Operations and Production

The regulations that govern operations associated with the exploration, permitting, development and production of onshore oil and gas deposits on Federal leases can be found under Title 43, subpart 3160 of the Code of Federal Regulations (43 CFR 3160). This subpart, entitled Onshore Oil and Gas Operations, states that, ”The objective of these regulations is to promote the orderly and efficient exploration, development and production of oil and gas.”

Once a leaseholder, operator, or designated agent identifies an oil and gas deposit on a Federal lease, they can file an application for permit to drill (APD). The BLM posts these APDs on its 30 Day Federal Public Posting Report Page. The BLM governs the APD process under Onshore Order #1 and its 2017 amendment, which is codified under 43 CFR §3160.

The BLM cannot approve an APD until the operator meets the requirements of certain laws and regulations, including the National Environmental Policy Act (NEPA), the National Historic Preservation Act, and the Endangered Species Act. Upon receiving an APD, BLM typically conducts an onsite inspection with surface and/or mineral estate owners, resource specialists, the operator, and when applicable, other Surface Management Agencies (or SMAs, such as states, tribal representatives, or other Federal agencies like the USDA Forest Service). After completing these inspections, the BLM, together with any other relevant SMAs, conducts a NEPA analysis, and then approves, approves with modifications, denies, or defers action on the application. Deferred action or denials can occur because the operator fails to provide all the necessary information or due to severe resource concerns. The BLM and other SMAs may add Conditions of Approval to the APD to protect site-specific resources. An approved APD is valid for two years or until the lease expires, whichever occurs first, but the BLM may grant a two-year extension to allow the operator more time to drill.

In the past decade, multi-well drilling pads have increased production volumes from individual locations and reduced surface disturbance from roads and pipelines. While the BLM tries to limit disturbance as much as possible, it is also important that workers have enough area to work in safely. The Gold Book provides operators with guidelines for safe and environmentally responsible permitting and development procedures for Federal oil and gas leases.

In addition to the Gold Book, the BLM provides operators with guidance on unitization, communitization, spacing, and drainage procedures, and in-response to Onshore Orders 3, 4, and 5, has formed a Production Measurement Team in-charge of approving new measurement equipment, practices, and technologies.