Oil and Gas and Sulphur Operations in the Outer Continental Shelf: Oil and Gas Production Requirements
Federal Register: April 19, 2010 (Volume 75, Number 74)
Rules and Regulations
Page 20271-20294
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DOCID:fr19ap10-7
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.
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,
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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
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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.
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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.
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(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.
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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
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(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.
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(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.
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(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 SO2emitted.
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:
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(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
