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
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Overview
Onshore Oil & Gas Order No. 1
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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.
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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. 1
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Defines terms
Components of APD
Time line
Approval requirements
Split estate
Indian leases
Reclamation/Abandonment
Appeals
Background
Reasons for Revision of Previous Order
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Leasing Reform Act of 1987
Energy Policy Act of 2005
Update for Current Practices
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Split estate policy
Cultural & wildlife inventory
Right of Way coordination
Master development plans, directional drilling
Best Management Practices
Background
Status
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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
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Process time line
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Section 366, Energy Policy Act of 2005
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Define terms
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Complete APD
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Requires compliance with applicable law
Onsite inspection included
Cultural & wildlife Inventories not included
Geo-referenced well plat
Background
Major Revisions (continued)
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Split estate
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Onsite inspection
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15 day requirement eliminated
Onsite required for complete APD
Valid period for APD
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Operator provides SUPO & COAs to surface owner
Bond compensation for loss or damages for access based
on statutory requirements on patented lands (min $1000)
Changed to 2 years with 2 year extension
Background
Controversial Issues
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Time line
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Onsite inspection required
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NEPA, NHPA, ESA compliance
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Required for complete APD
Potential delays – no definite time to process
APD may be deferred or denied within 30 day
after complete APD submittal
Background
Controversial Issues (continued)
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Valid period for APD
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Split estate
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2 years with 2 year extension
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
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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
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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
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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
General
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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
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More complete casing and cementing
information
Added language for directional drilling
Specifics
12-point Surface Use Plan
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Order includes a more complete explanation
of well conversions
Added a section on conversion to an
injection well
Specifics
Waivers, Exceptions, Modifications
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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
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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
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FS SUPO subject to FS appeal requirements
BIA decisions subject to BIA appeal
requirements
Thoughts, Comments?
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Onshore Oil and Gas Order Number 1,
Approval of Operations
Federal Register, Volume 72, Page 1030810338 (72FR10308), Wednesday, March 7,
2007
Effective May 7, 2007