[Federal Register Volume 75, Number 74 (Monday, April 19, 2010)]
[Rules and Regulations]
[Pages 20271-20294]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8798]
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DEPARTMENT OF THE INTERIOR
Minerals Management Service
30 CFR Part 250
[MMS-2008-OMM-0034]
RIN 1010-AD12
Oil and Gas and Sulphur Operations in the Outer Continental
Shelf--Oil and Gas Production Requirements
AGENCY: Minerals Management Service (MMS), Interior.
ACTION: Final rule.
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SUMMARY: The MMS is amending the regulations regarding oil and natural
gas production requirements. This is a complete rewrite of these
regulations, addressing issues such as production rates, burning oil,
and venting and flaring natural gas, to ensure appropriate development
of these natural resources. The final rule eliminates most restrictions
on production rates and clarifies limits on the amount of natural gas
that can be flared or vented. The final rule is written using plain
language, so it is easier to read and understand.
DATES: Effective Date: This rule is effective on May 19, 2010.
FOR FURTHER INFORMATION CONTACT: Amy C. White, Regulations and
Standards Branch, 703-787-1665.
SUPPLEMENTARY INFORMATION:
Background
Notice of Proposed Rulemaking
On March 6, 2007, the MMS published a Notice of Proposed Rulemaking
(NPR) in the Federal Register (72 FR 9884). This NPR requested comments
on proposed revisions to 30 CFR part 250, subpart K, Oil and Gas
Production Rates. The MMS accepted comments on the NPR until June 4,
2007 (90 days). We received eight comments on the NPR. These comments
came from producers of oil and natural gas in the Outer Continental
Shelf (OCS) and from the State of Alaska. The MMS made revisions to the
proposed rule based on these comments.
Mandate of the Outer Continental Shelf Lands Act
Under the OCS Lands Act (OCSLA), MMS has the responsibility to
issue regulations governing oil and natural gas production operations
on the OCS. Our regulations related to oil and natural gas operations
are primarily based on three responsibilities given to the MMS by the
OCSLA, these include:
1. Safety;
2. Protection of the environment; and
3. Conservation of resources.
The primary purpose of the final rule is to establish criteria for
oil and natural gas production to ensure conservation of resources.
These regulations help ensure that the American people received the
maximum benefit from oil and natural gas production by maximizing the
amount of oil and natural gas that is produced and marketed. For
example, these regulations establish the criteria for natural gas
flaring and venting and set limits on the time that natural gas may be
flared or vented. These regulations are designed to work with other MMS
regulations related to safety and protection of the environment and our
other responsibilities under other Federal laws.
The MMS regulates air quality under the authority of the Clear Air
Act (CAA), for areas in the Gulf of Mexico located west of 87.5[deg]
longitude (western Gulf of Mexico) and the Environmental Protection
Agency (EPA) has authority for air quality elsewhere on the OCS. The
MMS must coordinate with EPA to implement the CAA requirements. The EPA
is responsible for setting National Ambient Air Quality Standards
(NAAQS); MMS enforces those standards for oil and natural gas
operations on the OCS. Our air quality requirements are located at 30
CFR subpart C--Pollution Prevention and Control. In addition to the
Subpart C regulations, oil and gas operators must submit projected air
emissions for their entire project as part of their Development and
Production Plan (DPP) or their Development Operations Coordination
Document (DOCD) at 30 CFR 250.249. Requests to flare or vent natural
gas must not exceed the volume approved by MMS in the DPP or DOCD.
The MMS also reviews the flaring and venting requests to determine
if they trigger an air quality review under 30 CFR subpart C. However,
the flaring and venting limits set in these final regulations are low
enough that additional air quality review is seldom required.
With regards to greenhouse gas emissions, MMS recognizes that this
is an important issue. The CAA requires MMS to coordinate our air
quality regulations with EPA. If EPA establishes a NAAQS for greenhouse
gas emissions, MMS would be responsible for enforcing those standards
in the western Gulf of Mexico and we would develop regulations to
implement that authority under the regulations at 30 CFR subpart C, as
appropriate.
Purpose of These Revisions
The MMS is revising subpart K to:
(1) Update the structure and readability of the rule, bringing it
into compliance with the Department of the Interior (DOI) plain
language guidance;
(2) Eliminate unnecessary requirements;
(3) Clarify limits on the amount of natural gas that may be flared
or vented during certain situations;
(4) Improve collection of data on flaring and venting; and
(5) Incorporate several existing Notices to Lessees (NTLs).
The DOI requires agencies to write regulations in plain language,
that is in a style that will ensure the regulations are easy to read
and clear. The MMS follows DOI's plain language guidelines when
creating new regulations or updating existing regulations. These
regulations were originally written before plain language standards
were required; we are updating the entire subpart to comply with those
standards.
Some requirements from the current subpart K regulations are
eliminated by the final rule because they are unnecessary in today's
petroleum industry. For example, MMS required operators to establish
maximum production rates (MPRs) for producing well completions, and
maximum efficient rates (MERs) for producing reservoirs, in OCS Order
No. 11 in 1974,
[[Page 20272]]
during a period of oil shortages and energy crises. In 1988, MMS
reduced the MER requirement. Currently, MERs are required only on
sensitive reservoirs (primarily oil reservoirs with associated gas
caps). Determining and maintaining production rates imposes a
significant burden on operators. Based on the past 30 years of
experience, MMS concluded that maximum rate requirements and production
balancing requirements can be largely eliminated without detriment to
efforts for conservation and maximization of ultimate recovery.
However, the final rule will allow the Regional Supervisor to set
production rates in cases where excessive production rates could harm
ultimate recovery from the reservoir.
The final rule clarifies limits on the length of time of natural
gas that may be flared or vented in certain situations. The final rule
requires approval from the Regional Supervisor to flare or vent natural
gas except for situations that are described in the rule. The
situations that don't require Regional Supervisor approval (provided
the activities are completed within a specific time frame in most
cases) include:
(1) When the gas is lease use gas (produced natural gas which is
used on or for the benefit of lease operations such as gas used to
operate production facilities) or is used as an additive necessary to
burn waste products, such as H2S.
(2) During the restart of a facility that was shut in because of
weather conditions, such as a hurricane.
(3) During the blow down of transportation pipelines downstream of
the royalty meter.
(4) During the unloading or cleaning of a well, drill-stem testing,
production testing, other well-evaluation testing, or the necessary
blow down to perform these procedures.
(5) When properly working equipment yields flash gas (natural gas
released from liquid hydrocarbons as a result of a decrease in
pressure, an increase in temperature, or both) from storage vessels or
other low-pressure production vessels, and you cannot economically
recover this flash gas.
(6) When the equipment works properly but there is a temporary
upset condition, such as a hydrate or paraffin plug.
(7) When equipment fails to work properly, including equipment
maintenance and repair, or when you must relieve system pressures.
We explain the length of time that gas may be flared or vented for
each situation and clarify when approval from the Regional Supervisor
is required. Regardless of the reason for flaring or venting natural
gas, the lessee or operator must report the amounts to MMS. The final
rule requires separate reporting of the amount of natural gas flared
and the amount of natural gas vented. This separate reporting
requirement is in response the GAO report recommending that MMS collect
these numbers separately. The MMS will publish the raw data on our Web
site, along with other oil and natural gas production data. The
Department of Energy's Energy Information Administration uses this
production data for their statistics and analysis. This requirement
will improve the quality of the data that is available on natural gas
emissions.
The final rule clarifies required information submittals to MMS,
including requirements relating to the documents submitted to MMS and
the timing of those submissions. For example, there are additional
requirements on notifying adjoining operators regarding production
within 500 feet of a common lease or unit line. The final rule provides
more detail as to when the notification must occur, what the notice
must include, and how to verify the notification with MMS.
There are several Notices to Lessees (NTLs) that will be rescinded
when the final rule becomes effective. However, if necessary, MMS will
issue additional NTLs to provide guidance. We will rescind the
following NTLs:
NTL No. 97-16, Production Within 500 Feet of a Unit or
Lease Line, effective August 1, 1997.
NTL No. 98-23, Interim Reporting Requirements for 30 CFR
part 250, subpart K, Oil and Gas Production Rates, effective October
15, 1998.
NTL No. 99-G20, Downhole Commingling Applications,
effective September 7, 1999.
NTL No. 2006-N06, Flaring and Venting Approvals, effective
December 19, 2006.
This NTL also provides contact information for each Region and provides
sample field records. These two items are not addressed in the final
rule. The MMS will issue a new NTL to include only this information,
after the effective date of this final rule.
GAO Report
In July 2004, the GAO issued a report on world-wide emissions from
vented and flared natural gas titled, Natural Gas Flaring and Venting--
Opportunities to Improve Data and Reduce Emissions (GAO-04-809). This
report is available on the GAO Web site at: http://www.gao.gov/new.items/d04809.pdf. This report reviewed the flaring and venting data
available, the extent of flaring and venting, their contributions to
greenhouse gas emissions, and opportunities for the Federal Government
to reduce flaring and venting.
The report concluded that more accurate records are needed on
flaring and venting to determine the amount of the resource that is
lost and the volume of greenhouse gas emissions these practices
contribute to the atmosphere each year. The report also stated that the
impact of methane (a naturally occurring gas released during venting)
on the earth's atmosphere is about 23 times greater than that of carbon
dioxide (a byproduct of flaring). The GAO made two recommendations to
the Secretary of the Interior: (1) Consider the cost and benefit of
requiring that companies flare the natural gas, whenever possible, when
flaring or venting is necessary; and (2) consider the cost and benefit
of requiring that companies use flaring and venting meters to improve
oversight. In addition, there was a recommendation to the Secretary of
Energy to consider consulting with EPA (Environmental Protection
Agency), MMS, and BLM (Bureau of Land Management), on how to best
collect separate statistics on flaring and venting.
The MMS conducted analyses to assess the costs and benefits of
requiring flare/vent meters and of requiring flaring instead of
venting. The first analysis supported the recommendation to require
meters, provided that the facilities process more than 2,000 barrels of
oil per day (bopd). This requirement is included in the final rule.
The second analysis indicated that a regulatory change to require
flaring instead of venting may be appropriate. However, the cost of
implementing this requirement could be significant, and input from
potentially affected parties is necessary. We requested comments on
this issue in the proposed rule. Commenters pointed out that converting
existing facilities that are equipped to vent natural gas to be able to
flare natural gas may require significant redesign for safety. They
also pointed out that there are many factors in determining whether to
flare natural gas or vent natural when designing a facility. These
factors include the operating philosophy, nature and type of reservoir,
facility design limitations or capabilities, operating practices,
safety, and economics. Industry comments were consistent in
recommending that in addition to the considering requiring flaring
instead of venting, that MMS work with them to find ways to reduce
overall natural gas emissions. They also stated that a
[[Page 20273]]
requirement for flaring instead of venting should be only for new
facilities. They requested that MMS hold a workshop to discuss the
issue. The MMS plans to work directly with interested parties to study
the costs and benefits of requiring that companies flare the natural
gas, whenever possible, when flaring or venting is necessary, as
recommended in the GAO report. We will hold a workshop to discuss the
issue of flaring instead of venting, shortly after this final rule is
published. This workshop and additional cost-benefit analysis will
consider greenhouse gas issues associated with flaring and venting. The
workshop will be the first step in considering how to best implement
this recommendation. The MMS will decide how to move forward with the
rulemaking on flaring natural gas after we hold the workshop. Our next
step would likely be an advance notice of proposed rulemaking to
further vet our approach with industry and other stakeholders.
To improve data collection, as the GAO report suggested, MMS will
require operators to report flaring and venting volumes to MMS
separately. Previously, MMS only collected information on the total
natural gas flared and vented. Operators did not need to differentiate
between the two categories.
Oil and Gas Industry Contributions to Greenhouse Gases in the Federal
OCS
Most natural gas production involves extracting natural gas from
wells drilled into underground gas reservoirs; however, some natural
gas is generated as a by-product of oil production. During oil and
natural gas production it may become necessary to burn or release
natural gas for a number of operational reasons, including safety.
These operations may be associated with unloading or cleaning of a
well, production testing, or relieving system pressure during equipment
failure. The controlled burning of natural gas is called flaring, while
the controlled release of unburned gases directly into the atmosphere
is called venting. Most flaring and venting occurs at the end of a
flare stack or boom which ensures that natural gas can be safely
disposed of in emergency and shutdown situations. It is virtually
impossible to produce oil and natural gas without any flaring or
venting and it would be impractical to shut in production every time an
upset occurs. It is estimated that operators in the Gulf of Mexico
Outer Continental Shelf (OCS) flare and vent less than 0.5 percent of
the gas produced, making this area a world leader in the conservation
of natural gas resources.
Both flaring and venting on the OCS are highly regulated by the
Minerals Management Service (MMS). Federal regulations (30 CFR 250,
Subpart K) specify the limited circumstances under which offshore oil
and gas operators may flare or vent natural gas. These final
regulations strictly limit the amount of time operators may flare or
vent. In some cases, operators request additional time in order to
complete equipment repairs. We evaluate each of these requests on a
case-by-case basis, with conservation as a primary focus.
Even though they are already a world leader, MMS continuously
strives to improve our oversight of OCS flaring and venting. In most
places around the world, for example, there is minimal reporting or
tracking of flare and/or vent volumes. In the Federal OCS, MMS requires
operators to continuously record these volumes and report them each
month. These final regulations will require operators to install flare/
vent meters on large platforms and also to report gas flared separately
from gas vented. These regulatory changes would provide more accurate
measurements of GHG emissions.
Given the existing restrictions on OCS flaring and venting, there
is minimal opportunity to further reduce the overall volume of gas
flared and vented. However, the global warming potential (GWP) of GHG
emissions could be reduced if MMS were to require operators to flare
instead of vent (when the release of natural gas is necessary). Such a
requirement would reduce the GWP of GHG emissions by converting most
methane to carbon dioxide as it is released. As previously stated, MMS
is planning a workshop to address this topic.
It is difficult to estimate the impact that flaring instead of
venting would have on GHG emissions until we begin to gather more
accurate data from the requirement to install flare/vent meters and to
report flare volumes separately from vent volumes. Furthermore, it is
impractical, if not impossible, to eliminate all venting. Even if 100%
of the released OCS gas could be flared instead of vented, the impact
on total U.S. GHG emissions would be very small.
In 2005, U.S. greenhouse gas (GHG) emissions totaled 7.986 x 10 \9\
tons of carbon dioxide equivalent (CO2e). Of that total,
only 24.7 x 10 \6\ tons of CO2e, or 0.31 percent, were
related to OCS oil and gas production (including platform and non-
platform sources), flaring and venting activities represent only a
fraction of that amount. Under MMS oversight, OCS oil and gas operators
are already ahead of the curve in terms of limiting GHG emissions.
Based on several assumptions, estimates, and existing analyses, MMS
roughly approximated the impact that might occur if it were to mandate
flaring over venting. These estimates indicate that such a requirement
would reduce total US GHG emissions by less than 0.05%. However, the
accuracy of these estimates will improve after the regulatory change
becomes final. Reported OCS flare and vent volumes could increase or
decrease based solely on improved reporting accuracy. In any event,
further analysis may shed light on whether flaring rather than venting
natural gas is cost effective from a greenhouse gas perspective, even
if the total amount of greenhouse gases is small.
Public Comments on the Proposed Rule
The MMS received eight sets of comments on the NPR from industry
trade groups and representatives and one comment from the State of
Alaska. The MMS reviewed and responded to these comments as
appropriate. To help convey the comments, we summarized and combined
similar comments. The results are explained in the following two
tables. Table 1 contains our responses to general comments and Table 2
addresses comments on specific sections.
[[Page 20274]]
Table 1--MMS Response to General Comments
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Comment MMS response
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Measurement
------------------------------------------------------------------------
(1) Measurement accuracy for flared or The MMS agrees. We will
vented gas envisioned by rule is not revise the accuracy
achievable given the wide range of requirement from 2 percent
conditions to which the meter would be to 5 percent. This is
exposed. established technology in
the North Sea and Canada,
and a 5 percent accuracy
requirement has been
adopted by regulatory
bodies in those regions.
Also, flare/vent meters
with this accuracy are
already used on some Gulf
of Mexico (GOM) facilities.
(2) Retrofitting may be a problem due to Installation of meters is
space limitations and safety concerns. necessary to improve
oversight of MMS's flare/
vent program. A cost-
benefit analysis conducted
by MMS supports GAO's
recommendation to install
meters on all facilities
that process more than
2,000 bopd. The Regional
Supervisor will work with
operators on a case-by-case
basis if a safety or space
issue is demonstrated, as a
departure under Sec.
250.142.
(3) If deferment of this part of the rule Installation of meters is
is not acceptable, it is recommended that necessary to improve
meters be limited to new facilities under oversight of MMS's flare/
construction 6 months after date that vent program. The cost-
final rule is published. benefit analysis concluded
that meters on all
facilities processing over
2,000 bopd is appropriate,
not just new facilities.
Also, metering flare/vent
volumes on all (existing
and future) facilities
processing over 2,000 bopd
better implements the GAO
recommendations.
(4) Defer requirement to install meters on The MMS has sufficient
all offshore complexes processing 2,000 information to finalize the
bopd to develop a best practice with rule. Additional input from
industry that would have broad industry groups is not
applicability to all facilities on the necessary and would delay
OCS, not just those processing 2,000 implementation of GAO
bopd. recommendations. We agree
that there should be a best
practice established for
estimating volumes of gas
flared or vented from
facilities processing less
than 2,000 bopd. However,
metering is more accurate,
and requiring meters on
those facilities that
process more than 2,000
bopd is consistent with the
GAO recommendations.
(5) The number of facilities impacted by The commenter did not
the rule has been underestimated since provide an alternate,
multiple facilities may be involved in documented number;
processing/handling production streams. therefore, MMS must use our
best analysis.
(6) Cost impact of the rule has been A higher cost estimate was
underestimated. provided by the commenter.
We used the cost model that
was submitted by the
commenter in our cost-
benefit analysis and
determined that the
difference is negligible
and that a 2,000 bopd
threshold for metering is
still appropriate.
(7) Set a thousand cubic feet (MCF) volume Volume estimates calculated
per day vented, calculated by test, from a test are far less
rather than having a mandatory metering accurate than metered
system. volumes and would not
achieve the improvements
recommended by GAO.
(8) These meters should not be subject to Flare/vent meters are
the requirements of Subpart L. subject to the requirements
of Subpart K.
(9) Cost is a huge burden to smaller See responses (2) and (6).
facilities; increase meter requirement to Also see discussion
facilities with average throughput of concerning the Regulatory
10,000 bopd or more. Flexibility Act.
(10) Revise time to install meters from The MMS agrees. We will
120 days to 180 days to accommodate revise the time allowed to
design, shipping, and labor. install meters from 120 to
180 days for facilities
processing more than 2,000
bopd when this final rule
becomes effective. The time
allowed to install meters
on facilities that begin
producing above 2,000 bopd,
after this final rule is
published, will also be
revised from 90 to 120
days.
(11) Revise accuracy to 15 percent. The MMS disagrees. See
response (1).
(12) Meter high flow events, calculate The MMS disagrees. See
others. response (2).
(13) What if we don't have a flow when we At a minimum, calibration/
schedule a calibration? Most of our verification of secondary
flaring/venting is done during upset or devices associated with
emergency situations. Flare pilot must be flare/vent meters can be
kept on at all times, hence, inert gas performed in a no-flow
such as nitrogen cannot be used as it situation in accordance
will pose a safety issue by extinguishing with American Petroleum
the pilot flame. Institute's (API) Manual of
Petroleum Measurement
Standards (MPMS) Chapter 14
Section 10. Also,
contingent upon the meter
type, verification may
include the performance of
manufacturer recommended
inspections and
diagnostics. However, after
further review, we
determined that calibrating
meters once a year is
adequate.
(14) The time required to bring an The MMS agrees. See response
existing facility into compliance would (10).
far exceed 120 days.
(15) Establish best practices for existing The limits on flaring and
facilities to reduce overall levels of venting set by these
gas vented/flared. regulations are minimal,
additional reductions in
the levels of natural gas
flared or vented would not
reduce the need for meters.
However, MMS does agree
that industry should
establish best practices
for reducing the amount of
natural gas flared or
vented and we will include
this topic as part of the
flaring and venting
workshop we are planning.
(16) Multiple meters would be required on The MMS anticipates 2 or 3
most facilities. meters on most facilities
where meters are required.
That is, one for each
pressure system (High
Pressure (HP), Intermediate
Pressure (IP), and Low
Pressure (LP)) that exists
on the facility. The meters
would likely be located
near the base of the flare
boom just before the piping
for that pressure system
exits the facility.
[[Page 20275]]
(17) Wait for completion of API RP on The MMS has sufficient
measurement and allocation. information to finalize the
rule. As API Recommended
Practices (RP) are
published, MMS will
consider incorporating
these into our regulations.
(18) Future workshop should be planned to The MMS will hold a workshop
discuss solutions and best practices. after this final rule is
issued. This will be
included as a topic as part
of our workshop on flaring
and venting.
(19) Where did 2,000 bopd come from? The MMS conducted a cost-
benefit analysis looking at
equipment costs, gas
prices, and platform life
to determine a minimum
production rate that could
support the installation of
flare/vent meters. Also see
Regulatory Flexibility Act
discussion.
------------------------------------------------------------------------
Flaring/Venting
------------------------------------------------------------------------
(20) Converting to flare on existing The MMS is still evaluating
facilities may require redesign for the flare versus vent issue
safety. and will hold an industry
workshop to collect
additional information.
(21) Limiting the flaring or venting of We have always distinguished
gas-well gas to 2 hours and allowing 48 between gas-well gas and
continuous hours for oil-well gas when a oil-well gas. The prior
hydrate plug forms is not consistent with regulation stated that
prior guidance and actions. Previous MMS ``lessees must not flare or
guidance made no distinction between gas- vent gas-well gas beyond
well gas and oil-well gas if the plug the time required to
(hydrate) formed naturally. eliminate an emergency
unless the Regional
Supervisor approves.'' MMS
policy has consistently
been to allow 2 hours to
eliminate the flare or vent
under this rule. We added
an exception for hydrate
plugs under Sec.
250.1160(a)(6).
(22) Short comment period for response did The MMS included information
not allow industry to develop detailed in the preamble on the
comments on flaring versus venting. flaring versus venting
issue because it was
addressed in the GAO
report, and we wanted
operators to be aware that
MMS is considering possible
changes to the regulations
to address this issue in
the future. The MMS is
still evaluating this issue
and we may hold a workshop
to collect additional
information, before
proposing new regulations
on this issue.
(23) Retain records for 2 years instead of There was no change proposed
6 years. here; this is merely a
clarification that existing
law (30 U.S.C. 1713,
implemented at 30 CFR part
212) applies to flare/vent
records. Those records must
be maintained for 6 years
(in accordance with 30
U.S.C. 1713 and 30 CFR part
212), in addition to being
maintained on the facility
for 2 years and available
for inspection by MMS
personnel.
------------------------------------------------------------------------
Miscellaneous
------------------------------------------------------------------------
(24) How much of the MMS budget is being The total discretionary
supported by the cost recovery program at budget for MMS in Fiscal
this time; is an evaluation of the fee Year 2007 was $288.2
structure being carried out to adjust for million. Total revenue
actual agency needs? generated by cost recovery
fees that year totaled
$11.9 million or 4.1
percent of the total MMS
discretionary budget. The
MMS recently adjusted these
fees by the Implicit Price
Deflator for the Gross
Domestic Product, as
provided by regulation. The
MMS plans to review cost
recovery fees in the coming
year. Should this review
result in a need to change
the fees significantly,
rulemaking will be required
and a proposed rule will be
published in the Federal
Register for public review
and comment.
Fees are established in
accordance with the
Independent Offices
Appropriation Act of 1952,
31 U.S.C. 9701. It should
be noted that MMS does not
determine or adjust cost
recovery fees to meet a pre-
determined funding target,
but rather to reflect the
cost of actual services
provided.
(25) The OOC, in conjunction with API, The MMS has sufficient
will commit to the development of a information to finalize
technical document or RP that would this final rule. As API RPs
address quantification, including volume, are published, MMS will
mass, and composition of flare and vent consider incorporating
quantities within the oil and gas these into our regulations.
production process. The OOC proposes to
start working on this document now,
concurrent with the subpart K final
rulemaking; document and workshops to
industry could occur within 18 months.
(26) For the protection of the State of The MMS does not agree that
Alaska's correlative rights, require this final rule violates
approval for operators to produce within State correlative rights.
500 ft of a lease or unit line even if The MMS understands the
adjacent acreage is unleased, allow State State of Alaska's interest
to comment. in protecting its
correlative rights in the
event of development and
production from an OCS
lease adjacent to State
unleased lands. Under the
MMS regulatory process, the
State of Alaska will
receive and will have the
opportunity to comment on
each OCS Development and
Production Plan (DPP) (30
CFR part 250 subpart B). A
DPP will include
information on surface and
bottom hole locations to
enable the State of Alaska
to determine if its
correlative rights are at
risk. The State of Alaska
is entitled to copies of
the Application(s) for
Permit to Drill (APD) to
monitor and assure that
activities are conducted in
accordance with an approved
DPP.
------------------------------------------------------------------------
[[Page 20276]]
Table 2--MMS Response to Comments on Specific Requirements
------------------------------------------------------------------------
Citation/comment MMS response
------------------------------------------------------------------------
Sec. 250.1153(b)(2)--Consider The MMS is not implementing this
completions with downhole gauges suggestion in the final rule. This
instead of requiring bottomhole configuration results in a single
pressure surveys. pressure measurement, which is not
a survey. A survey is required in
order to establish a pressure
gradient, which is used to correct
reservoir pressures to a common
datum. As stated in Sec.
250.1153(d), industry may continue
to request departures from this
requirement, if necessary.
Sec. 250.1160(a)--Add gas-well Wording in the final rule will
flash gas. change from oil-well gas or gas-
well gas to natural gas. This
wording covers the venting or
flaring of all natural gas
regardless of the well type.
Sec. 250.1160(a)(3)(i)--Neither The commenter is correct, approval
lease nor pipeline operator needs under this subpart will not be
MMS approval to blowdown required for this situation since
pipelines downstream of royalty the activity is downstream of the
meters. royalty meter; however, flaring or
venting must be reported after the
fact in accordance with this final
rule. Approvals may be required
under subparts H and J of this
part.
Sec. 250.1160(a)(4)--Include The MMS agrees. The wording was
unloading or cleaning of a well modified to be consistent with the
in addition to testing under the Condition column.
Additional requirements column.
Sec. 250.1160(a)(5)--Define the Since economic conditions vary with
amount of routine flaring or time, MMS cannot specify a fixed
venting that is considered volume higher than 50 MCF per day.
uneconomic. The Additional requirements column
clearly indicates that a monthly
average volume equal to 50 MCF per
day or less is assumed by MMS to be
uneconomic. If your facility
averages more than 50 MCF per day,
you will be expected to capture the
gas or demonstrate that the volume
is uneconomic and continue to
monitor the economic viability as
costs and prices change.
Sec. 250.1160(a)(6)--The time The initial cause of the problem
necessary to unload a well after will determine where the incident
an upset is remedied should be falls (either Sec.
granted under Sec. 250.1160(a)(2), (a)(4), (a)(6), or
250.1160(a)(4) and should not be (a)(7)). For example, an operator
included in the 48 continuous may flare oil-well gas without
hours or 144 cumulative hours prior approval for 48 continuous
allowed under Sec. hours in order to remediate a
260.1160(a)(6) (upset due to hydrate plug. However, that
hydrate plugs, etc.). operator may not continue to flare
without approval for an additional
48 hours in order to unload the
well after the hydrate plug is
remediated. In this example, the
initial cause of the problem was a
hydrate plug; therefore, the
operator will only be authorized to
flare oil-well gas for up to 48
continuous hours without approval
(under Sec. 250.1160(a)(6)).
Sec. 250.1160(a)(7)--The The initial cause of the problem
cumulative time allowed in will determine where the incident
paragraph (a)(4) should also be falls (either Sec.
included in (a)(7)(iv). The hours 250.1160(a)(2), (a)(4), (a)(6), or
accumulated to restore/optimize (a)(7)) and therefore the time
production should not impact the allotted to perform the work
hours accrued due to equipment related to the incident. If an
failures. equipment failure results in a need
to flare or vent under Sec.
250.1160(a)(7), any additional
procedures needed to restore
production (e.g., well blow down),
must be performed within the time
allotted under Sec.
250.1160(a)(7). The operator would
need to request approval from the
Regional Supervisor if additional
time is needed.
Sec. 250.1160(b)--Subpart C is The MMS agrees that it is not
sufficient to regulate pollution necessary to mention subpart C in
issues, mentioning Subpart C in subpart K. The MMS also agrees that
Subpart K is redundant and production upsets may not lend
confusing. Production upsets are themselves to prior approval.
not anticipated and therefore Paragraph (a) details the periods
would not lend themselves to allowable during production upsets
prior approval. before MMS approval is required.
Regardless of whether or not
operators need and receive prior
approval under (a), however, they
are still obligated to follow their
approved Development Operations
Coordination Document (DOCD) or DPP
under subpart B. We reworded Sec.
250.1160(b) to clarify that MMS
flare or vent approvals granted
under subpart K do not exempt
operators from the requirement to
follow their DOCD or DPP. Before
flaring and/or venting an amount
that exceeds the limits specified
in their DOCD or DPP, operators
must submit and receive approval of
a revised DOCD or DPP.
Sec. 250.1160(e)--If MMS The subject paragraph was eliminated
approves flaring or venting, the since negligence related to flaring
volume should not be considered and venting is adequately covered
avoidably lost unless information in the subsequent paragraph.
provided was incorrect. Revise
wording to state RS will evaluate
flaring and venting requests to
determine if situation exceeds
those in Sec. 250.1160(a).
Sec. 250.1160(f)--If MMS Additional wording referencing Sec.
approves flaring or venting, the 250.1160(a) is not necessary.
volume should not be considered Although MMS does not intend to
avoidably lost unless information commonly determine gas to be
provided was incorrect. Revise avoidably lost after we have
wording to state flaring or approved the flaring or venting,
venting in excess of situations the Regional Supervisor must retain
in Sec. 250.1160(a) without full authority to make that
approval, or if approval was determination.
obtained with misleading
information, will be considered
avoidably lost.
Sec. 250.1161(c)--Industry The MMS agrees. Small leaks from
supports addressing small leaks valves, fittings, flanges, pressure
from valves, etc., if all safety relief valves or similar components
concerns are addressed. are considered fugitive emissions
and are more appropriately
addressed under 30 CFR 250.107
(``What must I do to protect
health, safety, property, and the
environment?''). Note that this
paragraph was reworded and
renumbered as 30 CFR 250.1160(f).
Sec. 250.1162(a)--Include all The MMS agrees. The word condensate
liquid hydrocarbons, not just will be replaced with liquid
condensate. hydrocarbons.
[[Page 20277]]
Sec. 250.1163(a)--Metering-- The MMS has sufficient information
defer this part until a workshop to finalize this rule. Additional
can be held with industry; work input from industry groups is not
in conjunction with API to necessary and would delay
develop a Technical Bulletin; not implementation of GAO
enough time to retrofit existing recommendations. The meter accuracy
facilities; high degree of requirement has been changed from 2
measurement accuracy is percent to 5 percent. We changed
unrealistic; if not deferred, the time to install the meters on
limit to new facilities; and existing facilities from 120 days
pulling a portion of the metering to 180 days based on an industry
requirement may conflict with the comment. Thus rulemaking is
Administration and Procedures Act. consistent with the Administrative
Procedure Act (5 U.S.C. Sec. 553,
Rulemaking).
Sec. 250.1163(a)(3)--OGOR-B Note--The proposed rule did not have
submitted to MRM will not a Sec. 250.1163(a)(3), this
accommodate multiple facility comment presumably refers to Sec.
submissions. Flared or vented gas 250.1163(b)(3). The MMS agrees that
at a host facility would have to modified reporting on Form MMS-4054
be allocated back to the lease. Part B (OGOR-B) is required in
order to implement this GAO
recommendation. In order to
implement this, Sec.
250.1163(a)(1) of the final rule
will require operators to notify
MMS of all facilities that process
more than 2,000 bopd and therefore
require meters. The Regional
Supervisor will then establish
Facility Measurement Point (FMP)
numbers for those metering
locations. These FMP numbers will
be used on the OGOR-B forms to
identify the facilities where
flaring and venting occurs.
Further, in order to ease the
reporting burden, the language will
be modified from that in the
proposed rule. Instead of requiring
operators to associate all flared
and vented volumes with the
facilities where the flaring and
venting occurred, such reporting
(on OGOR-B forms) is only required
for those facilities which are
required to install flare/vent
meters (Sec. 250.1160(b)(3)). For
other facilities, operators must
continue to report flared and
vented volumes by lease or unit
(Sec. 250.1163(b)(4)) (note that
flared and vented volumes must be
separated regardless of whether
reporting is by facility, lease, or
unit). Additionally, MRM will send
guidance to operators on all other
reporting requirements necessitated
by this regulatory change.
Sec. 250.1163(b)(1)--Reporting See response Sec. 250.1163(a)(3).
separate flaring or venting on
OGOR B will require modification
to current reporting requirements.
Sec. 250.1163(b)(2)--Lease use The MMS agrees. Section
already reported on OGOR B. 250.1163(b)(2) requires reporting
lease use gas on Form MMS-4054,
which is the OGOR. This rule does
not impose additional lease use
reporting requirements. The wording
was modified slightly to clarify
this issue.
Sec. 250.1163(b)(3)--Reporting See response Sec. 250.1163(a)(3).
flaring or venting from multiple
facilities separately on a single
lease is redundant and requires
changes from industry and MRM.
These records are kept at each
facility and could be requested
from the operator as needed to
eliminate this burdensome
requirement.
Sec. 250.1163(c)--Industry sends The MMS disagrees. Summary
a letter summarizing pertinent information submitted in a letter
flaring or venting information following an oral approval is only
after receiving oral approval to a portion of the required records
flare or vent; requiring actual to be saved on location. A complete
flaring or venting records be record must be maintained on each
kept on location is redundant. facility for routine inspections by
MMS personnel.
Sec. 250.1164(b)(1)--Subpart C The MMS agrees. This paragraph was
is sufficient to regulate deleted.
pollution issues.
Sec. 250.1167-General--Requiring Data submitted for an early
the following additional application would often be obsolete
information is burdensome and interpretations and result in
redundant to data previously inaccurate conclusions.
submitted in other documents Furthermore, receiving the data in
(e.g. CIDs). separate submittals will expedite
MMS review of industry
applications.
Sec. 250.1167(a)(3)--net sand
isopach.
Sec. 250.1167(a)(4)--net
hydrocarbon isopach.
Sec. 250.1167(b)(2)--amplitude
maps.
Sec. 250.1167(d)(1)--estimated
recoverable reserves for each
completion in a reservoir.
Sec. 250.1167(e)(2)--reservoir
name and whether it is
competitive.
------------------------------------------------------------------------
After reviewing and responding to the comments, MMS changed the
appropriate rule language as specified in the MMS comment response.
Table 3 compares the changes from the NPR to this final rule.
Table 3--Changes From the Proposed Rule to This Final Rule
------------------------------------------------------------------------
Citation--description, or Proposed rule
reason for the change language Final rule language
------------------------------------------------------------------------
Sec. 250.105--Removed the Flaring means the Flaring means the
phrase ``in the field'' burning of gas in burning of natural
from the definition of the field as it is gas as it is
Flaring. This phrase is not released into the released into the
necessary, since all atmosphere. atmosphere.
activities under this
regulation take place in
the field. Also, changed
``gas'' to ``natural gas''
for clarity.
[[Page 20278]]
Sec. 250.105--Revised the Sensitive reservoir Sensitive reservoir
definition of Sensitive means a reservoir means a reservoir
reservoir to state that it in which high in which the
is a reservoir in which the reservoir production rate
production rate will affect production rates will affect
ultimate recovery. This is will decrease ultimate recovery.
a more accurate and ultimate recovery.
inclusive definition.
Sec. 250.1150--Revised You must produce You must produce
wording back to the text in wells and wells and
the existing rule, changed reservoirs at rates reservoirs at rates
``without harming ultimate that provide for that provide for
recovery'' to ``while economic economic
maximizing ultimate development without development while
recovery''. This wording is harming ultimate maximizing ultimate
more consistent with our recovery and recovery and
mission and with the without adversely without adversely
requirements of the final affecting affecting
rule. correlative rights. correlative rights.
Sec. 250.1151(c)--Revised You must submit an You must submit to
language to clarify original and one the Regional
submittal requirement for copy of the form Supervisor an
the required form (either required by original and two
form MMS-126 or MMS-128). paragraph (a) of copies of the
Three copies of the form this section, as appropriate form
must be submitted, one of listed in the table required by
those copies is a public in Sec. 250.1167. paragraph (a) of
information copy. A public You must include this section; one
information copy of the one public of the copies of
supporting documents is not information copy the form must be a
required, therefore only with each submittal public information
two copies of the in accordance with copy in accordance
supporting information must Sec. Sec. with Sec. Sec.
be submitted. 250.190 and 250.186 and
250.196, and mark 250.197, and marked
that copy ``Public ``Public
Information''. Information.'' You
must submit two
copies of the
supporting
information as
listed in the table
in Sec. 250.1167
with form MMS-126.
Sec. 250.1153(d)-- The Regional The Regional
Clarified language on Supervisor may Supervisor may
requesting a departure from grant a departure grant a departure
conducting a static from the from the
bottomhole pressure survey requirement to run requirement to run
to specify what information a static bottomhole a static bottomhole
must be included with the pressure survey. pressure survey. To
request. You must request a request a
departure by departure, you must
letter, along with submit a
Form MMS-140, justification,
Bottomhole Pressure along with Form MMS-
Survey Report. You 140, Bottomhole
must include Pressure Survey
sufficient Report, showing a
justification to calculated
support the bottomhole pressure
departure request. or any measured
data.
Sec. 250.1154(a)(3)-- The reservoir is The reservoir is
Simplified wording--changed undergoing undergoing enhanced
``secondary or tertiary'' secondary or recovery.
to ``enhanced''. The term tertiary recovery.
enhanced includes secondary
and tertiary recovery
techniques.
Sec. 250.1154(b)-- For the purposes of For the purposes of
Restructured the paragraph, this subpart, near- this subpart, near-
adding two subparagraphs. critical fluids are critical fluids
those fluids that are: (1) Those
occur in high fluids that occur
temperature, high- in high
pressure reservoirs temperature, high-
where it is not pressure reservoirs
possible to define where it is not
the liquid-gas possible to define
contact or fluids the liquid-gas
in reservoirs that contact; or
are near bubble (2) Fluids in
point or dew point reservoirs that are
conditions. near bubble point
or dew point
conditions.
Sec. 250.1155--Revised You must submit an You must submit to
language to clarify original and three the Regional
submittal requirements for copies of Form MMS- Supervisor an
form MMS-127. Three copies 127 and supporting original and two
of form MMS-127 must be information, as copies of Form MMS-
submitted, one is a public listed in the table 127; one of the
information copy. A public in Sec. 250.1167 copies must be a
information copy of the to the Regional public information
supporting documents is not Supervisor. You copy in accordance
required, therefore only must include one with Sec. Sec.
two copies of the public information 250.186 and
supporting information must copy with each 250.197, and marked
be submitted. submittal in ``Public
accordance with Information.'' You
Sec. Sec. must also submit
250.190 and two copies of the
250.196, and mark supporting
that copy ``Public information, as
Information.'' listed in the table
in Sec.
250.1167.* * *
Sec. 250.1155(b)--Added At least once during At least once during
language to clarify that the calendar year. the calendar year,
the structure maps and well but you do not need
logs, required as to resubmit
supporting information for unrevised structure
form MMS-127, are not maps (Sec.
required as part of the 250.1167(a)(2)) or
annual submittal. previously
submitted well logs
(Sec.
250.1167(c)(1)).
[[Page 20279]]
Sec. 250.1156(a)-- You must obtain You must obtain
Clarified that approval is approval from the approval from the
needed before producing Regional Supervisor Regional Supervisor
from a reservoir within in before you start before you start
a well that is less than producing from a producing from a
500 ft. from a lease line. well that has any reservoir within a
Reworded the section to portion of the well that has any
clarify instructions on completed interval portion of the
submitting the service fee less than 500 feet completed interval
and supporting information. from a unit or less than 500 feet
Removed the phrase, lease line. Submit from a unit or
``whether it is necessary to MMS the service lease line. Submit
to,'' from the sentence on fee listed in Sec. to MMS the service
how the Regional Supervisor 250.125 and the fee listed in Sec.
will determine whether to Regional Supervisor 250.125, according
approve the request. Added will determine to the instructions
the parenthetical phrase whether approval of in Sec. 250.126,
record title and operating your request will and the supporting
rights to clarify the maximize ultimate information, as
meaning of lease interest recovery, avoids listed in the table
and to be consistent with the waste of in Sec. 250.1167,
the definition of lessee in natural resources with your request.
30 CFR part 250 subpart A. or whether it is The Regional
necessary to Supervisor will
protect correlative determine whether
rights. You do not approval of your
need to obtain request will
approval if the maximize ultimate
adjacent leases or recovery, avoid the
units have the same waste of natural
unit, lease, and resources, or
royalty interests protect correlative
as the lease or rights. You do not
unit you plan to need to obtain
produce. You do not approval if the
need to obtain adjacent leases or
approval if the units have the same
adjacent block is unit, lease (record
unleased. title and operating
rights), and
royalty interests
as the lease or
unit you plan to
produce. You do not
need to obtain
approval if the
adjacent block is
unleased.
Sec. 250.1157--Added You must request and (a) You must
wording to state that the receive written request and receive
Regional Supervisor will approval from the approval from the
determine whether the Regional Supervisor Regional
request to produce gas-cap- before producing Supervisor:
gas from an oil reservoir gas from each (1) Before producing
maximizes ultimate completion in an gas-cap gas from
recovery. This informs the oil reservoir that each completion in
applicant of the basis for is known to have an an oil reservoir
the decision to approve or associated gas cap. that is known to
disapprove the request. We If the oil have an associated
also restructured the reservoir is not gas cap.
section to improve initially known to (2) To continue
readability. have an associated production from a
gas cap, but your well if the oil
oil well begins to reservoir is not
show initially known to
characteristics of have an associated
a gas well, you gas cap, but the
must request and oil well begins to
receive written show
approval from the characteristics of
Regional Supervisor a gas well.
to continue (b) For either
producing the well. request, you must
You must include submit the service
the service fee fee listed in Sec.
listed in Sec. 250.125, according
250.125 and the to the instructions
supporting in Sec. 250.126,
information, as and the supporting
listed in the table information, as
in Sec. 250.1167, listed in the table
with your request. in Sec. 250.1167,
with your request.
(c) The Regional
Supervisor will
determine whether
your request
maximizes ultimate
recovery.
Sec. 250.1158(b)--Changed If one or more of If one or more of
``commingled'' to the commingled the reservoirs
``proposed for reservoirs is a proposed for
commingling,'' since the competitive commingling is a
reservoirs are only reservoir, you must competitive
proposed for commingling at notify the reservoir, you must
this stage of the process. operators of all notify the
leases that contain operators of all
the reservoir that leases that contain
you intend to the reservoir that
downhole commingle you intend to
the reservoirs. downhole commingle
the reservoirs.
Sec. 250.1159(b)--Changed If the Regional If the Regional
``or'' to ``and/or.''. Supervisor sets an Supervisor sets an
MPR for a producing MPR for a producing
well completion, or well completion and/
an MER for a or an MER for a
reservoir, you may reservoir, you may
not exceed those not exceed those
rates except due to rates except due to
normal variations normal variations
and fluctuations in and fluctuations in
production rates, production rates as
as set by the set by the Regional
Regional Supervisor. Supervisor.
Sec. 250.1160(a)--Per You must receive You must request and
industry comment, we approval from the receive approval
changed oil-well gas or gas- Regional Supervisor from the Regional
well gas to natural gas. to flare or vent Supervisor to flare
This wording covers the oil-well gas or gas- or vent natural gas
venting or flaring of all well gas at your at your facility,
natural gas regardless of facility, * * *
the well type.
Sec. 250.1160(a)(4), You may not exceed You may not exceed
Additional requirements 48 cumulative hours 48 cumulative hours
column--Per industry of flaring or of flaring or
comment, we added during venting per testing venting per
unloading or cleaning of a operation on a unloading or
well to make wording single completion cleaning or testing
consistent with wording without Regional operation on a
under the Condition column. Supervisor approval. single completion
without Regional
Supervisor
approval.
Sec. 250.1160(b)--Per You must inform the Regardless of the
industry comment, we Regional Supervisor requirements in
simplified the wording and and receive paragraph (a) of
clarified that the approval to flare this section, you
operators are accountable or vent gas before must not flare or
for estimated maximum flare/ you exceed the vent gas over the
vent volumes provided to volume specified in volume approved in
MMS in DPPs and DOCDs and your DPP submitted your Development
removed reference to 30 CFR under subpart B of Operations
part 250 subpart C. this part, even if Coordination
the flaring or Document (DOCD) or
venting does not your Development
require approval and Production Plan
under paragraph (a) (DPP).
of this section.
The Regional
Supervisor will
determine whether
your proposed
flaring or venting
complies with air
emission thresholds
under subpart C of
this part.
Sec. 250.1160(e)--Per The Regional Deleted entire
industry comment, we Supervisor will paragraph.
deleted this paragraph and evaluate your
renumbered the section, request for gas
since negligence in flaring flaring or venting
or venting of gas is and determine if
covered in Sec. the loss of
250.1160(f). hydrocarbons is due
to negligence, or
could be avoided.
[[Page 20280]]
Sec. 250.1161--Revised You may flare or You must request and
introductory paragraph to vent oil-well gas receive approval
improve clarity. and gas-well flash from the Regional
gas for a period Supervisor to flare
that the Regional or vent gas for an
Supervisor will extended period of
specify, and which time. The Regional
will not exceed 1 Supervisor will
year, if the specify the
Regional Supervisor approved period of
approves your time, which will
request for one of not exceed 1 year.
the following The Regional
reasons: Supervisor may deny
your request if it
does not ensure the
conservation of
natural resources
or is not
consistent with
national interests
relating to
development and
production of
minerals of the
OCS. The Regional
Supervisor may
approve your
request for one of
the following
reasons:
Sec. 250.1161(c)--Moved to Sec. 250.1161(c) Sec. 250.1160(f)
Sec. 250.1160(f). The Regional Fugitive emissions
Clarified how MMS will Supervisor from valves,
handle small emissions that determines that an fittings, flanges,
are not caught by a capture improperly working pressure relief
system. Emissions that valve, pipe valves or similar
occur from leaking valves, fitting, or similar components do not
fittings, flanges, pressure component results require approval
relief valves and similar in flaring or under this subpart
components, are considered venting of less unless specifically
fugitive emissions. These than 10 MCF per required by the
emissions are more day, and that it is Regional
appropriately addressed prudent to repair Supervisor.
under safety regulations the leak at a later
than conservation date. The Regional
regulations. Section Supervisor may
250.1161(c) was renumbered exempt this flaring
to Sec. 250.1160(f) or venting from the
because this paragraph time limits set in
provides general guidance Sec. 250.1160.
to operators and is
therefore more
appropriately listed under
Sec. 250.1160.
Sec. 250.1162(a)--Per You must request and You must request and
industry comments, we receive approval receive approval
replaced the term from the Regional from the Regional
condensate with liquid Supervisor to burn Supervisor to burn
hydrocarbons to allow any produced liquid any produced liquid
burning of oil in limited hydrocarbons. The hydrocarbons. The
cases. In addition, we Regional Supervisor Regional Supervisor
deleted the statement ``In may allow you to may allow you to
most cases, the Regional burn condensate if burn liquid
Supervisor will not allow you demonstrate hydrocarbons if you
you to burn more than 300 that transporting demonstrate that
barrels of condensate in it to market or re- transporting them
total during unloading or injecting it is not to market or re-
cleaning of a well, drill- feasible or poses a injecting them is
stem testing, production significant risk of not technically
testing, or other well- harm to offshore feasible or poses a
evaluation testing.'' We personnel or the significant risk of
decided it is better to environment. In harm to offshore
make this decision on a most cases, the personnel or the
case-by-case basis. Also Regional Supervisor environment.
changed ``feasible'' to will not allow you
``technically feasible.'' to burn more than
300 barrels of
condensate in total
during unloading or
cleaning of a well,
drill-stem testing,
production testing,
or other well-
evaluation testing.
Sec. 250.1162(b)--We The Regional Paragraph deleted
eliminated this paragraph Supervisor will and subsequent
and renumbered the evaluate your paragraph
subsequent paragraph request for liquid renumbered.
because this is covered in hydrocarbon
Sec. 250.1162(c). burning, and
determine if the
loss of
hydrocarbons is due
to negligence or
could be avoided.
Sec. 250.1163(a)--Per If your facility If your facility
industry comments, we processes more than processes more than
changed the requirement to an average of 2,000 an average of 2,000
install meters on bopd during May bopd during May
facilities that already 2010, you must 2010, you must
process more than 2,000 install flare/vent install flare/vent
bopd from 120 days after meters within 120 meters within 180
the rule is published to days after May days after May
180 days after the rule is 2010. If your 2010. If your
effective. Per industry facility processes facility processes
comments, we changed the more than an more than an
requirement to install average of 2,000 average of 2,000
meters on facilities that bopd during a bopd during a
begin to process more than calendar month calendar month
2,000 bopd, after the rule after May 2010, you after May 2010, you
is effective, from 90 days must install flare/ must install flare/
to 120 days after the vent meters within vent meters within
facility begins to process 90 days after the 120 days after the
more than the 2,000 bopd. end of the month in end of the month in
which the average which the average
amount of oil amount of oil
processed exceeds processed exceeds
2,000 bopd. 2,000 bopd.
Sec. 250.1163(a)(1)--Per No language proposed You must notify the
industry comment, we added Regional Supervisor
a new paragraph to require when your facility
a one-time notification to begins to process
the Regional Supervisor if more than an
a facility processes more average of 2,000
than 2,000 bopd. This will bopd in a calendar
trigger FMP assignments to month.
simplify reporting. We
renumbered the subsequent
paragraphs.
Sec. 250.1163(a)(2)--Per The flare/vent The flare/vent
industry comment, we meters must measure meters must measure
revised the accuracy all flared and all flared and
requirement from 2 percent vented gas within 2 vented gas within 5
to 5 percent. This is percent accuracy. percent accuracy.
established technology in
the North Sea and Canada,
and a 5 percent accuracy
requirement has been
adopted by regulatory
bodies in those regions.
Also, flare/vent meters
with this accuracy are
already used on some Gulf
of Mexico facilities.
[[Page 20281]]
Sec. 250.1163(a)(3)--Per You must calibrate You must calibrate
industry comment, we the meters the meters
changed the calibration regularly, in regularly, in
requirement from at least accordance with the accordance with the
once every 6 months to at manufacturer's manufacturer's
least once every year. recommendation, or recommendation, or
at least once every at least once every
6 months, whichever year, whichever is
is shorter. shorter.
Sec. 250.1163(a)(4)--Added No language proposed You must use and
a new paragraph to clarify maintain the flare/
that meters should not be vent meters for the
removed if the amount of life of the
oil the facility processes facility.
later drops below 2,000
bopd.
Sec. 250.1163(b)(2)-- You may classify and You may classify and
Simplified wording from, report gas used to report gas used to
``gas used as pilot lights, operate equipment operate equipment
instrument gas, purge gas on the facility on the lease, such
used to prevent oxygen from (such as gas used as gas used to
entering the flare or vent to power engines, power engines,
stack, sparge gas used to gas used as pilot instrument gas, and
regenerate glycol, and lights, instrument gas used to
blanket gas used to gas, purge gas used maintain pilot
maintain pressure in low to prevent oxygen lights, as lease
pressure vessels)'' to from entering the use gas.
``instrument gas, and gas flare or vent
used to maintain pilot stack, sparge gas
lights '' Per industry used to regenerate
comment, we changed ``on glycol, and blanket
the facility'' to ``on the gas used to
lease.'' maintain pressure
in low pressure
vessels) as lease
use gas.
Sec. 250.1163(b)(3)--Per You must report the If flare/vent meters
industry comment, we added amount of gas are required at one
language to clarify that flared and vented or more of your
this only applies to at each facility on facilities, you
facilities that are a lease or unit must report the
required to have meters. basis. Gas flared amount of gas
and vented from flared and vented
multiple facilities at each of those
on a single lease facilities
or unit must be separately from
reported separately. those facilities
that do not require
meters and
separately from
other facilities
with meters.
Sec. 250.1163(b)(4)--Per No language proposed Added new paragraph:
industry comment, added a (4) If flare/vent
new paragraph to clarify meters are not
that if a facility is not required at your
required to have meters, facility:
the operator may report the (i) You may report
amounts of gas flared or the gas flared and
vented on a lease or unit vented on a lease
basis. This reduces the or unit basis. Gas
reporting burden on flared and vented
industry. from multiple
facilities on a
single lease or
unit may be
reported together.
(ii) If you choose
to install meters,
you may report the
gas volume flared
and vented
according to the
method specified in
paragraph (b)(3) of
this section.
Sec. 250.1163(c)-- You must prepare and You must prepare and
Restructured section. Split maintain records maintain records
the introductory paragraph detailing gas detailing gas
into subparagraphs and flaring, gas flaring, gas
renumbered the section to venting, and liquid venting, and liquid
conform. Removed reference hydrocarbon burning hydrocarbon burning
to part 212, clarifying for each facility. for each facility
that the retention period You must maintain for 6 years.
for these records is 6 these records for (1) You must
years, as specified in 30 the period maintain these
U.S.C. 1713. The MMS specified in part records on the
promulgated regulations 212 of this title. facility for at
under this law at 30 CFR You must keep these least the first 2
part 212, but specific records on the years and have them
reference to part 212 is facility for 2 available for
not necessary here. Revised years and have them inspection by MMS
paragraph (2) to make available for representatives.
consistent with language in inspection by MMS (2) After 2 years,
Sec. 250.1163(d)(1)(ii). representatives. you must maintain
After 2 years, you the records, allow
must maintain the MMS representatives
records, allow MMS to inspect the
representatives to records upon
inspect the records request and provide
upon request, and copies to the
provide copies to Regional Supervisor
the Regional upon request, but
Supervisor upon are not required to
request, but you keep them on the
are not required to facility.
keep them on the (3) The records must
facility. The include, at a
records must minimum:
include, at a
minimum:
(1 O='xl') Daily (i) Daily volumes of
volumes of gas gas flared, gas
flared, gas vented, vented, and liquid
and liquid hydrocarbons
hydrocarbons burned;
burned;.
(2) Number of hours (ii) Number of hours
of gas flaring, gas of gas flaring, gas
venting, and liquid venting, and liquid
hydrocarbon hydrocarbon
burning, on a daily burning, on a daily
basis; and monthly
cumulative basis;
(3) A list of the (iii) A list of the
wells contributing wells contributing
to gas flaring, gas to gas flaring, gas
venting, and liquid venting, and liquid
hydrocarbon hydrocarbon
burning, along with burning, along with
gas-oil ratio data; gas-oil ratio data;
(4) Reasons for gas (iv) Reasons for gas
flaring, gas flaring, gas
venting, and liquid venting, and liquid
hydrocarbon hydrocarbon
burning; and burning; and
(5) Documentation of (v) Documentation of
all required all required
approvals. approvals.
Sec. 250.1163(c)(3)(ii)-- Number of hours of Number of hours of
Renumbered from Sec. gas flaring, gas gas flaring, gas
250.1163(c)(2). Added that venting, and liquid venting, and liquid
the records must include hydrocarbon hydrocarbon
the number of hours of gas burning, on a daily burning, on a daily
flaring, gas venting, and basis; and monthly
liquid hydrocarbon burning cumulative basis;
on a monthly cumulative
basis. This number is
normally recorded by
operators. This specifies
that operators are required
to add up the monthly
cumulative on the field
records because inspectors
need this to verify that
the operators are in
compliance with Sec. Sec.
250.1160(a)(6)(iii) and
(a)(7)(iii).
[[Page 20282]]
Sec. 250.1163(d)--Removed If your facility is If your facility is
citations Sec. Sec. required to have required to have
212.50 and 212.51. flare/vent meters, flare/vent meters:
Restructured the section, you must maintain (1) You must
to improve clarity. the meter maintain the meter
Retained the requirement to recordings for the recordings for 6
keep meter recordings for 6 period specified in years.
years. Also added Sec. Sec. 212.50 (i) You must keep
requirement for maintaining and 212.51 of this these recordings on
calibration and maintenance title. You must the facility for 2
records. keep these years and have them
recordings on the available for
facility for 2 inspection by MMS
years and have them representatives.
available for (ii) After 2 years,
inspection by MMS you must maintain
representatives. the recordings,
After 2 years, you allow MMS
must maintain the representatives to
recordings, allow inspect the
MMS representatives recordings upon
to inspect the request and provide
recordings upon copies to the
request, and Regional Supervisor
provide copies to upon request, but
the Regional are not required to
Supervisor upon keep them on the
request, but are facility.
not required to (iii) These
keep them on the recordings must
facility. These include the begin
recordings must times, end times,
include the begin and volumes for all
times, end times, flaring and venting
and volumes for all incidents.
flaring and venting (2) You must
incidents. maintain flare/vent
meter calibration
and maintenance
records on the
facility for 2
years.
Sec. 250.1163(e)--Deleted If your flaring or If your flaring or
reference to Sec. venting of gas, or venting of gas, or
250.140, because that burning of liquid burning of liquid
section only applies to hydrocarbons, hydrocarbons,
oral approvals. required written or required written or
oral approval, you oral approval, you
must submit must submit
documentation to documentation to
the Regional the Regional
Supervisor Supervisor
summarizing the summarizing the
location, dates, location, dates,
number of hours, number of hours,
and volumes of gas and volumes of gas
flared, gas vented, flared, gas vented,
and liquid and liquid
hydrocarbons burned hydrocarbons burned
under the approval, under the approval.
as required under
Sec. 250.140.
Sec. 250.1164(b)(1)--Per You may not emit Deleted paragraph
industry comment, we more than 15 lbs of and renumbered
deleted this paragraph SO2 per hour per subsequent
since air quality mile from shore, paragraphs.
guidelines are governed by without approval
Subpart C (Pollution from the Regional
Prevention and Control). Supervisor.
Sec. 250.1164(b)(2)--Added If the Regional If the Regional
a reference to Sec. Supervisor Supervisor
250.303 to clarify the determines that determines that
authority for requesting flaring at a flaring at a
additional air quality facility or group facility or group
modeling analysis and the of facilities may of facilities may
requirements for the significantly significantly
analysis. affect the air affect the air
quality of an quality of an
onshore area, the onshore area, the
Regional Supervisor Regional Supervisor
may require you to may require you to
conduct an air conduct an air
quality modeling quality modeling
analysis to analysis, under
determine the Sec. 250.303, to
potential effect of determine the
facility emissions. potential effect of
The Regional facility emissions.
Supervisor may The Regional
require monitoring Supervisor may
and reporting, or require monitoring
may restrict or and reporting, or
prohibit flaring, may restrict or
under Sec. Sec. prohibit flaring,
250.303 and 250.304. under Sec. Sec.
250.303 and
250.304.
Sec. 250.1164(c)--Deleted You must report The Regional
first sentence in flared and vented Supervisor may
introductory paragraph gas containing H2S require you to
regarding reporting flared as required under submit monthly
and vented gas containing Sec. 250.1163. In reports of flared
H2S, because the reporting addition, the and vented gas
requirement is covered in Regional Supervisor containing H2S.
paragraph (b) of this may require you to
section. submit monthly
reports of flared
and vented gas
containing H2S.
Sec. 250.1165(b)--Removed Before initiating Before initiating
the reference to supporting enhanced recovery enhanced recovery
data (structure map and operations, you operations, you
well log section) and cited must submit a must submit a
Sec. 250.1167 for the proposed plan to proposed plan to
required supporting the Regional the Regional
information for Form MMS- Supervisor and Supervisor and
127. receive approval receive approval
for pressure for pressure
maintenance, maintenance,
secondary or secondary or
tertiary recovery, tertiary recovery,
cycling, and cycling, and
similar recovery similar recovery
operations intended operations intended
to increase the to increase the
ultimate recovery ultimate recovery
of oil and gas from of oil and gas from
a reservoir. The a reservoir. The
proposed plan must proposed plan must
include, for each include, for each
project reservoir, project reservoir,
a brief geologic a geologic and
and engineering engineering
overview, structure overview, Form MMS-
map, well log 127 and supporting
section, Form MMS- data as required in
127, and any Sec. 250.1167,
additional and any additional
information information
required by the required by the
Regional Supervisor. Regional
Supervisor.
Sec. 250.1165(c)--Changed You must report to You must report to
citation from Sec. 216.53 Minerals Revenue Minerals Revenue
to Sec. 210.102 to Management the Management the
conform with changes made volumes of oil, volumes of oil,
in the Minerals Revenue gas, or other gas, or other
Management regulations. substances substances
injected, produced, injected, produced,
or produced for a or produced for a
second time under second time under
Sec. 216.53 of Sec. 210.102 of
this title. this title.
[[Page 20283]]
Sec. 250.1166(a)--Revised For any development For any development
wording from ``a greater in the Alaska OCS in the Alaska OCS
ultimate recovery of oil Region, you must Region, you must
and gas'' to ``maximize submit an annual submit an annual
ultimate recovery of oil reservoir reservoir
and gas.'' The new wording management report management report
is consistent with to the Regional to the Regional
terminology used in the Supervisor. The Supervisor. The
rest of the rule. report must contain report must contain
information information
detailing the detailing the
activities activities
performed during performed during
the previous year the previous year
and planned for the and planned for the
upcoming year that upcoming year that
will provide for: will:
(1) the prevention (1) provide for the
of waste;. prevention of
waste;
(2) the protection (2) provide for the
of correlative protection of
rights; and. correlative rights;
and
(3) a greater (3) maximize
ultimate recovery ultimate recovery
of oil and gas.. of oil and gas.
Sec. 250.1167--Revised You must submit the You must submit the
introductory paragraph to supporting supporting
clarify that columns 1 and information listed information listed
2 are for forms and columns in the following in the following
3 through 6 are for table with the table with the
approvals. forms and for the forms identified in
approvals required columns 1 and 2 and
under this subpart:. for the approvals
required under this
subpart identified
in columns 3
through 6:
Sec. 250.1167(a)(3) and(4) Required............ Additional items the
(table)--Changed the Regional Supervisor
submittal requirement for may request.
net sand isopach with total
net sand penetrated for
each well, identified at
the penetration point, and
net hydrocarbon isopach
with net feet of pay for
each well, identified at
the penetration point, for
Form SRI MMS-127 from
Required to Additional
items the Regional
Supervisor may request.
Sec. 250.1167(c)(2) Not required........ Additional items the
(table)--Added that the Regional Supervisor
Regional Supervisor may may request.
request the structural
cross-sections for
production within 500-ft of
a lease or unit line.
Sec. 250.1167(e)(5) Explanation of why Explanation of why
(table)--Revised wording, the proposed the proposed
from ``will not harm completion scenario completion scenario
ultimate recovery'' to will not harm will maximize
``will maximize ultimate ultimate recovery. ultimate recovery.
recovery.'' This change is
consistent with terminology
used throughout the rest of
the rule.
------------------------------------------------------------------------
Final Rule Organization
The final rule completely restructures subpart K. The final rule is
divided into shorter, easier-to-read sections, that focus on only one
topic. For example, in the current subpart K regulation, the
requirements regarding burning liquid hydrocarbons, as well as those
governing flaring or venting natural gas, were all together in one
section. In the final rule, these same requirements are in five
sections, making it easier for an operator to find the information that
applies to a particular situation. The numbering for subpart K starts
at Sec. 250.1150 instead of Sec. 250.1100 to accommodate other
planned rulemaking. The final rule structure is shown in the following
table:
------------------------------------------------------------------------
Current regulations Final rule
------------------------------------------------------------------------
Sec. 250.1100 Definitions for Sec. 250.105 Definitions.
production rates.
Sec. 250.105 Definitions ...............................
Sec. 250.1101 General requirements Sec. 250.1150 What are the
and classification of reservoirs. general reservoir production
requirements?
Sec. 250.1154 How do I
determine if my reservoir is
sensitive?
Sec. 250.1155 What
information must I submit for
sensitive reservoirs?
Sec. 250.1156 What steps must
I take to receive approval to
produce within 500 feet of a
unit or lease line?
Sec. 250.1157 How do I
receive approval to produce
gas-cap gas from an oil
reservoir with an associated
gas cap?
Sec. 250.1102 Oil and gas production Requirements for production
rates. rates are largely eliminated.
Portions retained were
combined with new information.
Sec. 250.1159 May the
Regional Supervisor limit my
well or reservoir production
rates?
Sec. 250.1103 Well production testing Sec. 250.1151 How often must
I conduct well production
tests?
Sec. 250.1152 How do I
conduct well tests?
Sec. 250.1104 Bottomhole pressure Sec. 250.1153 When must I
survey. conduct a static bottomhole
pressure survey?
Sec. 250.1105 Flaring or venting of Sec. 250.1160 When may I
gas and burning liquid hydrocarbons. flare or vent gas?
Sec. 250.1161 When may I
flare or vent gas for extended
periods of time?
Sec. 250.1162 When may I burn
produced liquid hydrocarbons?
Sec. 250.1163 How must I
measure gas flaring or venting
volumes and liquid hydrocarbon
burning volumes and what
records must I maintain?
[[Page 20284]]
Sec. 250.1164 What are the
requirements for flaring or
venting gas containing H2S?
Sec. 250.1106 Downhole commingling... Sec. 250.1158 How do I
receive approval to downhole
commingle hydrocarbons?
Sec. 250.1107 Enhanced oil and gas Sec. 250.1165 What must I do
recovery operations. for enhanced recovery
operations?
New.................................... Sec. 250.1159 May the
Regional Supervisor limit my
well or reservoir production
rates?
Sec. 250.1166 What additional
reporting is required for
developments in the Alaska OCS
Region?
Sec. 250.1167 What
information must I submit with
forms and for approvals?
------------------------------------------------------------------------
Procedural Matters
Regulatory Planning and Review (Executive Order (E.O.) 12866)
The Office of Management and Budget (OMB) has designated this rule
significant for OMB review under Executive Order 12866.
(1) The final rule will not have an annual effect of $100 million
or more on the economy. It will not adversely affect in a material way
the economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities. A cost-benefit and economic analysis is not required.
This final rule revises the requirements for oil and gas
production. The changes in the rule are not significant enough to have
an impact on the economy or an economic sector, productivity, jobs, the
environment, or other units of government. Some of the previous
requirements will be relaxed. For example, limits on production rates
were eliminated in most cases. This will allow the operators to produce
the oil and gas at the rates that they determine are best, and will not
have a significant effect on any sector of the economy.
(2) The final rule will not create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency
because MMS is the only Federal agency directly involved in setting
production requirements for the offshore oil and natural gas industry.
(3) This final rule will not alter the budgetary effects of
entitlements, grants, user fees or loan programs or the rights or
obligations of their recipients.
(4) This final rule will raise novel legal or policy issues.
Regulatory Flexibility Act
The Department of the Interior certifies that this final rule will
not have a significant economic effect on a substantial number of small
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
The changes in this rule will affect lessees and operators of
leases in the OCS. This includes about 130 active Federal oil and gas
lessees. Small lessees that operate under this rule fall under the
Small Business Administration's (SBA) North American Industry
Classification System (NAICS) codes 211111, Crude Petroleum and Natural
Gas Extraction, and 213111, Drilling Oil and Gas Wells. For these NAICS
code classifications, a small company is one with fewer than 500
employees. Based on these criteria, an estimated 70 percent of these
companies are considered small. This final rule, therefore, will affect
a substantial number of small entities, but the changes in the rule
will not have a significant economic effect on a these entities.
The only new requirement that will impose a cost to operators is a
requirement to install flaring/venting meters on all facilities that
process more than 2,000 bopd. The GAO report on flaring and venting
natural gas, released in July 2004, recommended that MMS require these
meters to improve oversight. The MMS agrees with this recommendation.
The MMS regulations allow flaring and venting in very limited
circumstances. These meters will help MMS:
Verify the amounts of natural gas that operators flare or
vent into the environment;
Prevent waste of resources;
Collect the proper royalties on avoidably flared or vented
gas;
Determine if an operator is violating MMS regulations; and
Assess the impacts on the environment.
In determining the criteria for which facilities must install the
meters, MMS considered the cost of the meters and the amount of
production needed to justify the cost. To ensure that the requirement
to install flare/vent meters will not produce an undue burden on small
companies, it is limited to those facilities that process more than an
average of 2,000 bopd.
In the proposed rule, MMS estimated that 34 companies will have to
install meters on 112 facilities at an average cost of $77,000 per
facility, with a total cost to industry of $8,624,000 (112 x $77,000 =
$8,624,000). Of those 34 companies, nine companies are considered small
entities, based on the NAICS. These nine companies represent only 7
percent of the 130 operators in the OCS. We estimate that seven of
these nine companies will need to install meters on one facility each;
one company will need to install meters on two facilities; and one
company will need to install meters on three facilities. This
represents an average cost of $102,667 for each of the small companies
(12 facilities x $77,000/9 companies). For the remaining companies, the
average cost to install meters will be $308,000 per company (100
facilities x $77,000/25 companies). This does not represent an unfair
burden to small companies because the cost of these meters is small in
comparison to the revenues generated by the amount of oil processed by
those facilities.
Your comments are important. The Small Business and Agriculture
Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were
established to receive comments from small businesses about Federal
agency enforcement actions. The Ombudsman will annually evaluate the
enforcement activities and rate each agency's responsiveness to small
business. If you wish to comment on the actions of MMS, call 1-888-734-
3247. You may comment to the Small Business Administration without fear
of retaliation. Allegations of discrimination/retaliation filed with
the SBA will be investigated for appropriate action.
Small Business Regulatory Enforcement Fairness Act
The final rule is not a major rule under 5 U.S.C. 804(2) of the
Small Business Regulatory Enforcement Fairness Act. This final rule:
a. Will not have an annual effect on the economy of $100 million or
more.
[[Page 20285]]
This final rule revises the requirements for oil and gas production.
Most of the new requirements are paperwork requirements, and will not
add significant time to development and production processes. One new
requirement will add new costs for some operators. Operators will be
required to install flare/vent meters on any facility that processes
more than an average of 2,000 bopd. The MMS estimates that 34 companies
will have to install meters on 112 facilities at an average cost of
$77,000 per facility, with a total cost to industry of $8,624,000 (112
x $77,000 = $8,624,000).
b. Will not cause a major increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies, or geographic regions.
The only change to this rule that has a cost associated with it is
a new requirement to install meters on facilities that process more
than an average of 2,000 bopd. As discussed previously, this
requirement will not significantly increase the cost of doing business
offshore and will not cause an increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies, or geographic regions.
c. Will not have significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises. This
final rule will eliminate the requirement for operators to set limits
on production rates, allowing the operators to determine the best rate
to produce their reservoirs. There are clearer limits on burning,
flaring, and venting, which will encourage conservation of our natural
resources.
Unfunded Mandates Reform Act
This final rule will not impose an unfunded mandate on State,
local, or tribal governments or the private sector of more than $100
million per year. The final rule will not have a significant or unique
effect on State, local, or tribal governments or the private sector. A
statement containing the information required by the Unfunded Mandates
Reform Act (2 U.S.C. 1531 et seq.) is not required.
Takings Implication Assessment (E.O. 12630)
Under the criteria in E.O. 12630, this final rule does not have
significant takings implications. The final rule is not a governmental
action capable of interference with constitutionally protected property
rights. A Takings Implication Assessment is not required.
Federalism (E.O. 13132)
Under the criteria in E.O. 13132, this final rule does not have
federalism implications. This final rule will not substantially and
directly affect the relationship between the Federal and State
governments. To the extent that State and local governments have a role
in OCS activities, this final rule will not affect that role. A
Federalism Assessment is not required.
Civil Justice Reform (E.O. 12988)
This rule complies with the requirements of E.O. 12988.
Specifically, this rule:
(a) Meets the criteria of section 3(a) requiring that all
regulations be reviewed to eliminate errors and ambiguity and be
written to minimize litigation; and
(b) Meets the criteria of section 3(b)(2) requiring that all
regulations be written in clear language and contain clear legal
standards.
Consultation With Indian Tribes (E.O. 13175)
Under the criteria in E.O. 13175, we have evaluated this final rule
and determined that it has no potential effects on federally recognized
Indian tribes. There are no Indian or tribal lands in the OCS.
Paperwork Reduction Act (PRA)
This rulemaking is a total rewrite of regulations under 30 CFR Part
250, Subpart K, Oil and Gas Production Rates. The rule changes the
information collection (IC) burden already approved for current subpart
K regulations; therefore, a submission was made to OMB under 44 U.S.C.
3501 et seq. The OMB approved the collection of information under OMB
Control Number 1010-0041, expiration date 3/31/2013, for a total of
43,396 burden hours and $9,234,392 non-hour cost burdens.
The title of the collection of information for the rule is 30 CFR
Part 250, Subpart K, Oil and Gas Production Requirements. Potential
respondents comprise Federal oil and gas and sulphur lessees. Responses
to this collection are mandatory or are required to obtain or retain a
benefit. The frequency of response is on occasion, monthly, semi-
annually, annually, and as a result of situations encountered depending
upon the requirement. The information collection does not include
questions of a sensitive nature. The MMS will protect proprietary
information according to the Freedom of Information Act (5 U.S.C. 552)
and its implementing regulations (43 CFR part 2), and 30 CFR 250.197,
Data and information to be made available to the public or for limited
inspection, and 30 CFR part 252, OCS Oil and Gas Information Program.
Proprietary information concerning geological and geophysical data will
be protected according to 43 U.S.C. 1352.
The information collected under subpart K is used in our efforts to
conserve natural resources, prevent waste, and protect correlative
rights, including the Government's royalty interest. Specifically, MMS
uses the information to:
Evaluate requests to burn liquid hydrocarbons and vent and
flare gas to ensure that these requests are appropriate;
Determine if a maximum production or efficient rate is
required; and,
Review applications for downhole commingling to ensure
that action maximizes ultimate recovery.
The IC burdens for these regulations include several changes from
the burdens published in the preamble to the proposed rule. The changes
and reasons for making them are:
(1) On August 25, 2008 (73 FR 49943) a final rulemaking was
published that increased the cost recovery fees required under Sec.
250.125. These fees became effective on September 24, 2008, and the
final rule includes these fees that affect subpart K.
(2) The OMB approval of the information collection burden (1010-
0041) for the current subpart K regulations was due to expire before
these final regulations became effective. As required by the Paperwork
Reduction Act, to renew the OMB approval of 1010-0041, we consulted
with several respondents and adjusted the burden estimates and number
of responses accordingly. The burden estimates for the final rule
reflect these updates.
(3) Based on a public comment, we removed the requirements
published in proposed Sec. 250.1164(b)(1) to request Regional
Supervisor approval for emitting more than 15 pounds of SO2,
and Sec. 250.1164(b)(2), submit to the Regional Supervisor air quality
modeling analysis. The commenter stated that 30 CFR 250, subpart C, was
sufficient to regulate pollution issues and MMS agreed.
(4) We also added two IC requirements and burdens to the following
IC burden table for the final regulations.
(a) First, operators/lessees must provide notice to operator(s) of
adjacent property(ies) of their request for MMS approval to produce
within 500 feet of a unit or lease line or to commingle
[[Page 20286]]
hydrocarbons. Sections 250.1156(b) and 250.1158(b) allow the notified
party(ies) to submit letters of acceptance or objection to MMS. This
provision was in the proposed rule, but was inadvertently omitted from
the IC table in the proposed rule.
(b) Second, is a new paragraph (1) under Sec. 250.1163(a) that
requires a notice to MMS when a facility begins to process more than an
average of 2,000 BOPD per month. This change was made in response to a
commenter's concern that the current Oil and Gas Operations Report
(OGOR)-B form does not allow for multiple facility submissions.
----------------------------------------------------------------------------------------------------------------
Non-hour cost burdens
Reporting & --------------------------------------------------------
30 CFR part 250 subpart K recordkeeping Average number of Annual burden
requirement Hour burden annual responses hours
----------------------------------------------------------------------------------------------------------------
WELL TESTS/SURVEYS and CLASSIFYING RESERVOIRS
----------------------------------------------------------------------------------------------------------------
1151(a)(1), (c); 1167.......... Conduct well 3................ 1,325 forms...... 3,975
production test;
submit Form MMS-126
(Well Potential Test
Report) and
supporting
information (within
15 days after end of
test period).
1151(a)(2), (c); 1167.......... Conduct well 0.1 to 3 *....... 13,000 GOM forms 3,100
production test; 600 POCS forms..
submit Form MMS-128
(Semiannual Well Test
Report) and
supporting
information (within
45 days after end of
calendar half-year).
1151(b)........................ Request extension of 0.5.............. 37 requests...... 19
time to submit
results of semi-
annual well test.
1152(b), (c)................... Request approval to 0.5.............. 37 requests...... 19
conduct well testing
using alternative
procedures.
1152(d)........................ Provide advance notice 0.5.............. 10 notices....... 5
of time and date of
well tests.
1153........................... Conduct static 14............... 1,270 surveys.... 17,780
bottomhole pressure
survey; submit Form
MMS-140 (Bottomhole
Pressure Survey
Report) (within 60
days after survey).
1153(d)........................ Submit a letter, along 1................ 120 survey 120
with Form MMS-140, to departures.
request a departure
from requirement to
run a static
bottomhole survey.
1154; 1167..................... Request approval, 6................ 20 requests...... 120
along with supporting
information, to
reclassify reservoir.
1155; 1165(b); 1166(c); 1167... Submit Form MMS-127 2.2.............. 2,189 forms...... 4,816
(Sensitive Reservoir
Information Report)
and supporting
information (within
45 days after certain
events or at least
annually).
----------------------------------------------------------------------------------------------------------------
Subtotal 18,608 responses 29,954 hours
----------------------------------------------------------------------------------------------------------------
APPROVALS PRIOR TO PRODUCTION
----------------------------------------------------------------------------------------------------------------
1156; 1167..................... Request approval to 5................ 33 requests...... 165
produce within 500
feet of a unit or
lease line; submit
supporting
information; pay
service fee and
include pay.gov
payment confirmation
with request; notify
adjacent operators
and provide MMS proof
of notice date.
--------------------------------------------------------
$3,608 x 33 requests = $119,064
----------------------------------------------------------------------------------------------------------------
1156(b); 1158(b)............... Notify adjacent .5............... 33 letters....... 17 (rounded)
operators submit
letters of acceptance
or objection to MMS
within 30 days after
notice.
1157; 1167..................... Request approval to 12............... 51 requests...... 612
produce gas-cap gas
in an oil reservoir
with an associated
gas cap, or to
continue producing an
oil well showing
characteristics of a
gas well with an
associated gas cap;
submit supporting
information; pay
service fee and
include pay.gov
payment confirmation
with request.
--------------------------------------------------------
$4,592 x 51 requests = $234,192
--------------------------------------------------------
[[Page 20287]]
1158; 1167..................... Request approval to 6................ 48 applications.. 288
downhole commingle
hydrocarbons; submit
supporting
information; pay
service fee and
include pay.gov
payment confirmation
with request; notify
operators and provide
proof of notice date.
--------------------------------------------------------
$5,357 x 48 applications = $257,136
----------------------------------------------------------------------------------------------------------------
165 responses 1,082 hours
--------------------------------------------------------------------------------
Subtotal $610,392 non-hour costs
----------------------------------------------------------------------------------------------------------------
FLARING, VENTING, and BURNING HYDROCARBONS
----------------------------------------------------------------------------------------------------------------
1160; 1161; 1163(e)............ Request approval to 0.5.............. 1,007 requests/ 504
flare or vent natural reports.........
gas or exceed
specified volumes;
submit documentation;
report flare/vent
information due to
blow down of
transportation
pipelines within 72
hours after incident.
1162; 1163(e).................. Request approval to 0.5.............. 60 requests/ 30
burn produced liquid reports.........
hydrocarbons; submit
documentation
--------------------------------------------------------
1163(a)........................ One-time initial 112 meters x $77,000 ea = $8,624,000
purchase and
installation of gas
meters to measure and
record the amount of
gas flared or vented.
This is a non-hour
cost burden required
to comply with
revised regulations
with relatively small
or no burden in
subsequent years.
--------------------------------------------------------
1163(a)(1)..................... Notify MMS when 0.833............ 112 notices...... 93 (rounded)
facility begins to
process more than an
average of 2,000 bopd
per month.
--------------------------------------------------------------
1163(b); 1164(c)............... Report to MRM hydrocarbons produced, including measured gas 0
flared/vented and liquid hydrocarbon burned--burden covered
under 1010-0139.
--------------------------------------------------------------
1163(c), (d)................... Maintain records for 6 13............... 869 flare/vent 11,297
years detailing gas platforms.......
flaring/venting,
liquid hydrocarbon
burning; and flare/
vent meter
recordings; make
available for
inspection or provide
copies upon request.
0.5.............. 60 liquid 30
hydrocarbons.
1164(c)........................ Submit monthly reports 2................ 3 operators x 12 72
of flared or vented mos. = 36.
gas containing H2S.
--------------------------------------------------------------
1160(b); 1164(b)(1), (2)....... H2S Contingency, Exploration, or Development and Production 0
Plans and, Development Operations Coordination Documents--
burdens covered under 1010-0141 and 1010-0151. Monitor air
quality and report--burdens covered under 1010-0057.
----------------------------------------------------------------------------------------------
2,084 responses 12,026 hours
--------------------------------------------------------------------------------
Subtotal$8,624,000 non-hour costs
----------------------------------------------------------------------------------------------------------------
OTHER REQUIREMENTS
----------------------------------------------------------------------------------------------------------------
1165........................... Submit proposed plan 12............... 14 plans......... 168
and supporting
information for
enhanced recovery
operations; including
Form MMS-127.
--------------------------------------------------------------
1165(c)........................ Submit periodic reports of volumes of oil, gas, or other 0
substances injected, produced, or produced for a second
time--burden covered under OMB approval 1010-0139.
--------------------------------------------------------------
1166........................... Alaska Region only: 1................ 1 (req'd by 1
submit annual State, MMS gets
reservoir management copy).
report and supporting
information,
including Form MMS-
127.
100.............. 1 new development 100
not State lands.
[[Page 20288]]
20............... 3 annual 60
revisions.
1150-1167...................... General departure or 1................ 5 submissions.... 5
alternative
compliance requests
not specifically
covered elsewhere in
subpart K.
----------------------------------------------------------------------------------------------------------------
Subtotal 24 responses 334 hours
----------------------------------------------------------------------------------------------------------------
20,881 responses 43,396 hours
--------------------------------------------------------------------------------
TOTAL B$9,234,392 non-hour cost burdens
----------------------------------------------------------------------------------------------------------------
* Reporting burden for this form is estimated to average 0.1 to 3 hours per form depending on the number of well
tests reported, including the time for reviewing instructions, gathering and maintaining data, and completing
and reviewing the form.
An agency may not conduct or sponsor, and you are not required to
respond to, a collection of information unless it displays a currently
valid OMB control number. The public may comment, at any time, on the
accuracy of the IC burden in this rule and may submit any comments to
the Department of the Interior; Minerals Management Service; Attention:
Regulations and Standards Branch; Mail Stop 5438; 381 Elden Street;
Herndon, Virginia 20170-4817.
National Environmental Policy Act of 1969
This rule does not constitute a major Federal action significantly
affecting the quality of the human environment. A detailed statement
under the National Environmental Policy Act of 1969 is not required
because the rule is covered by a categorical exclusion. This rule is
excluded from the requirement to prepare a detailed statement because
it falls within the MMS categorical exclusion covering the ``[i]ssuance
and modification of regulations, Orders, Standards, Notices to Lessees
and Operators. Guidelines and field rules for which the impacts are
limited to administrative, economic, or technological effects and the
environmental impacts are minimal.'' This categorical exclusion is
documented in 516 Departmental Manual 15.4(C)(1). We have also
determined that the rule does not involve any of the extraordinary
circumstances listed in 43 CFR 46.215 that would require further
analysis under the National Environmental Policy Act.
Data Quality Act
In developing this rule, we did not conduct or use a study,
experiment, or survey requiring peer review under the Data Quality Act
(Pub. L. 106-554, app. C Sec. 515, 114 Stat. 2763, 2763A-153-154).
Effects on the Energy Supply (E.O. 13211)
This rule is not a significant energy action under the definition
in E.O. 13211. A Statement of Energy Effects is not required.
List of Subjects in 30 CFR Part 250
Continental shelf, Environmental protection, Oil and gas
exploration, Public lands--mineral resources, reporting and
recordkeeping requirements.
Dated: December 23, 2009.
Ned Farquhar,
Acting Assistant Secretary--Land and Minerals Management.
0
For the reasons stated in the preamble, Minerals Management Service
(MMS) amends 30 CFR part 250 as follows:
PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER
CONTINENTAL SHELF
0
1. The authority citation for part 250 continues to read as follows:
Authority: 31 U.S.C. 9701, 43 U.S.C. 1334.
0
2. Amend Sec. 250.105 by revising the definition of Sensitive
reservoir and adding in alphabetical order definitions for Flaring and
Venting to read as follows:
Sec. 250.105 Definitions.
* * * * *
Flaring means the burning of natural gas as it is released into the
atmosphere.
* * * * *
Sensitive reservoir means a reservoir in which the production rate
will affect ultimate recovery.
* * * * *
Venting means the release of gas into the atmosphere without
igniting it. This includes gas that is released underwater and bubbles
to the atmosphere.
* * * * *
0
3. In Sec. 250.125, revise paragraphs (a)(27) through (29) to read as
follows:
Sec. 250.125 Service fees.
(a) * * *
Service Fee Table
------------------------------------------------------------------------
Service--processing of the
following: Fee amount 30 CFR citation
------------------------------------------------------------------------
* * * * * * *
(27) 500 Feet From Lease/Unit 3,608 Sec. 250.1156(a).
Line Production Request.
(28) Gas Cap Production Request 4,592 Sec. 250.1157.
(29) Downhole Commingling 5,357 Sec. 250.1158(a).
Request.
* * * * * * *
------------------------------------------------------------------------
[[Page 20289]]
0
4. In Sec. 250.199, paragraph (e)(10) is revised to read as follows:
Sec. 250.199 Paperwork Reduction Act statements--information
collection.
* * * * *
(e) * * *
------------------------------------------------------------------------
30 CFR subpart, title and/or MMS Form Reasons for collecting
(OMB Control No.) information and how used
------------------------------------------------------------------------
* * * * * * *
(10) Subpart K, Oil and Gas Production To inform MMS of production
Rates (1010-0041), including Forms MMS- rates for hydrocarbons
126, Well Potential Test Report; MMS- produced on the OCS. To ensure
127, Sensitive Reservoir Information economic maximization of
Report; MMS-128, Semiannual Well Test ultimate hydrocarbon recovery.
Report; MMS-140 Bottomhole Pressure
Survey Report.
* * * * * * *
------------------------------------------------------------------------
Sec. 250.490 [Amended]
0
5. In Sec. 250.490, paragraph (o)(3), the citation ``Sec. 250.1105''
is revised to read ``Sec. 250.1164''.
0
6. Revise subpart K to read as follows:
Subpart K--Oil and Gas Production Requirements
General
Sec.
250.1150 What are the general reservoir production requirements?
Well Tests and Surveys
250.1151 How often must I conduct well production tests?
250.1152 How do I conduct well tests?
250.1153 When must I conduct a static bottomhole pressure survey?
Classifying Reservoirs
250.1154 How do I determine if my reservoir is sensitive?
250.1155 What information must I submit for sensitive reservoirs?
Approvals Prior To Production
250.1156 What steps must I take to receive approval to produce
within 500 feet of a unit or lease line?
250.1157 How do I receive approval to produce gas-cap gas from an
oil reservoir with an associated gas cap?
250.1158 How do I receive approval to downhole commingle
hydrocarbons?
Production Rates
250.1159 May the Regional Supervisor limit my well or reservoir
production rates?
Flaring, Venting, And Burning Hydrocarbons
250.1160 When may I flare or vent gas?
250.1161 When may I flare or vent gas for extended periods of time?
250.1162 When may I burn produced liquid hydrocarbons?
250.1163 How must I measure gas flaring or venting volumes and
liquid hydrocarbon burning volumes, and what records must I
maintain?
250.1164 What are the requirements for flaring or venting gas
containing H2S?
Other Requirements
250.1165 What must I do for enhanced recovery operations?
250.1166 What additional reporting is required for developments in
the Alaska OCS Region?
250.1167 What information must I submit with forms and for
approvals?
General
Sec. 250.1150 What are the general reservoir production requirements?
You must produce wells and reservoirs at rates that provide for
economic development while maximizing ultimate recovery and without
adversely affecting correlative rights.
Well Tests and Surveys
Sec. 250.1151 How often must I conduct well production tests?
(a) You must conduct well production tests as shown in the
following table:
------------------------------------------------------------------------
And you must submit to the
You must conduct: Regional Supervisor:
------------------------------------------------------------------------
(1) A well[dash]flow potential test on Form MMS-126, Well Potential
all new, recompleted, or reworked well Test Report, along with the
completions within 30 days of the date supporting data as listed in
of first continuous production. the table in Sec. 250.1167,
within 15 days after the end
of the test period.
(2) At least one well test during a Results on Form MMS-128,
calendar half-year for each producing Semiannual Well Test Report,
completion. of the most recent well test
obtained. This must be
submitted within 45 days after
the end of the calendar half-
year.
------------------------------------------------------------------------
(b) You may request an extension from the Regional Supervisor if
you cannot submit the results of a semiannual well test within the
specified time.
(c) You must submit to the Regional Supervisor an original and two
copies of the appropriate form required by paragraph (a) of this
section; one of the copies of the form must be a public information
copy in accordance with Sec. Sec. 250.186 and 250.197, and marked
``Public Information.'' You must submit two copies of the supporting
information as listed in the table in Sec. 250.1167 with form MMS-126.
Sec. 250.1152 How do I conduct well tests?
(a) When you conduct well tests you must:
(1) Recover fluid from the well completion equivalent to the amount
of fluid introduced into the formation during completion, recompletion,
reworking, or treatment operations before you start a well test;
(2) Produce the well completion under stabilized rate conditions
for at least 6 consecutive hours before beginning the test period;
(3) Conduct the test for at least 4 consecutive hours;
(4) Adjust measured gas volumes to the standard conditions of 14.73
pounds per square inch absolute (psia) and 60[deg] F for all tests; and
(5) Use measured specific gravity values to calculate gas volumes.
(b) You may request approval from the Regional Supervisor to
conduct a well test using alternative procedures if you can demonstrate
test reliability under those procedures.
(c) The Regional Supervisor may also require you to conduct the
following tests and complete them within a specified time period:
(1) A retest or a prolonged test of a well completion if it is
determined to be necessary for the proper establishment of a Maximum
Production Rate (MPR) or a Maximum Efficient Rate (MER); and
[[Page 20290]]
(2) A multipoint back-pressure test to determine the theoretical
open-flow potential of a gas well.
(d) An MMS representative may witness any well test. Upon request,
you must provide advance notice to the Regional Supervisor of the times
and dates of well tests.
Sec. 250.1153 When must I conduct a static bottomhole pressure
survey?
(a) You must conduct a static bottomhole pressure survey under the
following conditions:
------------------------------------------------------------------------
If you have . . . Then you must conduct . . .
------------------------------------------------------------------------
(1) A new producing reservoir.......... A static bottomhole pressure
survey within 90 days after
the date of first continuous
production.
(2) A reservoir with three or more Annual static bottomhole
producing completions. pressure surveys in a
sufficient number of key wells
to establish an average
reservoir pressure. The
Regional Supervisor may
require that bottomhole
pressure surveys be performed
on specific wells.
------------------------------------------------------------------------
(b) Your bottomhole pressure survey must meet the following
requirements:
(1) You must shut-in the well for a minimum period of 4 hours to
ensure stabilized conditions; and
(2) The bottomhole pressure survey must consist of a pressure
measurement at mid-perforation, and pressure measurements and gradient
information for at least four gradient stops coming out of the hole.
(c) You must submit to the Regional Supervisor the results of all
static bottomhole pressure surveys on Form MMS-140, Bottomhole Pressure
Survey Report, within 60 days after the date of the survey.
(d) The Regional Supervisor may grant a departure from the
requirement to run a static bottomhole pressure survey. To request a
departure, you must submit a justification, along with Form MMS-140,
Bottomhole Pressure Survey Report, showing a calculated bottomhole
pressure or any measured data.
Classifying Reservoirs
Sec. 250.1154 How do I determine if my reservoir is sensitive?
(a) You must determine whether each reservoir is sensitive. You
must classify the reservoir as sensitive if:
(1) Under initial conditions it is an oil reservoir with an
associated gas cap;
(2) At any time there are near-critical fluids; or
(3) The reservoir is undergoing enhanced recovery.
(b) For the purposes of this subpart, near-critical fluids are:
(1) Those fluids that occur in high temperature, high-pressure
reservoirs where it is not possible to define the liquid-gas contact;
or
(2) Fluids in reservoirs that are near bubble point or dew point
conditions.
(c) The Regional Supervisor may reclassify a reservoir when
available information warrants reclassification.
(d) If available information indicates that a reservoir previously
classified as non-sensitive is now sensitive, you must submit a request
to the Regional Supervisor to reclassify the reservoir. You must
include supporting information, as listed in the table in Sec.
250.1167, with your request.
(e) If information indicates that a reservoir previously classified
as sensitive is now non-sensitive, you may submit a request to the
Regional Supervisor to reclassify the reservoir. You must include
supporting information, as listed in the table in Sec. 250.1167, with
your request.
Sec. 250.1155 What information must I submit for sensitive
reservoirs?
You must submit to the Regional Supervisor an original and two
copies of Form MMS-127; one of the copies must be a public information
copy in accordance with Sec. Sec. 250.186 and 250.197, and marked
``Public Information.'' You must also submit two copies of the
supporting information, as listed in the table in Sec. 250.1167. You
must submit this information:
(a) Within 45 days after beginning production from the reservoir or
discovering that it is sensitive;
(b) At least once during the calendar year, but you do not need to
resubmit unrevised structure maps (Sec. 250.1167(a)(2)) or previously
submitted well logs (Sec. 250.1167(c)(1));
(c) Within 45 days after you revise reservoir parameters; and
(d) Within 45 days after the Regional Supervisor classifies the
reservoir as sensitive under Sec. 250.1154(c).
Approvals Prior to Production
Sec. 250.1156 What steps must I take to receive approval to produce
within 500 feet of a unit or lease line?
(a) You must obtain approval from the Regional Supervisor before
you start producing from a reservoir within a well that has any portion
of the completed interval less than 500 feet from a unit or lease line.
Submit to MMS the service fee listed in Sec. 250.125, according to the
instructions in Sec. 250.126, and the supporting information, as
listed in the table in Sec. 250.1167, with your request. The Regional
Supervisor will determine whether approval of your request will
maximize ultimate recovery, avoid the waste of natural resources, or
protect correlative rights. You do not need to obtain approval if the
adjacent leases or units have the same unit, lease (record title and
operating rights), and royalty interests as the lease or unit you plan
to produce. You do not need to obtain approval if the adjacent block is
unleased.
(b) You must notify the operator(s) of adjacent property(ies) that
are within 500 feet of the completion, if the adjacent acreage is a
leased block in the Federal OCS. You must provide the Regional
Supervisor proof of the date of the notification. The operators of the
adjacent properties have 30 days after receiving the notification to
provide the Regional Supervisor letters of acceptance or objection. If
an adjacent operator does not respond within 30 days, the Regional
Supervisor will presume there are no objections and proceed with a
decision. The notification must include:
(1) The well name;
(2) The rectangular coordinates (x, y) of the location of the top
and bottom of the completion or target completion referenced to the
North American Datum 1983, and the subsea depths of the top and bottom
of the completion or target completion;
(3) The distance from the completion or target completion to the
unit or lease line at its nearest point; and
(4) A statement indicating whether or not it will be a high-
capacity completion having a perforated or open hole interval greater
than 150 feet measured depth.
Sec. 250.1157 How do I receive approval to produce gas-cap gas from
an oil reservoir with an associated gas cap?
(a) You must request and receive approval from the Regional
Supervisor:
(1) Before producing gas-cap gas from each completion in an oil
reservoir that is known to have an associated gas cap.
[[Page 20291]]
(2) To continue production from a well if the oil reservoir is not
initially known to have an associated gas cap, but the oil well begins
to show characteristics of a gas well.
(b) For either request, you must submit the service fee listed in
Sec. 250.125, according to the instructions in Sec. 250.126, and the
supporting information, as listed in the table in Sec. 250.1167, with
your request.
(c) The Regional Supervisor will determine whether your request
maximizes ultimate recovery.
Sec. 250.1158 How do I receive approval to downhole commingle
hydrocarbons?
(a) Before you perforate a well, you must request and receive
approval from the Regional Supervisor to commingle hydrocarbons
produced from multiple reservoirs within a common wellbore. The
Regional Supervisor will determine whether your request maximizes
ultimate recovery. You must include the service fee listed in Sec.
250.125, according to the instructions in Sec. 250.126, and the
supporting information, as listed in the table in Sec. 250.1167, with
your request.
(b) If one or more of the reservoirs proposed for commingling is a
competitive reservoir, you must notify the operators of all leases that
contain the reservoir that you intend to downhole commingle the
reservoirs. Your request for approval of downhole commingling must
include proof of the date of this notification. The notified operators
have 30 days after notification to provide the Regional Supervisor with
letters of acceptance or objection. If the notified operators do not
respond within the specified period, the Regional Supervisor will
assume the operators do not object and proceed with a decision.
Production Rates
Sec. 250.1159 May the Regional Supervisor limit my well or reservoir
production rates?
(a) The Regional Supervisor may set a Maximum Production Rate (MPR)
for a producing well completion, or set a Maximum Efficient Rate (MER)
for a reservoir, or both, if the Regional Supervisor determines that an
excessive production rate could harm ultimate recovery. An MPR or MER
will be based on well tests and any limitations imposed by well and
surface equipment, sand production, reservoir sensitivity, gas-oil and
water-oil ratios, location of perforated intervals, and prudent
operating practices.
(b) If the Regional Supervisor sets an MPR for a producing well
completion and/or an MER for a reservoir, you may not exceed those
rates except due to normal variations and fluctuations in production
rates as set by the Regional Supervisor.
Flaring, Venting, and Burning Hydrocarbons
Sec. 250.1160 When may I flare or vent gas?
(a) You must request and receive approval from the Regional
Supervisor to flare or vent natural gas at your facility, except in the
following situations:
------------------------------------------------------------------------
Condition Additional requirements
------------------------------------------------------------------------
(1) When the gas is lease use gas The volume of gas flared or
(produced natural gas which is used on vented may not exceed the
or for the benefit of lease operations amount necessary for its
such as gas used to operate production intended purpose. Burning
facilities) or is used as an additive waste products may require
necessary to burn waste products, such approval under other
as H2S. regulations.
(2) During the restart of a facility Flaring or venting may not
that was shut in because of weather exceed 48 cumulative hours
conditions, such as a hurricane. without Regional Supervisor
approval.
(3) During the blow down of (i) You must report the
transportation pipelines downstream of location, time, flare/vent
the royalty meter. volume, and reason for flaring/
venting to the Regional
Supervisor in writing within
72 hours after the incident is
over.
(ii) Additional approval may be
required under subparts H and
J of this part.
(4) During the unloading or cleaning of You may not exceed 48
a well, drill-stem testing, production cumulative hours of flaring or
testing, other well-evaluation venting per unloading or
testing, or the necessary blow down to cleaning or testing operation
perform these procedures. on a single completion without
Regional Supervisor approval.
(5) When properly working equipment You may not flare or vent more
yields flash gas (natural gas released than an average of 50 MCF per
from liquid hydrocarbons as a result day during any calendar month
of a decrease in pressure, an increase without Regional Supervisor
in temperature, or both) from storage approval.
vessels or other low-pressure
production vessels, and you cannot
economically recover this flash gas.
(6) When the equipment works properly (i) For oil-well gas and gas-
but there is a temporary upset well flash gas (natural gas
condition, such as a hydrate or released from condensate as a
paraffin plug. result of a decrease in
pressure, an increase in
temperature, or both), you may
not exceed 48 continuous hours
of flaring or venting without
Regional Supervisor approval.
(ii) For primary gas-well gas
(natural gas from a gas well
completion that is at or near
its wellhead pressure; this
does not include flash gas),
you may not exceed 2
continuous hours of flaring or
venting without Regional
Supervisor approval.
(iii) You may not exceed 144
cumulative hours of flaring or
venting during a calendar
month without Regional
Supervisor approval.
(7) When equipment fails to work (i) For oil-well gas and gas-
properly, during equipment maintenance well flash gas, you may not
and repair, or when you must relieve exceed 48 continuous hours of
system pressures. flaring or venting without
Regional Supervisor approval.
(ii) For primary gas-well gas,
you may not exceed 2
continuous hours of flaring or
venting without Regional
Supervisor approval.
(iii) You may not exceed 144
cumulative hours of flaring or
venting during a calendar
month without Regional
Supervisor approval.
(iv) The continuous and
cumulative hours allowed under
this paragraph may be counted
separately from the hours
under paragraph (a)(6) of this
section.
------------------------------------------------------------------------
[[Page 20292]]
(b) Regardless of the requirements in paragraph (a) of this
section, you must not flare or vent gas over the volume approved in
your Development Operations Coordination Document (DOCD) or your
Development and Production Plan (DPP).
(c) The Regional Supervisor may establish alternative approval
procedures to cover situations when you cannot contact the MMS office,
such as during non-office hours.
(d) The Regional Supervisor may specify a volume limit, or a
shorter time limit than specified elsewhere in this part, in order to
prevent air quality degradation or loss of reserves.
(e) If you flare or vent gas without the required approval, or if
the Regional Supervisor determines that you were negligent or could
have avoided flaring or venting the gas, the hydrocarbons will be
considered avoidably lost or wasted. You must pay royalties on the loss
or waste, according to part 202 of this title. You must value any gas
or liquid hydrocarbons avoidably lost or wasted under the provisions of
part 206 of this title.
(f) Fugitive emissions from valves, fittings, flanges, pressure
relief valves or similar components do not require approval under this
subpart unless specifically required by the Regional Supervisor.
Sec. 250.1161 When may I flare or vent gas for extended periods of
time?
You must request and receive approval from the Regional Supervisor
to flare or vent gas for an extended period of time. The Regional
Supervisor will specify the approved period of time, which will not
exceed 1 year. The Regional Supervisor may deny your request if it does
not ensure the conservation of natural resources or is not consistent
with national interests relating to development and production of
minerals of the OCS. The Regional Supervisor may approve your request
for one of the following reasons:
(a) You initiated an action which, when completed, will eliminate
flaring and venting; or
(b) You submit to the Regional Supervisor an evaluation supported
by engineering, geologic, and economic data indicating that the oil and
gas produced from the well(s) will not economically support the
facilities necessary to sell the gas or to use the gas on or for the
benefit of the lease.
Sec. 250.1162 When may I burn produced liquid hydrocarbons?
(a) You must request and receive approval from the Regional
Supervisor to burn any produced liquid hydrocarbons. The Regional
Supervisor may allow you to burn liquid hydrocarbons if you demonstrate
that transporting them to market or re-injecting them is not
technically feasible or poses a significant risk of harm to offshore
personnel or the environment.
(b) If you burn liquid hydrocarbons without the required approval,
or if the Regional Supervisor determines that you were negligent or
could have avoided burning liquid hydrocarbons, the hydrocarbons will
be considered avoidably lost or wasted. You must pay royalties on the
loss or waste, according to part 202 of this title. You must value any
liquid hydrocarbons avoidably lost or wasted under the provisions of
part 206 of this title.
Sec. 250.1163 How must I measure gas flaring or venting volumes and
liquid hydrocarbon burning volumes, and what records must I maintain?
(a) If your facility processes more than an average of 2,000 bopd
during May 2010, you must install flare/vent meters within 180 days
after May 2010. If your facility processes more than an average of
2,000 bopd during a calendar month after May 2010, you must install
flare/vent meters within 120 days after the end of the month in which
the average amount of oil processed exceeds 2,000 bopd.
(1) You must notify the Regional Supervisor when your facility
begins to process more than an average of 2,000 bopd in a calendar
month;
(2) The flare/vent meters must measure all flared and vented gas
within 5 percent accuracy;
(3) You must calibrate the meters regularly, in accordance with the
manufacturer's recommendation, or at least once every year, whichever
is shorter; and
(4) You must use and maintain the flare/vent meters for the life of
the facility.
(b) You must report all hydrocarbons produced from a well
completion, including all gas flared, gas vented, and liquid
hydrocarbons burned, to Minerals Revenue Management on Form MMS-4054
(Oil and Gas Operations Report), in accordance with Sec. 210.102 of
this title.
(1) You must report the amount of gas flared and the amount of gas
vented separately.
(2) You may classify and report gas used to operate equipment on
the lease, such as gas used to power engines, instrument gas, and gas
used to maintain pilot lights, as lease use gas.
(3) If flare/vent meters are required at one or more of your
facilities, you must report the amount of gas flared and vented at each
of those facilities separately from those facilities that do not
require meters and separately from other facilities with meters.
(4) If flare/vent meters are not required at your facility:
(i) You may report the gas flared and vented on a lease or unit
basis. Gas flared and vented from multiple facilities on a single lease
or unit may be reported together.
(ii) If you choose to install meters, you may report the gas volume
flared and vented according to the method specified in paragraph (b)(3)
of this section.
(c) You must prepare and maintain records detailing gas flaring,
gas venting, and liquid hydrocarbon burning for each facility for 6
years.
(1) You must maintain these records on the facility for at least
the first 2 years and have them available for inspection by MMS
representatives.
(2) After 2 years, you must maintain the records, allow MMS
representatives to inspect the records upon request and provide copies
to the Regional Supervisor upon request, but are not required to keep
them on the facility.
(3) The records must include, at a minimum:
(i) Daily volumes of gas flared, gas vented, and liquid
hydrocarbons burned;
(ii) Number of hours of gas flaring, gas venting, and liquid
hydrocarbon burning, on a daily and monthly cumulative basis;
(iii) A list of the wells contributing to gas flaring, gas venting,
and liquid hydrocarbon burning, along with gas-oil ratio data;
(iv) Reasons for gas flaring, gas venting, and liquid hydrocarbon
burning; and
(v) Documentation of all required approvals.
(d) If your facility is required to have flare/vent meters:
(1) You must maintain the meter recordings for 6 years.
(i) You must keep these recordings on the facility for 2 years and
have them available for inspection by MMS representatives.
(ii) After 2 years, you must maintain the recordings, allow MMS
representatives to inspect the recordings upon request and provide
copies to the Regional Supervisor upon request, but are not required to
keep them on the facility.
(iii) These recordings must include the begin times, end times, and
volumes for all flaring and venting incidents.
(2) You must maintain flare/vent meter calibration and maintenance
records on the facility for 2 years.
[[Page 20293]]
(e) If your flaring or venting of gas, or burning of liquid
hydrocarbons, required written or oral approval, you must submit
documentation to the Regional Supervisor summarizing the location,
dates, number of hours, and volumes of gas flared, gas vented, and
liquid hydrocarbons burned under the approval.
Sec. 250.1164 What are the requirements for flaring or venting gas
containing H2S?
(a) You may not vent gas containing H2S, except for
minor releases during maintenance and repair activities that do not
result in a 15-minute time-weighted average atmosphere concentration of
H2S of 20 ppm or higher anywhere on the platform.
(b) You may flare gas containing H2S only if you meet
the requirements of Sec. Sec. 250.1160, 250.1161, 250.1163, and the
following additional requirements:
(1) For safety or air pollution prevention purposes, the Regional
Supervisor may further restrict the flaring of gas containing
H2S. The Regional Supervisor will use information provided
in the lessee's H2S Contingency Plan (Sec. 250.490(f)),
Exploration Plan, DPP, DOCD, and associated documents to determine the
need for restrictions; and
(2) If the Regional Supervisor determines that flaring at a
facility or group of facilities may significantly affect the air
quality of an onshore area, the Regional Supervisor may require you to
conduct an air quality modeling analysis, under Sec. 250.303, to
determine the potential effect of facility emissions. The Regional
Supervisor may require monitoring and reporting, or may restrict or
prohibit flaring, under Sec. Sec. 250.303 and 250.304.
(c) The Regional Supervisor may require you to submit monthly
reports of flared and vented gas containing H2S. Each report
must contain, on a daily basis:
(1) The volume and duration of each flaring and venting occurrence;
(2) H2S concentration in the flared or vented gas; and
(3) The calculated amount of SO2 emitted.
Other Requirements
Sec. 250.1165 What must I do for enhanced recovery operations?
(a) You must promptly initiate enhanced oil and gas recovery
operations for all reservoirs where these operations would result in an
increase in ultimate recovery of oil or gas under sound engineering and
economic principles.
(b) Before initiating enhanced recovery operations, you must submit
a proposed plan to the Regional Supervisor and receive approval for
pressure maintenance, secondary or tertiary recovery, cycling, and
similar recovery operations intended to increase the ultimate recovery
of oil and gas from a reservoir. The proposed plan must include, for
each project reservoir, a geologic and engineering overview, Form MMS-
127 and supporting data as required in Sec. 250.1167, and any
additional information required by the Regional Supervisor.
(c) You must report to Minerals Revenue Management the volumes of
oil, gas, or other substances injected, produced, or produced for a
second time under Sec. 210.102 of this title.
Sec. 250.1166 What additional reporting is required for developments
in the Alaska OCS Region?
(a) For any development in the Alaska OCS Region, you must submit
an annual reservoir management report to the Regional Supervisor. The
report must contain information detailing the activities performed
during the previous year and planned for the upcoming year that will:
(1) Provide for the prevention of waste;
(2) Provide for the protection of correlative rights; and
(3) Maximize ultimate recovery of oil and gas.
(b) If your development is jointly regulated by MMS and the State
of Alaska, MMS and the Alaska Oil and Gas Conservation Commission will
jointly determine appropriate reporting requirements to minimize or
eliminate duplicate reporting requirements.
(c) Every time you are required to submit Form MMS-127 under Sec.
250.1155, you must request an MER for each producing sensitive
reservoir in the Alaska OCS Region, unless otherwise instructed by the
Regional Supervisor.
Sec. 250.1167 What information must I submit with forms and for
approvals?
You must submit the supporting information listed in the following
table with the forms identified in columns 1 and 2 and for the
approvals required under this subpart identified in columns 3 through
6:
----------------------------------------------------------------------------------------------------------------
Production
WPT MMS- SRI MMS- within 500-
126 (2 127 (2 Gas cap Downhole Reservoir ft of a
copies) copies) production commingling reclassification unit or
lease line
----------------------------------------------------------------------------------------------------------------
(a) Maps:
(1) Base map with surface, .......... .......... [radic] [radic] ................ [radic]
bottomhole, and completion
locations with respect to
the unit or lease line and
the orientation of
representative seismic lines
or cross-sections...........
(2) Structure maps with [radic] [radic] [radic] [radic] [radic] [radic]
penetration point and subsea
depth for each well
penetrating the reservoirs,
highlighting subject wells;
reservoir boundaries; and
original and current fluid
levels......................
(3) Net sand isopach with .......... * [radic] [radic]
total net sand penetrated
for each well, identified at
the penetration point.......
(4) Net hydrocarbon isopach .......... * [radic] [radic]
with net feet of pay for
each well, identified at the
penetration point...........
(b) Seismic data:
(1) Representative seismic .......... .......... [radic] [radic] ................ [radic]
lines, including strike and
dip lines that confirm the
structure; indicate polarity
(2) Amplitude extraction of .......... .......... [radic] [radic] [radic] [radic]
seismic horizon, if
applicable..................
(c) Logs:
(1) Well log sections with [radic] [radic] [radic] [radic] [radic] [radic]
tops and bottoms of the
reservoir(s) and proposed or
existing perforations.......
(2) Structural cross-sections .......... .......... [radic] [radic] [radic] *
showing the subject well and
nearby wells................
(d) Engineering data:
[[Page 20294]]
(1) Estimated recoverable .......... [radic] [dagger] [dagger] ................ [radic]
reserves for each well
completion in the reservoir;
total recoverable reserves
for each reservoir; method
of calculation; reservoir
parameters used in
volumetric and decline curve
analysis....................
(2) Well schematics showing .......... .......... [radic] [radic] ................ [radic]
current and proposed
conditions..................
(3) The drive mechanism of .......... [radic] [radic] [radic] [radic] [radic]
each reservoir..............
(4) Pressure data, by date, .......... .......... [radic] [radic] [radic]
and whether they are
estimated or measured.......
(5) Production data and .......... .......... [radic] [radic] [radic]
decline curve analysis
indicative of the reservoir
performance.................
(6) Reservoir simulation with .......... .......... * * * *
the reservoir parameters
used, history matches, and
prediction runs (include
proposed development
scenario)...................
(e) General information:
(1) Detailed economic .......... .......... * *
analysis....................
(2) Reservoir name and .......... [radic] [radic] [radic] [radic] [radic]
whether or not it is
competitive as defined under
Sec. 250.105..............
(3) Operator name, lessee .......... .......... [radic] [radic] ................ [radic]
name(s), block, lease
number, royalty rate, and
unit number (if applicable)
of all relevant leases......
(4) Geologic overview of .......... .......... [radic] [radic] [radic] [radic]
project.....................
(5) Explanation of why the .......... .......... [radic] [radic] ................ [radic]
proposed completion scenario
will maximize ultimate
recovery....................
(6) List of all wells in .......... .......... [radic] [radic] [radic] [radic]
subject reservoirs that have
ever produced or been used
for injection...............
----------------------------------------------------------------------------------------------------------------
[radic] Required.
[dagger] Each Gas Cap Production request and Downhole Commingling request must include the estimated recoverable
reserves for (1) the case where your proposed production scenario is approved, and (2) the case where your
proposed production scenario is denied.
* Additional items the Regional Supervisor may request.
Note: All maps must be at a standard scale and show lease and unit lines. The Regional Supervisor may waive
submittal of some of the required data on a case-by-case basis.
(f) Depending on the type of approval requested, you must submit
the appropriate payment of the service fee(s) listed in Sec. 250.125,
according to the instructions in Sec. 250.126.
[FR Doc. 2010-8798 Filed 4-16-10; 8:45 am]
BILLING CODE 4310-MR-P