MEMORANDUM OF UNDERSTANDING

between:

State of Montana

and

Department of the Interior - Bureau of Land Management

concerning:

Preparing an Environmental Impact Statement

For Oil and Gas Development

I. Purpose. The Bureau of Land Management (BLM) and the State of Montana (State) have determined that an environmental impact statement (EIS) must be prepared to analyze and plan for oil and gas development, including coal bed methane. The planning area for BLM is the BLM-administered oil and gas estate in the Powder River and Billings resource management plan (RMP) areas. The planning area for the State is statewide. The EIS will be contracted by BLM with assistance from the State. The EIS must comply with the provisions of the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. Sec. 4321 (1988), and all subsequent regulations implementing the act (see Council on Environmental Quality (CEQ) regulations, 40 CFR Part 1500-1508), the Montana Environmental Policy Act (MEPA), Title 75, Chapter 1, Montana Code Annotated, and regulations implementing the act, ARM 17.4.601 et seq., and Department of Interior requirements listed in Departmental Manual 516 “Environmental Quality”. It will also comply with the guidance listed in the BLM’s Environmental Handbook, H-1790-1, and fulfill the requirements of related local, State, and other Federal laws and regulations.

II. Objective. The purpose of this Memorandum of Understanding (MOU) is to establish an agreement between the State and BLM regarding the conditions and procedures to be followed in preparing an EIS to comply with the laws and regulations through a joint BLM and State effort. The BLM, Miles City Field Office will be the lead Federal Agency for the project. The Department of Environmental Quality, State of Montana, will be the State lead for the project.

III. Authority. This memorandum is entered into under the following authorities:

A. National Environmental Policy Act of 1969, as amended (PL 91-190, 42 U.S.C.)

B. Federal Land Policy and Management Act of 1976, 43 U.S.C. 1701 et. seq. as amended (PL 94-579)

C. Mineral Leasing Act of 1920, as amended, (PL 93-153)

D. Montana Environmental Policy Act, Title 75, Chapter 1, Montana Code Annotated

E. ARM 17.4.627

IV. Procedure.

A. BLM Responsibilities

1. The BLM is the lead federal agency and is responsible for ensuring full compliance of the EIS document with the requirements of NEPA and MEPA. Further, the BLM is responsible for ensuring that all federal, state, local and tribal agencies affected by the proposed project are given the opportunity to be cooperating agencies and shall ensure that all necessary consultation and coordination is performed with all Federal, State, local and tribal governments and private organizations under applicable laws, rules, regulations and orders.

2. BLM will use the GSA approved contractor list online to hire a contractor for the EIS. The BLM will develop a Statement of Work, requisition and Request for Quotes. Selection of the contractor shall be based on, but not limited to, the following general criteria:

a. Expertise in the areas of environmental analysis, including water and air quality, ground water resources, biology, soils, land uses, archaeology, Native American values and socioeconomic values.

b. Expertise in preparing EIS’ for Oil and Gas activities including coal bed methane activities for BLM.

c. Ability to produce environmental analyses, demonstrated through experience or expertise.

d. Ability to produce thorough, concise, readable and informative documents.

e. Evidence of a good working knowledge of NEPA, corresponding federal and state regulations and applicable local ordinances and other statutory requirements.

f. Ability to complete work in a timely manner.

3. The BLM will be the main contact for the EIS contractor and will manage the contract. Mary Bloom, Miles City Field Office, will be the key contact for the BLM on all matters related to preparation of the EIS with the State and the contractor.

4. The BLM, in coordination with the State, will develop a preparation plan with a public participation key date schedule and a key person contact list. The date schedule will indicate key events in the preparation of the EIS.

5. The BLM will ensure that the Contractor provides adequate copies of all maps, reports and draft documents to each person on the key contact list to allow for a timely review of the product.

6. The BLM will be responsible for maintaining the mailing list for the plan.

7. The BLM has full responsibility for complying with NEPA procedures and implementing regulations including, but not limited to, public review of the EIS, public distribution of the EIS and any required BLM decision documentation.

B. State Responsibilities

1. Greg Hallsten, Department of Environmental Quality, is the designated state contact for the BLM on all matters relating to the preparation of the EIS.

2. The DEQ is the lead state agency and is responsible for ensuring full compliance of the EIS document with the requirements of MEPA. Further, the State is responsible for ensuring that all federal, state, local and tribal agencies affected by the proposed project are given the opportunity to be cooperating agencies and shall ensure that all necessary consultation and coordination is performed with all Federal, State, local and tribal governments and private organizations under applicable laws, rules, regulations and orders.

3. The State shall provide, directly to the BLM, responses to data requests (e.g., descriptions of proposed action) and provide review comments within the time limits established by the BLM and the State in the attached schedule.

4. The State shall provide any reasonably justifiable, necessary or relevant technical or environmental information it may have which is needed, at the BLM’s request, for the EIS.

5. The State may use environmental and other information developed by the Contractor for the purpose of analyzing permit applications, related procedures, or for any design and alternative evaluation.

6. The State will participate in the preparation and negotiation of appropriate mitigation measures and associated documents.

7. The State has full responsibility for complying with MEPA procedures and implementing State regulations.

C. Process

1. The BLM and the State will consult with one another during all phases of the EIS. Bimonthly telephone calls may be held to help coordinate activities.

2. The BLM and the State shall share the responsibility for conducting scoping meetings. The EIS contractor will prepare a comment analysis after the scoping meetings. The BLM, State, and Cooperators will review the scoping analysis.

3. The EIS contractor will have primary responsibility for writing and rewriting all sections, parts or chapters of the EIS and for completing chapters consistent with the overall time schedule attached. The contractor will provide copies of the draft EIS and final EIS to BLM. BLM will distribute copies of EIS.

4. The BLM and the State will ensure that the Contractor considers existing data and environmental analyses available from BLM, State and other sources and that it does not duplicate work already done.

5. The BLM and the State will coordinate with Cooperators to keep them informed of the progress of the EIS, as well as any additional data needs or changes as necessary or on a monthly basis at a minimum.

6. The BLM and the State will coordinate with one another to identify mapping needs. Maps will be done using GIS and will meet BLM’s data standards. Mapping products will be provided by the State’s mapping contractor and the BLM’s EIS contractor, as identified in the Statement of Work.

7. The BLM and State and Cooperators will review the preliminary Draft EIS and will comment and make changes to the EIS within the time period attached. The EIS contractor shall incorporate these comments and changes into the sections, parts or chapters of the EIS.

8. The BLM and the State may invite the Contractor to attend meetings related to the project with federal, state, regional and local agencies and other groups (e.g., they may be asked to participate in discussions on the proposed action and on special or critical resource needs).

9. Joint meetings between the BLM, State and the EIS contractor shall be held to coordinate the EIS preparation. When significant meetings or conversations between the BLM or State occur, written documentation will be provided to the other missing parties by the meeting initiator.

10. BLM and the State will document all phone calls from the public regarding the plan and provide copies to the other party. Copies of all correspondence to and from the agencies related to the EIS shall be provided to the other agency in a timely manner.

11. The BLM and the State will be the recipients of all comments on the EIS resulting from the review and comment periods. Each will provide copies of all comments to the other party. The BLM will provide copies of all comments to the EIS Contractor for analysis and response.

12. BLM and the State will prepare the Preferred Alternative and any mitigation measures to be included as part of the proposed plan.

13. After the close of the Draft EIS review and comment period, the BLM and the State will determine any necessary modification of the text. These modifications shall be identified by BLM and the State and incorporated into the EIS by the EIS contractor.

14. Upon revision of the Draft EIS, the BLM, State and Cooperators will review the preliminary Final EIS.

15. BLM and the State are responsible for signing the EIS. Upon release of the Final EIS to the public, the BLM will hold a public protest period for its proposed decisions.

16. The BLM will be responsible for preparing the Record of Decision for BLM’s approved decisions. The State will be responsible for preparing a separate Record of Decision to approve its decisions.

V. Administration.

Modifications to this MOU may be proposed by either party and shall become effective upon the written approval by both parties. Changes to this MOU must be initialed and dated on each replacement page by an authorized agent of each party.

Either party may withdraw from this MOU following thirty (30) days written notice to the other party.

Nothing in this MOU will be construed as affecting the authorities of the participants or as binding beyond their respective authorities or to require any of the participants to obligate or expend funds.

This MOU will become effective upon signature of all of its participants.

APPROVED

Timothy M. Murphy Field Manager BLM Miles City Field Office	Date: December 18, 2000
Mark Simonich Director, Department of Environmental Quality State of Montana	Date: December 21, 2000