New BLM Eastern States Director
BLM has announced the appointment, as of July 6, 2020, of Mitchell Leverette as the new State Director for the Eastern States Office. He comes to the Eastern States Office from a position as BLM’s Acting Deputy Assistant Director for Energy, Minerals and Realty Management; and his past service with BLM includes a previous stint at the Eastern States Office. He succeeds Karen Mouritsen, who became BLM’s California State Director earlier in the year. BLM’s Eastern States Office has jurisdiction over 39 million subsurface acres in the 31 States east of and bordering on the Mississippi River.
Lease Suspensions and Royalty Rate Reductions Due to Coronavirus
In late April 2020, BLM issued guidance on seeking federal lease suspensions based on impacts from the coronavirus pandemic. Existing law provides for two types of lease suspensions: suspensions of operations and production, for reasons of conservation of natural resources (which suspend both the running of the lease term and the obligation to pay rentals); and suspensions of operations only, or of production only, for reasons of force majeure (which do not affect the rental or minimum royalty obligation). The guidance envisions a need to request a suspension of operations and production resulting from the virus’s potential impact on BLM functions; as well as a need to suspend either operations or production resulting from the virus’s potential impact on lessees or operators. In either case, the guidance contemplates a suspension of only 60 days, although subject to extension if warranted.
At the same time, BLM also issued guidance – updated in June – on seeking temporary royalty rate reductions on federal leases based on the virus’s impact. To obtain such relief, an operator would need to show that a lease would be uneconomic at the current royalty rate on account of “the extreme circumstances presented due to the COVID-19 pandemic.” A royalty rate reduction on these grounds similarly would be limited to 60 days, but subject to renewal if warranted.
For notable recent court opinions, decisions by the Interior Board of Land Appeals, federal regulations, and BLM lease sale information, click the following links: