BMP of Oil and Gas Development

Federal Laws

The Bureau of Land Management (BLM) leases minerals and manages oil and gas development activities on over 570 million acres of BLM and other federal lands, as well as private lands where mineral rights have been retained by the federal government. The Forest Service identifies areas on national forest system lands where leases can be sold and will determine the appropriate lease stipulations necessary to protect surface resources. The BLM issues the lease and manages the sub-surface operations, but the Forest Service and other land management agencies manage the surface operations throughout the drilling process on their lands. Most BLM regulations that govern the BLM's oil and gas leasing program may be found in Title 43 of the Code of Federal Regulations, Part 3100. Under these laws, the BLM has the authority to approve or deny oil and gas leases or to impose environmental restrictions on leases when appropriate. Forest Service oil and gas regulations are found in Title 36 of the Code of Federal Regulations, Part 228, Section E.

Federal Oil and Gas Statutes

The federal government owns, and the BLM and other federal agencies manage, most of the land suitable for oil and gas development in the United States. An additional 56 million acres of split estates also exist, in which private individuals own surface rights and the federal government owns subsurface mineral right. The BLM leases federal minerals and manages these oil and gas leases, in cooperation with other federal agencies or private surface owners where appropriate.

The General Mining Act of 1872 was the seminal law regarding mineral management on federal lands in the United States. However, this act was implemented primarily to deal with hard-rock mining, and it was not until the enactment of the Mineral Leasing Act of 1920 that a comprehensive system was developed for managing oil and gas development on federal lands. Since 1920, the Mineral Leasing Act has been modified by several amendments and elaborated upon by the implementation of new statutes. These are discussed below.

Mineral Leasing Act of 1920 (30 U.S.C. § 181 et seq.) - The Mineral Leasing Act established the authority of the Secretary of the Interior to oversee oil and gas operations on federal land. "The Secretary of the Interior is authorized to prescribe necessary and proper rules and regulations and to do any and all things necessary to carry out and accomplish the purposes of this Act." 30 U.S.C. § 189

Mineral Leasing Act for Acquired Lands of 1947 (30 U.S.C. § 351 et seq.) - Extends the provisions of the Mineral Leasing Act and the authority of the Secretary of the Interior over oil and gas operations to federal "acquired lands."

Mining and Minerals Policy Act of 1970 (30 U.S.C. § 21 et seq.) - An amendment to the Mineral Leasing Act, this statute encompasses both hard rock mining and oil and gas and established modern federal policy regarding mineral resources in the United States. The Act articulates a national interest to foster and encourage private enterprise while mitigating adverse environmental impacts.

Federal Land Policy and Management Act of 1976 (43 U.S.C. §1701 et seq.) - FLPMA, also called the BLM Organic Act, consolidated and articulated BLM management responsibilities and delegated many management responsibilities pertaining to federal land from the Secretary of the Interior to the Director of the BLM, including oversight of oil and gas leases. (For leases on Indian lands, the delegation to the BLM appears at 25 CFR parts 211, 212, 213, 225, and 227.) FLPMA provides an express congressional policy aimed at retaining federal control and possession over valuable lands and mineral resources. As a result, the FLMPA established additional land and resource management authorities; it also amended, or repealed provisions on federal land withdrawals, land acquisitions and exchanges, right-of-way, and the general organization and administration of BLM and the public lands. FLPMA established multiple use, sustained yield, and environmental protection as the guiding principles for public land management. Specifically, BLM must take any action necessary to prevent unneccesary or undue degradation of the lands.

Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. § 1701 et seq.) - The Royalty Management Act affirmed the authority of the Secretary of the Interior to administer and enforce all rules and regulations governing oil and gas leases on Federal or Indian Land, and established a policy aimed at developing a comprehensive system to manage royalties derived from leased oil and gas operations. Typically, oil and gas lessees pay the federal government royalties of 12.5 percent of the value of oil and gas removed or sold from each lease.

Federal Onshore Oil and Gas Leasing Reform Act of 1987 (FOOGLRA) (30 U.S.C. § 181 et seq.) - Another amendment to the Mineral Leasing Act, The Federal Onshore Oil and Gas Leasing Reform Act of 1987 granted the USDA Forest Service the authority to make decisions and implement regulations concerning the leasing of public domain minerals on National Forest System lands containing oil and gas. The Act changed the analysis process from responsive to proactive. The BLM administers the lease but the Forest Service has more direct involvement in the leasing process for lands it administers. The Act also established a requirement that all public lands that are available for oil and gas leasing be offered first by competitive leasing.

Federal Environmental Statutes

The following are very brief summaries and links to some of the major environmental statutes applicable to oil and gas development. For more detailed, but still general treatment of the statutes, see the Environmental Protection Agency's Profile of the Oil and Gas Extraction Industry. (http://www.epa.gov/compliance/resources/publications/assistance/sectors/notebooks/oilgas.pdf)

National Environmental Policy Act (NEPA) (42 U.S.C. § 4321 et seq.) - Enacted in 1970, NEPA established a national policy to encourage productive and enjoyable harmony between man and his environment and to promote the prevention and elimination of damage to the environment and biosphere. At the heart of NEPA is the requirement that environmental impact statements (EISs) be prepared for all major federal agency actions significantly affecting the human environment. For more information on "major" actions and other NEPA issues, see the NEPA section on the Red Lodge Clearinghouse web site.

Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) (42 U.S.C. § 9601 et seq.) - CERCLA, commonly known as Superfund, provides broad federal authority to respond directly to releases or threatened releases of hazardous substances that may endanger public health or the environment. CERCLA established prohibitions and requirements concerning closed and abandoned hazardous waste sites, provided for liability of persons responsible for releases of hazardous waste as these sites, and established a trust, funded by a tax on the chemical and petroleum industries, to provide cleanup when no responsible party could be identified.

Clean Water Act (CWA) (33 U.S.C. § 1251 et seq.) - The Clean Water Act was established to restore and maintain the chemical, physical, and biological integrity of the nation's waters. The CWA aims to protect water quality through development of water quality standards, anti-degradation policies, water quality permitting procedures, water body monitoring and assessment programs, and elimination or point and nonpoint pollution sources. The CWA regulates the National Pollutant Discharge Elimination System (NPDES) permitting process, which establishes, through a permit, pollutant limits on the discharge of produced water that generally include a volume (quantity) and concentration (quality).

Pollutants under the NPDES program fall into one of three categories: conventional, toxic, and non-conventional. There are two types of permits under the NPDES program that allow for the discharge of pollutants from point sources. These are individual permits, which are specific to an individual facility, and general permits, which cover multiple facilities within a specific permit category.

For more information on Clean Water Act provisions applicable to oil and gas development, see the Federal Clean Water Act section

Clean Air Act (CAA) (42 U.S.C. § 7401 et seq.) - Congress passed the CAA in 1970 in order to combat air pollution in the United States and protect the health and general welfare of United States citizens against air pollutants. The act prescribes the measures that federal agencies, state and local governments, and polluters in business and industry must take in order to decrease air pollution in the country. This act was last amended in 1990.

For more information on CAA provisions applicable to oil and gas development, see the Federal Clean Air Act section.

Federal Oil and Gas Regulations

The Bureau of Land Management promulgates regulations, which are enforceable as law, upon oil and gas developers. These regulations are codified in the Code of Federal Regulations in Title 43, Part 3100. The BLM also issues administrative orders and notices to carry out its authority, which are published in the Federal Register. Additionally, other agencies such as the EPA and Forest Service, promulgate rules and regulations that impact oil and gas development.

BLM Regulations affecting Oil and Gas Leasing are found in Title 43, Part 3100 of the Code of Federal Regulations. Rules of particular interest include:

43 C.F.R. § 3101 - Issuance of Leases - Provides the terms and conditions under which the BLM can and will grant leases as well as various contingent limitations on leases.

43 C.F.R. § 3101.1-3 - Stipulations and Information Notices - Establishes that an authorized officer may require stipulations as conditions of lease issuance. Stipulations shall become part of the lease and shall supersede inconsistent provisions of the standard lease form.

43 C.F.R. § 3101.1-4 - Modification or Waiver of Lease Terms and Stipulations - Allows a stipulation included in an oil and gas lease to be modified or waived if the authorized officer determines that the factors leading to its inclusion in the lease have changed sufficiently to make the protection provided by the stipulation no longer justified or if proposed operations would not cause unacceptable impacts. If the authorized officer has determined, prior to lease issuance, that a stipulation involves an issue of major concern to the public, modification or waiver of the stipulation shall be subject to public review for at least a 30-day period.

43 C.F.R. § 3102.5 - Compliance, Certification of Compliance and Evidence - Establishes that any lease or subsequent lease can be cancelled by the BLM if an operator failed to comply with applicable reclamation standards on any past or present lease operation, and obliges the operator to provide evidence of compliance if ordered by the authorization officer.

43 C.F.R. § 3104.1 - Bond Obligations - Required bonding for oil and gas lease operations in order to ensure that the operator performs all obligations of the lease contract, including but not limited to surface reclamation and cleanup of abandoned operations. Minimum amount - $10,000.

43 C.F.R. § 3104.5 - Increased Amount of Bond - Authorizes the supervising BLM officer to increase the amount of a bond applying to certain operators who represent a high risk based on various factors including, a history of previous violations, royalties due, or revised reclamation cost estimates.

43 C.F.R. § 3108.3 - Cancellation - Provides that, under certain circumstances, the authorized officer may cancel a lease if the lessee fails to comply with regulations or conditions of the lease.

43 C.F.R. § 3150 - Onshore Oil and Gas Geophysical Exploration - Enumerates requirements for geophysical exploration operations on BLM-administered lands, which includes any surface disturbing activity carried out in exploration of oil and gas prior to an APD. (For Forest Service requirements, see Forest Service Manual.)

43 C.F.R. § 3160 - BLM (DOI), Onshore Oil and Gas Operations - Reiterates the authority of the BLM over onshore oil and gas operations on federal land pursuant to the Mineral Leasing Act, 30 U.S.C. § 181 et seq., and establishes the objective and scope of the BLM's management of onshore operations.

43 C.F.R. § 3161 - Jurisdiction and Responsibility - Establishes the authority and jurisdiction of the appropriate local authorized officer to direct and oversee oil and gas operations, to require that all operations be conducted in a manner which protects other natural resources and the environmental quality.

43 C.F.R. § 3162.3 - Conduct of Operations - Requires operators to file a new form for obtaining approval or to report new management practices whenever modifications are made to production handling equipment or any substantive element of operations.

43 C.F.R. § 3162.5 - Environment and Safety - Requires conducting operations in a manner, which protects mineral resources, other natural resources, and environmental quality.

43 C.F.R. § 3164.1 - Onshore Oil and Gas Order Number 1, Approval of Operations - Provides the requirements necessary for the approval of all proposed oil and gas wells on all Federal and Indian (other than those of the Osage Tribe) onshore oil and gas leases. Provides a detailed analysis of the steps operators must perform in order to gain approval through the BLM. Defines Best Management Practices as practices that provide for state-of-the-art mitigation of specific impacts that result from surface operations and that BMPs are voluntary unless they have been analyzed as a mitigation measure in the environmental review for a Master Development Plan, APD, Right of Way, or other related facility and included as a condition of approval

Forest Service Regulations affecting Oil and Gas lease management are found in Title 36 of the Code of Federal Regulation in Part 228, and can also be found in the Forest Service Manual. Rules of particular interest include:

36 C.F.R. § 228 - USFS (Dept. of Ag.), Oil and Gas Resources - Provides rules and procedures for issuance of Federal oil and gas leases and management of subsequent oil and gas operation on National Forest System lands, including approval and modification of surface use plans, monitoring, enforcement and reclamation standards.

36 C.F.R. § 228.8 - Requirements for Environmental Protection - Lists conditions that all oil and gas operations must comply with, recognizing the special character and natural vulnerability of Forest Service lands.

Federal Oil and Gas Policy and Guidance

The following are various guidelines and policy statements issued by the BLM aimed at guiding oil and gas development throughout the United States in an environmentally conscious manner and at increasing understanding of and compliance with current oil and gas laws and regulations.

BLM Policies and Guidance

The Gold Book - United States Department of the Interior and United States Department of Agriculture (2007), Surface Operating Standards and Guidelines for Oil and Gas Exploration and Development (the Gold Book). Bureau of Land Management. Denver, Colorado. 84 pp.

The Gold Book, prepared and issued by the BLM (now in its Fourth Edition), is the foremost federal resource for oil and gas developers operating on federal leases. The Gold Book provides guidance regarding how to comply with BLM regulations, policies, and guidelines across the entire range of development from planning to production. The Gold Book also instructs field offices to incorporate appropriate BMPs into Applications for Permit to Drill and associated on- and off- lease rights-of-way approvals.

According to the Gold Book, numerous oil and gas operators have developed and used BMPS, yet BMPs are not "one size fits all." The actual practices and mitigation measures best for a particular sire are evaluated through the National Environmental Policy Act (i.e. an environmental assessment or impact statement) process and vary to accommodate unique, site-specific conditions and local resource conditions.

Oil and Gas Bond Adequacy Reviews (2008) - Bureau of Land Management Instruction Memorandum No. 2008-122 (expires: 9/30/2009) directs authorized offices to place a high priority on assessing the adequacy of bond amounts for oil and gas lessees and to consider increases when appropriate. (Renews: IM No. 2006-206)

Exceptions, Waivers, and Modifications of Fluid Minerals Stipulations and Conditions of Approval, and Associated Rights-of-way Terms and Conditions - Bureau of Land Management Instruction Memorandum No. 2008-032 (expires 09/30/2009) provides guidance for adapting the exception, waiver, and modification process to permits such as Oil and Gas Applications for Permit to Drill, Geophysical Notices of Intent, and Geothermal Drilling Permit Conditions of Approval; and energy related Rights-of-Way Terms and Conditions. Consolidates and further refines sometimes conflicting exception, waiver, and modification guidance contained in law, regulations, handbooks, and other guidance documents.

The Oil, Gas, and Geothermal Development Environmental Best Management Practices Awards Program - Bureau of Land Management Instruction Memorandum No. 2007-175 (expired 9/30/2008) invites nominations of energy companies for the 2008 Oil, Gas, and Geothermal Development Environmental Best Management Practices (BMP) Awards Program. The Purpose of the Awards Program is to promote and showcase the finest examples of responsible fluid minerals resource development on Federal, Indian Trust, and Federal split estate lands, and to recognize oil, gas, and geothermal operators and their partners who demonstrate leadership and creativity in reducing the impacts of energy development.

Integration of Best Management Practices into Application for Permit to Drill Approvals and Associated Rights-of-Way (2007) - Bureau of Land Management Instruction Memorandum No. 2007-021 (expired 09/30/2008) includes guidance to BLM staff as well as a general listing of high priority BMPs, typical BMPs and other reference.

Split Estate Report to Congress - Implementation of Fluid Mineral Leasing and Land Use Planning Recommendations - Bureau of Land Management Instruction Memorandum No. 2007-165 (expired 09/30/2008) provides guidance and procedures for implementation of fluid mineral leasing and land use planning recommendations addressing certain issues in the Split Estate Report to Congress dated December 2006. The Split Estate Report to Congress may be found at http://www.blm.gov/bmp/Split_Estate.htm

Interim Offsite Compensatory Mitigation for Oil, Gas, Geothermal, and Energy Rights-of-Way - Bureau of Land Management Instruction Memorandum No. 2005-069 (expired 9/30/2006) outlines an interim BMP policy for one of five types of mitigation defined by the Council on Environmental Quality. The IM mainly deals with off-site mitigation.

BLM 8400 - Manual Series: Visual Resource Management (VRM) - Provisions of the VRM manual require operators to comply with visual resource management objectives for all activities that alter landforms, disturb vegetation, or require structures. A primary consideration is the selection of a paint color that allows long-term facilities to blend in with the natural landscape background.

BLM 9113 - Roads Manual - The Roads manual provides detailed guidance specific to constructing and maintaining roads for oil and gas lessees on federal land and provides BMPs to minimize environmental and riparian impact and mitigate interference with wildlife habitats.

Forest Service Policies and Guidelines

FS Water/Road Interaction Series - A handbook created by the Forest Service to inform and educate surface users on Forest Service land about common problems encountered regarding water impacts on road location and construction. The handbook also recommends common methods to mitigate environmental harm caused by building roads on Forest Service land.

EPA Policies and Guidelines

Environmental Protection Agency's Profile of the Oil and Gas Extraction Industry - Part of EPA's Sector Notebook project, the profile provides an introduction to the opportunities, compliance and enforcement history, compliance assurance activities and initiatives, and a summary of pertinent statutes and regulations.

Background for NEPA Reviewers: Crude Oil and Natural Gas Exploration, Development and Production (June, 1992) - This contractor prepared document provides information to assist EPA staff in reviewing NEPA documents regarding oil and gas exploration, development and production on federal lands. The guidance includes a description of the oil and gas development process and briefly summarizes laws applicable to development.

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