees, royalties, and bonds are major steps in the right direction. However, the proposed rule does not adequately address GAO’s concerns and recommendations that are described in GAO-19-615 – In the report, GAO identified the following concerns and recommendations regarding BLM’s bonding policies (emphasis added to underlined sections below):
- Bond minimums are based on the bond category and not the number of wells they cover, which can vary greatly.
- Current bonds are not sufficient to prevent orphaned wells in part because they do not reflect full reclamation costs for the wells they cover… About 84 percent of these bonds—covering 99.5 percent of these wells—would not fully cover reclamation costs under a low-cost scenario (these bonds have an average value per well of less than $20,000).
- The majority of bond values do not reflect reclamation costs in large part because most bonds—82 percent—remain at their regulatory minimum. Comment: This finding suggests that BLM rarely, if ever, increases bond amounts based on an increased number of wells.
- A bond that increases with each additional well it covers and then decreases as wells are reclaimed could increase the financial incentive for operators to reclaim their wells in a timely manner.
- BLM has a policy for reviewing the adequacy of bonds but has not been able to consistently secure bond increases when needed; and this policy has not resulted in bonds that would be adequate to reclaim most wells.
- While BLM’s federal oil and gas bond minimums do not sufficiently reflect the costs of well reclamation, requirements for bond amounts for other federal mining and energy development activities (e.g., coal mining and renewable energy development) account for potential reclamation costs to some extent.
- The Director of BLM should take steps to adjust bond levels to more closely reflect expected reclamation costs, such as by increasing regulatory minimums to reflect inflation and incorporating consideration of the number of wells on each bondand their characteristics.
In other words, the bond amounts that are being collected by BLM fail to fully cover expected reclamation costs for 99.5% of the wells covered by bonds; and, even if bond fees are increased after a bond adequacy review, BLM has a track record of having difficulty in securing bond increases from lessees. Despite these clear GAO concerns and recommendations, the proposed rule does NOT include any specific provision(s) to increase bond fees based on the number of wells developed under a lease; and no specific provision(s) to improve accountability of lessee bond payments if/when such fees are increased after a bond adequacy review. To address these concerns, we offer suggested revisions to the proposed rule in the section-by-section comments below.
In addition to the above concerns, GAO-19-615 also identified two well reclamation cost scenarios: low-cost wells typically cost about $20,000 to reclaim, and high-cost wells typically cost about $145,000 to reclaim. The low-cost scenario is based on the 25th percentile of average well reclamation costs in proofs of claim, and the high-cost scenario is based on the 75th percentile. We will refer to this information in our comments below.
- We are very concerned that the BLM continues to issue oil and gas leases based on outdated land use plans that provide little, if any, effective guidance for identifying appropriate versus inappropriate locations for oil and gas development – Since 2015, the Coalition has actively commented on numerous BLM oil and gas leasing proposals that were based on grossly outdated land use plans (e.g., resource management plans or RMPs) and inadequate bureau-wide guidance regarding the siting, review, and approval of oil and gas drilling proposals.
By “grossly outdated,” we mean plans that are 20 or more years old and did not provide effective screening criteria to identify “appropriate” or “preferred” fluid mineral leasing areas or identify “exclusion areas” where leasing would not be allowed; did not consider the impacts of fracking, which is now a much more common practice than when the plans were prepared decades ago; and did not consider the impacts of climate change. The plans also typically failed to identify, much less analyze, the potential adverse impacts of oil and gas development on public lands immediately adjacent to special conservation areas, such as units of the National Park System. By “inadequate bureau-wide guidance,” we mean the absence of effective oil and gas lease siting criteria, which should include “preferred leasing zones” as well as “exclusion areas” where leasing is not allowed. Such criteria could be developed in a programmatic environmental impact statement (PEIS), similar to what the BLM has done for solar and wind energy development and then adopted into existing land use plans. It is truly disappointing that for decades the BLM has exercised much greater care in approving the siting of renewable energy projects on public lands than it has in issuing leases for oil and gas development, which is far more damaging to the environment than renewable energy development ever could be.
The cumulative effects of BLM Field Offices determinedly moving forward with oil and gas leasing based on outdated and inadequate guidance is painfully obvious. As described in a 2022 report co-authored by Archeology Southwest and the Coalition, BLM’s oil and gas leasing practices have been particularly damaging to Native American sacred sites and cultural landscapes within our national parks and national monuments. For example, the BLM’s Farmington District in northwest New Mexico has leased to the oil and gas industry nearly 92 percent of the public land surrounding Chaco Culture National Historic Park and allowed them to drill over 37,000 wells. The national park protects approximately 4,000 prehistoric and historic archaeological sites, representing more than 12,000 years of human cultural history in Chaco Canyon; and is the centerpiece of the larger Chaco Culture World Heritage Site. Natural gas leakage from BLM-approved wells in this region has contributed significantly to what a 2016 NASA study found to be a “hot spot in the U.S. Southwest [that] is responsible for producing the largest concentration of the greenhouse gas methane seen over the United States.” (Emphasis added) To state the obvious, these past practices are not environmentally responsible energy development; and we greatly appreciate that BLM is now taking steps to address these longstanding concerns.
We could continue citing examples of the impacts of BLM’s past and current oil and gas leasing practices. In brief, what has been severely lacking in BLM’s management of its oil and gas leasing program are effective screening criteria, similar to the screening criteria and “exclusions” that the BLM uses to identify appropriate renewable energy project locations and avoid major conflicts with other resources and uses. While the proposed leasing rule represents improvement over the existing leasing regulations, it needs more effective “sideboards” to ensure that future oil and gas leasing and development occurs only in locations with bothhigh potential for fluid mineral development potential and low potential for conflicts with other resources and uses.
However, as described in our previously mentioned report, other national park units are also being adversely impacted by BLM’s oil and gas leasing practices. These adverse impacts could best be avoided by BLM implementing bureau-wide criteria or standards, such as minimum set-back stipulations, which would preclude new oil and gas drilling near the boundaries of special conservation areas, whether managed by BLM or by Tribal governments or by other federal or state agencies. The criteria should include minimum set-backs of up to 10 miles from ACEC’s, Native American cultural sites, historic properties eligible for listing on the National Register of Historic Places, state parks, National Wildlife Refuges that are not open to drilling, and units of the National Park System. It is time for BLM to take a holistic, nation-wide approach to reducing these impacts, rather than continuing to take an ineffective, piece-meal approach on a district-by-district basis. An effective approach will require the BLM to revise, coordinate, and integrate its various oil and gas leasing regulations and policies so that such guidance is mutually reinforcing and unified and consistent across the Bureau.
- Related polices and concerns – The proposed rule relates specifically to certain procedural elements of the BLM’s fluid mineral leasing process. However, there are other important BLM policies and guidelines that also relate directly to the BLM leasing program and therefore directly relate to the proposed rule. The following policies should be reviewed and updated, as needed, to be consistent with and support effective implementation of the final rule:
a. BLM Instruction Memorandum IM 2023-010 on “Oil and Gas Leasing – Land Use Planning and Lease Parcel Reviews” – The IM lays out instructions for determining which parcels to make available for lease sales. Sections I and II of the IM discuss the importance of parcel selection being in conformance with existing land use plans, such as RMP’s. However, the IM provides no guidance regarding the currency of the underlying RMP. As stated earlier in this letter, BLM oil and gas lease sales are often based on grossly outdated RMP’s that are more than 20 years old; lacked effective screening criteria for determining appropriate and inappropriate locations for drilling; never considered the adverse impacts of modern drilling techniques such as fracking; never considered the impacts of climate change; and never considered the impact of BLM leasing practices on nearby special conservation areas, such as units of the National Park System. We therefore urge BLM to update IM 2023-010 to provide that identification of parcels for leasing shall be based on current land use plans as we recommend that term be defined in § 3000.5 of the leasing rule. The IM should also make clear that parcels that are NOT identified as “eligible” and “available” for leasing in a current land use plan shall be deferred and will NOT be leased. In addition, current land use plans should identify preferred leasing areas that are suitable for leasing and exclusion areas that are closed to leasing, as we recommend those terms be defined § 3000.5.
In addition, section II.E of the IM describes “NEPA Compliance Documentation.” The guidance is very general in nature. However, because past and recent BLM lease sale NEPA documents rarely evaluate impacts of lease proposals on special conservation areas immediately adjacent to the proposed leasing area, we recommend that the following sentences be added the third paragraph of this section of the IM:
The NEPA analysis shall evaluate potential adverse impacts to special conservation areas bordering or adjacent to the leasing areas, whether managed by the BLM, by Tribal governments, or by other federal or state agencies. Special conservation areas include, but are not limited to, ACEC’s, Native American cultural sites, historic properties eligible for listing on the National Register of Historic Places, state parks, National Wildlife Refuges if not otherwise open to drilling, and units of the National Park System.
b. BLM Instruction Memorandum IM 2019-014 on “Bond Adequacy Review” – As discussed in our section-by-section comments below, the Bond Adequacy Review process described in IM 2019-014 is focused on operator compliance, using an elaborate points system to examine aspects of an operator’s well status, compliance history, and reclamation stewardship to indicate if increased an increased bond amount is warranted for an “at risk” operator. There is no mention of increasing the bond amount based on the number of wells involved, which is a material shortcoming of BLM’s leasing program that was identified in GAO-19-615. In brief, by not adjusting bond amounts based on the number of wells covered under any bond, BLM’s current and proposed lease bond pricing methodology fails to ensure that the majority of wells administered by the Bureau are adequately covered by reclamation bonds.
We encourage the BLM to comply with GAO’s straightforward and common sense recommendation that bond amounts should be adjusted based on the number of wells covered under a bond. To address this, we suggest BLM include a specific provision in § 3104.20 the proposed rule, as described in the section-by-section comments below. Once the final rule is issued, then IM 2019-014 should then be updated to reflect whatever bond pricing methodology and bond adequacy review process that BLM decides to implement.
c. BLM Oil and Gas Leasing Master Stipulations List(s) – It is unclear from information available on-line if the BLM has a single master list of oil and gas leasing stipulations that are standardized and consistent across the Bureau, or if it is up to each regional, state and/or district office to determine what their stipulations may be. However, in reviewing the master list of stipulations for Montana and the Dakotas, we note that many of the No Surface Occupancy (NSO) stipulations include woefully inadequate set-back distances from a number of special resources. For example, inadequate NSO set-back distances are provided for the following resources: ½ mile from designated National Historic Trails; ½ mile from the boundaries of cultural properties determined to be of particular importance to Native American groups, determined to be traditional cultural properties, and /or designated for traditional use; NSO within Areas of Critical Environmental Concern (i.e., no set-back from the ACEC boundary); NSO within paleontological sites (i.e., no set-back); NSO within State Lands, including State parks (i.e., no set-back); NSO within NRHP-eligible properties/ districts and cultural sites allocated to conservation for future use, traditional use, and public use (i.e., no set-back).
To be frank, while the NSO set-back provisions described above may minimally avoid surface disturbance within the special resource areas, the provisions are grossly inadequate for minimizing other impacts (e.g., visual and noise impacts; water and air quality impacts; or wildlife disturbance) typically caused by drilling operations along the boundaries of these special conservation areas. As we see it, the primary purpose of NSO stipulations should be to avoid or at least effectively minimize conflicts between drilling operations and other resources and uses. In order to do that, set-back distances must be adequate.
As a national parks advocacy group, we are also concerned that the BLM does not have a standard NSO stipulation or a complete withdrawal of leasing to preclude oil and gas operations in close proximity to units of the National Park System. Such a lack of guidance undoubtedly accounts, in part, for the excessive drilling near Chaco Culture NHP that is described in General Comment # 3 above. While updating the BLM’s master stipulation list is NOT part of this rulemaking, the imposition of stipulations by the BLM is provided for in the rule. And stipulations can only be effective if they actually minimize conflicts and reduce the impacts of oil and operations on other resources and uses. We therefore strongly recommend that BLM conduct a comprehensive bureau-wide review of its standard stipulation list(s), especially the NSO set-back distances from sensitive and important resources; AND offer the public an opportunity to comment on the updated list.
To address the above concerns, we offer the following the section-by-section comments.
SECTION-BY-SECTION COMMENTS
BLM is proposing to amend numerous sections of its fluid mineral leasing regulations in 43 CFR parts 3000, 3100, 3110, 3120, 3130, 3140, 3150, 3160, 3170, and 3180. This is a much needed and comprehensive approach to updating the Bureau’s onshore oil and gas leasing program. We strongly support many of the proposed changes; and will focus our comments below on those sections of the proposed rule that we think should be clarified or improved upon.
1. Subpart 3100—Onshore Oil and Gas Leasing: General
§ 3000.5 Definitions.
One of the major flaws in BLM’s current oil and gas leasing program is its lack of screening criteria: 1) to identify “preferred leasing areas” that have a high potential for sustainable oil and gas production and a low potential for conflict with other resources and uses; and 2) to identify “exclusion areas” where drilling would NOT be permitted due to a high potential for such conflicts. We have long been concerned about the impacts of BLM-approved drilling in close proximity to units of the National Park System, such as the previously mentioned example of Chaco Culture National Historical Park.
In contrast, BLM’s solar energy project siting guidance (e.g., the 2012 Western Solar Plan/PEIS) generally provides effective renewable energy project siting criteria to help identify both “priority development areas” where leasing is encouraged and “exclusion areas” that are closed to solar energy development due to conflicts with other resources and uses. We urge the BLM to model its mineral leasing screening criteria after its guidance for determining appropriate locations for renewable energy projects, which includes identifying “preferred leasing areas” where energy development is allowed, as well as “exclusion areas” where such development is precluded.
We are also concerned that BLM has often tiered its leasing decisions to grossly outdated land use plans (e.g., RMPs) that are 20 or more years old. Typically, these outdated RMP’s did not provide effective screening criteria for determining appropriate locations for leasing; and did not consider the impacts of advanced fracking techniques that are now commonly used and are a well-documented threat to air and water quality. These plans also typically did not consider the potential impacts of drilling/fracking, which includes air and water quality impacts, on adjacent special conservation areas such as ACEC’s, Native American cultural sites, units of the National Park System, and/or historic properties eligible for listing on the National Register of Historic Places.
As result, we strongly recommend that the proposed rule include the concepts of “preferred [fluid mineral] leasing areas” that have a high potential for sustainable oil and gas production and a low potential for conflict with other resources and uses; and “exclusion areas” that are officially closed to drilling because of high potential for conflicts with other resources and uses. We also recommend that the rule provide a definition for “current land use plan” that would serve as a basis for determining the NEPA adequacy of the underlying RMP. We recommend that these terms be defined as suggested below.
- Include a definition for “current land use plan” similar to the following:
Current land use plan means a document developed through a formal planning process to guide the management of activities and uses of public lands and that has been approved, amended, or recertified within the past ten years.
- Include a definition for “exclusion area” similar to the following:
Exclusion area means a location or parcel that, regardless of fluid mineral development potential, has been determined in a current land use plan to have a high potential for conflict with other resources or uses on or adjacent to public lands, including special conservation areas managed by the BLM, by a Tribal government, or by other federal or state agencies.
- Include a definition for “preferred leasing area” similar to the following:
Preferred leasing area means a location or parcel that has been determined in a current land use plan to have high potential for sustainable fluid mineral development and a low potential for conflict with other resources or uses on or adjacent to public lands, including special conservation areas managed by the BLM, by a Tribal government, or by other federal or state agencies.
2. Subpart 3101—Issuance of Leases
Lease Terms and Conditions
Using the median number to establish a minimum bond amount may seem to make sense at first glance. However, this rationale is flawed for developing an effective bond pricing structure that will ensure reclamation costs are adequately covered for the vast majority of wells administered by the BLM. In essence, 5,166 lease bonds (covering 2 wells per bond) would provide adequate bond coverage (at $75,000 per well) to reclaim up to 10,332 wells, which is about 14.3% of the total of 72,324 wells under individual lease bonds. As a result, the BLM runs a considerable risk of perpetuating the historically inadequate bonding levels described in GAO-19-615 unless the BLM provides for increasing the minimum bond amount based on the number of wells covered by a bond.
We note that the preamble to the proposed rule does state that “the BLM would increase the lease bond amount for operators with more than two wells tied to the bond.” (Emphasis added) However, neither the proposed rule itself nor BLM’s current Instruction Memorandum on Bond Adequacy Review, IM 2019-014, explicitly provide for increasing the bond amount based on the number of wells covered by any particular bond. For example, the Increased Amount of Bonds guidance provided in § 3104.50 of the proposed rule is entirely focused on operator compliance history, and includes no provision related to the number of wells covered under any particular bond. Similarly, the Bond Adequacy Review process described in IM 2019-014 focuses on operator compliance, using an elaborate points system to examine aspects of an operator’s well status, compliance history, and reclamation stewardship to indicate if increased an increased bond amount is warranted for an “at risk” operator. Again, there is no mention of increasing the bond amount based on the number of wells involved.
In brief, BLM’s current and proposed lease bond pricing methodology fails to ensure that the majority of wells administered by the Bureau are adequately covered by reclamation bonds. We encourage the BLM to comply with GAO’s straightforward and common sense recommendation that bond amounts should be adjusted based on the number of wells covered under a bond. To address this, we suggest BLM include a specific provision in the proposed rule, described below, that would establish such a requirement.
As background about the bond value per additional well that we suggest be used, the GAO report identified two well reclamation cost scenarios: low-cost wells typically cost about $20,000 to reclaim, and high-cost wells typically cost about $145,000 to reclaim. Based on the low cost scenario, we recommend that BLM revise § 3104.20 of the proposed rule as follows (suggested revision is shown in RED font below):
§ 3104.20 Lease bond. The operator must be covered by a bond in its own name as principal or obligor in an amount of not less than $150,000 for each lease conditioned upon compliance with all of the terms of the lease. (insert) The minimum bond covers up to two wells and shall be increased by at least $20,000 for each additional well covered by the bond. Additional bonding…
b. § 3104.30 Statewide Bonds – Our concerns about the proposed Statewide Bond provision are very similar to our concerns about the individual Lease Bond provision in the previous section. The proposed rule would require lessees, owners of operating rights (sublessees), or operators to furnish a bond in an amount of not less than $500,000 covering all leases and operations in any one State. As reported in the preamble, 1,007 statewide bonds currently cover an average of 66 wells, which equates to a total of about 66,462 wells under statewide bonds.
Using the median number of 7 wells per statewide bond to establish a minimum bond amount may seem to make sense at first glance. However, this rationale is flawed for developing an effective bond pricing structure that will ensure reclamation costs are adequately covered for the vast majority of wells administered by the BLM. In essence, 1,007 statewide bonds covering 7 wells per bond would provide adequate bond coverage (at $75,000 per well) to reclaim up to 7,049 wells, which is about 10.6% of the 66,462 wells under Statewide bonds. As a result, the BLM runs a considerable risk of perpetuating the historically inadequate bonding levels described in GAO-19-615 unless the BLM provides for increasing the minimum bond amount based on the number of wells covered by a bond.
Similar to our suggestion for the previous section, we recommend that the BLM revise the statewide provision as shown below (suggested edits are shown in RED font):
§ 3104.30 Statewide bonds. In lieu of lease bonds, lessees, owners of operating rights (sublessees), or operators may furnish a bond in an amount of not less than $500,000 covering all leases and operations in any one State. The minimum bond covers up to seven wells and shall be increased by at least $20,000 for each additional well covered by the bond within the State.
c. § 3104.50 Increased amount of bonds – This section of the proposed rule provides for the BLM to charge an increased amount for bond(s) issued to operators who have previously failed to comply with lease requirements including failure to plug wells or reclaim lands in a timely manner or a history of previous violations. On the surface, it seems reasonable to collect higher bond(s) from operators who, based on past performance, pose an increased compliance and therefore financial risk under a new lease.
However, as this section is currently worded, it suggests that operators with a history of noncompliance could be issued new leases that include bonds in increased amounts. This approach completely misses the point established in § 3102.51 of the proposed rule, which is that “Only responsible and qualified bidders and lessees may own, hold, or control an interest in a lease or prospective lease.” Specifically, §3102.51(f) states, in part, that: “A lease issued, or an assignment or transfer approved, to any [noncompliant] person in violation of this paragraph (f) will be subject to the cancellation provisions of 43 CFR 3108.30,… for failure to comply with the prescribed reclamation standards on any lease holdings.” (Emphasis added) In other words, operators with a history of noncompliance should NOT be considered eligible or issued new leases requiring new or increased bonds until all issues of past noncompliance have been resolved to the satisfaction of the BLM.
In addition to the above concern, this section of the proposed rule should include a requirement to increase minimum bonds amounts based on the number of wells covered under a bond. We therefore recommend that the BLM revise the wording of § 3104.50, as shown below, to indicate, in effect, that “increased bonds” would NOT apply to those operators who are considered noncompliant under §3102.51.
§ 3104.50 Increased amount of bonds.
(add) Subject to the provisions of § 3102.51:
(a) (as proposed)
(b) (as proposed)
(add)(c) The authorized officer shall increase the minimum bond based on the number of wells covered under individual lease or statewide bonds as provided for in § 3104.20 and § 3104.30.
4. Subpart 3120—Competitive Leases
a. § 3120.11 Lands available for competitive leasing – As written, this section is a bit too vague and open-ended, which diminishes its effectiveness as guidance for determining where leasing is appropriate and where it is not appropriate. As written, and especially because of the “but not limited to” qualification for the various listed conditions, it sounds like “lands available for leasing” could be just about anything that an authorized officer decides is available. Instead of taking such an open-ended approach, we recommend that “availability” be limited to only those lands that have been identified as “eligible” and “available” for leasing in a current land use plan, plus any other locations that already have existing leases should be grand-fathered in. We suggest that the BLM edit the wording of this provision and add a new sub-section (a) as indicated below in RED font:
All lands eligible and available for leasing may be offered for competitive auction under this subpart, including but not limited to (i.e., strike out “but not limited to”):
(a) As of [EFFECTIVE DATE OF FINAL RULE], lands that have been identified as preferred leasing areas in a current land use plan. Lands identified as exclusion areas in a current land use plan shall not be available for leasing;
(a)(b) Lands that were covered by previously issued oil and gas leases that have terminated, expired, been cancelled or relinquished; (then renumber subsequent sub-sections accordingly)
Comment: This concern goes back to our General Comment # 3. BLM often bases its lease sales offerings on grossly outdated land use plans that did not identify “preferred leasing areas” where drilling would be appropriate or “exclusions areas” where drilling would be in clear conflict with the protection of other resources and uses; did not consider the impacts of modern drilling methods such as fracking; and did not consider the impacts of climate change. Moving forward, it is critical that the proposed rule include provision(s) that would modernize BLM’s outdated approach to determining which lands are “eligible” and “available” for leasing. As stated previously, it is disappointing that the BLM exercises considerably more care in determining appropriate locations for renewable energy projects than it does for mineral fluid development. Lastly, we urge BLM to delete the words “but not limited to” as shown above. Leasing should, in fact, be limited only to only parcels that the BLM has previously determined to be eligible and available. Identifying which parcels to lease should not be an unrestricted discretionary decision as the wording “but not limited to” suggests.
b. Sections 3120.30 – 3120.33 Lease Nominations and § 3120.41 Expressions of Interest (EOI) – As proposed, these are two separate and distinct processes would provide two separate pathways for identifying lands available for leasing. We recommend instead that the BLM use a single nomination process, which would include EOIs, to accomplish this. Such an approach would provide a consolidated List of Lands for Competitive Nominations. We suggest that the BLM create this revised nomination process by omitting currently proposed sections 3120.30 through 3120.33 and instead make them part of a single nomination process within proposed section 3120.41. This could be accomplished by combining sections under a header titled “Nomination and Expressions of Interest Process.”
c. § 3120.41 [Expressions of Interest ] Process – In addition to the above recommendation, we suggest the following revisions to the wording of this section, which are necessary to reinforce previous suggested revisions. Suggested edits or additions are shown in RED font below.
(e) The BLM may include lands in a lease sale on its own initiative (add) that it has previously determined to be eligible and available.
Comment: The edit is necessary to limit the scope of this provision to only those lands previously identified as “eligible and available” as described in § 3120.11 above.
(f) When determining whether the BLM should offer lands specified in an expression of interest at lease sales, … At a minimum, the BLM will consider (subsections 1-5, including):
(4) The presence of recreation and other important uses or resources, (add) including special conservation areas managed by the BLM, by a Tribal government, or by other federal or state agencies, giving preference to lands that would not impair the value of such uses or resources; and
(5) The potential for oil and gas development, giving preference to lands with high potential for development (add) and a low potential for conflict with other important uses or resources.
Comment: The suggested edits are necessary to ensure that the BLM considers potential impacts of its leasing decisions on important resources and uses managed by other agencies.
CLOSING COMMENT
In closing, the Coalition strongly supports the objectives of the proposed rule, which include “to protect the fiscal interests of the American public and to promote leasing practices that are consistent with diligent development requirements and multiple-use and sustained-yield principles.” Our primary concerns are that certain sections of the proposed rule lack sufficient clarity or specificity to ensure that the BLM accomplishes these important objectives. We have relied upon GAO-19-615 as a primary reference in preparing our comments; and urge the BLM to be more responsive to GAO’s recommendation that bond amounts be adjusted based on the total number of wells covered under a bond. We hope our comments will help improve the proposed rule and contribute to its successful implementation. We greatly appreciate the opportunity to comment on this important issue.
Sincerely,
Michael B. Murray
Chair of the Executive Council
Coalition to Protect America’s National Parks
2 Massachusetts Ave NE
Unit 77436
Washington, DC 20013
cc:
Peter Cowan, Senior Mineral Leasing Specialist, BLM
Matt Warren, Acting Division Chief for the Division of Fluid Minerals, BLM Stephanie Gaswirth, Geologic Resources Division Director, National Park Service Kirsten King, Air Resources Division Director, National Park Service