NEPA Compliance for Oil and Gas Reinstatement Petitions 

United States Department of the Interior
BUREAU OF LAND MANAGEMENT
Washington, D.C.  20240
https://www.blm.gov

July 3, 2018

In Reply Refer To:
3100 (310) P  

EMS Transmission 7/3/2018
Permanent Instruction Memorandum No. 2018-010       

To:                   State Directors

From:               Assistant Director, Energy, Minerals, and Realty Management

Subject:           NEPA Compliance for Oil and Gas Reinstatement Petitions                                                                     

Program Area:  Oil and Gas Leasing.

Purpose:  This Instruction Memorandum (IM) directs all oil and gas leasing offices to implement changes to the Bureau of Land Management’s (BLM) policy regarding National Environmental Policy Act (NEPA) compliance before approving a Class I or Class II oil and gas lease reinstatement petition.[1]  This policy replaces the guidance as previously directed by WO-IM-2013-177.

Policy/Action:  Before approving or denying an oil and gas lease reinstatement petition, all BLM offices must review applicable Resource Management Plans (RMP) and NEPA documentation to:

1. Confirm that the reinstatement of the lease meets the requirements of and would be in conformance with 43 CFR 3108.2-2 or 3108.2-3.
2. Ensure reinstatement of the lease would be in conformance with the existing RMP.  Prior to the approval of a lease reinstatement on lands managed by another surface management agency (SMA), the BLM must ensure that the SMA is contacted. The BLM will send a letter requesting that the SMA provide any new information that warrants a change in the lease stipulations since the issuance of the original lease within 60 days of receipt of the request.  If the SMA does not respond within 60 days, a follow-up letter will be sent to the supervising office of the SMA initially contacted, again asking the SMA requesting the required information within an additional 60 days.  If additional follow-up is needed with SMA contact to solicit an instructional response, then BLM will make sure any instructional response is in writing.  The SMA should provide reason with their consent to the reinstatement and any new information and stipulation changes.   The BLM is responsible for determining and preparing the appropriate level of NEPA documentation in coordination with other SMAs.  Refer to Attachment 1 for NEPA guidance and Attachment 3 for coordination with the SMAs, such as the Forest Service.
3. Evaluate the adequacy of existing NEPA analysis and documentation related to the lease area.  Refer to the NEPA Compliance section for guidance on public involvement when using the Determination of NEPA Adequacy (DNA) process; and
4. Complete any necessary new or supplemental NEPA analysis and documentation if the existing NEPA analysis and documentation are inadequate. 

The state offices must support their decision to reinstate a terminated oil and gas lease by completing environmental review in compliance with NEPA.  Typically, this obligation can be satisfied by completing a DNA.  However, in unique situations where there have been significant changes to resource issues or significant new information about the resources within the leasehold, the reinstatement may require the preparation of an Environmental Assessment (EA)/Environmental Impact Statement (EIS), as appropriate.  For all Class II lease reinstatement Federal Register Notices (FRN) sent to the Washington Office (WO), the State Director will include in the FRN reinstatement package:

1. A separate memo signed by the Deputy State Director (DSD) for Resources certifying that the BLM completed a DNA or appropriate NEPA analysis that the DSD has signed;
2. NEPA document and, if applicable, the BLM National NEPA Register number; and
3. Identification of the updated lease stipulations the BLM proposes to modify or to add to the lease instrument.

To document a DNA review, complete the DNA Worksheet, Attachment 2 (also found in Appendix 8, Handbook H-1790-1, National Environmental Policy Act https://www.blm.gov/sites/blm.gov/files/uploads/Media_Library_BLM_Policy_Handbook_h1790-1.pdf).  Section 5.1 of Handbook H-1790-1 (BLM NEPA Handbook) provides instructions for identifying and reviewing existing RMPs and NEPA documents, considering whether additional public involvement is necessary, and documenting findings.  A DNA may rely on one existing NEPA document (e.g., a RMP EIS) or relevant aspects of multiple NEPA documents (e.g., a RMP EIS and an EA prepared before leasing). 

For reinstatements on Forest Service managed lands, Attachment 3 includes information that supplements the 2006 Memorandum of Understanding (MOU) between the BLM and the Forest Service Concerning Oil and Gas Leasing and Operations until a revised MOU is issued.

Plan Conformance Review

Review the existing RMP or amendment to determine whether planning decisions, stipulations required for new leases, or the areas open to leasing have changed since the BLM originally issued the lease. 

The state office must deny reinstatement of the lease if the existing RMP or amendment closed all or a portion of the lease area to leasing.  This would not apply to leases that drilled a well or earned a drilling extension and the lessee failed to pay the rental timely.  If the state office denies the reinstatement, the state office will refund the pre-paid rental and the publication costs.

Through the RMP conformance review, and if found to be appropriate, consider adding additional existing RMP lease stipulations to the lease (see H-1601-1, Chapter VI, Section H. 3. and 4.) or modifying existing stipulations on the lease (see H-1601-1, Chapter VI, Section H. 6).

The BLM will condition a reinstatement on the lessee’s agreement to new or modified stipulations.  (This is not limited to the rental and royalty provisions, which the statute and regulations require to be changed for Class II reinstatements.)  For example, if the BLM has updated the RMP to require a new or modified stipulation for improved protection of a specific resource, the state office will condition the reinstatement on the lessee’s agreement to the new or modified stipulation.  If the RMP was revised or amended subsequent to the issuance of the original lease and the updated RMP identifies new lease stipulations for the affected area that are not currently included in the lease, or identifies modifications to stipulations that are included in the lease, the state office must condition the reinstatement on inclusion of those stipulations or modified stipulations in the reinstated lease.   

The state office will deny the reinstatement if the lessee does not agree to the additional or modified stipulations.  In that event, the state office will refund the pre-paid rental and publication costs.

NEPA Compliance

Review the existing NEPA documentation related to the leases to determine whether new or supplemental NEPA analysis is necessary. 

The lease is eligible for reinstatement based on a DNA if the “NEPA Adequacy Criteria” in the DNA Worksheet indicates that the existing NEPA documentation is sufficient to assess the environmental consequences of the proposed reinstatement.  For the DNA, public notification and involvement is incorporated into this policy through the use of the FRN for Class II Reinstatements.  In accordance with NEPA Handbook (H-1780-1), Section 5.1.2, if public involvement with the existing NEPA documentation was appropriate, additional public involvement during the DNA process is at the discretion of the decision-maker (e.g., external scoping, public notification before or during your review of the existing NEPA, public meetings, or public notification or review of a completed DNA Worksheet).

If the “NEPA Adequacy Criteria” indicate that the existing NEPA documentation is no longer adequate, then additional NEPA analysis is required.  In that event, prepare an EA/Finding of No Significant Impact (or EIS, as appropriate) to inform the decision approving or denying the reinstatement petition.  The appropriate office must conduct additional NEPA analysis in a prompt and timely manner.  If the BLM is considering a standalone EA for the reinstated lease, it may be appropriate to tier the EA to the RMP/EIS or to the EA for an earlier quarterly lease sale involving the same field office.  The EA for the proposed reinstatement can then narrow its focus to issues that are ripe for decision.  (See Incorporating by Reference and Tiering, H-1790-, Section 5.2.)  In addition to posting EAs on the field office NEPA website, determine whether additional public involvement is warranted.

Administrative Costs

The RMP conformance review and NEPA compliance cost are part of the “administrative costs” of a Class II reinstatement under 30 U.S.C. § 188(e), for which recovery is capped at $500 under that section, and which are paid through the $500 administrative fee required under 43 CFR 3108.2-3(b)(3)(vi).  Therefore, additional cost recovery for NEPA analysis does not apply to Class II reinstatements.  The fee for Class I reinstatements is included in the fixed fee schedule.  Determining whether existing NEPA analysis is adequate is not a unique processing cost within the meaning of 43 CFR 3000.11(a) and therefore, not a proper subject for cost recovery. 

The lease reinstatement process table (Attachment 1) outlines the steps for reviewing and documenting RMP conformance and NEPA adequacy and completing any additional NEPA analysis and documentation that may be necessary before approving a reinstatement. 

If the authorized officer finds that the reinstatement will not afford the lessee a reasonable opportunity to continue operations under the lease, the BLM should consider whether it is appropriate to grant a lease extension, as allowed under 43 CFR 3107.6. 

Budget Impact:  This policy will result in nominal costs for increased planning, coordination, NEPA review, responding to administrative challenges, and associates program costs.  It is expected that staff will be able to use existing land use planning and be able to prepare low level NEPA reviews and documentation in the form of a DNA or, in rarer cases, an EA.  It is not anticipated that reinstatement petitions and reviews would trigger new land use planning.

Background:  Based on applicable law and legislative history, the Secretary of the Interior’s consideration of a lessee’s application to reinstate an oil and gas lease, as provided in 30 U.S.C. 188(c), is a discretionary decision that requires NEPA compliance.  This IM provides guidance to ensure that lease reinstatement decisions comply with NEPA and that reinstated leases comply with applicable RMPs.  This IM also updates and clarifies the role of other SMAs in the reinstatement process. 

Pages of Manual/ Handbook Sections Affected:  The BLM will incorporate this guidance into H-3108-1, Continuation, Extension or Renewal of Leases (O&G Adjudication Handbook) during the next revision.  This guidance will also be incorporated into the next revision of the MOU between U.S. Department of the Interior/BLM and Forest Service.

Instruction Memorandums Affected:  This policy replaces the guidance as previously directed by WO-IM-2013-177.

Coordination:  The Washington Office Division of Fluid Minerals coordinated preparation of this policy with the FS to clarify their role in the reinstatement process.

Contact:  If there are any questions concerning this IM, please contact me 202-208-4201, or your staff may contact Steve Wells, Division Chief (WO-310), at 202-912-7123.

Signed by:
Michael D. Nedd
Assistant Director
Energy, Minerals, and Realty Management

Authenticated by:
Catherine Emmett
WO-870, IT Policy and Planning

3 Attachments

1 - Lease Reinstatement Process Table (2 pp)

2 - DNA Worksheet (4 pp)

3 - Supplement to MOU between BLM and Forest Service Concerning Oil and Gas Leasing and Operations (3 pp)