Regulations

 

The final rule on hydraulic fracturing that was issued by BLM in March 2015 (80 FR 16128) was set aside by a June 21, 2016, decision by the U.S. District Court for the District of Wyoming.  That court found that BLM lacked statutory authority to issue the rule, and that hydraulic fracturing could only be regulated by the States.  Executive Order 13783 of March 28, 2017 (82 FR 16093), however, directed a review of this rule, for possible suspension, revision, or rescission; and on July 25 (82 FR 34464), BLM published a notice of proposed rulemaking to rescind the rule and to return to the regulations that were in place immediately prior to the rule’s adoption.  Given the reversal of BLM’s position on the rule, the U.S. Court of Appeals for the 10th Circuit, on appeal of the district court’s decision, vacated that court’s judgment on September 21, without reaching the merits of the case, and ordered the case to be dismissed.  And on December 29 (82 FR 61924), BLM published a final rule, effective that same date, rescinding the 2015 regulation.

Implementation of the final rule defining “waters of the United States,” which was issued by the Corps of Engineers and EPA in June 2015 (80 FR 37053), was enjoined by an October 9, 2015, order of the U.S. Court of Appeals for the 6th Circuit in State of Ohio v. U.S. Army Corps of Engineers.  The Corps and EPA, on March 6, 2017 (82 FR 12532), published a notice announcing their intention to review and rescind or revise this rule; and on July 27 (82 FR 34899), those agencies published a proposed rule rescinding the 2015 definition, and returning to the status quo prior to that definition, pending a further review of the proper regulatory definition of “waters of the United States.”  The 6th Circuit’s ruling meanwhile was under review by the Supreme Court; so to keep the 2015 definition from going into effect before a final rule rescinding that definition could be implemented, the Corps and EPA published a further proposed rule on November 22 (82 FR 55542) that would defer the applicability of the 2015 definition for two years.  And upon the Supreme Court’s determination, on January 22, 2018, that the Court of Appeals did not have jurisdiction to consider this matter, a final rule was published on February 6 (83 FR 5200) setting the applicability date for the 2015 rule as February 6, 2020.

A final rule amending ONRR’s regulations on onshore and offshore federal oil and gas royalty valuation (as well as federal and Indian coal valuation) was published on July 1, 2016 (81 FR 43337), effective January 1, 2017. On February 27, however (82 FR 11823), ONRR published a notice postponing the effectiveness of this rule until the resolution of pending judicial challenges; and on April 4, ONRR published (1) a proposed rule to repeal the 2016 rule (82 FR 16323), and (2) an advance notice of proposed rulemaking for other possible revisions to the pre-2016 rule (82 FR 16325).  And on August 7, 2017 (82 FR 36934), ONRR published a final rule, effective September 6, repealing the 2016 regulations, and reinstating the regulations that were previously in effect.

BLM’s most recent annual update of fees for activities relating to federal mineral resources (43 CFR 3000.12) was published on September 23 (81 FR 65558), effective October 1, 2016.

The National Park Service, on November 4 (81 FR 77972), and the Fish and Wildlife Service, on November 14, 2016 (81 FR 79948), published rules governing the management of non-federal oil and gas rights on lands under their respective jurisdictions.  A review of both of these rules, for possible suspension, revision, or rescission, was directed by Executive Order 13783 of March 28, 2017.

Final rules to reduce waste of natural gas from venting, flaring, and leaks, as well as to clarify when lost gas is subject to royalties, were published by BLM on November 18, 2016 (81 FR 83008, as corrected at 81 FR 88634), effective January 17, 2017.  The rules also clarify when on-site use of production is royalty-free.  In addition — although unrelated to the rest of the rulemaking — the new rules include an amendment of the regulation on royalty rates, to conform it to the statutory provision for royalty payments on competitive leases of not less than 12.5% (which has the potential for considerable mischief if it is interpreted as empowering the Secretary to increase royalty rates without amending the regulations).  Executive Order 13783 of March 28, 2017, directed a review of the 2016 rules, for possible suspension, revision, or rescission.  As a part of that review, BLM, on June 15 (82 FR 27430), published a notification that those compliance dates that had not yet passed under the rule were being postponed in light of pending litigation.  And on December 8 (82 FR 58050), BLM published a final rule, effective January 8, 2018, postponing implementation of the provisions in question for one year — i.e., to January 17, 2019.  That, however, did not end the matter because, on February 22, 2018, the U.S. District Court for the Northern District of California issued a preliminary injunction against the postponement.  But meanwhile BLM, on that same date, published proposed rules (83 FR 7924) that would replace provisions of the 2016 rules with requirements similar to those that were in effect previously.  And in light of the process initiated by the proposed rulemaking of February 22, the U.S. District Court for the District of Wyoming, on April 4, granted a stay of the provisions of the 2016 rules while the revision of those provisions is pending.

The Fish and Wildlife Service published a notice of revisions to its mitigation policy with regard to adverse impacts on fish, wildlife, plants, and habitats on November 21 (81 FR 83440); and a notice of its Endangered Species Act compensatory mitigation policy on December 27, 2016 (81 FR 95316).  On November 6, 2017 (82 FR 51382), FWS published a request for comments to determine whether and how these policies should be revised.

New resource management planning rules were published by BLM on December 12, 2016 (81 FR 89580), effective January 11, 2017.  According to BLM, the changes, referred to as “Planning 2.0,” were made in response to concerns that the planning process has become both too slow and too unresponsive to the public.  Those two concerns may not have been easy to reconcile, since additional opportunities for public involvement appear conducive to additional litigation.  BLM’s rationale, however, was that gathering more information up front — including through a new “planning assessment” to determine baseline conditions at the start of the process — “should help reduce the need for supplementation later in the planning process, which is often the cause for long delays under the current rule.”  A significant goal of the new rules was to maintain “flexibility to plan at the appropriate scale to deal with changing resource issues” — a landscape-scale approach, under which a resource management plan would cover the geographic area that would “best address all relevant resource issues” — which may or not make sense, since each affected resource could have a different “landscape.”  On March 27, 2017, however, the President signed into law a bill revoking the new rules.  And in what probably amounts to a bookkeeping measure, BLM, on December 21 (82 FR 60554), published a final rule formalizing the revocation.

By Executive Order 13792 of April 26, 2017 (82 FR 20420), the President directed a review by the Secretary of the Interior of certain National Monument designations made since 1996, to result in recommendations for such actions as may be appropriate. The review was to be based on consideration of several factors, “including the [Antiquities] Act’s requirement that reservations of land not exceed ‘the smallest area compatible with the proper care and management of the objects to be protected.’”  By Executive Order 13795 of April 28 (82 FR 20815), the President, citing the importance to the economy and to national security of energy and minerals produced from lands and waters under federal management, directed an effort by the Secretary of the Interior to schedule an annual oil and gas lease sale in each Outer Continental Shelf Planning Area, along with other actions to facilitate OCS mineral development — including actions implicitly pertaining to Marine National Monuments.  In response to the two preceding orders, the Secretary of the Interior, on May 11 (82 FR 22016), published a notice of the review of certain National Monuments under Executive Order 13792, and of certain Marine National Monuments under Executive Order 13795.  As a consequence of the review, Presidential proclamations No. 9681 (82 FR 58081) and No. 9682 (82 FR 58089) were issued on December 4, respectively reducing the areas included in two National Monuments in Utah: the Bears Ears National Monument (proclaimed in 2016), and the Grand Staircase – Escalante National Monument (proclaimed in 1996).  Changes to additional National Monuments are being considered.

In 1980, an area of the coastal plain of the Arctic National Wildlife Refuge was recognized by law as having high potential for oil and natural gas development. In 2013, the Interior Department established a plan for management of the National Petroleum Reserve – Alaska, which determined nearly half of NPR-A’s area to be unavailable for leasing. By Secretarial Order No. 3352 of May 31, 2017, a review was initiated of the area within NPR-A that should appropriately be available for leasing, as well as the mineral potential of ANWR’s coastal plain.  BLM, as an outgrowth of the review, published a notice on August 7, 2017 (82 FR 36827), requesting nominations and comments for all unleased NPR-A tracts, including tracts that are unavailable under the 2013 plan.  (A lease sale that was held on December 6 for NPR-A lands, however, resulted in bids for only a fraction of the acreage that was offered.)

By notice of June 22, 2017 (82 FR 28429), the Interior Department requested public input, on an ongoing basis, regarding Departmental regulatory reform in general. Comments may be submitted either by mail or through the www.regulations.gov website.  By notice of July 17, 2017 (82 FR 32649), the Agriculture Department (which includes the Forest Service) similarly requested comments on regulatory reform.  The Corps of Engineers did the same by notice of July 20, 2017 (82 FR 33470).

The Office of Natural Resources Revenue, on January 22, 2018 (83 FR 2907), issued a final rule making an annual adjustment for inflation to the amounts charged for civil monetary penalties resulting from violations of statutes, regulations, orders, or lease terms relating to royalty payments (30 CFR Part 1241).  A similar annual adjustment for inflation to the Bureau of Land Management’s charges for civil monetary penalties, for violations relating to lease operations (43 CFR Part 3160), was made by final rule issued on January 29 (83 FR 3992).

On January 23, 2018 (83 FR 3075), ONRR published a final rule repealing a 2013 regulation that had allowed service of official ONRR correspondence by electronic means, in addition to U.S. mail, private mailing services, and personal delivery.  (The notice explained that ONRR had intended to withdraw the rule following its publication in 2013, but had been prevented from doing so in time by a government shutdown.)

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A number of regulatory actions affecting the oil and gas industry are now under consideration by agencies in the Interior Department and elsewhere.

The Fish and Wildlife Service, on November 25, 2016 (81 FR 85250), published a notice of intent to prepare an environmental impact statement relating to issuance of an incidental take permit under the Endangered Species Act, in connection with a habitat conservation plan that is being developed to streamline permitting for oil and gas exploration, production, and maintenance activities in Ohio, Pennsylvania, and West Virginia.

On April 3, 2017 (82 FR 16222), the Secretary announced the establishment of a Royalty Policy Committee, to provide advice on fair market value determinations and revenue collections for federal and Indian energy and mineral resources.  (In practice, the work of that committee has been expanded to address issues that relate only tangentially to royalty collections — e.g., increased use of categorical exclusions in the environmental analysis of applications for permit to drill, and streamlining of APD review for wells drilled directionally from non-federal lands into federal minerals, both of which have led to the issuance of instruction memoranda implementing those recommendations.  See the Recent Developments page of this website.)

Included in Executive Order 13783 of March 28, 2017, was a directive to agencies to review and report on existing regulations and policies “that potentially burden the development or use of domestically produced energy resources,” in order to identify those requirements that are unnecessary and appropriately should be suspended, revised, or rescinded.  Reports in compliance with this directive have been published by the Forest Service, the Department of the Interior, and the Corps of Engineers.  Recommendations for the Forest Service include revision of the regulations on categorical exclusions and environmental analysis for oil and gas leasing (36 CFR 220.6, 228.102), and revision of the memorandum of understanding with the Interior Department regarding the agencies’ environmental review roles and responsibilities for leasing.  Recommendations for the Interior Department include revision of Onshore Oil and Gas Orders Nos. 3 (site security), 4 (oil measurement), and 5  (gas measurement); revision and replacement of current BLM policies for processing nominations of lands for leasing (which, as the report accurately notes, have “resulted in longer time frames in analyzing and responding to protests and appeals, . . . longer lead times for BLM to clear and make available parcels for oil and gas lease sales . . . , [and] increased workload and staffing needs to conduct additional upfront environmental analysis”), and elimination of the 2013 requirement for master leasing plans as a part the leasing process; and rescinding or modifying the 2013 requirement for environmental review in reinstatements of terminated leasesRecommendations on land use planning and lease parcel reviews in the Interior Department report have now been implemented by Instruction Memorandum 2018-034 of January 31, 2018, as discussed in detail on the Recent Developments page.  The Corps of Engineers report makes recommendations for changes to certain nationwide permits under the Clean Water Act.

The Secretary of the Interior, by Order No. 3358 of October 25, 2017, established an Executive Committee for Expedited Permitting to identify and recommend improvements that can be made to energy permitting policies.

The Bureau of Ocean Energy Management, on January 8, 2018 (83 FR 829), announced a draft proposed outer continental shelf leasing program for 2019-2024.  Even though this website does not generally cover OCS leasing, BOEM’s announcement is noteworthy both for its principled stance, and for the abrupt abandonment of principle that ensued.  The principle on which the announcement was premised is that, if OCS leasing is a proper component of the country’s domestic energy strategy, then all OCS areas that are not off-limits by law (i.e., everything besides the North Aleutian Basin in Alaska) ought to be open to consideration for their potential contribution to production.  But within a few days of the announcement, the administration acquiesced in a request by the governor of Florida to exempt that State’s OCS areas from the leasing program.  And unsurprisingly, that has been followed by demands from several other coastal-state governors for similar not-in-my-backyard treatment.

The Forest Service, on April 19 (83 FR 17359), announced the initiation of a planning process that will lead to the issuance of a revised Forest Plan for the Wayne National Forest in Ohio.