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(b) The reserves, and probable and potential resources, on lands under coal permit or lease, or under application for permit or lease.

Answer. With respect to AEC's planned uranium leasing program, information available on reserves and potential resources is believed to be adequate to formulate appropriate lease terms and to administer the leasing program effectively. Although not applicable to AEC with respect to resource management, AEC considers there is inadequate information on location, quality and cost of exploitation of coal resources for overall energy resource planning.

(c) The number, acreage, and reserves or resources of uranium claims; (d) The persons owning or effectively controlling leases or claims ;

(e) The progress of development, or volume and value of production from lenses or claims.

Answer. AEC does not have complete information on the number, acreage, ownership and control of all individual claims, but does not consider such information to be necessary at this time for its program planning. The information on liranium being made available voluntarily by the uranium industry to the AEC is adequate to determine developed uranium reserves and to monitor progress of development and volume and value of production.

(14) Does oil and gas exploration, development and production on the Outer Comtinental Shelf impose a net economic or fiscal burden on the adjacent coastal state? Should this burden, if any, be compensated by granting the coastal states @ share of OCS mineral leasing revenues!

Answer. Not applicable.

(15) What funds have been paid to states under the revenue sharing provisions of the Mineral Leasing Act of 1920? What is the basis in policy for such sharing of revenues! With respect to public lands states other than Alaska is there any reason why such a revenue sharing policy should not be prepetuated in any suhsequent legislation related to mineral leasing? Answer. Not applicable.

ATTACHMENT B

ENERGY RESOURCES LEASING AND DISPOSAL QUESTIONS AND POLICY ISSUES

PART I. ISSUES CONCERNING ALL ENERGY RESOURCES

A. Legal and Management Regimes

1. What constitutes the principal legal authority under which each resource is developed?

Answer. Uranium on the public lands (except Indian and acquired lands) is developed under the mining laws dating back to the mining law of 1872. The proposed leasing of AEC-controlled lands for uranium mining will be carried out under the AEC's legal authority to lease acquired and withdrawn lands for uranium in the Atomic Energy Act of 1954, as amended (42 USC 2097).

2. What are the principal goals and objectives of the government with respect to management of each resource?

Answer. The principal goals and objectives of the AEC concerning the man. agement of uranium resources on AEC-controlled lands are the orderly progress of uranium mining in the area and exploitation of AEC-controlled resources in a manner which results in the maximum extraction within the limits imposed by economics and the corresponding income to the government.

a. To what extent is each goal or objective specifically set out by law, or adopted at the discretion of the Department!

Answer. At the discretion of the AEC (10 CFR Part 60).

b. To what extent is each goal or objective compatible with other objectives for the management of individual resources (for example, how are encourage. ment of current development, conservation of supplies for future use and maxi. misation of government revenues reconciled!)

Answer. Through proper timing relative to the development of the area in which the resources are located and by appropriate bidding procedures and royalty schedules.

c. What is the basis for any difference in goals or objectives with respect to different energy resources!

Answer. Not applicable.

d. To what extent do the goals and objectives of the principal legal authorities under which individual energy resources are managed require review and amendment to make them consistent with today's energy requirements!

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Answer. Projected energy requirements are such as to justify the continnal review of the development and management of the nation's energy resources and the legal authorities relating thereto.

3. To the extent that receipt of "fair market valueis an objective of management policy for any resource, how is each such resource evaluated before lease or sale, when reviewing bids, when reviewing a lease for renewal or other pur. poses, and when determining royalty obligations? For each resource, and in each instance?

Answer. The following answers concern only the AEC limited uranium land leasing program:

a. Who makes the evaluation?

Answer. The evaluation is performed by a team of AEC personnel including geologists, mining engineers, metallurgical engineers and cost analysts.

6. What is net public resource value, and how is it measured and hor is it used in evaluation?

Answer. A net public resource value for AEC-controlled lands containing uranium ores is not used by the Commission in its evaluation. Instead, the Commission examines the potential consequences of the mining activity as it may result in the production of useful materials as well as the possible adverse effects on the environment. These two aspects are not necessarily quantifiable in the same terms so as to permit a determination of net public resource value.

C. What is fair market value, and how is it measured and how does it relate to the evaluation ?

Answer. The fair market value is considered to be the value on the commercial market of the ore estimated to exist on the property and the potential for new discoveries, less the cost of extraction and a reasonable profit to provide the incentive to a prospective lessee to undertake the risk of exploration, development and mining. The estimate of the fair market value is considered directly as a measure of the adequacy of bids received.

d. Distinguish, if possible, between fair market value and marimization of government revenue,

Answer. It is difficult to distinguish between fair market value and maximiz:tion of government revenue. An attempt to increase government revenne abore that indicated from a determination of fair market value as in question 3.C. above by means of increased royalty rates, for example, would tend to decrease the total quantity of ore mined and, therefore, decrease the ultimate income to the Government.

e. Is a discounted cash flow analysis used in leasing evaluations? If so, hoor

Answer. Yes. The analysis is used to determine the relative values of cash bids and royalties over an extended period of operation of the mining properties.

f. How is fair market value determined in isolated, non-industrialized areas?

Answer. All of the AEC-controlled lands proposed for leasing are located with in a reasonable distance of milling facilities. Proximity to milling farilities is the only economic factor bearing on the location of uranium properties. The mill product is a highly concentrated one that can be shipped in world-wide commerce at low unit cost.

4. Describe briefly the system (location, competitive lease, lease to first applicant, prospecting permit with preference right, negotiated sale, etc.) used to make each resource available for private development.

Answer. Except for leases on Indian lands, acquired lands and the uraniumbearing lands controlled by AEC, the system used to make uranium available is through the location of mining claims.

5. What initiative or action is required by a private party to obtain rights to each resource!

Answer. The action required to obtain rights to uranium on the public lands is the location of mining claims. Rights to uranium on Indian lands are obtained through lease.

6. What discretionary authority, if any, has the Interior Department to lease or not to lease, or otherwise to open or close lands to development of each resource?

Answer. Not applicable.

7. What discretionary authority, if any, has the agency with jurisdiction orer the surface (if other than Interior) to open or close lands to dcrelopmen: nt each resource?

Answer. The AEC has discretionary authority under the Atomic Energy Act (42 USC 2097) with regard to acquired lands, to open or close the lands to development, as described in the answer to Question 2 of Attachment A. Except for the limited area of AEC-controlled uranium lands, the AEC has not exercised this authority with respect to the development of uranium resources.

8. How is the price determined that is paid to the government for each resource or the right to develop it? To what extent is the system of pricing and/or the specific price prescribed by law, and what, if any, discretionary authority has the Interior Department over them?

Answer. No compensation is paid to the Government for uranium mined on public lands under the mining laws. With respect to A EC-controlled lands, the disposal procedures and royalty schedules for uranium are to be determined at the discretion of AEC, with the objective of maximizing economic extraction and associated income to the governinent.

9. What is the term of a lease, permit, sale, or other right to each resource ?

Answer. No leases on AEC-controlled uranium lands are presently in effect. The AEC expects that when it grants leases they will be for a term of 5–10 years, renewable for an additional 5–10 years.

a. Can the contract provision be reviewed and amended within this term, and if so, with respect to what conditions ?

Answer. It is expected that the lease contracts in the AEC leasing program will contain provisions for review and adjustment with respect to the price per pound used to determine royalty payments. The leases will also provide for continuing AEC approval of exploration and mining plans and changes to permit assurance of adequate environmental control.

b. To what extent are the term and scope of review and amendment prescribed by law, or within the discretionary authority of the Interior Department?

Answer. The term and other provisions of a lease for these lands is within the discretionary authority of the AEC (10 CFR Part 60).

10. What are the conditions for renewal or continuation of a lease, permit, sale, or other right to cach energy resource?

Answer. It is expected that a lea se will be renewed or continued on application of the lessee if he has adequately performed under the lease terms, and if renewal is in the best interest of the Government.

a. To what extent may the conditions for renewal or continuation differ or be mode different from the original conditions for issuance of the lease, permit, or right?

Auswer. The terms and conditions of the original leases, which would contain provisions regarding renewal, have not as yet been determined.

b. To what extent are the conditions of renewal prescribed by law, or within the discretionary authority of the Interior Department?

Answer. The conditions of renewal are not prescribed by law or regulation; they would be entirely within the discretionary authority of the AEC.

11. Where law or regulation establishes a performance standard (producible, commercial protection, diligent development, valid discovery, etc.) for issuance continuance or renewal of a lease, permit, or other right:

a. How is this standard defined in law, in regulation, and in administrative practice?

b. What, if any, test is conducted or required by the Interior Department to determine whether this standard has been fulfilled? Who makes and/or reviews these tests?

Answer. Not applicable.

12. For each energy resource, uhat, if any, limits are there on the number or acreage of leases, sales, permits or claims that one person may hold? To what ertent do these limitations apply to options, partial and total assignments, partnerships, associations, stockholder interests, or other kinds of interest?

Answer. With respect to uranium on the public domain there is not limit to the number or acreage of claims that any one person may hold. There are no statutory or regulatory restrictions on the number or acreage of leases applicable to AEC'S leasing program. It is probable that AEC will impose some limits but these have not yet been determined. AEC's approval of assignments and transfers will be required.

13. For each resource, what conditions regarding protection of other resources, land reclamation, or enrironmental quality, are currently required for permissire exploration or in a lease or sale contract, permit, claim or patent?

a. To what extent are such conditions prescribed or proscribed by law, or within the discretionary authority of the Interior Department?

b. In what instances, if any, does the law permit or require bonding or other assurance of financial responsibility?

c. What, if any, recourse or enforcement authority has the Interior Department with respect to violations or default of contract provisions regarding protection of other resources or environmental quality, or land reclamation? Does the Department have authority to cancel a lease, permit, sale, or other resource right in such an instance?

Answer. With respect to the location-patent system which applies to uranium, the Mining Law of 1972 does not provide for Federal control of land reclamation, or environmental quality. Mining operations are subject to surface management authorities of various Federal agencies relating to protection of other resourers As previously stated (Question 6, Attachment A), with respect to AEC's limited uranium leasing program, adequate provisions for protection of other resources, environmental quality, etc., will be included in the lease.

14. Describe the cristing procedure for complying with Section 102 of the National Environmental Policy Act with respect to leasing or disposition of each energy resource?

a. At what points in the existing process are the overall alternatives to general leasing or disposal strategies, and to specific lease, permit or sale offerings, land closures or land openings, considered?

Answer. AEC made a programmatic determination, relating to the economic viability of the area and optimum realization of government revenues, that it was appropriate to initiate its planned limited leasing program on uranium-bearing lands withdrawn by AEC. The resulting production of uranium from this programu will be quite small in relation to total United States production. A draît envirozie mental impact statement has been issued by AEC (WASH-1523, dated 3/27/2, "Leasing of AEC-Controlled Uranium-Bearing Lands), and a final statement will be issued. With respect to all uranium mining and milling operations, environmental impact statements are issued pursuant to AEC's licensing authority de scribed in the answer to Question 6, Attachment A.

15. What, if any, procedures are prescribed by law, or instituted by regulation or administrative practice, for considering state and local views and interests, and the relation to privately, state or municipally owned resources of the same type, in Interior Department decisions regarding leases, sales, permits, or the opening or closing of lands to development of each energy resource?

Answer. No specific procedures relating to AEC's leasing program are prescribed by law. However, as stated in the answer to Question 14, AEC has issued an environmental impact statement on its leasing program which is subject to comment by state and local agencies, other government agencies and the public.

16. For each agency resource, describe briefly the organization of the depart. ment for administration of leases, permits, sales or claims.

Answer. The AEC Director of Regulation requires submission of environ. mental impact statements for uranium mining and milling operations as part of AEC's licensing procedures. The A EC's proposed leasing program will be directed by the AEC Grand Junction, Colorado, office. B. Systems of Disposition and Management: Alternatives and Modifications

17. What major in-house or contractor studies and analyses have been undertaken by the Interior Department since 1969 with respect to alternative systems of resource leasing or disposal, or with respect to management procedures!

Answer. Not applicable.

18. In the case of each energy resource, summarize briefly the major modifica. tions in law or management actively considered either by the Public Land Lor Revieto Commission or by this Administration. Reference these alternatives to the PLLRC report and/or consultant reports, or to Interior Department or con. tractor publications.

Answer. With respect to mining claims (including uranium) the Public Land Law Review Commission considered the following changes in the mining laws

(a) Exploration: Congress should establish maximum size of exclusive permit and aggregate acreage to be held by one person ; specify period of time for er. ploration permit; and establish performance requirements to assure diligent exploration. The distinction between Inde and placer claims would be abolished.

(h) Environmental Protection : Surface protection controls would be admin. istratively applied under Congressional guidelines through the exploration,

development, proquction, and post-production stages, and would include restoration or rehabilitation.

(c) Discovery: Proof of a "discovery," as historically defined, would no longer be a prerequisite to obtaining mining rights or getting a patent.

(d) Patent: A patent would give the holder ownership of the minerals only, as opposed to the fee granted under existing law, and would allow the use of the surface only to the extent necessary for extracting and processing the minerals. At his option, however, the holder (patentee) could acquire title to the land by paying the market value for it.

(e) Royalties: Royalties would be payable on production both before and after patent.

(f) Elimination of Dormant Claims: A method would be provided to enable a holder of claims to perfect them under the new system. Abandoned claims would be extinguished. (See “One Third of the Nation's Lands, Public Land Law Review Commission," pp. 124–130).

19. What, if any, major modifications or systems or management policy have been put into effect either by legislation, regulation, or operating decision since 1969?

Answer. With respect to uranium mining claims, we know of no major modification of systems or management policy which have been put into effect since 1969.

20. What major modifications of the manner of developing these resources are incorporated into legislation currently proposed by the Administration?

Answer. The Administration's proposed legislation in this area is the responsibility of the Department of the Interior.

21. For which energy resources are the Department's decisions regarding ere. cution of particular leases, permits, or sales, or regarding the opening or closing of lands to exploration or location part of an overall schedule of development related to national energy needs (like the Ocs five-year leasing schedule) ? Please summarize the principles, schedule and strategy of development in each instance. (Special attention is requested to the oil shale and geothermal energy resources.)

Auswer. Please refer to the answer to Question 14(a) concerning the timing of AEC's leasing program. C. Quantitative and historical information

22. Please provide the best available estimates of proved reserves, and probable and potential resources (or some other appropriate classification according to certainty and/or recoverability) on the U.S. public lands, of each of the energy resources listed at the beginning of Part I. In each of these instances, the reserves or resources on U.S. public lands should be compared with total U.S. rescrves or resources. Estimates of coal and oil reserves and resources should, to the estent available, be subdivided by state, according to a measure of sulphur and ash, content (i.e., distinguish between clean and dirty" resources), and as mined or mineable by (a) underground methods, and by (0) surface mining methods.

Answer. See following table:

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(23) In the case of each energy resource indicate:

a. The acreage of lands classified as containing, or suitable for production of that resource.

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