Bureau of Land Management, Interior.
The Bureau of Land Management (BLM) is providing the six-month notification to terminate all royalty rate reductions for stripper well properties under the regulations at 43 CFR 3103.4-2(b)(4). In addition, BLM is requesting comments on the financial conditions under which BLM would reestablish the benefit.
This termination of benefits for stripper well properties is effective for sales on or after February 1, 2006. Send your comments to reach BLM on or before August 22, 2005. The BLM will not necessarily consider comments received after the above date.
Mail: Director (630), Bureau of Land Management, Eastern States Office, 7450 Boston Boulevard, Springfield, Virginia 22153.
Personal or messenger delivery: 1620 L Street, NW., Suite 401, Washington, DC 20036.
Direct Internet: http://www.blm.gov.nhp/news/regulatory/index.html.
Internet E-mail: Comments_Washington@blm.gov.
Federal eRulemaking Portal: http://www/regulations.gov.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Rudy Baier, Bureau of Land Management, (202) 452-5024 (Commercial or FTS). Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339, 24 hours a day, seven days a week, except holidays, for assistance in reaching Mr. Baier. Start Printed Page 42094End Further Info End Preamble Start Supplemental Information
Under 43 CFR 3103.4-2(b)(4), BLM may terminate the benefits under the stripper well royalty reduction program upon 6 month's notice in the Federal Register when BLM determines that the average oil price has remained above $28 per barrel over a period of 6 consecutive months (based on the WTI Crude average posted prices and adjusted for inflation using the implicit price deflator for gross national product with 1991 as the base year). The adjusted threshold for the third quarter of calendar year 2004 was $35.97 and for the fourth quarter $36.16.
Based on BLM analysis, the WTI Crude average oil prices exceeded the adjusted threshold during the last 6 months. Therefore, as authorized by 43 CFR 3103.4-2, this serves as notice that BLM will terminate the benefits of the stripper well royalty reduction program effective for sales on or after February 1, 2006. Therefore, beginning on the effective date, those properties currently receiving relief under section 3103.4-2 must pay royalty in accordance with the royalty rate in the lease or other BLM-approved royalty rate reductions.
Inherent in our authority to terminate the benefits of the royalty reduction program for stripper wells at a price threshold is the authority to reinstate the program should prices later fall beneath such a threshold. In the event that the new stripper royalty reduction regulations are not in effect when prices again make production uneconomic, BLM proposes to reinstate the availability of benefits under the royalty reduction program for stripper wells after publication of notice in the Federal Register.
It is BLM's intention to propose new regulations to address situations in which prices again make marginal production uneconomic. In the time between when the benefits of the program terminate and when the new regulations are effective, BLM may reinstate the existing program.
BLM proposes to reinstate the availability of benefits when it determines that the average oil price has remained below $28 per barrel over a period of 6 consecutive months (based on the WTI Crude average posted prices and adjusted for inflation using the implicit price deflator for gross national product with 1991 as the base year).
BLM recognizes that the $28 per barrel trigger was instituted over 12 years ago and conditions since that time may have changed considerably. Therefore, BLM is requesting comment specifically on the financial conditions under which BLM would reestablish the benefit under the existing stripper well royalty reduction program. Please see the ADDRESSES section above for information on where to submit your comments.Start Signature
Dated: May 13, 2005.
Acting Assistant Secretary, Land and Minerals Management.
[FR Doc. 05-14100 Filed 7-20-05; 8:45 am]
BILLING CODE 4310-84-P