[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
------------------------------------------------------------------------
                  Comment                           MMS response
------------------------------------------------------------------------
                               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