Increased Fee for Processing Applications for Permit to Drill in Fiscal Year 2016

United States Department of the Interior

BUREAU OF LAND MANAGEMENT

Washington, DC 20240

http://www.blm.gov

September 2, 2015

In Reply Refer To:                                                                                         

3100 (310) P                                                                                                  

EMS TRANSMISSION DATE 09/17/2015

Instruction Memorandum No. 2015-142

Expires:  09/30/2018

To:               All Field Officials                                                                     

From:            Assistant Director, Energy Minerals and Realty Management

Subject:        Increased Fee for Processing Applications for Permit to Drill in Fiscal Year 2016                                    

Program Areas:  Oil and Gas Operations

Policy/Action: Effective October 1, 2015, every new Application for Permit to Drill (APD), including those on Indian minerals, is to be accompanied by a non-refundable filing fee in the amount of $9,500.  This fee applies to any new APD submitted on Form 3160-3, whether submitted individually or as part of a Master Development Plan.  The fee, to be collected upon submission, is for processing APDs and is required whether or not an APD is subsequently approved.

The fee is not required for a Notice of Staking, but is required if an APD is submitted using Form 3160-3.  The increase in the fee does not change Onshore Oil and Gas Order Number 1 (Order No. 1) or its implementation.

If an operator submits an APD for a new well without the fee of $9,500, the BLM is not to log it in, post, process, or consider it as received until the operator pays the full fee.  If the operator submits the old fee of $6,500, the BLM shall consider the fee as not paid until the operator pays the full fee of $9,500.  In the event that the operator does not submit the full fee, the BLM will contact the operator and give the operator 10 business days to submit the required amount.  The BLM is to consider an APD filed and start the processing clock in Order No. 1 only after the operator submits the full fee.

Failure to submit the APD fee is not an Order No. 1 deficiency.  If the operator fails to pay the missing fee after the 10-day notice described above, the BLM shall return the APD along with any partial fee to the operator.  An operator who fails to submit the full $9,500 fee cannot seek a State Director Review and has no right of appeal to the Interior Board of Land Appeals.  Failure to submit the fee is a statutory violation, not a violation of Department regulations.

The acceptable form of payment and the processing of the payment are in accordance with the BLM Collection Reference Guide, May 2008.

The BLM is to enter the collected funds in the Collections and Billings System (CBS) and Pay.Gov using the collection protocol as follows:

Commodity - OIL & GAS
Subject - APPLICATION FOR PERMIT TO DRILL (APD)
Action - APD FEE (*XL1109PF)(1312)

Replacement wells that an operator uses when it encounters down-hole problems and must skid the rig a few feet on the same well pad may require a new 3160-3 for administrative purposes.  However, the BLM has already completed most of the work in approving the APD, including consultation and environmental work, so the new 3160-3 does not represent a new well application.  Accordingly, an additional processing fee is not required.

If the operator moves the well location at the request of the BLM to accomplish agency or resource protection goals or to accommodate a surface owner request, and the move results in a new APD, an additional processing fee is not required.  An example would be moving a well to reduce a cut and fill or loss of habitat.  However, if the operator requests the move and the move results in a new APD, an additional processing fee is required.  An additional processing fee would not be required if the operator submits a second 3160-3 for the purpose of correcting a clerical error or to adjust a drilling location that is changed at the on-site inspection.

Timeframe: This guidance is effective on October 1, 2015. Any continuing resolutions passed for FY 2016 will have no effect on the implementation of this IM.  As required by the authorizing legislation, the amount of the fee shall changed as indexed for United States dollar inflation form October 1, 2015 (as measured by the Consumer Price Index).  The Washington Office will issue the updated fee amount on an annual basis.

Budget Impact: The collection and processing of this fee is expected to have minimal impact on the budget.  The increased fee is expected to have a positive impact on the oil and gas budget.  Since the National Defense Authorization Act for Fiscal Year 2015 established an increased ADP fee, regular appropriations bills have no effect on the collection of this fee.

Background: The National Defense Authorization Act for Fiscal Year 2015 established the increased APD processing fee for the Bureau of Land Management.

Manual/Handbook Sections Affected: None

Coordination: The Washington Office coordinated preparation of this IM with the BLM National Operations Center - Accounts Receivable Section; Washington Office Division of Budget; and the Assistant Director for Business, Fiscal, and Information Resources.

Contact: If there are any questions concerning this IM, please contact me at 202-208-4201. Your staff may contact Steven Wells, Division Chief, WO-310, at 202‑912-7143 or s1wells@blm.gov, or Gary Torres, Deputy Division Chief, WO-310, at 202-912-7157 or gtorres@blm.gov. 

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

Authenticated by: 
Catherine Emmett
Division of IRM Governance,WO-860