CMM Interstate & Federal Regulations 2 — Questions and Answers
Question 1: Which federal agency administers the Mineral Leasing Act on onshore federal lands?
- Bureau of Land Management (BLM) (Correct answer)
- Environmental Protection Agency (EPA)
- Federal Energy Regulatory Commission (FERC)
- U.S. Geological Survey (USGS)
Correct answer: Bureau of Land Management (BLM)
The Bureau of Land Management (BLM) administers the Mineral Leasing Act of 1920 and manages onshore federal mineral leases.
Question 2: Under the Federal Oil and Gas Royalty Management Act (FOGRMA), what is the standard royalty rate for onshore federal oil and gas leases?
- 12.5% (Correct answer)
- 16.67%
- 18.75%
- 25%
Correct answer: 12.5%
The standard onshore federal royalty rate under FOGRMA is 12.5% (one-eighth) of production value, though it may vary.
Question 3: The Interstate Oil and Gas Compact Commission (IOGCC) was established primarily to:
- Regulate interstate pipeline tariffs
- Promote conservation of oil and gas resources among member states (Correct answer)
- Set federal royalty rates for all states
- Enforce federal Clean Air Act provisions in oil fields
Correct answer: Promote conservation of oil and gas resources among member states
The IOGCC was created by Congress in 1935 to encourage member states to adopt conservation measures for oil and gas resources.
Question 4: Which federal law requires operators on federal leases to file a Notice of Intent (NOI) before conducting surface-disturbing activities?
- National Environmental Policy Act (NEPA)
- Surface Resources Act
- Federal Land Policy and Management Act (FLPMA) (Correct answer)
- Endangered Species Act (ESA)
Correct answer: Federal Land Policy and Management Act (FLPMA)
FLPMA and BLM regulations require operators to submit a Notice of Intent or Application for Permit to Drill before surface-disturbing activities on federal lands.
Question 5: A federal oil and gas lease term is typically how long for a producing lease?
- 5 years
- 10 years
- Held by production as long as operations continue (Correct answer)
- 25 years with mandatory renewal
Correct answer: Held by production as long as operations continue
Federal leases are held by production (HBP) for as long as oil or gas is produced in paying quantities after the primary term expires.
Question 6: Under the Natural Gas Act, the Federal Energy Regulatory Commission (FERC) has jurisdiction over:
- Wellhead gas pricing on private lands
- Interstate natural gas pipeline transportation and sales (Correct answer)
- State royalty calculations for gas production
- Intrastate gas gathering systems
Correct answer: Interstate natural gas pipeline transportation and sales
FERC regulates the interstate transportation and wholesale sale of natural gas under the Natural Gas Act of 1938.
Question 7: What is the purpose of an Onshore Oil and Gas Order (OOGOO) issued by BLM?
- To authorize a specific well permit
- To establish detailed operational standards for drilling and production on federal leases (Correct answer)
- To transfer lease ownership between operators
- To set royalty payment schedules for individual lessees
Correct answer: To establish detailed operational standards for drilling and production on federal leases
BLM's Onshore Oil and Gas Orders establish uniform operational requirements for drilling, production, and environmental protection on federal leases.
CMM Interstate & Federal Regulations 2
Which federal agency administers the Mineral Leasing Act on onshore federal lands?