QUESTION 5

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In view of the large acreage and probable quantities

of some energy resources in private ownership, or under current federal lease, what is your position on the need to issue additional leases or prospecting permits? Consider especially coal and oil shale.

ANSWER 5

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The Department's present position is to proceed cautiously on the issuance of further coal leases and permits pending an analysis of the quantity and quality of coal already under lease, and the demand and need for additional coal. In addition, the Department plans to incorporate terms and conditions in the outstanding leases upon their renewal in order to foster their development.

In regard to oil shale, the quality and quantity of oil shale deposits on private lands generally does not match the best of the Federal deposits. Therefore, Federal leasing of oil shale should be encouraged.

In regard to uranium, known reserves of relatively low cost uranium fall far short of the Nation's requirements. Where possible, federal lands should be open to mining claim location and the Department should continue to consider prospecting permits.

In his Clean Energy Message of June 1971, the President underscored the critical National need for clean energy and directed the Department to accelerate offshore oil and gas leasing and to prepare a five-year leasing schedule for oil and gas on the Outer Continental

Shelf. The Department is operating under this tentative five-year lease schedule. The President also emphasized the importance of a

geothermal leasing program and an oil shale leasing program which have

been developed.

Additional onshore oil and gas leases are needed, but it is even more

important that the leases be issued under conditions which will promote orderly development.

It is believed that a system of all competitive leasing with appropriate requirements for exploration and development, instead of the present noncompetitive leasing system, would be more responsive to supply and demand and would lead to less holding of leases primarily for speculation. The Administration's proposed bill to reform the Mineral Leasing Laws would provide that, with minor exceptions, all leases would be issued competitively.

QUESTION 6--For each resource, what conditions regarding land reclamation, protection of other resources, or environmental quality, are currently required for exploration or energy resource production on the public lands?

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 for
environmental protection or performance?

c) What, if any, recourse or enforcement authority has the
Interior Department (or your agency) with respect to
violations or default of contract provisions regarding
protection of other resources or environmental quality,
or land reclamation? Does the Federal government have

authority to cancel a lease permit, or other resource
right in such an instance? Is additional authority

needed at this time? If so, what provisions should such
new authority contain?

d) What has been the specific effect of environmental laws,
regulations, and requirements on the level of exploration
and production of energy minerals on the public lands?

85-197 O-73-4

ANSWER 6

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Oil and Gas on the OCS

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All oil and gas lease sales

on the OCS are considered major actions which can significantly affect the quality of the human environment and consequently require the preparation of environmental impact statements. Compliance with detailed lease stipulations, operating regulations and orders designed to protect the environment is required of all lessees and operators on the OCS.

(a) Section 102(c) of NEPA prescribes the specific

minimal content of environmental impact state

ments required of all major actions affecting
the environment.

Section (5) of the OCS Lands Act provides the
Secretary broad discretionary authority to
prescribe such rules and regulations as may be
necessary to administer leasing on the OCS.

(b) The OCS leasing regulations provide for bonding

all lessees, these bonds are being conditioned

on compliance with all terms of the lease.

(c) The OCS operating regulations provide for the
suspension of operations, including production,

which in the Department's judgment threatens

immediate, serious, or irreparable harm to the

environment.

Any non-producing lease may be cancelled administratively whenever

the lessee fails to comply with any provision of the OCS

Act or lease or applicable regulations in force and

effect on the date of issuance of the lease. Pro

ducing leases may be cancelled for such failure only
by judicial proceedings.

We believe the Department presently has ample authority

to suspend operations and/or cancel a lease.

(d) The net effects of strengthened environmental laws has

been an increase in the time required to implement

operational steps which necessarily precede

and lead up to an OCS sale and some reduction in the
acreage offered for lease. In order for the Department
to fully comply with the requirements of NEPA as it has
been interpreted in recent court decisions, a further
increase of this time frame has been necessary.

Onshore Minerals--Under 43 CFR 23.5(a) (1) Departmental regulations and BLM manual procedures, before a permit for exploratory activity is issued, a technical examination is made to determine the probable effect of prospecting activity on the environment.

The examination

takes into consideration the need for the "preservation and protection of other resources including recreational, scenic, historic, and ecological values; the control of erosion, flooding and pollution of