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Electronic Code of Federal Regulations

e-CFR Data is current as of November 26, 2014

Title 43Subtitle BChapter IISubchapter C → Part 3140


Title 43: Public Lands: Interior


PART 3140—LEASING IN SPECIAL TAR SAND AREAS


Contents

Subpart 3140—Conversion of Existing Oil and Gas Leases and Valid Claims Based on Mineral Locations

§3140.0-1   Purpose.
§3140.0-3   Authority.
§3140.0-5   Definitions.
§3140.1   General provisions.
§3140.1-1   Existing rights.
§3140.1-2   Notice of intent to convert.
§3140.1-3   Exploration plans.
§3140.1-4   Other provisions.
§3140.2   Applications.
§3140.2-1   Forms.
§3140.2-2   Who may apply.
§3140.2-3   Application requirements.
§3140.3   Time limitations.
§3140.3-1   Conversion applications.
§3140.3-2   Action on an application.
§3140.4   Conversion.
§3140.4-1   Approval of plan of operations (and unit and operating agreements).
§3140.4-2   Issuance of the combined hydrocarbon lease.
§3140.5   Duration of the lease.
§3140.6   Use of additional lands.
§3140.7   Lands within the National Park System.

Subpart 3141—Leasing in Special Tar Sand Areas

§3141.0-1   Purpose.
§3141.0-3   Authority.
§3141.0-5   Definitions.
§3141.0-8   Other Applicable Regulations.
§3141.1   General.
§3141.2   Prelease exploration within Special Tar Sand Areas.
§3141.2-1   Geophysical exploration.
§3141.2-2   Exploration licenses.
§3141.3   Land use plans.
§3141.4   Consultation.
§3141.4-1   Consultation with the Governor.
§3141.4-2   Consultation with others.
§3141.5   Leasing procedures.
§3141.5-1   Economic evaluation.
§3141.5-2   Term of lease.
§3141.5-3   Royalties and rentals.
§3141.5-4   Lease size.
§3141.5-5   Dating of lease.
§3141.6   Sale procedures.
§3141.6-1   Initiation of competitive lease offering.
§3141.6-2   Publication of a notice of competitive lease offering.
§3141.6-3   Conduct of sales.
§3141.6-4   Qualifications.
§3141.6-5   Fair market value for combined hydrocarbon leases.
§3141.6-6   Rejection of bid.
§3141.6-7   Consideration of next highest bid.
§3141.7   Award of lease.

Subpart 3142—Paying Quantities/Diligent Development for Combined Hydrocarbon Leases

§3142.0-1   Purpose.
§3142.0-3   Authority.
§3142.0-5   Definitions.
§3142.1   Diligent development.
§3142.2   Minimum production levels.
§3142.2-1   Minimum production schedule.
§3142.2-2   Advance royalties in lieu of production.
§3142.3   Expiration.

Authority: 30 U.S.C. 181 et seq.; 30 U.S.C. 351-359; 95 Stat. 1070; 43 U.S.C. 1701 et seq.; the Energy Policy Act of 2005 (Pub. L. 109-58), unless otherwise noted.

Subpart 3140—Conversion of Existing Oil and Gas Leases and Valid Claims Based on Mineral Locations

Source: 47 FR 22478, May 24, 1982, unless otherwise noted.

§3140.0-1   Purpose.

The purpose of this subpart is to provide for the conversion of existing oil and gas leases and valid claims based on mineral locations within Special Tar Sand Areas to combined hydrocarbon leases.

§3140.0-3   Authority.

These regulations are issued under the authority of the Mineral Lands Leasing Act of February 25, 1920 (30 U.S.C. 181 et seq.), the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.), and the Combined Hydrocarbon Leasing Act of 1981 (Pub. L. 97-78).

§3140.0-5   Definitions.

As used in this subpart, the term:

(a) Combined hydrocarbon lease means a lease issued in a Special Tar Sand Area for the removal of gas and nongaseous hydrocarbon substances other than coal, oil shale or gilsonite.

(b) A complete plan of operations means a plan of operations that is in substantial compliance with the information requirements of 43 CFR 3592 for both exploration plans and mining plans, as well as any additional information required in this part and under 43 CFR 3593, as may be appropriate.

(c) Special Tar Sand Area means an area designated by the Department of the Interior's orders of November 20, 1980 (45 FR 76800), and January 21, 1981 (46 FR 6077) referred to in those orders as Designated Tar Sand Areas, as containing substantial deposits of tar sand.

(d) Owner of an oil and gas lease means all of the record title holders of an oil gas lease.

(e) Owner of a valid claim based on a mineral location means all parties appearing on the title records recognized as official under State law as having the right to sell or transfer any part of the mining claim, which was located within a Special Tar Sand Area prior to January 21, 1926, for any hydrocarbon resource, except coal, oil shale or gilsonite, leasable under the Combined Hydrocarbon Leasing Act.

(f) Unitization means unitization as that term is defined in 43 CFR part 3180.

[47 FR 22478, May 24, 1982, as amended at 55 FR 12351, Apr. 3, 1990; 70 FR 58614, Oct. 7, 2005]

§3140.1   General provisions.

§3140.1-1   Existing rights.

(a) The owner of an oil and gas lease issued prior to November 16, 1981, or the owner of a valid claim based on a mineral location situated within a Special Tar Sand Area may convert that portion of the lease or claim so situated to a combined hydrocarbon lease, provided that such conversion is consistent with the provisions of this subpart.

(b) Owners of oil and gas leases in Special Tar Sand Areas who elect not to convert their leases to a combined hydrocarbon lease do not acquire the rights to any hydrocarbon resource except oil and gas as those terms were defined prior to the enactment of the Combined Hydrocarbon Leasing Act of 1981. The failure to file an application to convert a valid claim based on a mineral location within the time herein provided shall have no effect on the validity of the mining claim nor the right to maintain that claim.

§3140.1-2   Notice of intent to convert.

(a) Owners of oil and gas leases in Special Tar Sand Areas which are scheduled to expire prior to the effective date of these regulations or within 6 months thereafter, may preserve the right to convert their leases to combined hydrocarbon leases by filing a Notice of Intent to Convert with the State Director, Utah State Office, Bureau of Land Management, 136 E. South Temple, Salt Lake City, Utah 84111.

(b) A letter, submitted by the lessee, notifying the Bureau of Land Management of the lessee's intention to submit a plan of operations shall constitute a notice of intent to convert a lease. The Notice of Intent shall contain the lease number.

(c) The Notice of Intent shall be filed prior to the expiration date of the lease. The notice shall preserve the lessee's conversion rights only for a period ending 6 months after the effective date of this subpart.

§3140.1-3   Exploration plans.

(a) The authorized officer may grant permission to holders of existing oil and gas leases to gather information to develop, perfect, complete or amend a plan of operations required for conversion upon the approval of the authorized officer of an exploration plan developed in accordance with 43 CFR 3592.1.

(b) The approval of an exploration plan in units of the National Park System requires the consent of the Regional Director of the National Park Service in accordance with §3140.7 of this title.

(c) The filing of an exploration plan alone shall be insufficient to meet the requirements of a complete plan of operations as set forth in §3140.2-3 of this title.

[47 FR 22478, May 24, 1982, as amended at 55 FR 12351, Apr. 3, 1990]

§3140.1-4   Other provisions.

(a) A combined hydrocarbon lease shall be for no more than 5,760 acres. Acreage held under a combined hydrocarbon lease in a Special Tar Sand Area is not chargeable to State oil and gas limitations allowable in §3101.2 of this title.

(b) The rental rate for a combined hydrocarbon lease shall be $2 per acre per year and shall be payable annually in advance.

(c)(1) The royalty rate for a combined hydrocarbon lease converted from an oil and gas lease shall be that provided for in the original oil and gas lease.

(2) The royalty rate for a combined hydrocarbon lease converted from a valid claim based on a mineral location shall be 1212 percent.

(3) A reduction of royalties may be granted either as provided in §3103.4 of this title or, at the request of the lessee and upon a review of information provided by the lessee, prior to commencement of commercial operations if the purpose of the request is to promote development and the maximum production of tar sand.

(d)(1) Existing oil and gas leases and valid claims based on mineral locations may be unitized prior to or after the lease or claim has been converted to a combined hydrocarbon lease. The requirements of 43 CFR part 3180 shall provide the procedures and general guidelines for unitization of combined hydrocarbon leases. For leases within units of the National Park System, unitization requires the consent of the Regional Director of the National Park Service in accordance with §3140.4-1(b) of this title.

(2) If the plan of operations submitted for conversion is designed to cover a unit, a fully executed unit agreement shall be approved before the plan of operations applicable to the unit may be approved under §3140.2 of this title. The proposed plan of operations and the proposed unit agreement may be reviewed concurrently. The approved unit agreement shall be effective after the leases or claims subject to it are converted to combined hydrocarbon leases. The plan of operations shall explain how and when each lease included in the unit operation will be developed.

(e) Except as provided for in this subpart, the regulations set out in part 3100 of this title are applicable, as appropriate, to all combined hydrocarbon leases issued under this subpart.

[47 FR 22478, May 24, 1982, as amended at 48 FR 33682, July 22, 1983; 55 FR 12351, Apr. 3, 1990; 61 FR 4752, Feb. 8, 1996; 70 FR 58614, Oct. 7, 2005]

§3140.2   Applications.

§3140.2-1   Forms.

No special form is required for a conversion application.

§3140.2-2   Who may apply.

Only owners of oil and gas leases issued within Special Tar Sands Areas, on or before November 16, 1981, and owners of valid claims based on mineral locations within Special Tar Sands Areas, are eligible to convert leases or claims to combined hydrocarbon leases in Special Tar Sands Areas.

[55 FR 12351, Apr. 3, 1990]

§3140.2-3   Application requirements.

(a) The applicant shall submit to the State Director, Utah State Office of the Bureau of Land Management, a written request for a combined hydrocarbon lease signed by the owner of the lease or valid claim which shall be accompanied by 3 copies of a plan of operations which shall meet the requirements of 43 CFR 3592.1 and which shall provide for reasonable protection of the environment and diligent development of the resources requiring enhanced recovery methods of development or mining.

(b) A plan of operations may be modified or amended before or after conversion of a lease or valid claim to reflect changes in technology, slippages in schedule beyond the control of the lessee, new information about the resource or the economic or environmental aspects of its development, changes to or initiation of applicable unit agreements or for other purposes. To obtain approval of a modification or amended plan, the applicant shall submit a written statement of the proposed changes or supplements and the justification for the changes proposed. Any modifications shall be in accordance with 43 CFR 3592.1(c). The approval of the modification or amendment is the responsibility of the authorized officer. Changes or modification to the plan of operations shall have no effect on the primary term of the lease. The authorized officer shall, prior to approving any amendment or modification, review the modification or amendment with the appropriate surface management agency. For leases within units of the National Park System, no amendment or modification shall be approved without the consent of the Regional Director of the National Park Service in accordance with §3140.7 of this title.

(c) The plan of operations may be for a single existing oil and gas lease or valid claim or for an area of proposed unit operation.

(d) The plan of operations shall identify by lease number all Federal oil and gas leases proposed for conversion and identify valid claims proposed for conversion by the recordation number of the mining claim.

(e) The plan of operations shall include any proposed designation of operator or proposed operating agreement.

(f) The plan of operations may include an exploration phase, if necessary, but it shall include a development phase. Such a plan can be approved even though it may indicate work under the exploration phase is necessary to perfect the proposed plan for the development phase as long as the overall plan demonstrates reasonable protection of the environment and diligent development of the resources requiring enhanced recovery methods of mining.

(g)(1) Upon determination that the plan of operations is complete, the authorized officer shall suspend the term of the Federal oil and gas lease(s) as of the date that the complete plan was filed until the plan is finally approved or rejected. Only the term of the oil and gas lease shall be suspended, not any operation and production requirements thereunder.

(2) If the authorized officer determines that the plan of operations is not complete, the applicant shall be notified that the plan is subject to rejection if not completed within the period specified in the notice.

(3) The authorized officer may request additional data after the plan of operations has been determined to be complete. This request for additional information shall have no effect on the suspension of the running of the oil and gas lease.

[47 FR 22478, May 24, 1982, as amended at 55 FR 12351, Apr. 3, 1990]

§3140.3   Time limitations.

§3140.3-1   Conversion applications.

A plan of operations to convert an existing oil and gas lease or valid claim based on a mineral location to a combined hydrocarbon lease shall be filed on or before November 15, 1983, or prior to the expiration of the oil and gas lease, whichever is earlier, except as provided in §3140.1-2 of this title.

§3140.3-2   Action on an application.

The authorized officer shall take action on an application for conversion within 15 months of receipt of a proposed plan of operations.

[47 FR 22478, May 24, 1982, as amended at 55 FR 12351, Apr. 3, 1990]

§3140.4   Conversion.

§3140.4-1   Approval of plan of operations (and unit and operating agreements).

(a) The owner of an oil and gas lease, or the owner of a valid claim based on a mineral location shall have such lease or claim converted to a combined hydrocarbon lease when the plan of operations, filed under §3140.2 of this title, is deemed acceptable and is approved by the authorized officer.

(b) The conversion of a lease within a unit of the National Park System shall be approved only with the consent of the Regional Director of the National Park Service in accordance with §3140.7 of this title.

(c) A plan of operations may not be approved in part but may be approved where it contains an appropriately staged plan of exploration and development operations.

[47 FR 22478, May 24, 1982, as amended at 55 FR 12351, Apr. 3, 1990]

§3140.4-2   Issuance of the combined hydrocarbon lease.

(a) After a plan of operations is found acceptable, and is approved, the authorized officer shall prepare and submit to the owner, for execution, a combined hydrocarbon lease containing all appropriate terms and conditions, including any necessary stipulations that were part of the oil and gas lease being converted, as well as any additional stipulations, such as those required to ensure compliance with the plan of operations.

(b) The authorized officer shall not sign the combined hydrocarbon lease until it has been executed by the conversion applicant and the lease or claim to be converted has been formally relinquished to the United States.

(c) The effective date of the combined hydrocarbon lease shall be the first day of the month following the date that the authorized officer signs the lease.

(d)(1) Except to the extent that any such lease would exceed 5,210 acres, the authorized officer may issue, upon the request of the applicant, 1 combined hydrocarbon lease to cover contiguous oil and gas leases or valid claims based on mineral locations which have been approved for conversion.

(2) To the extent necessary to promote the development of the resource, the authorized officer may issue, upon the request of the applicant, one combined hydrocarbon lease that does not exceed 5,760 acres, which shall be as nearly compact as possible, to cover non-contiguous oil and gas leases or valid claims which have been approved for conversion.

[47 FR 22478, May 24, 1982, as amended at 70 FR 58614, Oct. 7, 2005]

§3140.5   Duration of the lease.

A combined hydrocarbon lease shall be for a primary term of 10 years and for so long thereafter as oil or gas is produced in paying quantities.

§3140.6   Use of additional lands.

(a) The authorized officer may noncompetitively lease additional lands for ancillary facilities in a Special Tar Sand Area that are needed to support any operations necessary for the recovery of tar sand. Such uses include, but are not limited to, mill site or waste disposal. Application for a lease or permit to use additional lands shall be filed under the provisions of part 2920 of this title with the proper BLM office having jurisdiction of the lands. The application for additional lands may be filed at the time a plan of operations is filed.

(b) A lease for the use of additional lands shall not be issued when the use can be authorized under parts 2800 and 2880 of this title. Such uses include, but are not limited to, reservoirs, pipelines, electrical generation systems, transmission lines, roads, and railroads.

(c) Within units of the National Park System, permits or leases for additional lands shall only be issued by the National Park Service. Applications for such permits or leases shall be filed with the Regional Director of the National Park Service.

§3140.7   Lands within the National Park System.

Conversions of existing oil and gas leases and valid claims based on mineral locations to combined hydrocarbon leases within units of the National Park System shall be allowed only where mineral leasing is permitted by law and where the lands covered by the lease or claim proposed for conversion are open to mineral resource disposition in accordance with any applicable minerals management plan. (See 43 CFR 3100.0-3 (g)(4)). In order to consent to any conversion or any subsequent development under a combined hydrocarbon lease requiring further approval, the Regional Director of the National Park Service shall find that there will be no resulting significant adverse impacts on the resources and administration of such areas or on other contiguous units of the National Park System in accordance with §3109.2(b) of this title.

[47 FR 22478, May 24, 1982, as amended at 48 FR 33682, July 22, 1983; 55 FR 12351, Apr. 3, 1990]

Subpart 3141—Leasing in Special Tar Sand Areas

Source: 48 FR 7422, Feb. 18, 1983, unless otherwise noted.

Note: The information collection requirements contained in 43 CFR subpart 3141 do not require approval by the Office of Management and Budget under 44 U.S.C. 3501 et seq. because there are fewer than 10 respondents annually.

§3141.0-1   Purpose.

The purpose of this subpart is to provide for the competitive leasing of lands and issuance of Combined Hydrocarbon Leases, Oil and Gas Leases, or Tar Sand Leases within special tar sand areas.

[70 FR 58614, Oct. 7, 2005]

§3141.0-3   Authority.

The regulations in this subpart are issued under the authority of the Mineral Leasing Act of February 25, 1920 (30 U.S.C. 181 et seq.), the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.), the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et seq.), the Combined Hydrocarbon Leasing Act of 1981 (95 Stat. 1070), and the Energy Policy Act of 2005 (Pub. L. 109-58).

[70 FR 58615, Oct. 7, 2005]

§3141.0-5   Definitions.

As used in this subpart, the term:

(a) Combined hydrocarbon lease means a lease issued in a Special Tar Sand Area for the removal of any gas and nongaseous hydrocarbon substance other than coal, oil shale or gilsonite.

(b) For purposes of this subpart, “oil and gas lease” means a lease issued in a Special Tar Sand Area for the exploration and development of oil and gas resources other than tar sand.

(c) Tar sand lease means a lease issued in a Special Tar Sand area exclusively for the exploration for and extraction of tar sand.

(d) Special Tar Sand Area means an area designated by the Department of the Interior's Orders of November 20, 1980 (45 FR 76800), and January 21, 1981 (46 FR 6077), and referred to in those orders as Designated Tar Sand Areas, as containing substantial deposits of tar and sand.

(e) Tar sand means any consolidated or unconsolidated rock (other than coal, oil shale or gilsonite) that either: (1) Contains a hydrocarbonaceous material with a gas-free viscosity, at original reservoir temperature greater than 10,000 centipoise, or (2) contains a hydrocarbonaceous material and is produced by mining or quarrying.

[47 FR 22478, May 24, 1982, as amended at 70 FR 58615, Oct. 7, 2005; 71 FR 28779, May 18, 2006]

§3141.0-8   Other Applicable Regulations.

(a) Combined hydrocarbon leases. (1) The following provisions of part 3100 of this title, as they relate to competitive leasing, apply to the issuance and administration of combined hydrocarbon leases issued under this part.

(i) All of subpart 3100, with the exception of §3100.3-2;

(ii) The following sections of subpart 3101: §§3101.1-1, 3101.2-1, 3101.2-2, 3101.2-4, 3101.2-5, 3101.7-1, 3101.7-2, and 3101.7-3;

(iii) All of subpart 3102;

(iv) All of subpart 3103, with the exception of §§3103.2-1, those portions of 3103.2-2 dealing with noncompetitive leases, and 3103.3-1 (a), (b), and (c);

(v) All of subpart 3104;

(vi) All of subpart 3105;

(vii) All of subpart 3106, with the exception of §3106.1 (c);

(viii) All of subpart 3107, with the exception of §3107.7;

(ix) All of subpart 3108; and

(x) All of subpart 3109, with special emphasis on §3109.2 (b).

(2) Prior to commencement of operations, the lessee shall develop either a plan of operations as described in 43 CFR 3592.1 which ensures reasonable protection of the environment or file an application for a permit to drill as described in 43 CFR part 3160, whichever is appropriate.

(3) The provisions of 43 CFR part 3180 shall serve as general guidance to the administration of combined hydrocarbon leases issued under this part to the extent they may be included in unit or cooperative agreements.

(b) Oil and gas leases. (1) All of the provisions of parts 3100, 3110, and 3120 of this title apply to the issuance and administration of oil and gas leases issued under this part.

(2) All of the provisions of part 3160 apply to operations on an oil and gas lease issued under this part.

(3) The provisions of 43 CFR part 3180 apply to the administration of oil and gas leases issued under this part.

(c) Tar sand leases. (1) The following provisions of part 3100 of this title, as they relate to competitive leasing, apply to the issuance of tar sand leases issued under this part.

(i) All of subpart 3102;

(ii) All of subpart 3103 with the exception of sections 3103.2-1, 3103.2-2(d), and 3103.3;

(iii) All of section 3120.4; and

(iv) All of section 3120.5.

(2) Prior to commencement of operations, the lessee shall develop a plan of operations as described in 43 CFR 3592.1 which ensures reasonable protection of the environment.

[48 FR 7422, Feb. 18, 1983, as amended at 55 FR 12351, Apr. 3, 1990; 70 FR 58615, Oct. 7, 2005]]

§3141.1   General.

(a) Combined hydrocarbons or tar sands within a Special Tar Sand Area shall be leased only by competitive bonus bidding.

(b) Oil and gas within a Special Tar Sand Area shall be leased by competitive bonus bidding as described in 43 CFR part 3120 or if no qualifying bid is received during the competitive bidding process, the area offered for competitive lease may be leased noncompetitively as described in 43 CFR part 3110.

(c) The authorized officer may issue either combined hydrocarbon leases, or oil and gas leases for oil and gas within such areas.

(d) The rights to explore for or develop tar sand deposits in a Special Tar Sand Area may be acquired through either a combined hydrocarbon lease or a tar sand lease.

(e) An oil and gas lease in a Special Tar Sand Area does not include the rights to explore for or develop tar sand.

(f) A tar sand lease in a Special Tar Sand Area does not include the rights to explore for or develop oil and gas.

(g) The minimum acceptable bid for a lease issued for tar sand shall be $2 per acre.

(h) The acreage of combined hydrocarbon leases or tar sand leases held within a Special Tar Sand Area shall not be charged against acreage limitations for the holding of oil and gas leases as provided in section 3101.2-1 of this title.

(i)(1) The authorized officer may noncompetitively lease additional lands for ancillary facilities in a Special Tar Sand Area that are shown by an applicant to be needed to support any operations necessary for the recovery of tar sand. Such uses include, but are not limited to, mill siting or waste disposal. An application for a lease or permit to use additional lands shall be filed under the provisions of part 2920 of this title with the proper BLM office having jurisdiction of the lands. The application for additional lands may be filed at the time a plan of operations is filed.

(2) A lease for the use of additional lands shall not be issued under this part when the use can be authorized under part 2800 of this title. Such uses include, but are not limited to, reservoirs, pipelines, electrical generation systems, transmission lines, roads and railroads.

(3) Within units of the National Park System, permits or leases for additional lands for any purpose shall be issued only by the National Park Service. Applications for such permits or leases shall be filed with the Regional Director of the National Park Service.

[47 FR 22478, May 24, 1982, as amended at 70 FR 58615, Oct. 7, 2005]

§3141.2   Prelease exploration within Special Tar Sand Areas.

§3141.2-1   Geophysical exploration.

Geophysical exploration in Special Tar Sand Areas shall be governed by part 3150 of this title. Information obtained under a permit shall be made available to the Bureau of Land Management upon request.

[48 FR 7422, Feb. 18, 1983, as amended at 55 FR 12351, Apr. 3, 1990]

§3141.2-2   Exploration licenses.

(a) Any person(s) qualified to hold a lease under the provisions of subpart 3102 of this title and this subpart may obtain an exploration license to conduct core drilling and other exploration activities to collect geologic, environmental and other data concerning tar sand resources only on lands, the surface of which are under the jurisdiction of the Bureau of Land Management, within or adjacent to a Special Tar Sand Area. The application for such a license shall be submitted to the proper BLM office having jurisdiction of the lands. No drilling for oil or gas will be allowed under an exploration license issued under this subpart. No specific form is required for an application for an exploration license.

(b) The application for an exploration license shall be subject to the following requirements:

(1) Each application shall contain the name and address of the applicant(s);

(2) Each application shall be accompanied by a nonrefundable filing fee of $250.00;

(3) Each application shall contain a description of the lands covered by the application according to section, township and range in accordance with the official survey;

(4) Each application shall include 3 copies of an exploration plan which complies with the requirements of 43 CFR 4392.1 (a); and

(5) An application shall cover no more than 5,760 acres, which shall be as compact as possible. The authorized officer may grant an exploration license covering more than 5,760 acres only if the application contains a justification for an exception to the normal limitation.

(c) The authorized officer may, if he/she determines it necessary to avoid impacts resulting from duplication of exploration activities, require applicants for exploration licenses to provide an opportunity for other parties to participate in exploration under the license on a pro rata cost sharing basis. If joint participation is determined necessary, it shall be conducted according to the following:

(1) Immediately upon the notification of a determination that parties shall be given an opportunity to participate in the exploration license, the applicant shall publish a “Notice of Invitation,” approved by the authorized officer, once every week for 2 consecutive weeks in at least 1 newspaper of general circulation in the area where the lands covered by the exploration license are situated. This notice shall contain an invitation to the public to participate in the exploration license on a pro rata cost sharing basis. Copies of the “Notice of Invitation” shall be filed with the authorized officer at the time of publication by the applicant for posting in the proper BLM office having jurisdiction over the lands covered by the application for at least 30 days prior to the issuance of the exploration license.

(2) Any person seeking to participate in the exploration program described in the Notice of Invitation shall notify the authorized officer and the applicant in writing of such intention within 30 days after posting in the proper BLM office having jurisdiction over the lands covered by the Notice of Invitation. The authorized officer may require modification of the original exploration plan to accommodate the legitimate exploration needs of the person(s) seeking to participate and to avoid the duplication of exploration activities in the same area, or that the person(s) should file a separate application for an exploration license.

(3) An application to conduct exploration which could have been conducted under an existing or recent exploration license issued under this paragraph may be rejected.

(d) The authorized officer may accept or reject an exploration license application. An exploration license shall become effective on the date specifed by the authorized officer as the date when exploration activities may begin. The exploration plan approved by the Bureau of Land Management shall be attached and made a part of each exploration license.

(e) An exploration license shall be subject to these terms and conditions:

(1) The license shall be for a term of not more than 2 years;

(2) The rental shall be $2 per acre per year payable in advance;

(3) The licensee shall provide a bond in an amount determined by the authorized officer, but not less than $5,000. The authorized officer may accept bonds furnished under subpart 3104 of this title, if adequate. The period of liability under the bond shall be terminated only after the authorized officer determines that the terms and conditions of the license, the exploration plan and the regulations have been met;

(4) The licensee shall provide to the Bureau of Land Management upon request all required information obtained under the license. Any information provided shall be treated as confidential and proprietary, if appropriate, at the request of the licensee, and shall not be made public until the areas involved have been leased or only if the Bureau of Land Management determines that public access to the data will not damage the competitive position of the licensee.

(5) Operations conducted under a license shall not unreasonably interfere with or endanger any other lawful activity on the same lands, shall not damage any improvements on the lands, and shall not result in any substantial disturbance to the surface of the lands and their resources;

(6) The authorized officer shall include in each license requirements and stipulations to protect the environment and associated natural resources, and to ensure reclamation of the land disturbed by exploration operations;

(7) When unforeseen conditions are encountered that could result in an action prohibited by paragraph (e)(5) of this section, or when warranted by geologic or other physical conditions, the authorized officer may adjust the terms and conditions of the exploration license, may direct adjustment in the exploration plan;

(8) The licensee may submit a request for modification of the exploration plan to the authorized officer. Any modification shall be subject to the regulations in this section and the terms and conditions of the license. The authorized officer may approve the modification after any necessary adjustments to the terms and conditions of the license that are accepted in writing by the licensee; and

(9) The license shall be subject to termination or suspension as provided in §2920.9-3 of this title.

[48 FR 7422, Feb. 18, 1983, as amended at 55 FR 12351, Apr. 3, 1990; 70 FR 58615, Oct. 7, 2005]

§3141.3   Land use plans.

No lease shall be issued under this subpart unless the lands have been included in a land use plan which meets the requirements under part 1600 of this title or an approved Minerals Management Plan of the National Park Service. The decision to hold a lease sale and issue leases shall be in conformance with the appropriate plan.

§3141.4   Consultation.

§3141.4-1   Consultation with the Governor.

The Secretary shall consult with the Governor of the State in which any tract proposed for sale is located. The Secretary shall give the Governor 30 days to comment before determining whether to conduct a lease sale. The Secretary shall seek the recommendations of the Governor of the State in which the lands proposed for lease are located as to whether or not to lease such lands and what alternative actions are available and what special conditions could be added to the proposed lease(s) to mitigate impacts. The Secretary shall accept the recommendations of the Governor if he/she determines that they provide for a reasonable balance between the national interest and the State's interest. The Secretary shall communicate to the Governor in writing and publish in the Federal Register the reasons for his/her determination to accept or reject such Governor's recommendations.

§3141.4-2   Consultation with others.

(a) Where the surface is administered by an agency other than the Bureau of Land Management, including lands patented or leased under the provisions of the Recreation and Public Purposes Act, as amended (43 U.S.C. 869 et seq.), all leasing under this subpart shall be in accordance with the consultation requirements of subpart 3100 of this title.

(b) The issuance of combined hydrocarbon leases, oil and gas leases, and tar sand leases within special tar sand areas in units of the National Park System shall be allowed only where mineral leasing is permitted by law and where the lands are open to mineral resource disposition in accordance with any applicable Minerals Management Plan. In order to consent to any issuance of a combined hydrocarbon lease, oil and gas lease, tar sand lease, or subsequent development of hydrocarbon resources within a unit of National Park System, the Regional Director of the National Park Service shall find that there will be no resulting significant adverse impacts to the resources and administration of the unit or other contiguous units of the National Park System in accordance with §3109.2 (b) of this title.

[48 FR 7422, Feb. 18, 1983, as amended at 55 FR 12351, Apr. 3, 1990; 70 FR 58615, Oct. 7, 2005]

§3141.5   Leasing procedures.

§3141.5-1   Economic evaluation.

Prior to any lease sale for a combined hydrocarbon lease, the authorized officer shall request an economic evaluation of the total hydrocarbon resource on each proposed lease tract exclusive of coal, oil shale, or gilsonite.

[70 FR 58615, Oct. 7, 2005]

§3141.5-2   Term of lease.

(a) Combined hydrocarbon leases or oil and gas leases shall have a primary term of 10 years and shall remain in effect so long thereafter as oil or gas is produced in paying quantities.

(b) Tar Sand leases shall have a primary term of 10 years and shall remain in effect so long thereafter as tar sand is produced in paying quantities.

[70 FR 58615, Oct. 7, 2005]

§3141.5-3   Royalties and rentals.

(a) The royalty rate on all combined hydrocarbon leases or tar sand leases is 1212 percent of the value of production removed or sold from a lease. The Minerals Management Service shall be responsible for collecting and administering royalties.

(b) The lessee may request the Secretary to reduce the royalty rate applicable to tar sand prior to commencement of commercial operations in order to promote development and maximum production of the tar sand resource in accordance with procedures established by the Bureau of Land Management and may request a reduction in the royalty after commencement of commercial operations in accordance with §3103.4-1 of this title.

(c) The rental rate for a combined hydrocarbon lease shall be $2 per acre per year, and shall be payable annually in advance.

(d) The rental rate for a tar sand lease shall be $1.50 per acre for the first 5 years and $2.00 per acre for each year thereafter.

(e) Except as explained in paragraphs (a), (b), and (c) of this section, all other provisions of §§3103.2 and 3103.3 of this title apply to combined hydrocarbon leasing.

[48 FR 7422, Feb. 18, 1983, as amended at 55 FR 12351, Apr. 3, 1990; 70 FR 58615, Oct. 7, 2005]

§3141.5-4   Lease size.

Combined hydrocarbon leases or tar sand leases in Special Tar Sand Areas shall not exceed 5,760 acres.

[70 FR 58616, Oct. 7, 2005]

§3141.5-5   Dating of lease.

A combined hydrocarbon lease shall be effective as of the first day of the month following the date the lease is signed on behalf of the United States, except that where prior written request is made, a lease may be made effective on the first of the month in which the lease is signed.

§3141.6   Sale procedures.

§3141.6-1   Initiation of competitive lease offering.

The Bureau of Land Management may, on its own motion, offer lands through competitive bidding. A request or expression(s) of interest in tract(s) for competitive lease offerings shall be submitted in writing to the proper BLM office.

§3141.6-2   Publication of a notice of competitive lease offering.

(a) Combined Hydrocarbon Leases. Where a determination to offer lands for competitive leasing is made, a notice shall be published of the lease sale in the Federal Register and a newspaper of general circulation in the area in which the lands to be leased are located. The publication shall appear once in the Federal Register and at least once a week for 3 consecutive weeks in a newspaper, or for other such periods deemed necessary. The notice shall specify the time and place of sale; the manner in which the bids may be submitted; the description of the lands; the terms and conditions of the lease, including the royalty and rental rates; the amount of the minimum bid; and shall state that the terms and conditions of the leases are available for inspection and designate the proper BLM office where bid forms may be obtained.

(b) Tar Sand Leases or Oil and Gas Leases. At least 45 days prior to conducting a competitive auction, lands to be offered for a competitive lease sale shall be posted in the proper BLM office having jurisdiction over the lands as specified in §1821.10 of this chapter, and shall be made available for posting to surface managing agencies having jurisdiction over any of the included lands.

[70 FR 58616, Oct. 7, 2005, as amended at 71 FR 28779, May 18, 2006]

§3141.6-3   Conduct of sales.

(a) Combined Hydrocarbon Leases. (1) Competitive sales shall be conducted by the submission of written sealed bids.

(2) Minimum bids shall be not less than $25 per acre.

(3) In the event that only 1 sealed bid is received and it is equal to or greater than the minimum bid, that bid shall be considered the highest bid.

(4) The authorized officer may reject any or all bids.

(5) The authorized officer may waive minor deficiencies in the bids or the lease sale advertisement.

(6) A bid deposit of one-fifth of the amount of the sealed bid shall be required and shall accompany the sealed bid. All bid deposits shall be in the form of either a certified check, money order, bank cashier's check or cash.

(b) Oil and Gas Leases. Lease sales for oil and gas leases will be conducted using the procedures for oil and gas leases in §3120.5 of this title.

(c) Tar Sand Leases. (1) Parcels shall be offered by oral bidding.

(2) The winning bid shall be the highest oral bid by a qualified bidder, equal to or exceeding $2.00 per acre.

(3) Payments shall be made as provided in §3120.5-2 of this title.

[48 FR 7422, Feb. 18, 1983, as amended at 70 FR 58616, Oct. 7, 2005]

§3141.6-4   Qualifications.

Each bidder shall submit with the bid a statement over the bidder's signature with respect to compliance with subpart 3102 of this title.

§3141.6-5   Fair market value for combined hydrocarbon leases.

Only those bids which reflect the fair market value of the tract(s) as determined by the authorized officer shall be accepted; all other bids shall be rejected.

§3141.6-6   Rejection of bid.

If the high bid is rejected for failure by the successful bidder to execute the lease forms and pay the balance of the bonus bid, or otherwise to comply with the regulations of this subpart, the one-fifth bonus accompanying the bid shall be forfeited.

§3141.6-7   Consideration of next highest bid.

The Department reserves the right to accept the next highest bid if the highest bid is rejected. In no event shall an offer be made to the next highest bidder if the difference beween his/her bid and that of the rejected successful bidder is greater than the one-fifth bonus forfeited by the rejected successful bidder.

[55 FR 12351, Apr. 3, 1990]

§3141.7   Award of lease.

After determining the highest responsible qualified bidder, the authorized officer shall send 3 copies of the lease on a form approved by the Director, and any necessary stipulations, to the successful bidder. The successful bidder shall, not later than the 30th day after receipt of the lease, execute the lease, pay the balance of the bid and the first year's rental, and file a bond as required in subpart 3104 of this title. Failure to comply with this section shall result in rejection of the lease.

Subpart 3142—Paying Quantities/Diligent Development for Combined Hydrocarbon Leases

Source: 51 FR 7276, Mar. 3, 1986, unless otherwise noted.

§3142.0-1   Purpose.

This subpart provides definitions and procedures for meeting the production in paying quantities and the diligent development requirements for tar sand in all combined hydrocarbon leases.

§3142.0-3   Authority.

These regulations are issued under the authority of the Mineral Leasing Act of 1920, as amended and supplemented (30 U.S.C. 181 et seq.), the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351-359), the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et seq.) and the Combined Hydrocarbon Leasing Act of 1981 (95 Stat. 1070).

§3142.0-5   Definitions.

As used in part 3140 of this title, the term production in paying quantities means:

(a) Production, in compliance with an approved plan of operations and by nonconventional methods, of oil and gas which can be marketed; or

(b) Production of oil or gas by conventional methods as the term is currently used in part 3160 of this title.

[51 FR 7276, Mar. 3, 1986, as amended at 70 FR 58616, Oct. 7, 2005]

§3142.1   Diligent development.

A lessee shall have met his/her diligent development obligation if:

(a) The lessee is conducting activity on the lease in accordance with an approved plan of operations; and

(b) The lessee files with the authorized officer, not later than the end of the eighth lease year, a supplement to the approved plan of operations which shall include the estimated recoverable tar sand reserves and a detailed development plan for the next stage of operations;

(c) The lessee has achieved production in paying quantities, as that term is defined in §3142.0-5(a) of this title, by the end of the primary term; and

(d) The lessee annually produces the minimum amount of tar sand established by the authorized officer under the lease in the minimum production schedule which shall be made part of the plan of operations or pays annually advance royalty in lieu of this minimum production.

§3142.2   Minimum production levels.

§3142.2-1   Minimum production schedule.

Upon receipt of the supplement to the plan of operations described in §3142.1(b) of this title, the authorized officer shall examine the information furnished by the lessee and determine if the estimate of the recoverable tar sand reserves is adequate and reasonable. In making this determination, the authorized officer may request, and the lessee shall furnish, any information that is the basis of the lessee's estimate of the recoverable tar sand reserves. As part of the authorized officer's determination that the estimate of the recoverable tar sand reserves is adequate and reasonable, he/she may consider, but is not limited to, the following: or grade, strip ratio, vertical and horizal continuity, extract process recoverability, and proven or unproven status of extraction technology, terrain, environmental mitigation factors, marketability of products and capital operations costs. The authorized officer shall then establish as soon as possible, but prior to the beginning of the eleventh year, based upon the estimate of the recoverable tar sand reserves, a minimum annual tar sand production schedule for the lease or unit operations which shall start in the eleventh year of the lease. This minimum production level shall escalate in equal annual increments to a maximum of 1 percent of the estimated recoverable tar sand reserves in the twentieth year of the lease and remain at 1 percent each year thereafter.

§3142.2-2   Advance royalties in lieu of production.

(a) Failure to meet the minimum annual tar sand production schedule level in any year shall result in the assessment of an advance royalty in lieu of production which shall be credited to future production royalty assessments applicable to the lease or unit.

(b) If there is no production during the lease year, and the lessee has reason to believe that there shall be no production during the remainder of the lease year, the lessee shall submit to the authorized officer a request for suspension of production at least 90 days prior to the end of that lease year and a payment sufficient to cover any advance royalty due and owing as a result of the failure to produce. Upon receipt of the request for suspension of production and the accompanying payment, the authorized officer shall approve a suspension of production for that lease year and the lease shall not expire during that year for lack of production.

(c) If there is production on the lease or unit during the lease year, but such production fails to meet the minimum production schedule required by the plan of operations for that lease or unit, the lessee shall pay an advance royalty within 60 days of the end of the lease year in an amount sufficient to cover the difference between such actual production and the production schedule required by the plan of operations for that lease or unit and the authorized officer shall direct a suspension of production for those periods during which no production occurred.

§3142.3   Expiration.

Failure of the lessee to pay advance royalty within the time prescribed by the authorized officer, or failure of the lessee to comply with any other provisions of this subpart following the end of the primary term of the lease, shall result in the automatic expiration of the lease as of the first of the month following notice to the lessee of its failure to comply. The lessee shall remain subject to the requirement of applicable laws, regulations and lease terms which have not been met at the expiration of the lease.



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