CMM Interstate & Federal Regulations 4 — Questions and Answers
Question 1: Under 30 CFR Part 1218, royalties on federal leases must be paid by what date each month?
- The 1st of the month following production
- The 15th of the month following production (Correct answer)
- The last day of the month of production
- Within 60 days of production
Correct answer: The 15th of the month following production
ONRR regulations at 30 CFR Part 1218 require royalties to be paid by the 15th day of the month following the month of production.
Question 2: Which act established the Office of Natural Resources Revenue (ONRR) and its authority to collect royalties from federal mineral leases?
- Federal Oil and Gas Royalty Management Act (FOGRMA) (Correct answer)
- Mineral Leasing Act of 1920
- Outer Continental Shelf Lands Act
- Energy Policy Act of 2005
Correct answer: Federal Oil and Gas Royalty Management Act (FOGRMA)
FOGRMA, enacted in 1982, established the framework for federal royalty management and led to creation of the agency now known as ONRR.
Question 3: An interstate natural gas pipeline company seeking to construct a new pipeline must obtain a Certificate of Public Convenience and Necessity from:
- BLM
- FERC (Correct answer)
- DOT Pipeline and Hazardous Materials Safety Administration
- State utility commissions
Correct answer: FERC
FERC issues Certificates of Public Convenience and Necessity under Section 7 of the Natural Gas Act for new interstate pipeline construction.
Question 4: Under federal regulations, a 'suspension of operations' on a federal oil and gas lease is typically granted for a maximum of:
- 6 months
- 1 year
- 5 years, with extensions possible (Correct answer)
- The remaining primary term only
Correct answer: 5 years, with extensions possible
BLM may grant suspensions of operations and production for up to 5 years, with possible extensions for extenuating circumstances.
Question 5: The Split Estate situation in the western U.S. occurs when:
- A federal lease is split between two operators
- The federal government owns the mineral rights but a private party owns the surface rights (Correct answer)
- A state and federal government both claim royalty on the same production
- Two federal agencies share jurisdiction over the same leasehold
Correct answer: The federal government owns the mineral rights but a private party owns the surface rights
Split estate refers to parcels where the federal government owns subsurface mineral rights while private individuals or entities own the surface.
Question 6: Which federal statute requires environmental impact assessments for major federal actions, including federal lease sales and drilling permit approvals?
- Resource Conservation and Recovery Act (RCRA)
- National Environmental Policy Act (NEPA) (Correct answer)
- Clean Water Act Section 404
- Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
Correct answer: National Environmental Policy Act (NEPA)
NEPA requires federal agencies to assess environmental impacts through Environmental Assessments or Environmental Impact Statements before major federal actions.
Question 7: Under the Mineral Leasing Act, what is the maximum acreage any individual or entity may hold in federal oil and gas leases within a single state?
- 100,000 acres
- 246,080 acres (Correct answer)
- 500,000 acres
- There is no statutory acreage limitation
Correct answer: 246,080 acres
The Mineral Leasing Act limits any person or entity to holding no more than 246,080 acres of federal oil and gas leases in any one state.
CMM Interstate & Federal Regulations 4
Under 30 CFR Part 1218, royalties on federal leases must be paid by what date each month?