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BLM, Forest Service Tweak New Onshore Drilling Rules

The Bureau of Land Management (BLM) and the U.S. Forest Service are jointly proposing further revisions of regulations governing oil and gas activity on public lands, supplementing an earlier proposal published by the two agencies last July and reopening the comment period for 30 days.

The July order, known as Onshore Oil and Gas Order Number 1, would establish the requirements that companies must meet to obtain approval for oil and gas exploration and development on all Federal and Indian lands (except those of the Osage Tribe). It would replace regulations that are 20 years old. The proposal printed in the Federal Register on March 13 would amend the July 2005 proposal slightly to make the drilling permit provisions conform with the Energy Policy Act of 2005.

The new energy law contains a time line for processing drilling permit applications -- known as Applications for Permits to Drill (APDs) -- that differs slightly from the one in last July's notice. A further proposed revision specifies what constitutes a "complete" APD package. This latest proposal also makes clear that the BLM and Forest Service intend to continue requiring an on-site inspection before determining that an APD package is complete.

In addition, the proposal would require additional bonding in split-estate situations where a lessee cannot reach agreement with an Indian surface owner. This provision would put into regulatory form the BLM's existing policy regarding split-estate circumstances involving Indian surface owners. Split-estate lands are those on which the surface is owned by a private or other nonfederal party while the federal government owns the sub-surface minerals.

Under the Bureau's existing split-estate policy, oil and gas developers must make a good-faith effort to reach an access agreement with surface owners. In cases where an agreement is not reached, developers must obtain a bond that provides for compensation to owners for certain economic losses, as specified by law.

The Federal Register notice opens up a 30-day comment period during which the public may submit written comments on the further proposed revisions to Onshore Oil and Gas Order Number 1. The notice also reopens for 30 days the comment period on the July 2005 regulatory proposal. Comments may be mailed to Director (630), Bureau of Land Management, Eastern States Office, 7450 Boston Boulevard, Springfield, VA, 22153, Attention: RIN 1004-AD59. Comments may also be hand delivered to 1620 L Street NW, Suite 401, Washington, DC 20036 or e-mailed to comments_washington@blm.gov (include"Attn: AD59" in the subject line).

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