Agency Information Collection Activities: Indian Oil and Gas Valuation
Federal Register, Volume 83 Issue 133 (Wednesday, July 11, 2018)
Federal Register Volume 83, Number 133 (Wednesday, July 11, 2018)
Notices
Pages 32141-32150
From the Federal Register Online via the Government Publishing Office www.gpo.gov
FR Doc No: 2018-14854
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DEPARTMENT OF THE INTERIOR
Office of Natural Resources Revenue
Docket No. ONRR-2011-0021; DS63644000 DR2000000.CH7000 189D0102R2; OMB Control Number 1012-0002
Agency Information Collection Activities: Indian Oil and Gas Valuation
AGENCY: Office of Natural Resources Revenue, Interior.
ACTION: Notice of information collection; request for comment.
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SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (PRA), we, the Office of Natural Resources Revenue (ONRR), are proposing to renew an information collection with revisions.
DATES: You must submit your written comments on or before September 10, 2018.
ADDRESSES: You may submit comments on this ICR to ONRR by using one of the following three methods (please reference ``ICR 1012-0002'' in your comments):
1. Electronically go to https://www.regulations.gov. In the entry titled ``Enter Keyword or ID,'' enter ``ONRR-2011-0021'' and then click ``Search.'' Follow the instructions to submit public comments. ONRR will post all comments.
2. Mail comments to Mr. Armand Southall, Regulatory Specialist, ONRR, P.O. Box 25165, MS 64400B, Denver, Colorado 80225-0165.
3. Hand-carry or mail comments, using an overnight courier service, to ONRR. Our courier address is Building 85, Entrance N-1, Denver Federal Center, West 6th Ave. and Kipling St., Denver, Colorado 80225.
FOR FURTHER INFORMATION CONTACT: For any technical questions, contact Ms. LeeAnn Martin, telephone (303) 231-3313, or email to email protected. For any other questions about this ICR, contact Mr. Armand Southall, telephone (303) 231-3221, or email to email protected. You may
Page 32142
also contact Mr. Southall to obtain copies, at no cost, of (1) the ICR, (2) any associated forms, and (3) the regulations that require us to collect the information.
SUPPLEMENTARY INFORMATION: In accordance with the Paperwork Reduction Act of 1995, we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
We are soliciting comments on the proposed ICR that is described below. This ICR covers six ONRR forms. We are especially interested in public comment addressing the following issues: (1) Is the collection necessary to the proper functions of ONRR; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might ONRR enhance the quality, utility, and clarity of the information to be collected; and (5) how might ONRR minimize the burden of this collection on the respondents, including through the use of information technology.
Comments that you submit in response to this notice are a matter of public record. ONRR will post all comments, including names and addresses of respondents at https://www.regulations.gov. We will include or summarize each comment in our request to Office of Management and Budget (OMB) to approve this ICR. Before including Personally Identifiable Information (PII), such as your address, phone number, email address, or other personal identifying information in your comment(s), you should be aware that your entire comment, including PII, may be made available to the public at any time. While you may ask us, in your comment, to withhold your PII from public view, we cannot guarantee that we will be able to do so. We also will post the ICR at https://www.onrr.gov/Laws_R_D/FRNotices/ICR0103.htm.
Abstract: The Secretary of the United States Department of the Interior is responsible for mineral resource development on Federal and Indian lands and the Outer Continental Shelf (OCS). Under various laws, the Secretary's responsibility is to manage mineral resources production on Federal and Indian lands and the OCS, collect royalties due, and distribute the funds collected. The Secretary also has trust responsibility to manage Indian lands and seek advice and information from Indian beneficiaries. ONRR performs the mineral revenue management functions for the Secretary and assists the Secretary in carrying out the Department's trust responsibility for Indian lands. Public laws pertaining to mineral leases on Federal and Indian lands are available at https://www.onrr.gov/Laws_R_D/PubLaws/index.htm.
Information collections that we cover in this ICR involve six forms, forms ONRR-4109, 4110, 4295, 4393, 4410, and 4411. References to these forms are identified in: 30 CFR part 1202, subparts C and J, which pertain to Indian oil and gas royalties; part 1206, subparts B and E, which govern the valuation of oil and gas produced from leases on Indian lands; and part 1207, which pertains to recordkeeping. Indian Tribes and individual Indian mineral owners receive all royalties generated from their lands. Determining product valuation is essential to ensure that Indian Tribes and individual Indian mineral owners receive payment on the full value of the minerals removed from their lands. Failure to collect the data that we describe in this ICR could result in the undervaluation of leased minerals on Indian lands. All data reported is subject to subsequent audit and adjustment.
Indian Oil
Regulations at 30 CFR part 1206, subpart B, govern the valuation for royalty purposes of oil produced from Indian oil and gas leases (Tribal and allotted), and are consistent with mineral leasing laws, other applicable laws, and lease terms. Generally, these regulations provide that lessees determine the value of oil based upon the higher of (1) the gross proceeds under an arm's-length contract; or (2) major portion analysis. These regulations require reporting on one form that is the subject of this ICR, form ONRR-4110.
From information collected on form ONRR-4110, Oil Transportation Allowance Report, ONRR and Tribal audit personnel evaluate (1) whether lessee-reported transportation allowances are within regulatory allowance limitations and calculated under applicable regulations; and (2) whether the lessees reported and paid the proper amount of royalties. Lessees must use form ONRR-4110 for both non-arm's-length contract or no contract situations.
Indian Gas
Regulations at 30 CFR part 1206, subpart E, govern the valuation for royalty purposes of natural gas produced from Indian oil and gas leases (Tribal and allotted). These regulations require reporting on four forms that are the subject of this ICR, forms ONRR-4109, 4295, 4410, and 4411:
From information collected on form ONRR-4109, Gas Processing Allowance Summary Report, ONRR and Tribal audit personnel evaluate (1) whether lessee-reported processing allowances are within regulatory allowance limitations and calculated under applicable regulations; and (2) whether the lessees reported and paid the proper amount of royalties.
From information collected on form ONRR-4295, Gas Transportation Allowance Report, ONRR and Tribal audit personnel evaluate (1) whether lessee-reported transportation allowances are within regulatory allowance limitations and calculated under applicable regulations; and (2) whether the lessees reported and paid the proper amount of royalties.
Lessees use form ONRR-4410, Accounting for Comparison Dual Accounting, to certify that dual accounting is not required on an Indian lease or to make an election for actual or alternative dual accounting for Indian leases. Most Indian leases contain the requirement to perform accounting for comparison (dual accounting) for gas produced from the lease. Therefore, lessees must elect to perform actual dual accounting as defined in 30 CFR 1206.176, or alternative dual accounting as defined in 30 CFR 1206.173.
Lessees use form ONRR-4411, Safety Net Report, when they sell gas production from an Indian oil or gas lease beyond the first index pricing point. The safety net calculation establishes the minimum value, for royalty purposes, of natural gas production from Indian oil and gas leases. This reporting requirement ensures that Indian lessors receive all royalties due and aids ONRR compliance efforts.
Indian Oil and Gas
Regulations at 30 CFR 1206.56(b)(2) and 1206.177(c)(2) and (c)(3) govern the valuation for royalty purposes of oil and gas produced from Indian oil and gas leases (Tribal and allotted), and are consistent with mineral leasing laws, other applicable laws, and lease terms. These regulations require reporting on one form that is the subject of this ICR, form ONRR-4393.
Lessees must submit form ONRR-4393, Request to Exceed Regulatory
Page 32143
Allowance Limitation, for both Federal and Indian leases to request to exceed the regulatory allowance limitation. Most of the burden hours are incurred on Federal leases; therefore, OMB approved the form under OMB Control Number 1012-0005, pertaining to Federal oil and gas leases. However, we include a discussion of the form in this ICR, as well as the burden hours for Indian leases. To request permission to exceed a regulatory allowance limit, lessees must (1) submit a letter to ONRR explaining why a higher allowance limit is necessary; and (2) provide supporting documentation, including a completed form ONRR-4393. This form provides ONRR with the data necessary to make a decision whether to approve or deny the request.
Revisions to ICR
This is an ICR with revisions because it takes into account the final rule published May 1, 2015, which amended ONRR's Indian oil valuation regulations (80 FR 24794). This ICR requires minor revisions to note changes to its authority when the final rule amended 30 CFR part 1206, subpart B. The two changes relevant to this ICR are that the amendment: (1) Eliminated the form ONRR-4110 filing requirements for arm's-length transportation allowance; and (2) eliminated the pre-
filing of form ONRR-4110 prior to claiming a non-arm's-length transportation allowance. The final rule noted that OMB approved a total of 220 burden hours for lessees to file their forms ONRR-4110 under OMB Control Number 1012-0002. It also noted that ``there will be no additional burden hours because this rule will insignificantly reduce the burden hours associated with the Oil Transportation Allowance Report.'' Under the revised Indian oil valuation regulations, rather than submitting estimated transportation cost information on the form and then following up with actual cost information at the end of the reporting cycle, lessees need only provide actual cost information. Also, Indian lessees that have arm's-length transportation costs are no longer required to submit form ONRR-4110 to report these costs, but will, instead, submit copies of the actual contracts to ONRR.
OMB Approval
We are requesting OMB's approval to continue to collect this information, with revisions. Not collecting this information would limit the Secretary's ability to discharge fiduciary duties and may also result in the inability to confirm the accurate royalty value to Indian Tribes and individual Indian mineral owners. ONRR protects the proprietary information that it receives and does not collect items of a sensitive nature. The requirement to report is mandatory for form ONRR-4410, Accounting for Comparison Dual Accounting, and for form ONRR-4411, Safety Net Report, under certain circumstances. The lessees are required to report on forms ONRR-4109, ONRR-4110, ONRR-4295, and ONRR-4393 in order to obtain a benefit.
Title of Collection: Indian Oil and Gas Valuation, 30 CFR parts 1202, 1206, and 1207.
OMB Control Number: 1012-0002.
Bureau Form Number: Forms ONRR-4109, ONRR-4110, ONRR-4295, ONRR-
4410, and ONRR-4411.
Type of Review: Extension of a currently approved collection, with revisions.
Respondents/Affected Public: Businesses.
Total Estimated Number of Annual Respondents: 149 Indian lessees.
Total Estimated Number of Annual Responses: 149.
Estimated Completion Time per Response: 8.85 hours.
Total Estimated Number of Annual Burden Hours: 1,319 hours.
Respondent's Obligation: Required to obtain or retain a benefit.
Frequency of Collection: Annually and on occasion.
Total Estimated Annual Nonhour Burden Cost: None.
We have not included in our estimates certain requirements performed in the normal course of business and considered usual and customary. The following chart shows the estimated burden hours by CFR section and paragraph:
Respondents' Estimated Annual Burden Hours
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Average number
30 CFR Reporting and recordkeeping Hour burden of annual Annual burden
requirement responses hours
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Part 1202--ROYALTIES
Subpart C--Federal and Indian Oil
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1202.101...................... Standards for reporting and Burden covered under Sec. 1210.52 in OMB
paying royalties. Report oil Control Number 1012-0004.
volumes in barrels of clean oil
of 42 standard U.S. gallons
(231 cubic inches each) at 60
degF.
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Subpart J--Gas Production From Indian Leases
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1202.551(b)................... How do I determine the volume of Burden covered under Sec. 1210.52 in OMB
production for which I must pay Control Number 1012-0004.
royalty if my lease is not in
an approved Federal unit or
communitization agreement
(AFA)? * * * (b) You and all
other persons paying royalties
on the lease must report and
pay royalties based on your
takes. * * *.
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1202.551(c)................... You and all other persons paying 1 1 1
royalties on the lease may ask
ONRR for permission to report
and pay royalties based on your
entitlements. * * *.
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1202.558(a) and (b)........... What standards do I use to Burden covered under Sec. 1210.52 in OMB
report and pay royalties on Control Number 1012-0004.
gas? (a) You must report gas
volumes * * * (b) You must
report residue gas and gas
plant product volumes. * * *.
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Part 1206--PRODUCT VALUATION
Subpart B--Indian Oil
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1206.56(b)(2)................. What general transportation 4 1 4
allowance requirements apply to
me? * * * (2) Upon your
request, ONRR may approve a
transportation allowance
deduction in excess of the
limitation prescribed by
paragraph (b)(1) of this
section. * * * An application
for exception (using Form ONRR-
4393, Request to Exceed
Regulatory Allowance
Limitation) must contain all
relevant and supporting
documentation necessary for
ONRR to make a determination. *
* *.
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1206.57(a)(1), (2), and (3)... How do I determine a AUDIT PROCESS. See note.
transportation allowance if I
have an arm's-length
transportation contract? Arm's-
length transportation. (a)(1) *
* * You have the burden of
demonstrating that your
contract is arm's-length. (2)
You must submit to ONRR a copy
of your arm's-length
transportation contract(s) and
all subsequent amendments to
the contract(s) within 2 months
of the date that ONRR receives
your report, which claims the
allowance on form ONRR-2014.
(3) * * * When ONRR determines
that the value of the
transportation may be
unreasonable, ONRR will notify
the lessee and give the lessee
an opportunity to provide
written information justifying
the lessee's transportation
costs.
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1206.57(a)(4)(i).............. * * * Except as provided in this Burden covered under Sec. 1206.57(a)(5).
paragraph, you may not take an
allowance for the costs of
transporting lease production,
which is not royalty-bearing,
without ONRR's approval.
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1206.57(a)(4)(ii)............. Notwithstanding the requirements 20 1 20
of paragraph (a)(4)(i) of this
section, you may propose to
ONRR a cost allocation method
on the basis of the values of
the products transported. * * *.
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1206.57(a)(5)................. If an arm's-length 40 1 40
transportation contract
includes both gaseous and
liquid products, and the
transportation costs
attributable to each product
cannot be determined from the
contract, you must propose an
allocation procedure to ONRR. *
* *.
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1206.57(a)(5)(ii)............. You must submit to ONRR all AUDIT PROCESS. See note.
available data to support your
proposal.
----------------------------------------------------------------------------------------------------------------
1206.57(a)(5)(iii)............ You must submit your initial 4 1 4
proposal within 3 months after
the last day of the month for
which you request a
transportation allowance,
whichever is later (unless ONRR
approves a longer period).
----------------------------------------------------------------------------------------------------------------
1206.57(b)(1)................. Reporting requirements. If ONRR AUDIT PROCESS. See note.
requests, you must submit all
data used to determine your
transportation allowance. * * *.
----------------------------------------------------------------------------------------------------------------
1206.57(b)(2)................. You must report transportation Burden covered under Sec. 1210.52 in OMB
allowances as a separate entry Control Number 1012-0004.
on Form ONRR-2014. * * *.
----------------------------------------------------------------------------------------------------------------
1206.58(a)(1)................. How do I determine a AUDIT PROCESS. See note.
transportation allowance if I
have a non-arm's-length
transportation contract or have
no contract? Non-arm's-length
or no contract. If you have a
non-arm's-length transportation
contract or no contract,
including those situations
where you or your affiliate
perform(s) transportation
services for you, the
transportation allowance is
based on your reasonable,
actual costs.
----------------------------------------------------------------------------------------------------------------
1206.58(a)(2)................. You must submit the actual cost 6 1 6
information to support the
allowance to ONRR on Form ONRR-
4110, Oil Transportation
Allowance Report, within 3
months after the end of the
calendar year to which the
allowance applies. * * *.
----------------------------------------------------------------------------------------------------------------
1206.58(a)(3)(iv)............. * * * After you have elected to 20 1 20
use either method for a
transportation system, you may
not later elect to change to
the other alternative without
approval of ONRR.
----------------------------------------------------------------------------------------------------------------
1206.58(a)(3)(iv)(A).......... * * * After you make an 20 1 20
election, you may not change
methods without ONRR's
approval. * * *.
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Page 32145
1206.58(a)(4)(i).............. * * * Except as provided in this 40 1 40
paragraph (a)(4)(i), you may
not take an allowance for
transporting lease production
that is not royalty bearing
without ONRR's approval.
----------------------------------------------------------------------------------------------------------------
1206.58(a)(4)(ii)............. Notwithstanding the requirements 20 1 20
of paragraph (a)(4)(i) of this
section, you may propose to
ONRR a cost allocation method
on the basis of the values of
the products transported. * * *.
----------------------------------------------------------------------------------------------------------------
1206.58(a)(5)(ii) and (iii)... (ii) Where both gaseous and 20 1 20
liquid products are transported
through the same transportation
system, you must propose a cost
allocation procedure to ONRR. *
* * (iii) You must submit to
ONRR all available data to
support your proposal. * * *
You must submit your initial
proposal within 3 months after
the last day of the month for
which you request a
transportation allowance
(unless ONRR approves a longer
period).
----------------------------------------------------------------------------------------------------------------
1206.58(a)(6)................. You may apply to ONRR for an 20 1 20
exception from the requirement
that you compute actual costs
under paragraphs (a)(1) through
(5) of this section.
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1206.58(b)(1)................. Reporting requirements. If ONRR 4 1 4
requests, you must submit all
data used to determine your
transportation allowance, You
must provide the data within a
reasonable period of time that
ONRR will determine.
----------------------------------------------------------------------------------------------------------------
1206.58(b)(2)................. You must report transportation 4 1 4
allowances as a separate entry
on Form ONRR-2014. * * *.
----------------------------------------------------------------------------------------------------------------
1206.58(b)(3)................. ONRR may require you to submit 12 1 12
all of the data that you used
to prepare your Form ONRR-4110.
You must submit the data within
a reasonable period of time
that ONRR determines.
----------------------------------------------------------------------------------------------------------------
1206.59(a).................... What interest applies if I Burden covered under Sec. 1210.52 in OMB
improperly report a Control Number 1012-0004.
transportation allowance? If
you deduct a transportation
allowance on Form ONRR-2014
without complying with the
requirements of Sec. Sec.
1206.56 and 1206.57 or Sec.
1206.58, you must pay
additional royalties due plus
late payment interest
calculated under Sec. 1218.54
of this chapter.
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1206.60(a).................... What reporting adjustments must Burden covered under Sec. 1210.52 in OMB
I make for transportation Control Number 1012-0004.
allowances? If your actual
transportation allowance is
less than the amount that you
claimed on Form ONRR-2014 for
each month during the allowance
reporting period, you must pay
additional royalties due, plus
late payment interest
calculated under Sec. 1218.54
of this chapter.
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1206.60(c).................... If you make an adjustment under Burden covered under Sec. 1210.52 in OMB
paragraph (a) or (b) of this Control Number 1012-0004.
section, then you must submit a
corrected Form ONRR-2014 to
reflect actual costs, together
with any payment, using
instructions that ONRR provides.
----------------------------------------------------------------------------------------------------------------
1206.61(a)(2)................. How will ONRR determine if my Burden covered under Sec. 1210.52 in OMB
royalty payments are correct? * Control Number 1012-0004.
* * If ONRR directs you to use
a different royalty value, you
must pay any additional
royalties due plus late payment
interest calculated under Sec.
1218.54 of this chapter.
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1206.62(a).................... How do I request a value 20 1 20
determination? You may request
a value determination from ONRR
regarding any oil produced.
Your request must include: (1)
Be in writing. (2) Identify
specifically all leases
involved, all interest owners
of those leases, the
designee(s), and the
operator(s) for those leases.
(3) Completely explain all
relevant facts. * * * (4)
Include copies of all relevant
documents. (5) Provide your
analysis of the issue(s) * * *
(6) Suggest your proposed
valuation method.
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Page 32146
1206.62(c)(2)................. After the Assistant Secretary Burden covered under Sec. 1210.52 in OMB
for Indian Affairs issues a Control Number 1012-0004.
value determination, you must
make any adjustments to royalty
payments that follow from the
determination, and, if you owe
additional royalties, you must
pay the additional royalties
due plus late payment interest
calculated under Sec. 1218.54
of this chapter.
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1206.64....................... What records must I keep to AUDIT PROCESS. See note.
support my calculations of
value under this subpart? If
you determine the value of your
oil under this subpart, you
must retain all data relevant
to the determination of royalty
value. * * *.
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Part 1206--PRODUCT VALUATION
Subpart E--Indian Gas
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1206.172(b)(1)(ii)............ How do I value gas produced from 4 58 232
leases in an index zone? (b)
Valuing residue gas and gas
before processing. (1)(ii) Gas
production that you certify on
Form ONRR-4410, Certification
for Not Performing Accounting
for comparison (Dual
Accounting), is not processed
before it flows into a pipeline
with an index but which may be
processed later; * * *.
----------------------------------------------------------------------------------------------------------------
1206.172(e)(6)(i) and (iii)... (e) Determining the minimum 3 11 33
value for royalty purposes of
gas sold beyond the first index
pricing point. * * * (6)(i) You
must report the safety net
price for each index zone to
ONRR on Form ONRR-4411, Safety
Net Report, no later than June
30 following each calendar
year; * * * (iii) ONRR may
order you to amend your safety
net price within one year from
the date your Form ONRR-4411 is
due or is filed, whichever is
later. * * *.
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1206.172(e)(6)(ii)............ You must pay and report on Form Burden covered under Sec. 1210.52 in OMB
ONRR-2014 additional royalties Control Number 1012-0004.
due no later than June 30
following each calendar year; *
* *.
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1206.172(f)(1)(ii), (f)(2), (f) Excluding some or all tribal 40 1 40
and (f)(3). leases from valuation under
this section. (1) An Indian
tribe may ask ONRR to exclude
some or all of its leases from
valuation under this section. *
* * (ii) If an Indian tribe
requests exclusion from an
index zone for less than all of
its leases, ONRR will approve
the request only if the
excluded leases may be
segregated into one or more
groups based on separate fields
within the reservation. (2) An
Indian tribe may ask ONRR to
terminate exclusion of its
leases from valuation under
this section. * * * (3) The
Indian tribe's request to ONRR
under either paragraph (f)(1)
or (2) of this section must be
in the form of a tribal
resolution. * * *.
----------------------------------------------------------------------------------------------------------------
1206.173(a)(1)................ How do I calculate the 2 12 24
alternative methodology for
dual accounting? (a) Electing a
dual accounting method. (1) * *
* You may elect to perform the
dual accounting calculation
according to either Sec.
1206.176(a) (called actual dual
accounting), or paragraph (b)
of this section (called the
alternative methodology for
dual accounting).
----------------------------------------------------------------------------------------------------------------
1206.173(a)(2)................ You must make a separate Burden covered under Sec. 1206.173(a)(1).
election to use the alternative
methodology for dual accounting
for your Indian leases in each
ONRR-designated area. * * *.
----------------------------------------------------------------------------------------------------------------
1206.174(a)(4)(ii)............ How do I value gas production Burden covered under Sec. 1210.52 in OMB
when an index-based method Control Number 1012-0004.
cannot be used? (a) Situations
in which an index-based method
cannot be used. (4)(ii) If the
major portion value is higher,
you must submit an amended Form
ONRR-2014 to ONRR by the due
date specified in the written
notice from ONRR of the major
portion value. * * *.
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Page 32147
1206.174(b)(1)(i) and (iii); (b) Arm's-length contracts. * * AUDIT PROCESS. See note.
(b)(2); (d)(2). * (1) The value of gas, residue
gas, or any gas plant product
you sell under an arm's-length
contract is the gross proceeds
accruing to you or your
affiliates * * * (i) You have
the burden of demonstrating
that your contract is arm's-
length. * * * (iii) * * * In
these circumstances, ONRR will
notify you and give you an
opportunity to provide written
information justifying your
value. * * * (2) ONRR may
require you to certify that
your arm's-length contract
provisions include all of the
consideration the buyer pays,
either directly or indirectly,
for the gas, residue gas, or
gas plant product. * * * (d)
Supporting data. * * * (2) You
must make all such data
available upon request to the
authorized ONRR or Indian
representatives, to the Office
of the Inspector General of the
Department, or other authorized
persons. * * *.
----------------------------------------------------------------------------------------------------------------
1206.174(d)................... Supporting data. If you AUDIT PROCESS. See note.
determine the value of
production under paragraph (c)
of this section, you must
retain all data relevant to
determination of royalty value.
----------------------------------------------------------------------------------------------------------------
1206.174(f)................... Value guidance. You may ask ONRR 40 1 40
for guidance in determining
value. You may propose a
valuation method to ONRR.
Submit all available data
related to your proposal and
any additional information ONRR
deems necessary. * * *.
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1206.175(d)(4)................ How do I determine quantities 20 1 20
and qualities of production for
computing royalties? (d)(4) * *
* You may request ONRR approval
of other methods for
determining the quantity of
residue gas and gas plant
products allocable to each
lease. * * *.
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1206.176(b)................... How do I perform accounting for Burden covered under Sec. 1206.173(a)(1).
comparison? * * * If you are
required to account for
comparison, you may elect to
use the alternative dual
accounting methodology provided
for in Sec. 1206.173 instead
of the provisions in paragraph
(a) of this section. * * *.
----------------------------------------------------------------------------------------------------------------
1206.176(c)................... * * * If you do not perform dual Burden covered under Sec.
accounting, you must certify to 1206.172(b)(1)(ii).
ONRR that gas flows into such a
pipeline before it is
processed. * * *.
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Transportation Allowances
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1206.177(c)(2) and (c)(3)..... What general requirements Burden covered under Sec. 1206.56(b)(2).
regarding transportation
allowances apply to me? (c) * *
* (2) If you ask ONRR, ONRR may
approve a transportation
allowance deduction in excess
of the limitation in paragraph
(c)(1) of this section. * * *
(3) Your application for
exception (using Form ONRR-
4393, Request to Exceed
Regulatory Allowance
Limitation) must contain all
relevant and supporting
documentation necessary for
ONRR to make a determination.
----------------------------------------------------------------------------------------------------------------
1206.178(a)(1)(i)............. How do I determine a 1 18 18
transportation allowance? (a)
Determining a transportation
allowance under an arm's-length
contract. (1) This paragraph
explains how to determine your
allowance if you have an arm's-
length transportation contract.
(i) * * * You are required to
submit to ONRR a copy of your
arm's-length transportation
contract(s) and all subsequent
amendments to the contract(s)
within 2 months of the date
ONRR receives your report which
claims the allowance on the
Form ONRR-2014.
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1206.178(a)(1)(iii)........... If ONRR determines that the AUDIT PROCESS. See note.
consideration paid under an
arm's-length transportation
contract does not reflect the
value of the transportation
because of misconduct by or
between the contracting parties
* * * In these circumstances,
ONRR will notify you and give
you an opportunity to provide
written information justifying
your transportation costs. * *
*.
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Page 32148
1206.178(a)(2)(i) and (ii).... (a)(2)(i) * * * You cannot 20 1 20
take an allowance for the costs
of transporting lease
production that is not royalty
bearing without ONRR approval,
or without lessor approval on
tribal leases. (ii) As an
alternative to paragraph
(a)(2)(i) of this section, you
may propose to ONRR a cost
allocation method based on the
values of the products
transported. * * *.
----------------------------------------------------------------------------------------------------------------
1206.178(a)(3)(i) and (ii).... (3)(i) If your arm's-length 40 1 40
transportation contract
includes both gaseous and
liquid products and the
transportation costs
attributable to each cannot be
determined from the contract,
you must propose an allocation
procedure to ONRR. * * * (ii)
You are required to submit all
relevant data to support your
allocation proposal. * * *.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(1)(ii)............ (b) Determining a transportation 15 5 75
allowance under a non-arm's-
length contract or no contract.
(1)(ii) You must submit the
actual cost information to
support the allowance to ONRR
on Form ONRR-4295, Gas
Transportation Allowance
Report, within 3 months after
the end of the 12-month period
to which the allowance applies.
* * *.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(2)(iv)............ You may use either depreciation 20 1 20
with a return on undepreciated
capital investment or a return
on depreciable capital
investment. After you have
elected to use either method
for a transportation system,
you may not later elect to
change to the other alternative
without ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(2)(iv)(A)......... * * * Once you make an election, 20 1 20
you may not change methods
without ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(3)(i)............. * * * Except as provided in this 40 1 40
paragraph, you may not take an
allowance for transporting a
product that is not royalty
bearing without ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(3)(ii)............ As an alternative to the 20 1 20
requirements of paragraph
(b)(3)(i) of this section, you
may propose to ONRR a cost
allocation method based on the
values of the products
transported. * * *.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(5)................ If you transport both gaseous 40 1 40
and liquid products through the
same transportation system, you
must propose a cost allocation
procedure to ONRR. * * * You
are required to submit all
relevant data to support your
proposal. * * *.
----------------------------------------------------------------------------------------------------------------
1206.178(d)(1)................ (d) Reporting your AUDIT PROCESS. See note.
transportation allowance.(1) If
ONRR requests, you must submit
all data used to determine your
transportation allowance. * * *.
----------------------------------------------------------------------------------------------------------------
1206.178(d)(2), (e), and (d) Reporting your Burden covered under Sec. 1210.52 in OMB
(f)(1). transportation allowance. (2) Control Number 1012-0004.
You must report transportation
allowances as a separate entry
on Form ONRR-2014. * * * (e)
Adjusting incorrect allowances.
If for any month the
transportation allowance you
are entitled to is less than
the amount you took on Form
ONRR-2014, you are required to
report and pay additional
royalties due, plus interest
computed under Sec. 1218.54
of this chapter from the first
day of the first month you
deducted the improper
transportation allowance until
the date you pay the royalties
due. * * * (f) Determining
allowable costs for
transportation allowances. * *
* (1) Firm demand charges paid
to pipelines. * * * You must
modify the Form ONRR-2014 by
the amount received or credited
for the affected reporting
period. * * *.
----------------------------------------------------------------------------------------------------------------
Page 32149
Processing Allowances
----------------------------------------------------------------------------------------------------------------
1206.180(a)(1)(i)............. How do I determine an actual 1 2 2
processing allowance? (a)
Determining a processing
allowance if you have an arm's-
length processing contract.
(1)(i) * * * You have the
burden of demonstrating that
your contract is arm's-length.
You are required to submit to
ONRR a copy of your arm's-
length contract(s) and all
subsequent amendments to the
contract(s) within 2 months of
the date ONRR receives your
first report that deducts the
allowance on the Form ONRR-2014.
----------------------------------------------------------------------------------------------------------------
1206.180(a)(1)(iii)........... If ONRR determines that the AUDIT PROCESS. See note.
consideration paid under an
arm's-length processing
contract does not reflect the
value of the processing because
of misconduct by or between the
contracting parties * * * In
these circumstances, ONRR will
notify you and give you an
opportunity to provide written
information justifying your
processing costs.
----------------------------------------------------------------------------------------------------------------
1206.180(a)(3)................ If your arm's-length processing 40 1 40
contract includes more than one
gas plant product and the
processing costs attributable
to each product cannot be
determined from the contract,
you must propose an allocation
procedure to ONRR. * * * You
are required to submit all
relevant data to support your
proposal. * * *.
----------------------------------------------------------------------------------------------------------------
1206.180(b)(1)(ii)............ (b) Determining a processing 20 12 240
allowance if you have a non-
arm's-length contract or no
contract.(1)(ii) * * * You must
submit the actual cost
information to support the
allowance to ONRR on Form ONRR-
4109, Gas Processing Allowance
Summary Report, within 3 months
after the end of the 12-month
period for which the allowance
applies. * * *.
----------------------------------------------------------------------------------------------------------------
1206.180(b)(2)(iv)............ You may use either depreciation 20 1 20
with a return on undepreciable
capital investment or a return
on depreciable capital
investment. After you elect to
use either method for a
processing plant, you may not
later elect to change to the
other alternative without ONRR
approval. * * *.
----------------------------------------------------------------------------------------------------------------
1206.180(b)(2)(iv)(A)......... * * * Once you make an election, 20 1 20
you may not change methods
without ONRR approval. * * *.
----------------------------------------------------------------------------------------------------------------
1206.180(b)(3)................ Your processing allowance under 20 1 20
this paragraph (b) must be
determined based upon a
calendar year or other period
if you and ONRR agree to an
alternative.
----------------------------------------------------------------------------------------------------------------
1206.180(c)(1)................ (c) Reporting your processing AUDIT PROCESS. See note.
allowance. (1) If ONRR
requests, you must submit all
data used to determine your
processing allowance. * * *.
----------------------------------------------------------------------------------------------------------------
1206.180(c)(2) and (d)........ (c)(2) You must report gas Burden covered under Sec. 1210.52 in OMB
processing allowances as a Control Number 1012-0004.
separate entry on the Form ONRR-
2014. * * * (d) Adjusting
incorrect processing
allowances. If for any month
the gas processing allowance
you are entitled to is less
than the amount you took on
Form ONRR-2014, you are
required to pay additional
royalties, plus interest
computed under Sec. 1218.54
of this chapter from the first
day of the first month you
deducted a processing allowance
until the date you pay the
royalties due. * * *.
----------------------------------------------------------------------------------------------------------------
1206.181(c)................... How do I establish processing 40 1 40
costs for dual accounting
purposes when I do not process
the gas? * * * A proposed
comparable processing fee
submitted to either the tribe
and ONRR (for tribal leases) or
ONRR (for allotted leases) with
your supporting documentation
submitted to ONRR. If ONRR does
not take action on your
proposal within 120 days, the
proposal will be deemed to be
denied and subject to appeal to
the ONRR Director under 30 CFR
part 1290.
----------------------------------------------------------------------------------------------------------------
Page 32150
PART 1207--SALES AGREEMENTS OR CONTRACTS GOVERNING THE DISPOSAL OF LEASE PRODUCTS
Subpart A--General Provisions
----------------------------------------------------------------------------------------------------------------
1207.4(b)..................... Contracts made pursuant to old AUDIT PROCESS. See note.
form leases. * * * The
stipulation, the substance of
which must be included in the
contract, or be made the
subject matter of a separate
instrument properly identifying
the leases affected thereby, is
as follows * * *.
----------------------------------------------------------------------------------------------------------------
1207.5........................ Contract and sales agreement AUDIT PROCESS. See note.
retention. Copies of all sales
contracts, posted price
bulletins, etc., and copies of
all agreements, other
contracts, or other documents
which are relevant to the
valuation of production are to
be maintained by the lessee and
made available upon request
during normal working hours to
authorized ONRR, State or
Indian representatives, other
ONRR or BLM officials, auditors
of the General Accounting
Office, or other persons
authorized to receive such
documents, or shall be
submitted to ONRR within a
reasonable period of time, as
determined by ONRR. Any oral
sales arrangement negotiated by
the lessee must be placed in
written form and retained by
the lessee. Records shall be
retained in accordance with 30
CFR part 1212.
----------------------------------------------------------------------------------------------------------------
Total Burden.............. ................................ .............. 149 1,319
----------------------------------------------------------------------------------------------------------------
Note: AUDIT PROCESS--The Office of Regulatory Affairs determined that the audit process is exempt from the
Paperwork Reduction Act of 1995 because ONRR staff asks non-standard questions to resolve exceptions.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
Gregory J. Gould,
Director for Office of Natural Resources Revenue.
FR Doc. 2018-14854 Filed 7-10-18; 8:45 am
BILLING CODE 4335-30-P
