Recent Developments

 

Drilling Permits for Directional Wells into Federal Minerals from Non-federal Lands

BLM, on June 12, 2018, issued Instruction Memorandum No. 2018-014, revising the procedures for an application for permit to drill into federal minerals from a well pad located on lands with non-federal surface and minerals.

The biggest change made by this IM is philosophical: it acknowledges that “BLM’s regulatory jurisdiction is limited to Federal lands;” so the processing of an APD for a directional well from the non-federal tract into federal minerals should not be taken as an opportunity to influence the activities on the non-federal tract beyond what is legally required in order for BLM to carry out its obligations. For purposes of the National Environmental Policy Act, the Endangered Species Act, and the National Historic Preservation Act, the IM recognizes that “the Federal action or undertaking to be analyzed is the approval of the APD, and the BLM should focus its environmental analysis accordingly.”

Thus, where the well is to be drilled from a preexisting well pad on the non-federal tract, any environmental analysis that is needed “may be limited to a discussion of environmental effects of the downhole operations to be approved,” plus potential effects of “any additional surface disturbance (e.g., well pad expansion) [that] is anticipated as a result of development of the Federal minerals.” As the IM reminds BLM, “The pre-existing surface disturbance(s) and facilities are not the result of the Federal APD.” Moreover, the IM encourages BLM to consider whether the need for further environmental analysis may be limited through a Determination of NEPA Adequacy (DNA) for preexisting environmental analyses, or through an applicable categorical exclusion (e.g., for drilling from a location where drilling has occurred within the previous five years, or for drilling within a developed field if the drilling was analyzed within the previous five years as a reasonably foreseeable activity).

Even if the well is to be drilled from a location where there is no prior surface disturbance, BLM should consider whether the well pad is likely to be constructed for non-federal wells even if the federal APD is not approved; but if “it appears that the well pad would only be constructed if the Federal APD is approved, the environmental analysis must consider all potential environmental effects associated with construction and operation of the well,” including consideration of “a range of reasonable alternatives in the siting of the surface facilities.”

(The IM includes a reference to BLM Information Bulletin No. 2018-061, which was issued six days previously. That document is a reminder to the BLM field offices, when evaluating a proposal for mineral development, to consider the availability of a DNA or a categorical exclusion as an alternative to the preparation of an Environmental Assessment or Environmental Impact Statement.)

Among other significant points made by the IM, with regard to APD’s for wells from non-federal tracts into federal minerals, are that such an APD need not include a Surface Use Plan of Operations, nor provide for an onsite well inspection; but that, while BLM may have no right of surface access without landowner consent, if BLM’s inability to access the surface prevented it from meeting its obligations under NEPA, ESA, or NHPA, that could be grounds for denying the APD.

 


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