BLM Buries Change to MLA Rights of Way in Wind and Solar Leasing Change

At the end of September 2014, BLM released the proposed rule to create a competitive leasing process for solar and wind energy development on public lands. While most of the proposed rule relates to the renewable energy right-of-way (“ROW”) procedures under the Federal Land Management Policy Act (“FLPMA”) regulations (43 CFR 2800) announced in 2012, buried in the voluminous proposal are changes to oil and gas pipeline rights of way under the Mineral Leasing Act (“MLA”). 43 CFR 2880.

Under the changes to Part 2880, BLM is proposing pre-application requirements and an increase in fees for all oil and gas pipelines 10 inches or more in diameter. (The rule adds similar new requirements for transmission lines of 100kV or greater). According to BLM, changes to Part 2880 are necessary to ensure consistency between MLA ROWs (governed by Part 2880) and the changes proposed for wind and solar ROWs (governed by Part 2800). BLM states that these changes are necessary because authorizations for any pipeline 10 inches or more in diameter are “generally large-scale operations that require additional steps to help protect the public land.”

The changes to Part 2880 include additional bonding requirements (such as identification of acceptable forms of bond), although BLM still retains discretion as to whether a bond will be required. The proposed rule also contains an increase in ROW application processing costs, which are determined based on a proposed table of costs accounting for project components. Under the proposed rule, BLM would be permitted to collect reimbursement from pipeline operators for the actual costs incurred in processing ROW applications, including pre-application expenditures.

The proposed rule also contains detailed pre-application procedures for project proponents, largely aimed at developing coordination between Federal, State, tribal and local governments that may be affected by the project. Specifically, for all pipelines over 10 inches in diameter, the proposed rule calls for a minimum of two pre-application meetings with interested governmental entities.

BLM proposes to require the submittal of a plan of development (“POD”) prior to, or contemporaneously with, accepting the ROW application. The POD should, at a minimum, contain a statement of purpose and need, a description of the proposed location and associated facilities, identification of the federal and state agencies affected and a summary of operation and maintenance and stabilization and reclamation plans. The comment process closed on December 16, 2014 and the rule is expected before the end of 2015.

The net result of these proposed changes will likely be an escalation in up-front project costs, consisting of both increased application and rental fees and an increase in soft costs associated with pre-project planning and coordination. It remains to be seen whether the increase in initial costs will reduce overall project costs through more efficient up-front planning and coordination.

The Federal Register notice with the text of the proposed rule can be found at: http://blmsolar.anl.gov/documents/docs/FR_Competitive_Leasing_Sep_30_2014.pdf

See Related Post: BLM Proposes Renewable Energy Leasing and Rights-of-Way Regulations

For more information about public lands and rights of way, please contact Nora Pincus at npincus@wsmtlaw.com