CMM Regulatory Compliance & Environmental Issues 2 — Questions and Answers
Question 1: Under NEPA, what is the primary purpose of an Environmental Impact Statement (EIS)?
- To penalize companies for environmental violations
- To inform federal decision-makers and the public of significant environmental effects (Correct answer)
- To replace state environmental permits
- To establish royalty rates for mineral extraction
Correct answer: To inform federal decision-makers and the public of significant environmental effects
NEPA requires an EIS to disclose significant environmental impacts so federal agencies and the public can make informed decisions.
Question 2: Which federal agency administers the Safe Drinking Water Act (SDWA) Underground Injection Control (UIC) program affecting oil and gas operations?
- Bureau of Land Management
- EPA (Correct answer)
- FERC
- OSHA
Correct answer: EPA
The EPA administers the UIC program under SDWA to protect underground sources of drinking water from injection well contamination.
Question 3: A 'categorical exclusion' under NEPA applies when a proposed federal action:
- Requires a full EIS due to major impacts
- Has no significant individual or cumulative environmental effects based on agency experience (Correct answer)
- Is exempt from all environmental review
- Involves only private land with no federal nexus
Correct answer: Has no significant individual or cumulative environmental effects based on agency experience
Categorical exclusions apply to actions that agencies have determined do not individually or cumulatively cause significant environmental effects.
Question 4: Under the Endangered Species Act, what must an operator do before conducting activities that may affect a listed species on federal land?
- Pay a mitigation fee to the U.S. Fish and Wildlife Service
- Obtain an incidental take permit or complete Section 7 consultation (Correct answer)
- File a complaint with the EPA
- Submit a NEPA waiver to BLM
Correct answer: Obtain an incidental take permit or complete Section 7 consultation
Section 7 consultation with USFWS or NMFS is required for federal actions that may affect listed species, and an incidental take permit covers non-federal actions.
Question 5: What does the term 'unitization' mean in the context of oil and gas regulatory compliance?
- Converting mineral rights from fee to federal ownership
- Combining separately owned tracts into a single operational unit to prevent waste (Correct answer)
- Dividing a large lease into smaller parcels for individual operators
- Transferring environmental liability to a unit operator
Correct answer: Combining separately owned tracts into a single operational unit to prevent waste
Unitization pools separately owned tracts into one operating unit to maximize recovery and prevent waste, often required by state conservation commissions.
Question 6: The Resource Conservation and Recovery Act (RCRA) Subtitle D exemption for oil and gas exploration and production wastes means:
- E&P wastes are regulated as hazardous waste under RCRA Subtitle C
- Certain E&P wastes are exempt from federal hazardous waste regulations but still subject to state regulation (Correct answer)
- All oilfield wastes may be disposed of without any regulatory oversight
- E&P companies pay reduced RCRA compliance fees
Correct answer: Certain E&P wastes are exempt from federal hazardous waste regulations but still subject to state regulation
The 1988 Bevill Amendment exempted many E&P wastes from Subtitle C hazardous waste rules, leaving regulation primarily to states.
Question 7: Under BLM regulations, what is a 'Notice of Intent' (NOI) used for on federal mineral lands?
- Notifying BLM of planned surface disturbance exceeding 5 acres or in sensitive areas requiring an APD (Correct answer)
- Declaring intent to purchase a federal mineral lease at auction
- Reporting a well blowout to BLM within 24 hours
- Requesting a royalty rate reduction due to marginal economics
Correct answer: Notifying BLM of planned surface disturbance exceeding 5 acres or in sensitive areas requiring an APD
An NOI is filed with BLM when a proposed operation will disturb more than 5 acres of federal land or is in an area of environmental concern, triggering BLM review before an APD is required.
CMM Regulatory Compliance & Environmental Issues 2
Under NEPA, what is the primary purpose of an Environmental Impact Statement (EIS)?