Conversely, all loss of gas not specifically found unavoidable is considered “avoidable” and, therefore, subject to royalties.Royalty provisions for new competitive leases With regard to the royalty rates applicable to onshore oil and gas leases, the proposed rule purports to do three things: (1) make clear that the royalty rate on all existing leases would remain at the same rate prescribed in the lease or regulations applicable at the time of lease issuance; (2) specify the fixed statutory rate of 12.5 percent, located at 30 U.S.C. § 226(c)(1), for all non-competitive leases issued after the rule’s effective date; and (3) for competitive leases issued after the effective date of the rule, align the rule text with the corresponding MLA text, which would allow the BLM to set royalty rates at or above 12.5 percent.
At the final stage before drilling may proceed, BLM reviews an Application for a Permit to Drill (APD) a well, which it must approve before any “drilling operations” or “surface disturbance preliminary thereto.” 30 U.S.C. §226(g); 43 C.F.R. §3162.3-1(c). BLM may condition its approval of an APD on additional reasonable terms and conditions that ensure consistency with the RMP.