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Onshore Oil & Gas Order #1. BLM/Forest Service Final Rule. Onshore Oil & Gas Order #1. Ken McMurrough NRS BLM, Colorado State Office 303-239-3642 (x3799 fax) hugh_mcmurrough@blm.gov Hank Szymanski – 303-239-3797 Hank_Szymanski@blm.gov. Overview Onshore Oil & Gas Order No. 1. Authority

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onshore oil gas order 1

Onshore Oil & Gas Order #1

BLM/Forest Service Final Rule

onshore oil gas order 12
Onshore Oil & Gas Order #1

Ken McMurrough

NRS BLM, Colorado State Office

303-239-3642 (x3799 fax)


Hank Szymanski – 303-239-3797


overview onshore oil gas order no 1
OverviewOnshore Oil & Gas Order No. 1
  • Authority

This rule, effective April 6, 2007, revised the existing OO#1 which supplemented primarily the federal regulations at 43 CFR 3162.3 and 3162.5.

    • Purpose - Approval of Operations of Federal and Indian Oil and Gas Leases

The purpose of OO#1 is to state the application requirements for the approval of all proposed oil and gas and service wells, certain subsequent well operations, and abandonment.

overview onshore oil gas order no 14
OverviewOnshore Oil & Gas Order No. 1
  • Defines terms
  • Components of APD
  • Time line
  • Approval requirements
  • Split estate
  • Indian leases
  • Reclamation/Abandonment
  • Appeals
background reasons for revision of previous order
BackgroundReasons for Revision of Previous Order
  • Leasing Reform Act of 1987
  • Energy Policy Act of 2005
  • Update for Current Practices
    • Split estate policy
    • Cultural & wildlife inventory
    • Right of Way coordination
    • Master development plans, directional drilling
    • Best Management Practices
background status
  • Proposed rule – Published July 2005
  • Energy Policy Act – Signed August 2005
  • Further proposed rule – Published March 2006
  • Public comments – Received nearly 90 from industry, interest groups and the public at large
  • Final rule – March 7, 2007
background major revisions
BackgroundMajor Revisions
  • Process time line
    • Section 366, Energy Policy Act of 2005
      • Requires compliance with applicable law
  • Define terms
    • Complete APD
      • Onsite inspection included
      • Cultural & wildlife Inventories not included
      • Geo-referenced well plat
background major revisions continued
BackgroundMajor Revisions (continued)
  • Split estate
    • Operator provides SUPO & COAs to surface owner
    • Bond compensation for loss or damages for access based on statutory requirements on patented lands (min $1000)
  • Onsite inspection
    • 15 day requirement eliminated
    • Onsite required for complete APD
  • Valid period for APD
    • Changed to 2 years with 2 year extension
background controversial issues
BackgroundControversial Issues
  • Time line
    • Onsite inspection required
      • Required for complete APD
    • NEPA, NHPA, ESA compliance
      • Potential delays – no definite time to process
    • APD may be deferred or denied within 30 day after complete APD submittal
background controversial issues continued
BackgroundControversial Issues (continued)
  • Valid period for APD
    • 2 years with 2 year extension
  • Split estate
    • SUPO & COAs provided to surface owner
    • Good Faith Effort vs mandatory notification
    • What is a “good faith effort”
    • Bonding for access
    • Compensation based on loss or damages or

as required by specific statutory authority

specifics definitions new or revised
SpecificsDefinitions, New or Revised
  • Best Management Practices
  • Casual Use
  • COA
  • Complete APD
  • Days
  • Emergency Repairs
  • Geospatial Database
  • Master Development Plan
  • Onsite Inspection
  • Private Surface Owner
  • Reclamation
  • Surface Managing Agency
specifics general
  • Read the preamble first if you have questions
  • Early notification is new (initial planning conference) & is voluntary, precede NOS
  • Best Management Practices, something we have been doing for decades, are strongly recommended
specifics notice of staking option
SpecificsNotice Of Staking Option
  • Provides operator opportunity to gather information to address site-specific resource concerns while preparing the APD package.
  • 10 days after receiving NOS, an onsite inspection will be scheduled to take place as soon as weather & conditions permit.
  • Minimum staking required: 1) center stake for proposed well, 2) 2 reference stakes, 3) flagged access centerline.
  • BLM will invite surface managing agency (SMA) and surface owner, if applicable.
specifics general14
  • Geospatial database, required for well plat
  • Operator must make a “Good Faith Effort” : 1) notify the private surface owner for access, 2) provide operator with SUPO & COA, 3) obtain surface access agreement
  • Casual Use further explained, includes surveying and staking
specifics 9 point drilling plan
Specifics9-point Drilling Plan
  • More complete casing and cementing information
  • Added language for directional drilling
specifics 12 point surface use plan
Specifics12-point Surface Use Plan
  • Geospatial data optional
  • Additional staking required over that used for an NOS
  • Certify or Good Faith Effort made to get the SUPO to the private surface owner (#11)
  • Moved “Certification” out of SUPO, it now stands alone as a required APD component
specifics bonding
  • Bond increase and phased release (lease bond only) are now in the Order
  • BLM requires sufficient bond to restore surface adversely affected by lease operations after abandonment
  • Authority to require additional bond to be applied to off-lease facilities required to develop a lease
specifics nos processing time line
SpecificsNOS Processing Time Line
  • Onsite scheduled within 10 days
  • “List of Concerns” provided at onsite or within 7 days
  • Submit APD within 60 days or NOS may be returned
specifics apd processing time line
SpecificsAPD Processing Time Line
  • 10-Day letter for APD completeness notification
  • Onsite scheduled within 10 days (unless NOS onsite conducted)
  • “Additional Deficiencies” provided at onsite
  • 45 days to submit additional information
  • 30 days for BLM decision after complete APD submitted
  • Decision to Approve, Defer, or Deny APD
specifics apd permit deferral
SpecificsAPD Permit Deferral
  • BLM will provide the operator a list of pending actions and a schedule for completion before final APD approval can be granted
  • BLM will inform the operator of the actions they could take to assist
  • The operator has 2 years to take the specified actions
  • BLM will approve the APD within 10 days after all actions are complete
specifics apd approval
SpecificsAPD Approval
  • FS has NEPA responsibility on the Forest
  • On the Forest, BLM should be a cooperating agency (Co-lead) and adopt the NEPA analysis as a basis for its decision
  • On Indian lands, BLM may be a cooperating agency (Co-lead) OR may adopt the NEPA analysis prepared by the BIA
specifics master development plans
SpecificsMaster Development Plans
  • Eliminated Master “Drilling” Plans
  • Master development plan (MDP) for 2 or more APDs with common drilling plan, SUPO and POD.
  • Subsequent APDs can reference the MDP for NEPA analysis
  • Each subsequent proposed well must have a survey plat and an APD Form (3160-3)
specifics operator responsibilities
SpecificsOperator Responsibilities
  • Section IV, General Operating Requirements Operator responsibilities discussed - includes requirements for :
  • NEPA
  • General operations
  • Protecting cultural & historic resources
  • Protecting endangered species & their habitat
  • Surface protection
  • Safety
  • Completion reports
specifics completion reports
SpecificsCompletion Reports
  • Well logs submitted in electronic format
  • For directional wells be sure to report the bottom hole lat/long locations (at top of production interval and at total depth)
specifics private surface
SpecificsPrivate Surface
  • Certify to BLM that a Good Faith Effort has been made to notify the private surface owner before entry
  • Certify to BLM that a surface use or access agreement has been reached or a Good Faith Effort made
  • Certify copy of SUPO & COA provided to private surface owner or a Good Faith Effort made
specifics subsequent operations
SpecificsSubsequent Operations
  • NOI required for new construction, re-construction, or alterations that result in new disturbance.
  • If no existing approved plan exists, an NOI must be filed & approved by the BLM. New field inspection may be required & additional cultural or biological inventories may be required.
  • Split Estate - Operator must “certify” that “good faith effort” made to provide private surface owner a copy of any proposal for new surface disturbance.
specifics well conversions
SpecificsWell Conversions
  • Order includes a more complete explanation of well conversions
  • Added a section on conversion to an injection well
specifics waivers exceptions modifications
SpecificsWaivers, Exceptions, Modifications
  • Waiver – Permanent removal of lease stipulation.
  • Exception – Case-by-case exemption from lease stipulation.
  • Modify – Permanent change to lease stipulation
  • Request should also include information to support that the stipulation no longer justified or the proposed operation would not cause unacceptable impacts.
specifics abandonment
  • 6 months to complete earthwork (weather permitting) after well completion/plugging
  • May be difficult on multi-well pad
  • An agreement between the SMA or private surface owner and the operator necessary before assuming improvements (roads, pads, other)
specifics appeals
  • FS SUPO subject to FS appeal requirements
  • BIA decisions subject to BIA appeal requirements
thoughts comments
Thoughts, Comments?
  • Onshore Oil and Gas Order Number 1, Approval of Operations
  • Federal Register, Volume 72, Page 10308-10338 (72FR10308), Wednesday, March 7, 2007
  • Effective May 7, 2007