Postlease Operations Safety

Federal RegisterFeb 13, 1998

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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Parts 218, 250, and 256

RIN 1010-AC32

Postlease Operations Safety

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Proposed rule.

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SUMMARY: These proposed revisions update and clarify MMS regulations

concerning postlease operations. The revised rule provides authority to

MMS to grant an easement and a right-of-use for an outer Continental

Shelf (OCS) tract to a State lessee. It also clarifies the distinction

between granting and directing a suspension, and the different

consequences of each; sets out criteria to disqualify an operator with

repeated poor operating performance from acquiring any new

leaseholdings; and requires written accident reports.

DATES: MMS will consider all comments we receive by May 14, 1998. We

will begin reviewing comments then and may not fully consider comments

we receive after May 14, 1998.

ADDRESSES: Mail or hand-carry written comments (3 copies) to the

Department of the Interior; Minerals Management Service; Mail Stop

4024; 381 Elden Street; Herndon, Virginia 20170-4817; Attention: Rules

Processing Team (Comments).

FOR FURTHER INFORMATION CONTACT: Kumkum Ray, Engineering and Operations

Division, at (703) 787-1600.

SUPPLEMENTARY INFORMATION: The proposed revision of 30 CFR part 250,

subpart A, is an effort to streamline and organize the various topics

that apply in a general sense to all the other subparts under 30 CFR

part 250. These postlease operations regulations would contain

requirements as well as useful information and reference materials,

with an emphasis on operations performance. We would include a newer

edition of a document incorporated by reference (API RP 2A).

Definition of Lessee

We would include an owner of operating rights in the definition of

lessee. We would emphasize in Sec. 250.15(d) that, in addition to the

lessee and operator, all persons who conduct lease activities on behalf

of the lessee or operator must also comply with our regulations. The

operator is responsible for the performance of its contractors. MMS

will hold the operator accountable for the contractors' performance.

Performance standards

We would revise the regulation addressing crane operations to

include certain specifications that apply to platforms in the Pacific

OCS Region. Also, we would include two new sections under Performance

standards: One on welding procedures and another on electrical

equipment requirements. These requirements are repeated under Drilling

(subpart D), Well-Completion (subpart E), and Well-Workover (Subpart

F). Since the requirements apply to all exploration, development, and

production operations, they would be listed in subpart A and would be

removed from the various other subparts.

Disqualifying an operator

Safety is MMS's top priority for offshore operations. A new

regulation has been proposed to provide criteria that MMS will

consider, individually or collectively, in evaluating whether to

disqualify operators with repeated poor safety performance from

acquiring additional leases. In some particularly serious cases, this

could also result in MMS disapproving or revoking a company's status as

a designated operator. MMS will hold a meeting in Houston, Texas within

the comment period of the rulemaking, to consult with industry before

setting up criteria to implement this provision in our rules. We will

publish the meeting notice in the Federal Register. We recognize that

the vast majority of operators are conscientious in their operations.

The intention of this provision is to safeguard you from the few that

may be in dire non-compliance.

Civil Penalty

The reference related to civil penalty appeals has been deleted

from subpart A. On August 8, 1997, MMS published a revision to subpart

N which provides information related to civil penalty appeals.

Granting a right-of-use and easement

In our effort to establish and maintain a cooperative relationship

with coastal States, and lessees of State submerged land oil and gas

leases adjacent to the OCS, we are proposing to amend our regulations

currently in Sec. 250.7. (See proposed Sec. 250.18). The proposed rule

further implements the Secretary of the Interior's authority to

regulate offshore operations under the OCS Lands Act. The rule would

provide specific regulatory authority for Regional Directors to grant

an easement and right-of-use on an OCS tract to the State lessee when

the lease is near or adjacent to the Federal and State jurisdictional

boundary. MMS would require an application processing fee, annual

rental payments, and surety bonds from State lessees.

Suspensions

We are proposing to reorganize the section on suspensions to flow

better and to distinguish clearly between granting or directing a

suspension. A new provision at Sec. 250.19 (l)(5) would authorize

suspensions as necessary for the diligent development of marginal

reserves that would otherwise not be developed. The proposed revisions

to ``effect of suspensions on lease terms'' appear in Sec. 250.19 and

Sec. 256.73.

Accident reports

Recent rapid growth in offshore exploration and production

activities in the Gulf of Mexico has led to an attendant increase in

accidents and injuries on the OCS related to these activities. Since

safety is our top priority, MMS sees a strong need to upgrade our

accident investigation functions to ensure the continued safety of OCS

operations. The proposed rule adds a new requirement (proposed

Sec. 250.20(a)) that OCS operators, lessees, or permit holders provide

the MMS District Supervisor with written reports concerning accidents

on the OCS. We have provided a table to specify the reports required

for different types of accidents. MMS will provide more guidance on

thresholds for fires, and factors that impair safety, through Notices

to Lessees. Safety concerns also prompted the new requirement in

proposed paragraph (b) in this section to require evacuation statistics

during natural occurrences such as earthquakes and hurricanes.

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Lease term extensions

We are proposing to expand the reporting requirements under

Sec. 250.23 to require the lessee/operator to report to MMS when lease

production is initiated, resumes before the end of the 180-day period

after production ceased, and when leaseholding operations occur during

the referenced 180-day interval. MMS needs this information in a timely

manner to efficiently maintain the lessee/operator's lease status.

Format of the proposed rule

We have written this proposed rule in a plain English format. We

have tried to set out these requirements in a straightforward and

uncomplicated manner. The plain English format uses the term ``you''

which means the lessee, right-of-way holder, or person acting on behalf

of a lessee or a right-of-way holder. We emphasize that ``you'' are

responsible for ensuring that all requirements are met. We encourage

your comments on our use of the plain English format in this proposed

rule as well as future rulemaking.

Executive Order (E.O.) 12866

This rule is not a significant rule under E. O. 12866 and does not

require a review by the Office of Management and Budget (OMB). The new

or expanded requirements in the rule are designed to safeguard lives,

property and the environment. They do not impose extensive burdens.

Lessees of a State lease located adjacent to the OCS will have to pay a

non-refundable filing fee if they apply for a right-of-use and

easement. The economic effects of the rule will be minimal. If there is

one application from State lessees per year, MMS will receive a total

of approximately $2,350 in fees and $5,000 in rental.

There are some additional new or expanded reporting requirements in

this rule. They do not impose extensive burdens, yet provide necessary

data that MMS will use to safeguard offshore operations. The estimated

additional burden for submitting copies of written accident reports is

1 hour. There are an estimated 142 responses and at the rate of $35 per

hour it would cost reporters a total of $4, 970 per year. The estimated

burden for evacuation statistics reports is 1 hour. There are an

estimated 620 responses and at the rate of $35 per hour it would cost

reporters a total of $21,700 per year. Since such events are extremely

unpredictable, we are estimating that these events could occur once

every three years. The estimated burden on lease production status is

one-half hour per report on lease production status. There are an

estimated 1,000 responses and at a rate of $35 per hour it would cost

reporters $17,500 per year.

Regulatory Flexibility Act

The proposed changes to 30 CFR part 250, subpart A will not have a

significant economic effect. In general, a company needs large

technical and financial resources and experience to safely conduct

offshore activities. However, many of the leases and operators have

less than 500 employees and are small businesses. It is likely that a

State lessee applying for a right-of-use and easement on the OCS may be

a small business. The costs associated with obtaining the benefit

(right-of-use and easement) would be minimal. The application fee is

estimated to be $2,350 per application and the rental is estimated to

be $5,000. A company is not expected to apply for more than one such

application per year. There are some additional new or expanded

reporting requirements in this rule but they do not impose extensive

burdens. 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

enforcement actions of MMS, call toll-free (888) 734-3247.

Paperwork Reduction Act

We have examined the proposed changes to 30 CFR part 218; 30 CFR

part 250; subparts E and F; and 30 CFR part 256 under the Paperwork

Reduction Act of 1995 (PRA). We have determined that no new reporting

and information collection requirements are included and the currently

approved collections of information for these sections remain

unchanged.

With respect to 30 CFR part 250, subpart D, the proposed changes

remove sections of the regulations that contain approved collections of

information subject to the PRA (OMB control number 1010-0053) and

relocate them to 30 CFR 250, subpart A. MMS will submit an inventory

correction change to OMB for approval when this rule is published in

final.

The proposed changes to 30 CFR 250, subpart A, do contain

collections of information subject to the PRA, and MMS has submitted

them to OMB for review and approval under section 3507(d) of the PRA.

As part of our continuing effort to reduce paperwork and respondent

burdens, MMS invites the public and other Federal agencies to comment

on any aspect of the reporting and recordkeeping burden. Submit your

comments to the Office of Information and Regulatory Affairs; OMB;

Attention: Desk Officer for the Department of the Interior (OMB control

number 1010-NEW); 725 17th Street, N.W., Washington, D.C. 20503. Send a

copy of your comments to the Rules Processing Team, Attn: Comments;

Mail Stop 4020; Minerals Management Service; 381 Elden Street; Herndon,

Virginia 20170-4817. You may obtain a copy of the supporting statement

for the new collection of information by contacting the Bureau's

Information Collection Clearance Officer at (202) 208-7744.

The PRA provides that an agency may not conduct or sponsor, and a

person is not required to respond to, a collection of information

unless it displays a currently valid OMB control number. OMB is

required to make a decision concerning the collection of information

contained in these proposed regulations between 30 to 60 days after

publication of this document in the Federal Register. Therefore, a

comment to OMB is best assured of having its full effect if OMB

receives it by March 16, 1998. This does not affect the deadline for

the public to comment to MMS on the proposed regulations.

The title of the collection of information for the main portion of

this proposed rule is ``Proposed Rulemaking--30 CFR 250, Subpart A,

General'' (OMB control number 1010-NEW). The current subpart A

regulations contain approved collections of information (OMB control

number 1010-0030) which consist of reporting and recordkeeping

requirements on designations of operator; performance capabilities and

standards; lease cancellations; suspensions of production or other

operations; determinations of well producibility; reinjection and

subsurface storage of gas; reimbursements of postlease geological and

geophysical data and information reproduction costs; accident

reporting; access to facilities; and crane inspection, testing,

maintenance and operator qualifications. MMS uses the information to

ensure that operations on the OCS are carried out in a manner that is

safe, pollution free, and do not interfere with the rights of other

users on the OCS.

The proposed rule, rewritten in plain English, restructures the

citations containing the information collection requirements approved

for the current

[[Page 7337]]

30 CFR 250, subpart A, regulations, but they remain unchanged. It also

relocates two requirements from other subparts of 30 CFR 250 that also

remain unchanged.

The proposed rule contains the following new or expanded

information collection requirements:

1. Sections 250.18(c) explains how lessees of a State lease located

adjacent to the OCS may apply for a right-of-use and easement on the

OCS, and includes a non-refundable filing fee for such applications.

MMS will use the information to determine if the right-of-use and

easement: serves the purpose specified in the grant when conducting

exploration, development, and production activities or other operations

on or off the lease; is maintained for such purposes specified; and

does not unreasonably interfere with the operations of any other

lessee. We estimate that the average burden for this new application

process will be 5 hours and a filing fee of approximately $2,350 per

application.

2. Section 250.20(a) expands accident reporting to include the

requirement to submit copies of written follow-up reports in addition

to oral notifications. MMS will use the information to upgrade the

accident investigation functions. We estimate that the average burden

for this new reporting requirement will be an additional 1 hour per

report.

3. Section 250.20(b) requires reports on evacuation statistics for

a natural occurrence (i.e., hurricanes, earthquakes, etc.). MMS will

use the information to be informed when there could be a major

disruption in the availability and supply of natural gas and oil due to

natural occurrences, to advise the Coast Guard of rescue needs, and to

alert the news media and interested public entities when production is

shut in and when resumed. We estimate that the average burden for this

reporting requirement will be 1 hour per report.

4. Sections 250.23(e), (f), and (g) expand the reporting

requirements for lease term dependency and operations for respondents

to report when lease production is initiated, resumes before the end of

the 180-day period after production ceased, and when leaseholding

operations occur during the referenced 180-day interval. MMS will use

this information to efficiently maintain the lessee/operator's lease

status. We estimate that the average burden for this expanded reporting

requirement will be one-half hour per report.

Respondents are approximately 130 Federal OCS oil and gas or

sulphur lessees and an estimate of one State lessee each year who will

apply for OCS right-of-use and easement. The frequency of response is

on occasion or annual. Responses to this collection of information are

mandatory or are required to obtain or retain a benefit. MMS will

protect proprietary information in accordance with the Freedom of

Information Act and 30 CFR 250.18 (renumbered to 30 CFR 250.27 in this

proposed rule), Data and information to be made available to the

public.

MMS estimates the total annual reporting and recordkeeping ``hour''

burden for the requirements in this proposed rule to be 10,578 hours.

This will reflect an increase of 2,150 hours for the new or expanded

requirements described above when this new collection replaces the

collection of information approved for the current requirements in 30

CFR 250, subpart A (1010-0030). MMS estimates the total annual

reporting and recordkeeping ``cost'' burden of this proposed rule to be

$2,350 for approximately one application filing fee per year under

Sec. 250.18(c).

In calculating the burden, MMS assumed that respondents perform

some of the requirements and maintain some of the records in the normal

course of their activities. MMS considers these to be usual and

customary and did not include them in the burden estimates. You are

invited to provide information if you disagree with this assumption.

MMS will summarize written responses to this notice and address

them in the final rule. All comments will become a matter of public

record.

1. MMS specifically solicits comments on the following questions:

(a) Is the proposed collection of information necessary for MMS to

properly perform its functions, and will it be useful?

(b) Are the estimates of the burden hours of the proposed

collection reasonable?

clarity, or usefulness of the information to be collected?

(d) Is there a way to minimize the information collection burden on

those who are to respond, including the use of appropriate automated

electronic, mechanical, or other forms of information technology?

2. In addition, the PRA requires agencies to estimate the total

annual cost burden to respondents or recordkeepers resulting from the

collection of information. MMS needs your comments on this item. Your

response should split the cost estimate into two components: (a) Total

capital and startup cost component, and (b) annual operation,

maintenance, and purchase of services component. Your estimates should

consider the costs to generate, maintain, and disclose or provide the

information. You should describe the methods you use to estimate major

cost factors, including system and technology acquisition, expected

useful life of capital equipment, discount rate(s), and the period over

which you incur costs. Capital and startup costs include, among other

items, computers and software you purchase to prepare for collecting

information; monitoring, sampling, drilling, and testing equipment; and

record storage facilities. Generally, your estimates should not include

equipment or services purchased: before October 1, 1995; to comply with

requirements not associated with the information collection; for

reasons other than to provide information or keep records for the

Government; or as part of customary and usual business or private

practices.

Takings Implication Assessment

The Department of the Interior (DOI) certifies that this proposed

rule does not represent a governmental action capable of interference

with constitutionally protected property rights. Thus, MMS did not need

to prepare a Takings Implication Assessment pursuant to Executive Order

(E.O.) 12630, Governmental Actions and Interference with

Constitutionally Protected Property Rights.

Unfunded Mandates Reform Act of 1995

DOI has determined and certifies according to the Unfunded Mandates

Reform Act, 2 U.S.C. 1502 et seq., that this rule will not impose a

cost of $100 million or more in any given year on State, local, and

tribal governments, or the private sector.

E.O. 12988

DOI has certified to OMB that the rule meets the applicable reform

standards provided in sections 3(a) and 3(b)(2) of E.O. 12988, Civil

Justice Reform.

National Environmental Policy Act

DOI has also determined that this action does not constitute a

major Federal action affecting the quality of the human environment;

therefore, an Environmental Impact Statement is not required.

List of Subjects

30 CFR Part 218

Continental shelf, Electronic funds transfers, Geothermal energy,

[[Page 7338]]

Government contracts, Indians--lands, Mineral royalties, Oil and gas

exploration, Public lands--mineral resources, Reporting and

recordkeeping requirements.

30 CFR Part 250

Continental shelf, Environmental impact statements, Environmental

protection, Government contracts, Incorporation by reference,

Investigations, Mineral royalties, Oil and gas development and

production, Oil and gas exploration, Oil and gas reserves, Penalties,

Pipelines, Public lands--mineral resources, Public lands--rights-of-

way, Reporting and recordkeeping requirements, Sulphur development and

production, Sulphur exploration, Surety bonds.

30 CFR Part 256

Administrative practice and procedures, Continental shelf,

Environmental Protection, Government contracts, Mineral royalties, Oil

and gas exploration, Pipelines, Public lands--mineral resources, Public

lands--rights-of-way, Reporting and recordkeeping requirements, Surety

bonds.

Dated: February 6, 1998.

Bob Armstrong,

Assistant Secretary, Land and Minerals Management.

For the reasons stated in the preamble, Minerals Management Service

(MMS) proposes to amend 30 CFR parts 218, 250, and 256 as follows:

PART 218--COLLECTION OF ROYALTIES, RENTALS, BONUSES AND OTHER

MONIES DUE THE FEDERAL GOVERNMENT

1. The authority citation continues to read as follows:

Authority: 25 U.S.C. 396 et seq.; 396a et seq.; 2101 et seq.; 30

U.S.C. 181 et seq.; 351 et seq.; 1001 et seq.; 1701 et seq.; 31

U.S.C.A. 3335; 43 U.S.C. 1301 et seq.; 1331 et seq.; 1801 et seq.

2. In Sec. 218.154 paragraphs (a) and (b) are revised to read as

follows:

Sec. 218.154 Effect of suspensions on royalty and rental.

(a) MMS will not require a lessee to pay rental or minimum royalty

for or during a period of suspension if the Regional Supervisor:

(1) Directs the suspension of both operations and production; or

(2) Directs the suspension of operations on a lease on which there

is no producible well under the provisions of 30 CFR 250.19 (j)(1),

(j)(2), (j)(4) or (k)(2).

(b) MMS will not relieve the lessee of the obligation to pay

rental, minimum royalty, or royalty for or during the period of

suspension if the Regional Supervisor approves a suspension of

operations or production, or both, requested by a lessee under the

provisions of 30 CFR 250.19 (j)(3), (j)(5), (k), (l) or (m)(1).

* * * * *

PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER

CONTINENTAL SHELF

3. The authority citation for part 250 continues to read as

follows:

Authority: 43 U.S.C. 1334 et seq.

4. 30 CFR Part 250 subpart A is revised to read as follows:

Subpart A--General

Authority and Definition of Terms

Sec.

250.1 Authority and applicability of this part.

250.2 Definitions.

Performance Standards

250.3 Under what standards will the Director regulate lease

operations?

250.4 What measures must I take to protect health, safety,

property, and the environment?

250.5 What standards must crane operations meet?

250.6 What must a welding, burning, and hot tapping practices and

procedures plan contain?

250.7 What requirements apply to electrical equipment?

250.8 When must I use best available and safest technologies

(BAST)?

250.9 How do I determine well producibility?

250.10 Under what conditions will MMS approve reinjection and

subsurface gas storage?

Inspection of Operations

250.11 How often does MMS conduct inspections?

Disqualification and Appeals

250.12 Under what conditions will MMS disqualify an operator or

lessee?

250.13 How can I appeal a decision made under MMS regulations?

Special Types of Approvals

250.14 Under what conditions will MMS give me an oral approval or

an approval for alternate procedures and/or departures?

250.15 How do I designate an operator and local agent?

Naming and Identifying Platforms and Wells

250.16 How do I name platforms and wells?

250.17 What identification signs must I display?

Right-Of-Use and Easement

250.18 When will MMS grant a right-of-use and easement?

Suspensions

250.19 Under what conditions can operations or production be

suspended?

Reporting Requirements

250.20 What accident reports and evacuation statistics must I

submit?

250.21 Reports and investigations of apparent violations.

250.22 What archaeological reports and surveys must I submit?

Lease Term Extensions

250.23 What effect do production, drilling, or well-reworking have

on the lease term?

250.24 Under what circumstance may MMS cancel my lease, with or

without compensation?

Information: Submission, Reimbursement For, Availability To Public

250.25 What reporting information and report forms must I submit?

250.26 When will MMS reimburse me for reproduction costs?

250.27 Data and information to be made available to the public.

References

250.28 Documents incorporated by reference.

250.29 Paperwork Reduction Act requirements--information

collection.

Subpart A--General

Authority and Definition of Terms

Sec. 250.1 Authority and applicability of this part.

(a) The Secretary of the Interior (Secretary) authorized MMS to

regulate oil, gas and sulphur exploration, development, and production

operations on the Outer Continental Shelf (OCS). Under this authority,

the Director requires that all operations:

(1) Are conducted in accordance with the Act, the regulations in

this part, MMS orders, the lease or right-of-way, and other applicable

laws, regulations, and amendments; and

(2) Conform to sound conservation practice to preserve, protect,

and develop mineral resources of the OCS to:

(i) Make resources available to meet the Nation's energy needs;

(ii) Balance orderly energy resource development with protection of

the human, marine, and coastal environments;

(iii) Ensure the public receives a fair and equitable return on the

resources of the OCS;

(iv) Preserve and maintain free enterprise competition; and

(v) Minimize or eliminate conflicts between the exploration,

development, and production of oil and natural gas and the recovery of

other resources.

[[Page 7339]]

(b) When you conduct operations on the OCS you will be required to

submit requests, applications, and notices, or provide supplemental

information, for MMS approval. The table that follows contains general

references and the corresponding regulatory section for these

processes. MMS will respond with either written or oral approvals.

Refer to Sec. 250.14(a) of this part for information on oral approvals.

Table--Where to Find Information for Conducting Operations

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To get information about Refer to

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Exploration Plans (EP)..................... Sec. 250.33.

Development and Production Plans (DPP)..... Sec. 250.34.

Applications for Permit to Drill........... Sec. 250.64.

Oil and gas well-completion operations..... Sec. 250.83.

Oil and gas well-workover operations....... Sec. 250.103.

Abandonment of wells....................... Sec. 250.111.

Oil and gas production safety systems...... Sec. 250.122.

Platforms and structures................... Sec. 250.131.

Pipelines.................................. Sec. 250.157.

Pipeline right-of-way...................... Sec. 250.160.

Flaring.................................... Sec. 250.175.

Downhole commingling....................... Sec. 250.176.

Measurement of gas......................... Sec. 250.181.

Unitization................................ Sec. 250.190.

Training................................... Sec. 250.211.

Sulphur operations......................... Sec. 250.253.

Off-lease Geological and Geophysical Part 251.

permits.

Oil Spill Response Plans................... Part 254.

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Sec. 250.2 Definitions.

Terms used in this part will have the meanings given in the Act and

as defined below:

Act means the OCS Lands Act, as amended (43 U.S.C. 1331 et seq.).

Affected State means with respect to any program, plan, lease sale,

or other activity proposed, conducted, or approved pursuant to the

provisions of the Act, any State:

(1) The laws of which are declared, pursuant to section 4(a)(2) of

the Act, to be the law of the United States for the portion of the OCS

on which such activity is, or is proposed to be, conducted;

(2) Which is, or is proposed to be, directly connected by

transportation facilities to any artificial island or installation or

other device permanently or temporarily attached to the seabed;

(3) Which is receiving, or in accordance with the proposed activity

will receive, oil for processing, refining, or transshipment which was

extracted from the OCS and transported directly to such State by means

of vessels or by a combination of means including vessels;

(4) Which is designated by the Secretary of the Interior

(Secretary) as a State in which there is a substantial probability of

significant impact on or damage to the coastal, marine, or human

environment, or a State in which there will be significant changes in

the social, governmental, or economic infrastructure, resulting from

the exploration, development, and production of oil and gas anywhere on

the OCS; or

(5) In which the Secretary finds that because of such activity

there is, or will be, a significant risk of serious damage, due to

factors such as prevailing winds and currents to the marine or coastal

environment in the event of any oil spill, blowout, or release of oil

or gas from vessels, pipelines, or other transshipment facilities.

Air pollutant means any airborne agent or combination of agents for

which the Environmental Protection Agency (EPA) has established,

pursuant to section 109 of the Clean Air Act, national primary or

secondary ambient air quality standards.

Analyzed geological information means data collected under a permit

or a lease which have been analyzed. Analysis may include, but is not

limited to, identification of lithologic and fossil content, core

analysis, laboratory analysis of physical and chemical properties, well

logs or charts, results from formation fluid tests, and descriptions of

hydrocarbon occurrences or hazardous conditions.

Archaeological resource means any material remains of human life or

activities that are at least 50 years of age and that are of

archaeological interest.

Attainment area means, for any air pollutant, an area which is

shown by monitored data or which is calculated by air quality modeling

(or other methods determined by the Administrator of EPA to be

reliable) not to exceed any primary or secondary ambient air quality

standards established by EPA.

Best available control technology (BACT) means an emission

limitation based on the maximum degree of reduction for each air

pollutant subject to regulation, taking into account energy,

environmental and economic impacts, and other costs. The Regional

Director will verify the BACT on a case-by-case basis and it may

include reductions achieved through the application of processes,

systems, and techniques for the control of each air pollutant.

Best available and safest technology (BAST) means the best

available and safest technologies which the Secretary determines to be

economically feasible wherever failure of equipment would have a

significant effect on safety, health, or the environment.

Coastal environment means the physical, atmospheric, and biological

components, conditions, and factors which interactively determine the

productivity, state, condition, and quality of the terrestrial

ecosystem from the shoreline inward to the boundaries of the coastal

zone.

Coastal zone means the coastal waters (including the lands therein

and thereunder) and the adjacent shorelands (including the waters

therein and thereunder) strongly influenced by each other and in

proximity to the shorelands of the several coastal States. The coastal

zone includes islands, transition and intertidal areas, salt marshes,

wetlands, and beaches. The coastal zone extends seaward to the outer

limit of the U.S. territorial sea and extends inland from the

shorelines to the extent necessary to control shorelands, the uses of

which have a direct and significant impact on the coastal waters, and

the inward boundaries of which may be identified by the several coastal

States, pursuant to the authority in section 305(b)(1) of the Coastal

Zone Management Act (CZMA) of 1972.

Competitive reservoir means a reservoir in which there are one or

more well completions on each of two or more leases or portions of

leases, with different lease operating interests, from which the

lessees plan future production.

Conservation means preservation, economy, and avoidance of waste.

It is especially important in the petroleum industry, since oil and gas

are irreplaceable.

Correlative rights when used with respect to lessees of adjacent

tracts, means the right of each lessee to be afforded an equal

opportunity to explore for, develop, and produce, without waste,

minerals from a common source.

Data means facts and statistics, measurements, or samples which

have not been analyzed or processed.

Departures means approvals granted by the appropriate MMS

representative for operating requirements/procedures other than those

specified in the regulations found in this part. These requirements/

procedures may be necessary to control a well; properly develop a

lease; conserve natural resources, or protect life, property, or the

marine, coastal, or human environment.

Development means those activities which take place following

discovery of minerals in paying quantities, including geophysical

activity, drilling, platform construction, and operation of all

[[Page 7340]]

onshore support facilities, and which are for the purpose of ultimately

producing the minerals discovered.

Director means the Director of the MMS of the U.S. Department of

the Interior.

District Supervisor means the MMS officer with authority and

responsibility for a district within an MMS Region.

Easement means an authorization for a non-possessory, non-exclusive

interest in a portion of an OCS tract, whether leased or unleased,

which specifies the rights of the holder to use the area embraced in

the easement in a manner consistent with the terms and conditions of

the granting authority.

Emission offsets means emission reductions obtained from

facilities, either onshore or offshore, other than the facility or

facilities covered by the proposed Exploration Plan or Development and

Production Plan.

Enhanced recovery operations means pressure maintenance operations,

secondary and tertiary recovery, cycling, and similar recovery

operations which alter the natural forces in a reservoir to increase

the ultimate recovery of oil or gas.

Existing facility, as used in Sec. 250.45, means an OCS facility

described in an Exploration Plan or a Development and Production Plan

approved before June 2, 1980.

Exploration means the commercial search for oil, gas, and sulphur.

Activities classified as exploration include but are not limited to:

(1) Geophysical and geological (G&G) surveys where magnetic,

gravity, seismic reflection, seismic refraction, gas sniffers, coring,

or other systems are used to detect or imply the presence of oil, gas,

or sulphur; and

(2) Any drilling, including the drilling in which a discovery of

oil or natural gas in paying quantities or sulphur is made. This

includes drilling of any additional well needed to delineate any

reservoir and any drilling to enable the lessee to determine whether to

proceed with development and production.

Facility, as used in Sec. 250.11 concerning inspections, means any

installation permanently or temporarily attached to the seabed (that

includes manmade islands, and bottom-sitting structures) and any

onshore installation used for oil, gas, or sulphur drilling,

production, or related activities. Any group of installations that is

interconnected with walkways, or any group of installations that

includes a central or primary installation with processing equipment

and one or more satellite or secondary installations, is a single

facility unless the Regional Supervisor determines that the complexity

of the individual installations justifies their classification as

separate facilities.

Facility, as used in Sec. 250.45 concerning air quality, means any

installation or device permanently or temporarily attached to the

seabed which is used for exploration, development, and production

activities for oil, gas, or sulphur and which emits or has the

potential to emit any air pollutant from one or more sources. All

equipment directly associated with the installation or device is part

of a single facility if the equipment is dependent on, or affects the

processes of, the installation or device. During production, multiple

installations or devices are a single facility if the installations or

devices are directly related to the production of oil or gas at a

single site. Any vessel used to transfer production from an offshore

facility is part of the facility while physically attached to it.

Facility, as used in Sec. 250.67(b) concerning hydrogen sulfide

(H2S), means a vessel, a structure, or an artificial island

used for drilling, well-completion, well-workover, and/or production

operations.

Gas reservoir means a reservoir that contains hydrocarbons

predominantly in a gaseous (single-phase) state.

Gas-well completion means a well completed in a gas reservoir or in

the gas-cap of an oil reservoir with an associated gas-cap.

Governor means the Governor of a State, or the person or entity

designated by, or pursuant to, State law to exercise the powers granted

to such Governor pursuant to the Act.

H2S absent means:

(1) Drilling, logging, coring, testing, or producing operations

have confirmed the absence of H2S in concentrations that

could potentially result in atmospheric concentrations of 20 ppm or

more of H2S; or

(2) Drilling in the surrounding areas and correlation of geological

and seismic data with equivalent stratigraphic units have confirmed an

absence of H2S throughout the area to be drilled.

H2S present means drilling, logging, coring, testing, or

producing operations have confirmed the presence of H2S in

concentrations and volumes that could potentially result in atmospheric

concentrations of 20 ppm or more of H2S.

H2S unknown means the designation of a zone or geologic

formation where neither the presence nor absence of H2S has

been confirmed.

Human environment means the physical, social, and economic

components, conditions, and factors which interactively determine the

state, condition, and quality of living conditions, employment, and

health of those affected, directly or indirectly, by activities

occurring on the OCS.

Information when used without an adjective means G&G data that have

been analyzed, processed, or interpreted.

Interpreted geological information means geological information,

often in the form of schematic cross sections, 3-dimensional

representations, and maps, developed by determining the geological

significance of data and analyzed geological information.

Interpreted geophysical information means geophysical information,

often in the form of seismic cross sections, 3-dimensional

representations, and maps, developed by determining the geological

significance of geophysical data and processed geophysical information.

Lease means an agreement which is issued under section 8 or

maintained under section 6 of the Act and which authorizes exploration

for, and development and production of, minerals. The term also means

the area covered by that authorization, whichever is required by the

context.

Lease term pipelines means those pipelines owned and operated by a

lessee or operator that are completely contained within the boundaries

of a single lease, unitized leases, or contiguous (not cornering)

leases of that lessee or operator.

Lessee means a person who has entered into, or who is the MMS-

approved assignee of, a lease with the United States to explore for,

develop, and produce the leased minerals. The term lessee also includes

an owner of operating rights for that lease.

Major Federal action means any action or proposal by the Secretary

which is subject to the provisions of section 102(2)(C) of the National

Environmental Policy Act of 1969, 42 U.S.C. (2)(C) (i.e., an action

which will have a significant impact on the quality of the human

environment requiring preparation of an Environmental Impact Statement

pursuant to section 102(2)(C) of the National Environmental Policy

Act).

Marine environment means the physical, atmospheric, and biological

components, conditions, and factors which interactively determine the

productivity, state, condition, and quality of the marine ecosystem,

including the waters of the high seas, the contiguous zone,

transitional and intertidal areas, salt marshes, and wetlands within

the coastal zone and on the OCS.

[[Page 7341]]

Marine remains means physical evidence of human habitation,

occupation, use, or activity, including the site, location, or context

in which such evidence is situated.

Maximum production rate (MPR) means the approved maximum daily rate

at which oil or gas may be produced from a specified oil-well or gas-

well completion.

Minerals includes oil, gas, sulphur, geopressured-geothermal and

associated resources, and all other minerals which are authorized by an

Act of Congress to be produced from ``public lands'' as defined in

section 103 of the Federal Land Policy and Management Act of 1976, 43

U.S.C. 1331.

Nonattainment area means, for any air pollutant, an area which is

shown by monitored data or which is calculated by air quality modeling

(or other methods determined by the Administrator of EPA to be

reliable) to exceed any primary or secondary ambient air quality

standard established by EPA.

Nonsensitive reservoir means a reservoir in which ultimate recovery

is not decreased by high reservoir production rates.

Of archaeological interest means capable of providing scientific or

humanistic understanding of past human behavior, cultural adaptation,

and related topics through the application of scientific or scholarly

techniques, such as controlled observation, contextual measurement,

controlled collection, analysis, interpretation, and explanation.

Oil reservoir means a reservoir that contains hydrocarbons

predominantly in a liquid (single-phase) state.

Oil reservoir with an associated gas cap means a reservoir that

contains hydrocarbons in both a liquid and gaseous (two-phase) state.

Oil-well completion means a well completed in an oil reservoir or

in the oil accumulation of an oil reservoir with an associated gas cap.

Operating rights means any interest held in a lease with right to

explore for, develop, and produce leased substances. Any assignment or

transfer of operating rights may specify the depth of the borehole down

to which the operating rights extend.

Operator means the person the lessee(s) designates as having

control or management of operations on the leased area or a portion

thereof.

Outer Continental Shelf (OCS) means all submerged lands lying

seaward and outside of the area of lands beneath navigable waters as

defined in section 2 of the Submerged Lands Act (43 U.S.C. 1301) and of

which the subsoil and seabed appertain to the United States and are

subject to its jurisdiction and control.

Person includes, in addition to a natural person, an association, a

State, a political subdivision of a State, or a private, public, or

municipal corporation.

Pipelines are the piping, risers, and appurtenances installed for

the purpose of transporting oil, gas, sulphur, and produced waters.

Processed geological information means data collected under a

permit or a lease which have been processed. Processing involves

changing the form of data to facilitate interpretation. Processing

operations may include, but are not limited to, applying corrections

for known perturbing causes, rearranging or filtering data, and

combining or transforming data elements. Reprocessing operations may

include varying identified parameters for the detailed study of a

specific problem area.

Producing in paying quantities means that a well is able to produce

oil, gas, or both in a cost-effective manner. This means that the

production quantities must yield a greater return than the total costs,

including well-completion costs, of producing the hydrocarbons at the

wellhead.

Production means those activities which take place after the

successful completion of any means for the removal of minerals,

including such removal, field operations, transfer of minerals to

shore, operation monitoring, maintenance, and work-over operations.

Projected emissions means emissions, either controlled or

uncontrolled, from a source or sources.

Regional Director means the MMS officer with responsibility and

authority for a Region within MMS.

Regional Supervisor means the MMS officer with responsibility and

authority for operations or other designated program functions within

an MMS Region.

Right-of-use means any authorization to use OCS lands issued under

this part.

Right-of-way pipelines are those pipelines which: (1) Are contained

within the boundaries of a single lease or unitized leases but are not

owned and operated by a lessee or operator of that lease or unit, (2)

are contained within the boundaries of contiguous (not cornering)

leases which do not have a common lessee or operator, (3) are contained

within the boundaries of contiguous (not cornering) leases which have a

common lessee or operator but are not owned and operated by that common

lessee or operator, or (4) are contained within a block(s) which is

unleased.

Routine operations, for the purposes of subpart F, means any of the

following operations conducted on a well with the tree installed:

(1) Cutting paraffin;

(2) Removing and setting pump-through-type tubing plugs, gas-lift

valves, and subsurface safety valves which can be removed by wireline

operations;

(3) Bailing sand;

(4) Pressure surveys;

(5) Swabbing;

(6) Scale or corrosion treatment;

(7) Caliper and gauge surveys;

(8) Corrosion inhibitor treatment;

(9) Removing or replacing subsurface pumps;

(10) Through-tubing logging (diagnostics);

(11) Wireline fishing;

(12) Setting and retrieving other subsurface flow-control devices;

and

(13) Acid treatments.

Sensitive reservoir means a reservoir in which high reservoir

production rates will decrease ultimate recovery. Initially, all oil

reservoirs with an associated gas cap are classified as sensitive.

Significant archaeological resource means those archaeological

resources that meet the criteria of significance for eligibility to the

National Register of Historic Places as defined in 36 CFR 60.4.

Suspension means a granted or directed deferral of the requirement

to produce (Suspension of Production (SOP)) or to conduct leaseholding

operations (Suspension of Operations (SOO)).

Waste of oil, gas, or sulphur means:

(1) The physical waste of oil, gas, or sulphur;

(2) The inefficient, excessive, or improper use, or the unnecessary

dissipation, of reservoir energy;

(3) The locating, spacing, drilling, equipping, operating, or

producing of any oil, gas, or sulphur well(s) in a manner which causes

or tends to cause a reduction in the quantity of oil, gas, or sulphur

ultimately recoverable under prudent and proper operations or which

causes or tends to cause unnecessary or excessive surface loss or

destruction of oil or gas; or

(4) The inefficient storage of oil.

Well-completion operations means the work conducted to establish

production from a well after the production-casing string has been set,

cemented, and pressure-tested.

Well-control fluid means drilling mud, completion fluid, or

workover fluid as appropriate to the particular operation being

conducted.

[[Page 7342]]

Workover operations means the work conducted on wells after the

initial well-completion operation for the purpose of maintaining or

restoring the productivity of a well.

You means the Lessee, right-of-way holder, or person acting on

behalf of a lessee or a right-of-way holder.

Performance Standards

Sec. 250.3 Under what standards will the Director regulate lease

operations?

The Director will regulate all operations under a lease, right-of-

use and easement, or right-of-way to:

(a) Promote orderly exploration, development, and production of

mineral resources;

(b) Prevent damage to or waste of any natural resource, life,

property, or the environment; and

other interested parties, and relevant Federal agencies.

Sec. 250.4 What measures must I take to protect health, safety,

property, and the environment?

(a) You must protect health, safety, property, and the environment

by:

(1) Performing all operations in a safe and workmanlike manner; and

(2) Maintaining all equipment in a safe condition.

(b) You must immediately take all necessary precautions to control,

remove, or otherwise correct any hazardous oil and gas accumulation or

other health, safety, or fire hazard.

Sec. 250.5 What standards must crane operations meet?

To ensure the safety of facility operations, you must meet the

requirements of paragraph (a) of this section. If your facility is

located in the Pacific OCS Region, you must also meet the requirements

of paragraph (b) of this section.

(a) In all cases, you must:

(1) Operate and maintain cranes installed on fixed platforms

according to the American Petroleum Institute (API) Recommended

Practice (RP) for Operation and Maintenance of Offshore Cranes (API RP

2D), and

(2) Keep records of inspection, testing and maintenance, and crane

operator qualifications according to the provisions of API RP 2D at

your field office nearest the OCS facility for a period of 2 years.

(b) This paragraph applies if your facility is located in the

Pacific OCS region. You may use other power-operated load-handling

equipment (such as air hoists or jib cranes) that has lower capacities

and is generally used for smaller loads than pedestal-mounted revolving

cranes. In this case, you must use such equipment according to specific

sections of API RP 2D as follows:

(1) Subsection 3.2 for Handling the Load;

(2) Section 4 for Inspection, Testing and Maintenance (with the

exception of 4.2.3, Load Test and 4.5, Crane Rerating); and

(3) Section 5 for Wire Rope and Sling Inspection, Requirement and

Maintenance.

Sec. 250.6 What must a welding, burning, and hot tapping practices and

procedures plan contain?

In this section, welding and burning include arc or fuel-gas

welding and arc or fuel-gas (acetylene or other gas) cutting. The term

welding includes welding, burning, and hot tapping activities.

(a) You must submit a Welding, Burning, and Hot Tapping Safe

Practices and Procedures Plan to the District Supervisor before you

begin drilling or production activities on a lease. You may not begin

welding activities until the District Supervisor has approved your

plan. A copy of the plan and its approval letter must be available at

the facility for the life of the facility (platform or drilling rig).

(b) Your plan must include the following:

(1) Standards or requirements for qualifying personnel who conduct

welding activities;

(2) Methods to ensure that only qualified personnel will conduct

welding activities;

(3) Practices and procedures for safe welding. Practices and

procedures must address:

(i) Welding in designated safe areas;

(ii) Welding in undesignated areas, including well bays;

(iii) Fire watches; and

(iv) Maintenance of welding equipment.

(4) Drawings showing any designated safe-welding areas; and

(5) Methods, practices and procedures to preclude spark producing

activities (i.e., grinding, abrasive blasting/cutting and arc-welding)

from becoming a source of ignition in hazardous locations.

thoroughly familiar with your welding plan. This person must ensure

that each welder is properly qualified according to the welding plan.

This person also must inspect all welding equipment before welding.

(d) Your welding equipment must meet the following requirements:

(1) All engine-driven welding equipment must be equipped with spark

arrestors and drip pans;

(2) Welding leads must be completely insulated and in good

condition;

(3) Hoses must be leak free and equipped with proper fittings,

gauges, and regulators; and

(4) Oxygen and fuel gas bottles must be secured in a safe place.

(e) Before you weld, you must move any equipment containing

hydrocarbons or other flammable substances at least 35 feet

horizontally from the work site. You must move similar equipment

located on lower decks at least 35 feet from the point of impact where

slag, sparks, or other burning materials could fall. If moving this

equipment is impractical, you must protect that equipment with flame-

proofed covers, shield it with metal or fire-resistant guards or

curtains, or render the flammable substances inert.

(f) While you weld, you must monitor all water-discharge-point

sources from hydrocarbon-handling vessels. If a discharge of flammable

fluids occurs, you must stop welding.

(g) If you cannot weld in an approved safe-welding area, you must

meet the following requirements:

(1) You may not begin welding until the designated person-in-charge

has authorized in writing that it is safe to proceed with the welding

activity. Before beginning welding, the designated person-in-charge and

the welder(s) must inspect the work area and areas below the work area

for potential fire and explosion hazards.

(2) During welding, the person-in-charge must designate one or more

persons as a fire watch. These persons must have no other duties while

actual welding is in progress. The fire watch must have usable

firefighting equipment. The fire watch must remain on duty for 30

minutes after welding activities end. If welding occurs in an area not

equipped with a gas detector, the fire watch also must maintain a

continuous surveillance during the welding and burning operation, with

a portable gas detector.

(3) You may not weld piping, containers, tanks, or other vessels

that have contained a flammable substance unless you have rendered the

contents inert and the designated person-in-charge has determined it is

safe to weld. This does not apply to approved hot taps.

(4) You may not weld in, or within 10 feet of, a well-bay or

production area unless you have shut in all producing wells in that

area.

(5) You may not weld while you drill, complete, workover, or

conduct

[[Page 7343]]

wireline operations unless the fluids in the well are noncombustible

and you have precluded the entry of formation hydrocarbons into the

wellbore. This does not apply to welding in an approved safe-welding

area.

Sec. 250.7 What requirements apply to electrical equipment?

The requirements in this section apply to all electrical equipment

on all platforms, artificial islands, fixed structures, and their

facilities.

(a) You must classify all areas in accordance with API RP 500,

Recommended Practice for Classification of Locations for Electrical

Installations at Petroleum Facilities.

(b) You must use trained and experienced personnel to maintain your

electrical systems. They must have expertise in area classification,

distribution system, performance characteristics and operation of

electrical equipment, and associated hazards.

RP 14F, Recommended Practice for Design and Installation of Electrical

Systems for Offshore Production Platforms. You do not have to comply

with Sections 7.4, Emergency Lighting, and 9.4, Aids to Navigation

Equipment.

(d) You must use a low-tension ignition system on each engine that

has electric ignition. You must design and maintain the ignition system

to minimize the release of electrical energy.

Sec. 250.8 When must I use best available and safest technologies

(BAST)?

(a) You must use BAST on all new exploration, development, and

production operations.

(b) You must use BAST on existing operations to avoid failure of

equipment that would have a significant effect on safety, health, or

the environment if the Director determines that:

(1) Using BAST is economically feasible; and

(2) The benefits of using BAST outweigh the costs.

consider you to be using BAST.

(d) MMS will analyze specific equipment and procedures or systems

not covered by standards, codes, or practices to determine if their

failure would have a significant effect on safety, health, or the

environment. If MMS identifies significant effects on safety, health,

and the environment, the Regional Supervisor may direct you to submit

on a case-by-case basis the following analysis:

(1) Information necessary to indicate the use of BAST;

(2) Alternatives you are considering to the specific equipment or

procedures;

(3) The rationale as to why you chose one safe alternative

technology instead of another; and

(4) A discussion of the costs involved in the use of alternate

technologies and the incremental benefits to be gained.

Sec. 250.9 How do I determine well producibility?

To determine whether a well is capable of producing in paying

quantities, submit a written request to the District Supervisor. You

must then meet the criteria in paragraphs (a) and (b) of this section.

Once a lease has a well that MMS determines is capable of producing in

paying quantities, no further determination of well producibility will

be made on the lease. A determination of well producibility invokes

minimum royalty status on the lease as provided in 30 CFR 202.53. If

your well is located in the Gulf of Mexico (GOM), you must also meet

the requirements of paragraph (c) of this section.

(a) You must give the District Supervisor a reasonable opportunity

to witness each test that you conduct under paragraph (b) of this

section. In lieu of witnessing a test, MMS will accept test data with

your affidavit, or third-party test data, but you must receive the

District Supervisor's approval for this arrangement before the test.

(b) You must conduct:

(1) A production test for oil wells that lasts at least 2 hours

after flow stabilizes; and

(2) Either:

(i) A deliverability test for gas wells that lasts at least 2 hours

after flow stabilizes, or

(ii) A four-point back pressure test.

or gas in paying quantities, the GOM OCS Region will also consider the

collective results of the following log, core analyses, and test

criteria:

(1) Resistivity or induction electric log of the well showing a

minimum of 15 feet of producible sand in one section. The producible

section must not include any interval which appears to be water

saturated. All of the sections you count as producible must exhibit:

(i) Electrical spontaneous potential exceeding 20-negative

millivolts beyond the shale base line; or

(ii) Gamma ray log deflection of at least 70 percent of the maximum

gamma ray deflection in the nearest clean water-bearing sand--if mud

conditions prevent a 20-negative millivolt reading beyond the shale

base line; and

(iii) A minimum true resistivity ratio of the producible section to

the nearest clean water-bearing sand of at least 5:1.

(2) A log indicating sufficient porosity in the producible section.

(3) Sidewall cores and core analyses which indicate that the

section is capable of producing oil or gas or evidence that an attempt

was made to obtain such cores.

(4) A wireline formation test and/or mud-logging analysis which

indicates that the section is capable of producing oil or gas.

Sec. 250.10 Under what conditions will MMS approve reinjection and

subsurface gas storage?

(a) The Regional Supervisor may authorize you to reinject gas on

the OCS to promote conservation of natural resources and to prevent

waste. To receive MMS approval for reinjection, you must:

(1) Show that the reinjection will not result in undue interference

with operations under existing leases; and

(2) Submit a written application to the Regional Supervisor for

reinjection of gas.

(b) The Regional Supervisor will approve gas reinjection

applications that:

(1) Enhance recovery projects;

(2) Prevent flaring of casinghead gas; or

(3) Implement other conservation measures approved by the Regional

Supervisor.

on the OCS for later commercial benefit. To receive MMS approval you

must:

(1) Show that the subsurface storage of gas will not result in

undue interference with operations under existing leases; and

(2) Sign a storage agreement which includes the required payment

amount of a storage fee or rental.

(d) MMS may approve reinjection or storage of gas for locations on-

or off-lease.

(1) If you produce gas from an OCS lease and store it in a

reservoir on the lease or unit, you are not required to pay royalty

until you remove or sell the gas from the storage reservoir.

(2) If you produce gas from an OCS lease and treat it at an off-

lease or off-unit location, you must pay royalties when the gas is

first produced.

(3) A reservoir on- or off-lease may contain both reinjected or

stored gas and gas original to the reservoir. In this case, when you

produce gas from the reservoir you must use an MMS-

[[Page 7344]]

approved formula to determine the amounts of injected or stored gas

and gas original to the reservoir.

(e) Using a lease area for subsurface storage of gas, does not

affect the continuance or expiration of the lease.

(f) You may not store gas on unleased lands unless the Regional

Supervisor has approved a right-of-use and easement for that purpose,

under Sec. 250.18.

(g) To receive the Regional Supervisor's approval of your request

to reinject gas into the cap rock of a salt dome containing a sulphur

deposit, you must show that the injection:

(1) Is necessary to recover oil and gas contained in the cap rock;

and

(2) Will not significantly increase potential hazards to present or

future sulphur mining operations.

Inspection of Operations

Sec. 250.11 How often does MMS conduct inspections?

(a) To ensure that you are conducting operations in accordance with

the Act, the regulations in this part, the lease or right-of-way, and

other applicable laws and regulations, MMS will inspect your OCS

facilities, including those facilities under jurisdiction of other

Federal agencies that MMS inspects by agreement.

(1) MMS conducts a scheduled onsite inspection of each offshore

facility that is subject to environmental or safety regulations under

the Act at least once a year. The inspection determines whether

environmental protection and safety equipment designed to prevent or

ameliorate blowouts, fires, spillages, or other major accidents has

been installed and is operating properly.

(2) MMS may also conduct periodic onsite inspection of any of your

facilities without advance notice.

(b) When MMS conducts an inspection, you must provide:

(1) Access to all platforms, artificial islands, and other

installations located on your leases or associated with your lease,

right of easement, or right of way; and

(2) The use of helicopter landing sites and refueling facilities

for helicopters used by MMS for regulating offshore operations.

inspection:

(1) The area covered under a lease, easement, right-of-way, or

permit;

(2) All improvements, structures, and fixtures on these areas; and

(3) All records of design, construction, operation, maintenance,

repairs, or investigations on or related to the area.

(d) Upon request, MMS will reimburse you for food, quarters, and

transportation that you provide for MMS representatives while they

inspect lease facilities and operations. You must send MMS your

reimbursement request within 90 days of the inspection.

Disqualification and Appeals

Sec. 250.12 Under what conditions will MMS disqualify an operator or

lessee?

MMS may disqualify an operator or lessee from acquiring any new

leaseholdings or lease assignments, or disapprove or revoke your

designation as operator, if your operating performance is unacceptable.

In making this determination, MMS will consider, individually or

collectively:

(a) Accidents and their nature;

(b) Pollution events, environmental damages and their nature;

(d) Civil penalties;

(e) Failure to adhere to OCS lease obligations; or

(f) Any other relevant factors.

Sec. 250.13 How can I appeal a decision made under MMS regulations?

You may appeal orders or decisions issued under MMS regulations in

subchapter B (parts 250 to 282) in accordance with part 290 of this

title. When you appeal to the Director, you must continue to follow all

requirements for compliance with the order or decision you appealed,

unless the Secretary of the Interior (Secretary) or the Secretary's

designee grants a stay of the request.

Special Types of Approvals

Sec. 250.14 Under what conditions will MMS give me an oral approval or

an approval for alternate procedures and/or a departure?

(a) Oral approvals. When you apply for MMS approval of any

activity, MMS normally gives you a written approval. However, you may

receive oral approval from MMS under certain circumstances:

(1) MMS may give you oral approval to an oral request. You must

confirm the oral request by submitting a written request to MMS within

72 hours of the oral approval. Oral approvals for gas flaring do not

require a written follow-up request.

(2) MMS may give you oral approval to a written application when

quick action is necessary. MMS will follow up its oral approval to your

written application by forwarding a written approval to you and will

include any conditions placed on the oral approval.

(3) Requests to, and approvals from, MMS for gas flaring are always

oral. You are not required to submit a written request to follow-up

your oral request. However, when you stop the approved flaring, you

must promptly submit a written letter summarizing the location, dates

and hours, and volumes of liquid hydrocarbons produced and gas flared

associated with the approved flaring in accordance with 30 CFR part

250, subpart K.

(b) Approval for alternate procedures. You may use alternate

procedures or equipment as follows:

(1) You may use new or alternate procedures or equipment, not

covered in this part, if they provide a level of protection to the

environment and ensure a measure of safety that is equal to or

surpasses the current MMS requirements.

(2) Before using the new or alternate technique or equipment, you

must have written approval from the District or Regional Supervisor, as

appropriate.

(3) To receive MMS approval, you must either submit information or

give an oral presentation to the District or Regional Supervisor, as

appropriate, describing the site-specific application(s), performance

characteristics, and safety features of the proposed procedure. The

District or Regional Supervisor will respond to each proposal in

writing.

procedure or equipment deviate from or are not covered by MMS

regulations, MMS may prescribe or approve exceptions from the operating

requirements of this part.

Sec. 250.15 How do I designate an operator and local agent?

(a) You must provide the Regional Supervisor an executed

Designation of Operator form unless you are the only lessee and are the

only person conducting lease operations. When there is more than one

lessee then the Regional Supervisor must receive and approve the

Designation of Operator form from each lessee before the designated

operator may commence operations on the leasehold.

(1) This designation is authority for the designated operator to

act on your behalf and to fulfill your obligations under the Act, the

lease, and the regulations in this part.

(2) When you are no longer the designated operator, you must

immediately provide in writing the termination of your Designation of

Operator to the Regional Supervisor. If you are also a designated

royalty payor and will not continue to be in the future, you must also

notify the Royalty Management Program of the termination of your

Designation of Operator.

(3) When a Designation of Operator terminates, the Regional

Supervisor must approve a new designated operator

[[Page 7345]]

under this paragraph before operator may continue.

(4) If your Designation of Operator is terminated, or a controversy

develops between you and your designated operator, you and your

designated operator must protect the lessor's interests.

(5) You, or your designated operator, must immediately provide the

Regional Supervisor a written notification of any change of address.

(b) When you are not the sole lessee, you and your co-lessee(s) are

jointly and severally responsible for fulfilling your obligations under

the provisions of this subchapter, unless otherwise provided in the

regulations in this subchapter. Should your designated operator fail to

fulfill any of your obligations under this subchapter, the Regional

Supervisor may require you or any or all of your co-lessee(s) to

fulfill those obligations or other operational obligations under the

Act, the lease, or the regulations in this subchapter.

Supervisor's approval, or the Regional Director may require you to

designate, a local agent empowered to: receive notices, submit

requests, applications, notices, or supplemental information; or

fulfill your obligations under the Act, the lease, or the regulations

in this part.

(d) Whenever the regulations in 30 CFR parts 250 to 282 require the

lessee to meet a requirement or perform an action, the lessee, operator

(if one has been designated), and the person actually performing the

activity to which the requirement applies are jointly and severally

responsible for compliance with the regulation.

Naming and Identifying Platforms and Wells

Sec. 250.16 How do I name platforms and wells?

(a) In the Gulf of Mexico Region: (1) Assign each platform a letter

designation. For example, A, B, CA, or CB.

(i) After a platform is installed, rename each well that was

drilled through a template and was assigned a number. Use a letter and

number designation. For example, rename Well No. 1: A-1, B-1, or C-1;

and

(ii) When you have more than one platform in a field (excluding

complexes), include the designations for the field and use a different

letter designation for each platform. For example, EC 221-A, EC 222-B,

EC 223-C.

(2) In naming multiple well caissons, you must assign a letter

designation.

(3) In naming single well caissons, you must use certain criteria

as follows:

(i) For single well caissons that are not attached to a platform

with a walkway, use the well designation. For example, Well No. 1;

(ii) For single well caissons that are attached to a platform with

a walkway, use the same designation as the platform. For example,

rename Well No.10 as A-10; and

(iii) For single well caissons with production equipment, use a

letter designation. For example, Well No. 1 as A-1.

(b) In the Pacific Region, platforms are assigned a name

designation.

accordance with the Regional Director's directions.

Sec. 250.17 What identification signs must I display?

(a) You must identify all platforms, structures, artificial

islands, and mobile drilling units with a sign.

(1) You must display an identification sign that can be viewed from

the waterline on at least one side of the platform. The sign must use

at least 3-inch letters and figures.

(2) When helicopter landing facilities are present, you must

display an additional identification sign that is visible from the air.

The sign must use at least 12-inch letters and figures, and must also

display the weight capacity of the helipad. If this sign is visible to

both helicopter and boat traffic, then the sign in paragraph (a)(1) of

this section is not required.

(3) Your identification sign must:

(i) List the name of the lessee or designated operator;

(ii) In the GOM OCS Region, list the area designation or

abbreviation and the block number of the platform location as depicted

on OCS Official Protraction Diagrams or leasing maps;

(iii) In the Pacific OCS Region, list the lease number on which the

facility is located; and

(iv) List the name of the platform, structure, artificial island,

or mobile drilling unit.

(b) You must identify singly completed wells and multiple

completions as follows:

(1) For each singly completed well, list the lease number and well

number on the wellhead or on a sign affixed to the wellhead;

(2) For wells with multiple completions, identify each completion

individually at the wellhead; and

(3) For subsea wellheads, affix the required sign on the flowline

that connects to the pipeline that connects to the subsea well at a

convenient location on the receiving platform.

and maintained in a legible condition.

Right-of-Use and Easement

Sec. 250.18 When will MMS grant a right-of-use and easement?

(a) Granting a right-of-use and easement. In addition to the rights

and privileges granted to you under a lease issued or maintained under

the Act, MMS may grant you a right-of-use and easement on the OCS if

you meet these requirements:

(1) You must need the right-of-use and easement to construct and

maintain off the lease platforms, artificial islands, and installations

and other devices that are:

(i) Permanently or temporarily attached to the seabed; and

(ii) Used for conducting exploration, development, and production

activities or other operations on your lease;

(2) You must exercise the right-of-use and easement in accordance

with the provisions of this part;

(3) If you apply for a right-of-use and easement on a leased area,

you must notify the lessee and give her/him an opportunity to comment

on your application; and

(4) You must receive MMS approval for all platforms, artificial

islands, and installations and other devices permanently or temporarily

attached to the seabed.

(b) Continuation of the right beyond lease termination.

If your right-of-use and easement is on a lease, you may continue

to exercise the right-of-use after the lease on which it is situated

terminates. You must only use the right-of-use and easement for the

purpose that the grant specifies. All future lessees of that portion of

the OCS on which your right-of-use and easement is situated must

continue to provide you the right-of-use and easement for the purpose

that the grant specifies.

MMS may grant a lessee of a State lease located adjacent to the OCS a

right-of-use and easement on the OCS. MMS will require you to pay an

application fee (see (c)(4)(i)) to reimburse us for our costs of

processing your application. The Independent Offices Appropriations Act

(31 U.S.C. 9701), Office of Management and Budget (OMB) Circular A-25,

and the Omnibus Appropriations Bill (Pub. L. 104-133, 110 Stat. 1321,

April 26, 1996) require us to collect these fees. MMS will

[[Page 7346]]

specify the fee and rental payment amounts (under paragraph (c)(3)) of

this section in notices to State lessees.

(1) MMS will only grant a right-of-use and easement under this

paragraph to enable a State lessee to conduct and maintain a device

that is permanently or temporarily attached to the seabed (i.e., a

platform, artificial island, or installation). The lessee must use the

device to explore for, develop, and produce oil and gas from the

adjacent State lease and for other operations that are related to these

activities.

(2) A right-of-use and easement granted under this section is

subject to the regulations of this part and any terms and conditions

that the Regional Director prescribes.

(3) For the whole or fraction of the first calendar year, and

annually after that, you must pay to MMS, in advance, an annual rental

payment in an amount MMS will establish in accordance with the statutes

and OMB Circular A-25, referenced in paragraph (c) of this section.

(4) When you apply for a right-of-use and easement, you must pay:

(i) A non-refundable filing fee; and

(ii) The first year's rental according to paragraph (c)(3) of this

section.

(5) With your application, you must describe the proposed use

giving:

(i) Details of the proposed uses and activities including access

needs and special rights-of-use that you may need;

(ii) A description of all facilities for which you are seeking

authorization;

(iii) A map or plat describing primary and alternate project

locations; and

(iv) A schedule for constructing any new facilities, drilling or

completing any wells, anticipated production rates, and productive life

of existing production facilities.

(6) Before MMS issues you a right-of-use and easement on the OCS,

you must furnish the Regional Director a surety bond in the amount of

$500,000. The Regional Director may require additional security from

you (i.e., security over and above the prescribed $500,000) to cover

additional costs and liabilities for regulatory compliance. This

additional surety:

(i) Must be in the form of a supplemental bond or bonds meeting the

requirements of Sec. 256.54 or an increase in the amount of coverage of

an existing surety bond; and

(ii) Covers additional costs and liabilities for regulatory

compliance, including well abandonment, platform and structure removal,

and site clearance from the seafloor of the right-of-use and easement.

Suspensions

Sec. 250.19 Under what conditions can operations or production be

suspended?

(a) You may request approval of a suspension, or the Regional

Supervisor may direct a suspension (Directed Suspension), for all or

any part of a lease. Depending on the nature of the suspended activity,

suspensions are labeled either Suspensions of Operations (SOO) or

Suspensions of Production (SOP).

(b) A suspension may extend the term of a lease (see 30 CFR

250.23). The extension is equal to the length of time the suspension is

in effect, except as provided in paragraph (c).

the Regional Supervisor direct a suspension because of:

(1) Gross negligence; or

(2) A willful violation of a provision of the lease or governing

statutes and regulations.

(d) MMS may issue suspensions for a period of up to 5 years. The

Regional Supervisor will set the length of the suspension based on the

conditions of the individual case involved. MMS may grant consecutive

suspensions.

(e) SOO's end automatically when the suspended operation commences.

(f) SOP's end automatically when production begins.

(g) A Directed Suspension normally terminates as specified in the

letter directing the suspension.

(h) MMS may terminate any suspension when the Regional Supervisor

determines the circumstances that justified the suspension no longer

exist or that other lease conditions warrant termination. The Regional

Supervisor will notify you of the reasons for termination and the

effective date.

(i) You must submit your request for a suspension to the Regional

Supervisor before the 180th day after you stop operations (see 30 CFR

250.23). MMS must receive the request before the lease term ends. The

request must include:

(1) The justification for the suspension including the length of

suspended period requested; and

(2) A schedule of work leading to the commencement or restoration

of the suspended activity.

(j) The Regional Supervisor may grant or direct a suspension under

any of the following circumstances:

(1) When necessary to comply with judicial or Congressional decrees

prohibiting any activity or the permitting of those activities. The

effective date of the suspension will be the effective date required by

the action of the court or Congress;

(2) When activities pose a threat of serious, irreparable, or

immediate harm. This would include damage to life (including fish and

other aquatic life), property, any mineral deposit, or the marine,

coastal, or human environment. MMS may require you to do a site-

specific study (see Sec. 250.19 (o)(1));

(3) When necessary for the installation of safety or environmental

protection equipment;

(4) When necessary to carry out the requirements of the National

Environmental Policy Act or to conduct an environmental analysis; or

(5) When necessary to allow for inordinate delays encountered in

obtaining required permits or consents, including administrative or

judicial challenges or appeals.

(k) The Regional Supervisor may direct a suspension when:

(1) You failed to comply with an applicable law, regulation, order,

or provision of a lease or permit; or

(2) The suspension is in the interest of national security or

defense.

(l) The Regional Supervisor may grant or direct an SOP when: the

suspension is in the national interest; you have exercised diligence in

pursuing production; the lease was drilled and a well was determined to

be producible in accordance with 30 CFR 250.9 or 250.253; and it is

necessary because the suspension will meet one of the following

criteria:

(1) It will facilitate the proper development of a lease, including

allowing you reasonable time to construct and install production

facilities;

(2) It will allow you time to obtain adequate transportation

facilities;

(3) It will allow you a reasonable amount of time to enter a sales

contract for oil, gas, or sulphur. You must show that you are making a

good faith effort to enter into the contract(s);

(4) It will avoid premature abandonment of a producing well(s);

(5) It will allow you to develop marginal reserves that would

otherwise not be developed. You must provide a schedule of work

commitments, with specific measurable milestones, which would lead to

development; or

(6) It will allow you reasonable time to acquire, properly process/

reprocess, and evaluate geophysical data or information. You must

demonstrate a commitment to developing the lease, and the evaluation

program must be designed to efficiently select a location for

additional development wells, assist in siting development facilities,

or locate an additional well needed to properly size production

facilities.

[[Page 7347]]

(m) The Regional Supervisor may grant an SOO when necessary to

allow you reasonable time to commence drilling or other operations when

your good-faith efforts are prevented by reasons beyond your control,

such as unexpected weather, unavoidable accidents, or drilling rig

delays.

(n) A directed suspension may affect the payment of rental or

royalties for the lease as provided in Sec. 218.154.

(o) If MMS grants or directs a suspension under paragraph (j)(2) of

this section, the Regional Supervisor may require you to:

(1) Conduct a site-specific study(s);

(2) Submit a revised EP (including any required mitigating

measures);

(3) Submit a revised DPP (including any required mitigating

measures); or

(4) Submit a revised Development Operations Coordination Document

according to Sec. 250.34.

(p) The Regional Supervisor must approve or prescribe the scope for

any site-specific study that you perform under Sec. 250.19 (o)(1).

(1) The study must evaluate the cause of the hazard, the potential

damage, and the available mitigation measures.

(2) You must pay for the study unless you request, and the Regional

Supervisor agrees to arrange, payment by another party.

(3) You must furnish copies and results of the study to the

Regional Supervisor.

(4) MMS will make the results available to other interested parties

and to the public.

(5) The Regional Supervisor will use the results of the study and

any other information that becomes available:

(i) To decide if the suspension can be lifted.

(ii) To determine any actions that you must take to mitigate or

avoid any damage to the environment, life, or property.

Reporting Requirements

Sec. 250.20 What accident reports and evacuation statistics must I

submit?

(a) Accident reports. You must report accidents in accordance with

the accident reporting table in this section. Copies of written company

reports may be submitted to fulfill these requirements.

Table--Accident Reporting

------------------------------------------------------------------------

Type of accident Reporting requirement

------------------------------------------------------------------------

Major accidents, including fires, are 1. In the case of death or

those which cause (1) any death or fire, orally notify the

serious injury resulting in District Supervisor

substantial impairment of any bodily immediately. Otherwise, orally

unit or function, or (2) property or notify the District Supervisor

equipment damage costing more than within 24 hours.

$25,000..

2. Follow up with a preliminary

written report within 10 days.

3. Submit a final written

report in 45 days.

4. In all written reports,

differentiate, to the extent

practicable, between factual

and conjectural or

interpretive information.

Reportable accidents include (1) all 1. Notify the District

other fires, (2) injuries requiring Supervisor within 72 hours.

more than first aid treatment and

which prevent the performance of

normal work duties, or (3) property or

equipment damage costing less than

$25,000 and which impairs safety

systems.

2. Follow up with a written

report within 10 days. To the

extent practicable,

differentiate between factual

and conjectural or

interpretive information.

All explosions and blowouts connected 1. Orally notify the District

with any activities or operations on a Supervisor immediately.

lease.

2. Follow up with a written

report within 10 days. To the

extent practicable,

differentiate between factual

and conjectural or

interpretive information.

Oil spills............................. Report all spills of oil in

accordance with 30 CFR part

254.

------------------------------------------------------------------------

(1) If you hold an easement, right-of-way, or other permit, you

must comply with paragraph (a) of this section by notifying and

reporting to the Regional Supervisor any accidents occurring on the

area covered by the easement, right-of-way, or other permit.

(2) Investigations that MMS conducts under the authority of

sections 22(d) (1) and (2) of the Act 43 U.S.C. 1348 d(1) and (2), are

fact-finding proceedings with no adverse parties. The purpose of the

investigation is to prepare a public report that determines the cause

or causes of the accident. The investigations may involve panel

meetings conducted by a chairperson appointed by MMS. The following

requirements must be met for any panel meetings involving persons

giving testimony:

(i) A person giving testimony may have legal and/or other

representative(s) present to provide advice or counsel while the person

is giving testimony. The chairperson may require a verbatim transcript

to be made of all oral testimony. The chairperson also may accept a

sworn written statement in lieu of oral testimony.

(ii) Only panel members, panel legal advisors, and panel experts

may address questions to any person giving testimony.

(iii) The chairperson may issue subpoenas to persons to appear and

provide testimony at a panel meeting. A subpoena may not require a

person to attend a panel meeting held at a location more than 100 miles

from where a subpoena is served.

(iv) Any person giving testimony is entitled to request

compensation for mileage and fees for service within 90 days after the

panel meeting. The compensated expenses must be similar to mileage and

fees for service that are permitted to be compensated by U. S. District

Courts.

(b) Evacuation statistics for natural occurrences. You must submit

evacuation statistics to the Regional Supervisor for a natural

occurrence such as an earthquake or hurricane. MMS will notify local

and national authorities and the public, as appropriate. You must:

(1) Submit the statistics by telefax or E-mail as soon as possible

when evacuation occurs;

(2) Submit statistics on a daily basis no later than 11 a.m. during

the period of shut-in and evacuation;

(3) Inform MMS when you resume production; and

(4) Submit statistics either by MMS district or the total figures

for your operations in the Region.

[[Page 7348]]

Sec. 250.21 Reports and investigations of apparent violations.

Any person may report to MMS an apparent violation or failure to

comply with any provision of the Act, any provision of a lease,

license, or permit issued under the Act, or any provision of any

regulation or order issued under the Act. When MMS receives a report of

an apparent violation, or when an MMS employee detects an apparent

violation, MMS will investigate in accordance with its procedures.

Sec. 250.22 What archaeological reports and surveys must I submit?

(a) If it is likely that an archaeological resource exists in the

lease area, the Regional Director will notify you in writing. You must

include an archaeological report in the EP or DPP.

(1) If the archaeological report suggests that an archaeological

resource may be present, you must either:

(i) Locate the site of any operation so as not to adversely affect

the area where the archaeological resource may be; or

(ii) Establish to the satisfaction of the Regional Director that an

archaeological resource does not exist or will not be adversely

affected by operations. This requires further archaeological

investigation, conducted by an archaeologist and a geophysicist, using

survey equipment and techniques the Regional Director considers

appropriate. You must submit the investigation report to the Regional

Director for review.

(2) If the Regional Director determines that an archaeological

resource is likely to be present in the lease area and may be adversely

affected by operations, the Regional Director will notify you

immediately. You must not take any action that may adversely affect the

archaeological resource until the Regional Director has told you how to

protect the resource.

(b) If you discover any archaeological resource while conducting

operations in the lease area, you must immediately halt operations

within the area of the discovery and report the discovery to the

Regional Director. If investigations determine that the resource is

significant, the Regional Director will tell you how to protect it.

Lease Term Extensions

Sec. 250.23 What effect do production, drilling, or well-reworking

have on the lease term?

(a) Your lease expires at the end of its primary term unless you

are producing in paying quantities or conducting drilling or well-

reworking operations on your lease (see 30 CFR part 256). The objective

of the drilling or well-reworking operations must be to establish

continuous production on the lease. For purposes of this section, the

term operations means continuous production, drilling, or well-

reworking.

(b)(1) If you stop conducting operations during the last 180 days

of your primary lease term, your lease will expire at the end of the

primary lease term unless by the 180th day after you stop operations

you either resume operations, or MMS receives your request for an SOO

or an SOP that the Regional Supervisor later grants under Sec. 250.19.

If the Regional Supervisor denies your request for an SOO or an SOP and

you do not resume operations within 180 days after you stop operations,

your lease expires at the end of the primary lease term.

(2) If you extend your lease term under paragraph (b)(1), you must

pay rental for each year or part of the year during which your lease

continues in force beyond the end of the primary lease term.

beyond its primary term, then your lease will expire unless you resume

operations or receive an SOO or an SOP from the Regional Supervisor

under Sec. 250.19 before the end of the 180th day after you stop

operations

(d) You may ask the Regional Supervisor to allow you more than 180

days to resume operations on a lease continued beyond its primary term

when operating conditions warrant. The request must be in writing and

explain the operating conditions that warrant a longer period. In

allowing additional time, the Regional Supervisor must determine that

the longer period is in the national interest and that it conserves

resources, prevents waste, or protects correlative rights.

(e) You must immediately notify MMS either orally or by fax or E-

mail when you begin operations and follow up with a written report

under paragraph (f) of this section.

(f) You must submit a report to the District Supervisor when lease

production is initiated, lease production ceases, when production

resumes before the end of the 180-day period after production ceased,

and when any operations occur during the referenced 180-day interval.

(1) The report must contain:

(i) The lease number;

(ii) The well number(s) involved; and

(iii) The pertinent dates and a description of the operation.

(2) You must submit the report within 30 days after production

either commences, resumes, or ceases, as appropriate, or 30 days after

the leaseholding operation is completed.

(g) You must immediately report to the District Supervisor if

production does not resume before the end of the 180-day period.

Sec. 250.24 Under what circumstances may MMS cancel my lease with or

without compensation?

If the Secretary cancels your lease under this part or under part

256, you are entitled to compensation under paragraph (d) of this

section. Paragraph (e) of this section gives conditions under which you

will receive no compensation.

(a) Conditions for canceling a lease with compensation. The

Secretary may cancel a lease after notice and opportunity for a hearing

when:

(1) Continued activity on the lease, would probably cause harm or

damage to life (including fish and other aquatic life), property, other

mineral deposits (in areas leased or not leased), or the marine,

coastal, or human environment;

(2) The threat of harm or damage will not disappear or decrease to

an acceptable extent within a reasonable period of time;

(3) The advantages of cancellation outweigh the advantages of

continuing the lease in force; and

(4) A suspension has been in effect for at least 5 years, or you

request termination of the suspension and lease cancellation.

(b) Canceling a lease at the exploration stage. MMS may not approve

an EP under subpart B of this part if the Regional Supervisor

determines that the proposed activities may cause serious harm or

damage to life (including fish and other aquatic life), property, any

mineral deposits, the national security or defense, or to the marine,

coastal, or human environment. When you cannot modify the EP to avoid

such conditions and the EP is subsequently disapproved under the

regulations in subpart B of this part, the Secretary may cancel the

lease if:

(1) The primary lease term has not expired and exploration has been

prohibited for 5 years following the disapproval; or

(2) You request cancellation at an earlier time.

stage. (1) MMS may extend your lease if you submit a DPP and the

Regional Supervisor disapproves the plan in accordance with the

regulations in subpart B of this part. Following the disapproval:

(i) MMS will allow you to hold the lease for 5 years maximum;

[[Page 7349]]

(ii) At any time within 5 years after the disapproval, you may

reapply for approval of the same or a modified plan; and

(iii) The Regional Supervisor will approve, disapprove, or require

modification of the plan under Sec. 250.34(l).

(2) If the Regional Supervisor has not approved a DPP or required

you to submit a DPP for approval or modification, the Secretary will

cancel the lease:

(i) When the 5-year period described in paragraph (c)(1) of this

section expires; or

(ii) If you request cancellation at an earlier time.

(d) Amount of compensation for lease cancellation. When the

Secretary cancels a lease under paragraphs (a), (b), or (c) of this

section, you are entitled to receive compensation under 43 U.S.C. 1334

(a)(2)(c). You must show the Director that the amount of compensation

claimed is the lesser of paragraph (d)(1) or (d)(2) of this section:

(1) The fair value of the cancelled rights as of the date of

cancellation, taking into account both:

(i) Anticipated revenues from the lease; and

(ii) Costs reasonably anticipated on the lease, including:

(A) Costs of compliance with all applicable regulations and

operating orders; and

(B) Liability for cleanup costs or damages, or both, in the case of

an oil spill.

(2) The excess, if any, over your revenues from the lease (plus

interest thereon from the date of receipt to date of reimbursement) of:

(i) All consideration paid for the lease; and

(ii) All your direct expenditures:

(A) After the issue date of the lease; and

(B) For exploration or development, or both, under the lease plus

interest on the consideration under paragraph (d)(2)(i) of this section

and expenditures under paragraph (d)(2)(ii) from date of payment to

date of reimbursement.

(3) Compensation for leases issued before September 18, 1978 will

be equal to the amount specified in paragraph (d)(1).

(e) Canceling a lease without compensation. You will not receive

compensation from MMS for lease cancellation if:

(1) MMS disapproves a DPP because you do not receive concurrence by

the State under section 307(c)(3)(B)(i) or (ii) of the CZMA, and the

Secretary of Commerce does not make the finding authorized by section

307(c)(3)(B)(iii) of the CZMA;

(2) You do not submit a DPP in accordance with Sec. 250.34 or do

not comply with the approved DPP;

(3) As the lessee of a nonproducing lease, you fail to comply with

the Act, the lease, or the regulations issued under the Act, and the

default continues for a period of 30 days after MMS mails you a notice

by overnight mail;

(4) The Regional Supervisor disapproves a DPP because you fail to

demonstrate compliance with the requirements of applicable Federal law;

(5) The Secretary forfeits or cancels a producing lease under

section (d) of the Act, 43 U.S.C. 1334(d).

Information: Submission, Reimbursement For, And Availability to Public

Sec. 250.25 What reporting information and report forms must I submit?

(a) You must submit required information as MMS prescribes.

(1) You may obtain copies of forms from, and submit completed forms

to, the Regional or District Supervisor.

(2) Instead of paper copies of forms available from the Regional or

District Supervisor, you may use your own computer generated forms

which are equal in size to MMS's forms. The data on your form must be

arranged in a format identical to the MMS form.

(3) You may submit digital data when the Region/District is

equipped to accept it.

(b) You must include, for public information, one copy of any

reports submitted on forms as MMS prescribes.

(1) You must mark it Public Information.

(2) You must include all required information except information

exempt from public disclosure under Sec. 250.27 or otherwise exempt

from public disclosure under law or regulation.

Sec. 250.26 When will MMS reimburse me for reproduction costs?

(a) MMS will reimburse you for reasonable costs of reproduction

when you submit geological data, geophysical data, analyzed geological

information, processed geological and geophysical information,

reprocessed geological and geophysical information, and interpreted

geological and geophysical information for the Regional Director to

review or select (and whether or not retained) in accordance with this

part if:

(1) MMS receives your request for reimbursement within 90 days from

the date of delivery and the Regional Supervisor determines that the

requested reimbursement is proper; and

(2) The cost is at your lowest rate or at the lowest commercial

rate established in the area, whichever is less.

(b) MMS will reimburse you for the reasonable processing costs of

geological or geophysical information if:

(1) You processed--at the request of the Regional Supervisor--the

geological or geophysical information, in a form or manner other than

normally used in conducting business; or

(2) You collected the information under a permit that MMS issued

you before October 1, 1985, and the Regional Supervisor requests the

information.

and processing costs separately from acquisition costs.

(d) MMS will not reimburse you for data acquisition costs or for

the costs of analyzing or processing geological information or

interpreting geological or geophysical information.

Sec. 250.27 Data and information to be made available to the public.

MMS will protect data and information you submit under this part,

except as described in this section. The tables in paragraphs (a) and

(b) of this section describe what data and information will be made

available to the public without the consent of the lessee and under

what circumstances and in what time period.

(a) MMS will disclose information collected on MMS forms in

accordance with the following table:

----------------------------------------------------------------------------------------------------------------

In the following

Data that you submit on form items Will be released And

----------------------------------------------------------------------------------------------------------------

MMS-123, Application for Permit All entries except At any time........ The data and information in items

to Drill. items 17, 24, and 17, 24, and 25 will be released

25. according to paragraph (b) of

this section or when the well

goes on production, whichever is

earlier.

[[Page 7350]]

MMS-124, Sundry Notices and All entries except At any time........ The data and information in item

Reports on Wells. item 36. 36 will be released according to

paragraph (b) of this section or

when the well goes on production,

whichever is earlier.

MMS-125, Well Summary Report..... All entries except At any time........ The data and information in the

items 17, 24, 34, excepted items will be released

37, and 46 through according to paragraph (b) of

87. this section or when the well

goes on production, whichever is

earlier. However, items 78 and 85

will not be released when the

well goes on production unless

the period of time in paragraph

(b) of this section has expired.

MMS-126, Well Potential Test All entries except When the well goes The data and information in item

Report and Request for Maximum item 101. on production. 101 will be released 2 years

Production Rate (MPR). after you submit it.

MMS-127, Request for Reservoir All entries except At any time........ The data and information in items

Maximum Efficient Rate (MER). items 124 through 124 through 168 will be released

168. according to the time periods in

paragraph (b) of this section.

MMS-128, Semiannual Well Test All entries......... At any time........ ..................................

Report.

----------------------------------------------------------------------------------------------------------------

(b) MMS will disclose information not collected on MMS forms in

accordance with the following table:

----------------------------------------------------------------------------------------------------------------

If MMS will release At this time Additional provisions

----------------------------------------------------------------------------------------------------------------

The Director determines that Geophysical data...... Any time.............. Data and information will be

data and information are Geological data shown only to persons with an

needed to unitize operations Reprocessed G&G interest.

on two or more leases, to information.

ensure proper plans of Interpreted geological

development for competitive & geophysical

reservoirs, or to promote information.

operational safety or protect Processed geophysical

the environment. information.

Analyzed geological

information.

The Director determines that Geophysical data...... Any time.............. MMS will release data and

data and information are Geological data....... information only if release

needed for specific Reprocessed G&G would further the national

scientific or research information. interest without unduly

purposes for the Government. Interpreted geological damaging the competitive

& geophysical position of the lessee.

information.

Processed geophysical

information.

Analyzed geological

information.

Data or information is Geophysical data...... 60 days after you MMS will release the data and

collected with high- Geological data....... submit the data or information earlier than 60

resolution systems (e.g., Processed geological & information, if the days if the Regional Supervisor

bathymetry, side-scan sonar, geophysical Regional Supervisor determines it is needed by

subbottom profiler, and information. deems it necessary. affected States to make

magnetometer) to comply with Interpreted G&G decisions under subpart B of

safety or environmental information. this part. The Regional

protection requirements. Supervisor will reconsider

earlier release if you satisfy

him/her that it would unduly

damage your competitive

position.

----------------------------------------------------------------------------------------------------------------

If MMS will release At this time Additional provisions

----------------------------------------------------------------------------------------------------------------

Your lease is no longer in Geophysical data...... When your lease This release time applies only

effect. Processed geophysical terminates or 10 if the provisions in this table

information. years after the date governing high resolution

Reprocessed G&G you submit the data, systems and the provisions in

information. whichever is earlier. Sec. 252.7 do not apply.

Interpreted G&G

information.

Your lease is no longer in Geological data....... When your lease This release time applies only

effect. Analyzed geological terminates. if the provisions in this table

information. governing high resolution

systems and the provisions in

Sec. 252.7 do not apply.

Your lease is still in effect. Geophysical data...... 2 years after you These release times apply only

Processed geophysical submit it or 60 days if the provisions in this table

information. after a lease sale if governing high resolution

Reprocessed G&G any portion of an systems and the provisions in

information. offered block is Sec. 252.7 do not apply. If

Interpreted G&G within 50 miles of a the primary term specified in

information. well, whichever is the lease is extended under

later. Sec. 252.10, the extension

applies to this provision.

[[Page 7351]]

Data is released to the owner Directional survey If the lessee from ................................

of an adjacent lease under data. whose lease the

subpart D of part 250. directional survey

was taken consents..

Data and information are Any data or At any time........... ................................

obtained from beneath information obtained.

unleased land as a result of

a well deviation that has not

been approved by the Regional

or District Supervisor.

----------------------------------------------------------------------------------------------------------------

References

Sec. 250.28 Documents incorporated by reference.

(a) MMS is incorporating by reference the documents listed in the

table in paragraph (e) of this section. The Director of the Federal

with 5 U.S.C. 552(a) and 1 CFR part 51.

(1) MMS will publish any changes to these documents in the Federal

(2) The rule change will become effective without prior opportunity

to comment when MMS determines that the revisions to a document result

in safety improvements or represent new industry standard technology,

and do not impose undue costs on the affected parties.

(b) MMS incorporated each document or specific portion by reference

in the sections noted. The entire document is incorporated by

reference, unless the text of the corresponding sections in this part

calls for compliance with specific portions of the listed documents. In

each instance, the applicable document is the specific edition or

specific edition and supplement or addendum cited in this section.

edition of a specific document incorporated by reference, provided:

(1) You demonstrate that compliance with the later edition provides

a degree of protection, safety, or performance equal to or better than

that which would be achieved by compliance with the listed edition; and

(2) You obtain the prior written approval for alternative

compliance from the authorized MMS official.

(d) You may inspect these documents at the Minerals Management

Service, 381 Elden Street, Room 3313, Herndon, Virginia; or at the

Office of the Federal Register, 800 North Capitol Street, N.W., Suite

700, Washington, D.C. You may obtain the documents from the publishing

organizations at the addresses given in the following table:

----------------------------------------------------------------------------------------------------------------

For Write to

----------------------------------------------------------------------------------------------------------------

ACI Standards.......................... American Concrete Institute, P.O. Box 19150, Detroit, MI 48219.

AISC Standards......................... American Institute of Steel Construction, Inc., P.O. Box 4588, Chicago,

IL 60680.

ANSI/ASME Codes........................ American National Standards Institute, Attention Sales Department, 1430

Broadway, New York, NY 10018; and/or American Society of Mechanical

Engineers, United Engineering Center, 345 East 47th Street, New York,

NY 10017.

API Recommended Practices, Specs, American Petroleum Institute, 1220 L Street, N.W., Washington, D.C.

Standards, Manual of Petroleum 20005.

Measurement Standards (MPMS) chapters.

ASTM Standards......................... American Society for Testing and Materials, 1916 Race Street,

Philadelphia, PA 19103.

AWS Codes.............................. American Welding Society, 550 N.W., LeJeune Road, P.O. Box 351040,

Miami, FL 33135.

NACE Standards......................... National Association of Corrosion Engineers, P.O. Box 218340, Houston,

TX 77218.

----------------------------------------------------------------------------------------------------------------

(e) This paragraph lists documents incorporated by reference. In

order to easily reference text of the corresponding sections with the

list of documents incorporated by reference, the list is in

alphanumerical order by organization and document.

------------------------------------------------------------------------

Incorporated by reference

Title of documents at

------------------------------------------------------------------------

ACI Standard 318-95, Building Code Sec. 250.138(b)(4)(i),

Requirements for Reinforced Concrete, plus (b)(6)(i), (b)(7),

Commentary on Building Code Requirements for (b)(8)(i), (b)(9),

Reinforced Concrete (ACI 318R-95). (b)(10), (c)(3),

(d)(1)(v), (d)(5),

(d)(6), (d)(7), (d)(8),

(d)(9), (e)(1)(i),

(e)(2)(i).

ACI Standard 357-R-84, Guide for the Design Sec. 250.130(g); Sec.

and Construction of Fixed Offshore Concrete 250.138(c)(2), (c)(3).

Structures, 1984.

AISC Standard, Specification for Structural Sec. 250.137(b)(1)(ii),

Steel for Buildings, Allowable Stress Design (c)(4)(ii), (c)(4)(vii).

and Plastic Design, June 1, 1989, with

Commentary.

ANSI/ASME Boiler and Pressure Vessel Code, Sec. 250.123(b)(1),

Section I, Power Boilers including (b)(1)(i); Sec.

Appendices, 1995 Edition. 250.292(b)(1),

(b)(1)(i).

ANSI/ASME Boiler and Pressure Vessel Code, Sec. 250.123(b)(1),

Section IV, Heating Boilers including (b)(1)(i); Sec.

Nonmandatory Appendices A, B, C, D, E, F, H, 250.292(b)(1),

I, and J, and the Guide to Manufacturers (b)(1)(i).

Data Report Forms, 1995 Edition.

ANSI/ASME Boiler and Pressure Vessel Code, Sec. 250.123(b)(1),

Section VIII, Pressure Vessels, Divisions 1 (b)(1)(i); Sec.

and 2, including Nonmandatory Appendices, 250.292(b)(1),

1995 Edition. (b)(1)(i).

ANSI/ASME B 16.5-1988 (including Errata) and Sec. 250.152(b)(2).

B 16.5a-1992 Addenda, Pipe Flanges and

Flanged Fittings.

ANSI/ASME B 31.8-1995, Gas Transmission and Sec. 250.152(a).

Distribution Piping Systems.

[[Page 7352]]

ANSI/ASME SPPE-1-1994 and SPPE-1d-1996 Sec. 250.126(a)(2)(i).

ADDENDA, Quality Assurance and Certification

of Safety and Pollution Prevention Equipment

Used in Offshore Oil and Gas Operations.

ANSI Z88.2--1992, American National Standard Sec. 250.67(g)(4)(iv),

for Respiratory Protection. (j)(13)(ii).

API RP 2A, Recommended Practice for Planning, Sec. 250.130(g); Sec.

Designing and Constructing Fixed Offshore 250.142(a).

Platforms Working Stress Design, Nineteenth

Edition, August 1, 1991, API Stock No. 811-

00200.

API RP 2A, Recommended Practice for Planning, Sec. 250.130(g); Sec.

Designing and Constructing Fixed Offshore 250.142(a).

Platforms-Working Stress Design:(RP 2A-WSD)

Twentieth Edition, July 1, 1993, API Stock

No. 811-00200.

API RP 2A, Recommended Practice for Planning, Sec. 250.130(g); Sec.

Designing and Constructing Fixed Offshore 250.142(a).

Platforms-Working Stress Design:(RP 2A-WSD)

Twentieth Edition, July 1, 1993, Supplement

1, December 1996, Effective Date, February

1, 1997, API Stock No. 811-00200.

API RP 2D, Recommended Practice for Operation Sec. 250.20(c); Sec.

and Maintenance of Offshore Cranes, Third 250.260(g).

Edition, June 1, 1995, API Stock No. G02D03.

API RP 14B, Recommended Practice for Design, Sec. 250.121(e)(4); Sec.

Installation, Repair and Operation of 250.124(a)(1)(i); Sec.

Subsurface Safety Valve Systems, Fourth 250.126(d).

Edition, July 1, 1994, with Errata dated

June 1996, API Stock No. Sec. 250.130(g);

Sec. 250.142(a) G14B04.

API RP 14C, Recommended Practice for Sec. 250.122(b), (e)(2);

Analysis, Design, Installation and Testing Sec. 250.123(a),

of Basic Surface Safety Systems for Offshore (b)(2)(i), (b)(4),

Production Platforms, Fourth Edition, (b)(5)(i), (b)(7),

September 1, 1986, API Stock No. 811-07180. (b)(9)(v), (c)(2); Sec.

250.124(a), (a)(5); Sec.

250.152(d); Sec.

250.154(b)(9); Sec.

250.291(c), (d)(2); Sec.

250.292(b)(2),

(b)(4)(v); Sec.

250.293(a).

API RP 14E, Recommended Practice for Design Sec. 250.122(e)(3); Sec.

and Installation of Offshore Production 250.291(b)(2), (d)(3).

Platform Piping Systems, Fifth Edition,

October 1, 1991, API Stock No. G07185.

API RP 14F, Recommended Practice for Design Sec. 250.53(c); Sec.

and Installation of Electrical Systems for 250.123(b)(9)(v); Sec.

Offshore Production Platforms, Third 250.292(b)(4)(v).

Edition, September 1, 1991, API Stock No.

G07190.

API RP 14G, Recommended Practice for Fire Sec. 250.123(b)(8),

Prevention and Control on Open Type Offshore (b)(9)(v); Sec.

Production Platforms, Third Edition, 250.292(b)(3),

December 1, 1993, API Stock No. G07194. (b)(4)(v).

API RP 14H, Recommended Practice for Sec. 250.122(d); Sec.

Installation, Maintenance and Repair of 250.126(d).

Surface Safety Valves and Underwater Safety

Valves Offshore, Fourth Edition, July 1,

1994, API Stock No. G14H04.

API RP 500, Recommended Practice for Sec. 250.53(b); Sec.

Classification of Locations for Electrical 250.122(e)(4)(i); Sec.

Installations at Petroleum Facilities, First 250.123(b)(9)(i); Sec.

Edition, June 1, 1991, API Stock No. G06005. 250.291(b)(3);

(d)(4)(i); Sec.

250.292(b)(4)(i).

API RP 2556, Recommended Practice for Sec. 250.180(f)(2)(i)(C)

Correcting Gauge Tables for Incrustation, .

Second Edition, August 1993, API Stock No.

H25560.

API Spec Q1, Specification for Quality Sec. 250.126(a)(2)(ii).

Programs, Fifth Edition, December 1994, API

Stock No. 811-00001.

API Spec 6A, Specification for Wellhead and Sec. 250.126(a)(3) Sec.

Christmas Tree Equipment, Seventeenth 250.152 (b)(1), (b)(2).

Edition, February 1, 1996, API Stock No.

G06A17.

API Spec 6AV1, Specification for Verification Sec. 250.126(a)(3).

Test of Wellhead Surface Safety Valves and

Underwater Safety Valves for Offshore

Service, First Edition, February 1, 1996,

API Stock No. G06AV1.

API Spec 6D, Specification for Pipeline Sec. 250.152(b)(1).

Valves (Gate, Plug, Ball, and Check Valves),

Twenty-first Edition, March 31, 1994, API

Stock No. G03200.

API Spec 14A, Specification for Subsurface Sec. 250.126(a)(3).

Safety Valve Equipment, Ninth Edition, July

1, 1994, API Stock No. G14A09.

API Spec 14D, Specification for Wellhead Sec. 250.126(a)(3).

Surface Safety Valves and Underwater Safety

Valves for Offshore Service, Ninth Edition,

June 1, 1994, with Errata dated August 1,

1994, API Stock No. G07183.

API Standard 2545, Method of Gaging Petroleum Sec. 250.180

and Petroleum Products, October 1965, (f)(2)(ii)(C).

reaffirmed October 1992; also available as

ANSI/American Society of Testing Materials

(ASTM) D 1085-65, API Stock No. H25450.

API Standard 2551, Standard Method for Sec. 250.180(f)(2)(i)(C)

Measurement and Calibration of Horizontal .

Tanks, First Edition, 1965, reaffirmed

October 1992; also available as ANSI/ASTM D

1410-65, reapproved 1984, API Stock No.

H25510.

API Standard 2552, Measurement and Sec. 250.180(f)(2)(i)(C)

Calibration of Spheres and Spheroids, First .

Edition, 1966, reaffirmed October 1992; also

available as ANSI/ASTM D 1408-65, reapproved

1984, API Stock No. H25520.

API Standard 2555, Method for Liquid Sec. 250.180(f)(2)(i)(C)

Calibration of Tanks, September 1966, .

reaffirmed October 1992; also available as

ANSI/ASTM D 1406-65, reapproved 1984, API

Stock No. H25550.

MPMS, Chapter 2, Tank Calibration, Section Sec. 250.180

2A, Measurement and Calibration of Upright (f)(2)(i)(A).

Cylindrical Tanks by the Manual Strapping

Method, First Edition, February 1995, API

Stock No. H022A1.

MPMS, Chapter 2, Section 2B, Calibration of Sec. 250.180

Upright Cylindrical Tanks Using the Optical (f)(2)(i)(B).

Reference Line Method, First Edition, March

1989; also available as ANSI/ASTM D4738-88,

API Stock No. H30023.

MPMS, Chapter 3, Tank Gauging, Section 1A, Sec. 250.180

Standard Practice for the Manual Gauging of (f)(2)(ii)(A).

Petroleum and Petroleum Products, First

Edition, December 1994, API Stock No. H031A1.

MPMS, Chapter 3, Section 1B, Standard Sec. 250.180

Practice for Level Measurement of Liquid (f)(2)(ii)(B).

Hydrocarbons in Stationary Tanks by

Automatic Tank Gauging, First Edition, April

1992, API Stock No. H30060.

[[Page 7353]]

MPMS, Chapter 4, Proving Systems, Section 1, Sec. 250.180(c)(6)(i),

Introduction, First Edition, July 1988, (d)(3)(iv).

reaffirmed October 1993, API Stock No.

H30081.

MPMS, Chapter 4, Section 2, Conventional Pipe Sec. 250.180(c)(6)(i),

Provers, First Edition, October 1988, (d)(3)(iv).

reaffirmed October 1993, API Stock No.

H30082.

MPMS, Chapter 4, Section 3, Small Volume Sec. 250.180(c)(6)(i),

Provers, First Edition, July 1988, (d)(3)(iv).

reaffirmed October 1993, API Stock No.

H30083.

MPMS, Chapter 4, Section 4, Tank Provers, Sec. 250.180(c)(6)(i),

First Edition, October 1988, reaffirmed (d)(3)(iv).

October 1993, API Stock No. H30084.

MPMS, Chapter 4, Section 5, Master-Meter Sec. 250.180(c)(6)(i),

Provers, First Edition, October 1988, (d)(3)(iv).

reaffirmed October 1993, API Stock No.

H30085.

MPMS, Chapter 4, Section 6, Pulse Sec. 250.180(c)(6)(i)

Interpolation, First Edition, July 1988, and (d)(3)(iv).

reaffirmed October 1993, API Stock No.

H30086.

MPMS, Chapter 4, Section 7, Field-Standard Sec. 250.180(c)(6)(i),

Test Measures, First Edition, October 1988, (d)(3)(iv).

API Stock No. H30087.

MPMS, Chapter 5, Metering, Section 1, General Sec. 250.180(c)(6)(ii).

Considerations for Measurement by Meters,

Third Edition, September 1995, API Stock No.

H05013.

MPMS, Chapter 5, Section 2, Measurement of Sec. 250.180(c)(6)(ii).

Liquid Hydrocarbons by Displacement Meters,

Second Edition, November 1987, reaffirmed

October 1992, API Stock No. H30102.

MPMS, Chapter 5, Section 3, Measurement of Sec. 250.180(c)(6)(ii).

Liquid Hydrocarbons by Turbine Meters, Third

Edition, September 1995, API Stock No.

H05033.

MPMS, Chapter 5, Section 4, Accessory Sec. 250.180(c)(6)(ii).

Equipment for Liquid Meters, Third Edition,

September 1995, with Errata, March 1996, API

Stock No. H05043.

MPMS, Chapter 5, Section 5, Fidelity and Sec. 250.180(c)(6)(ii).

Security of Flow Measurement Pulsed-Data

Transmission Systems, First Edition, June

1982, reaffirmed October 1992, API Stock No.

H30105.

MPMS, Chapter 6, Metering Assemblies, Section Sec. 250.180(c)(6)(iii)(

1, Lease Automatic Custody Transfer (LACT) A).

Systems, Second Edition, May 1991, API Stock

No. H30121.

MPMS, Chapter 6, Section 6, Pipeline Metering Sec. 250.180(c)(6)(iii)(

Systems, Second Edition, May 1991, API Stock B)

No. H30126.

MPMS, Chapter 6, Section 7, Metering Viscous Sec. 250.180(c)(6)(iii)(

Hydrocarbons, Second Edition, May 1991, API C).

Stock No. H30127.

MPMS, Chapter 7, Temperature Determination, Sec. 250.180

Section 2, Dynamic Temperature (c)(6)(iv)(A),

Determination, Second Edition, March 1995, (f)(2)(iii)(A).

API Stock No. H07022.

MPMS, Chapter 7, Section 3, Static Sec. 250.180

Temperature Determination Using Portable (c)(6)(iv)(B),

Electronic Thermometers, First Edition, July (f)(2)(iii)(B)

1985, reaffirmed March 1990, API Stock No.

H30143.

MPMS, Chapter 8, Sampling, Section 1, Sec. 250.180 (c)(6)(v),

Standard Practice for Manual Sampling of (f)(2)(iv).

Petroleum and Petroleum Products, Third

Edition, October 1995; also available as

ANSI/ASTM D 4057-88, API Stock No. H30161.

MPMS, Chapter 8, Section 2, Standard Practice Sec. 250.180 (c)(6)(v),

for Automatic Sampling of Liquid Petroleum (f)(2)(iv).

and Petroleum Products, Second Edition,

October 1995; also available as ANSI/ASTM D

4177, API Stock No. H30162.

MPMS, Chapter 9, Density Determination, Sec. 250.180(c)(6)(vi)(A

Section 1, Hydrometer Test Method for ), (f)(2)(v)(A).

Density, Relative Density (Specific

Gravity), or API Gravity of Crude Petroleum

and Liquid Petroleum Products, First

Edition, June 1981, reaffirmed October 1992;

also available as ANSI/ASTM D 1298, API

Stock No. H30181.

MPMS, Chapter 9, Section 2, Pressure Sec. 250.180(c)(6)(vi)(B

Hydrometer Test Method for Density or ), (f)(2)(v)(B).

Relative Density, First Edition, April 1982,

reaffirmed October 1992, API Stock No.

H30182.

MPMS, Chapter 10, Sediment and Water, Section Sec. 250.180(c)(6)(vii)(

1, Determination of Sediment in Crude Oils A), (f)(2)(vi)(A).

and Fuel Oils by the Extraction Method,

First Edition, April 1981, reaffirmed

December 1993; also available as ANSI/ASTM D

473, API Stock No. H30201.

MPMS, Chapter 10, Section 2, Determination of Sec. 250.180(c)(6)(vii)(

Water in Crude Oil by Distillation Method, B), (f)(2)(vi)(B).

First Edition, April 1981, reaffirmed

December 1993; also available as ANSI/ASTM D

4006, API Stock No. H30202.

MPMS, Chapter 10, Section 3, Determination of Sec. 250.180(c)(6)(vii)(

Water and Sediment in Crude Oil by the C), (f)(2)(vi)(C).

Centrifuge Method (Laboratory Procedure),

First Edition, April 1981, reaffirmed

December 1993; also available as ANSI/ASTM D

4007, API Stock No. H30203.

MPMS, Chapter 10, Section 4, Determination of Sec. 250.180(c)(6)(vii)(

Sediment and Water in Crude Oil by the D), (f)(2)(vi)(D).

Centrifuge Method (Field Procedure), Second

Edition, May 1988; also available as ANSI/

ASTM D 96, API Stock No. H30204.

MPMS, Chapter 11.1, Volume Correction Sec. 250.180(c)(6)(viii)

Factors, Volume 1, Table 5A--Generalized (A), (d)(3)(v)(B),

Crude Oils and JP-4 Correction of Observed (f)(2)(vii).

API Gravity to API Gravity at 60 deg.F, and

Table 6A--Generalized Crude Oils and JP-4

Correction of Observed API Gravity to API

Gravity at 60 deg.F, First Edition, August

1980, reaffirmed October 1993; also

available as ANSI/ASTM D 1250, API Stock No.

H27000.

MPMS, Chapter 11.2.1, Compressibility Factors Sec. 250.180(c)(6)(viii)

for Hydrocarbons: 0-90 deg. API Gravity (B).

Range, First Edition, August 1984,

reaffirmed May 1996, API Stock No. H27300.

MPMS, Chapter 11.2.2, Compressibility Factors Sec. 250.180(c)(6)(viii)

for Hydrocarbons: 0.350-0.637 Relative (C).

Density (60 deg.F/60 deg.F) and -50 deg.F to

140 deg.F Metering Temperature, Second

Edition, October 1986, reaffirmed October

1992; also available as Gas Processors

Association (GPA) 8286-86, API Stock No.

H27307.

MPMS, Chapter 11, Physical Properties Data, Sec. 250.180(c)(6)(viii)

Addendum to Section 2.2, Compressibility (D).

Factors for Hydrocarbons, Correlation of

Vapor Pressure for Commercial Natural Gas

Liquids, First Edition, December 1994; also

available as GPA TP-15, API Stock No. H27308.

MPMS, Chapter 11.2.3, Water Calibration of Sec. 250.180 (d)(3)(iv).

Volumetric Provers, First Edition, August

1984, reaffirmed, May 1996, API Stock No.

H27310.

[[Page 7354]]

MPMS, Chapter 12, Calculation of Petroleum Sec. 250.180 (c)(6)(ix),

Quantities, Section 2, Calculation of (d)(3)(v)(A),

Petroleum Quantities Using Dynamic (d)(3)(v)(C).

Measurement Methods and Volumetric

Correction Factors, Including Parts 1 and 2,

Second Edition, May 1995; also available as

ANSI/API MPMS 12.2-1981, API Stock No.

H30302.

MPMS, Chapter 14, Natural Gas Fluids Sec. 250.181(c)(1).

Measurement, Section 3, Concentric Square-

Edged Orifice Meters, Part 1, General

Equations and Uncertainty Guidelines, Third

Edition, September 1990; also available as

ANSI/API 2530, Part 1, 1991, API Stock No.

H30350.

MPMS, Chapter 14, Section 3, Part 2, Sec. 250.181(c)(1).

Specification and Installation Requirements,

Third Edition, February 1991; also available

as ANSI/API 2530, Part 2, 1991, API Stock

No. H30351.

MPMS, Chapter 14, Section 3, Part 3, Natural Sec. 250.181(c)(1).

Gas Applications, Third Edition, August

1992; also available as ANSI/API 2530, Part

3, API Stock No. H30353.

MPMS, Chapter 14, Section 5, Calculation of Sec. 250.181(c)(1).

Gross Heating Value, Relative Density, and

Compressibility Factor for Natural Gas

Mixtures From Compositional Analysis,

Revised, 1996; also available as ANSI/API

MPMS 14.5-1981, order from Gas Processors

Association, 6526 East 60th Street, Tulsa,

Oklahoma 74145.

MPMS, Chapter 14, Section 6, Continuous Sec. 250.181(c)(1).

Density Measurement, Second Edition, April

1991, API Stock No. H30346.

MPMS, Chapter 14, Section 8, Liquefied Sec. 250.181(c)(1).

Petroleum Gas Measurement, First Edition,

February 1983, reaffirmed May 1996, API

Stock No. H30348.

ASTM Standard C33-93, Standard Specification Sec. 250.138(b)(4)(i).

for Concrete Aggregates including

Nonmandatory Appendix.

ASTM Standard C94-96, Standard Specification Sec. 250.138(e)(2)(i).

for Ready-Mixed Concrete.

ASTM Standard C150-95a, Standard Sec. 250.138(b)(2)(i).

Specification for Portland Cement.

ASTM Standard C330-89, Standard Specification Sec. 250.138(b)(4)(i).

for Lightweight Aggregates for Structural

Concrete.

ASTM Standard C595-94, Standard Specification Sec. 250.138(b)(2)(i).

for Blended Hydraulic Cements.

D1.1-96, Structural Welding Code--Steel, Sec. 250.137(b)(1)(i).

1996, including Commentary.

DI.4-79, Structural Welding Code--Reinforcing Sec. 250.138(e)(3)(ii).

Steel, 1979.

NACE Standard MR-01-75-96, Sulfide Stress Sec. 250.67(p)(2).

Cracking Resistant Metallic Materials for

Oil Field Equipment, January 1996.

NACE Standard RP 0176-94, Standard Sec. 250.137(d).

Recommended Practice, Corrosion Control of

Steel Fixed Offshore Platforms Associated

with Petroleum Production.

------------------------------------------------------------------------

Sec. 250.29 Paperwork Reduction Act requirements--information

collection.

(a) OMB has approved the information collection requirements in

part 250 under 44 U.S.C. 3501 et seq. The table in paragraph (e) of

this section lists the subpart in the rule requiring the information

and its title, provides the OMB control number, and summarizes the

reasons for collecting the information and how MMS uses the

information. The associated MMS forms required by this part are listed

at the end of this table with the relevant information.

(b) Respondents are OCS oil, gas, and sulphur lessees and

operators. The requirement to respond to the information collections in

this part are mandatory under the OCS Lands Act (43 U.S.C. 1331 et

seq.) and the OCS Lands Act Amendments of 1978 (43 U.S.C. 1801 et

seq.). Some responses are also required to obtain or retain a benefit.

Proprietary information will be protected under Sec. 250.27, Data and

information to be made available to the public; parts 251 and 252 of

this Chapter; and the Freedom of Information Act (5 U.S.C. 552) and its

implementing regulations at 43 CFR part 2.

public that 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.

(d) Send comments regarding any aspect of the collections of

information under this part, including suggestions for reducing the

burden, to the Information Collection Clearance Officer, Minerals

Management Service, Mail Stop 4230, 1849 C Street, N.W., Washington,

D.C. 20240; and to the Office of Information and Regulatory Affairs,

Office of Management and Budget, Attention: Desk Officer for the

Department of the Interior (1010-XXXX), Washington, D.C. 20503.

(e) MMS is collecting this information for the reasons given in the

following table:

----------------------------------------------------------------------------------------------------------------

30 CFR 250 subpart/title (OMB control

No.) Reasons for collecting information and how used

----------------------------------------------------------------------------------------------------------------

Subpart A General (1010-0030).......... To inform MMS of actions taken to comply with general operational

requirements on the OCS. To ensure that operations on the OCS meet

statutory and regulatory requirements, are safe and protect the

environment, and result in diligent exploration, development, and

production on OCS leases.

Subpart B Exploration and Development To inform MMS, States, and the public of planned exploration,

and Production Plans (1010-0049). development, and production operations on the OCS. To ensure that

operations on the OCS are planned to comply with statutory and

regulatory requirements, will be safe and protect the human, marine,

and coastal environment, and will result in diligent exploration,

development and production of leases.

Subpart C Pollution Prevention and To inform MMS of measures to be taken to prevent water and air

Control (1010-0057). pollution. To ensure that appropriate measures are taken to prevent

water and air pollution.

Subpart D Oil and Gas Drilling To inform MMS of the equipment and procedures to be used in drilling

Operations (1010-0053). operations on the OCS. To ensure that drilling operations are safe and

protect the human, marine, and coastal environment.

Subpart E Oil and Gas Well-Completion To inform MMS of the equipment and procedures to be used in well-

Operations (1010-0067). completion operations on the OCS. To ensure that well-completion

operations are safe and protect the human, marine, and coastal

environment.

[[Page 7355]]

Subpart F Oil and Gas Well-Workover To inform MMS of the equipment and procedures to be used during well-

Operations (1010-0043). workover operations on the OCS. To ensure that well-workover

operations are safe and protect the human, marine, and coastal

environment.

Subpart G Abandonment of Wells (1010- To inform MMS of procedures to be used during the temporary and

0079). permanent abandonment of wells. To ensure that wells are abandoned in

a manner that is safe and minimizes conflicts with other uses of the

OCS.

Subpart H Oil and Gas Production Safety To inform MMS of the equipment and procedures to be used during

Systems (1010-0059). production operations on the OCS. To ensure that production operations

are safe and protect the human, marine, and coastal environment.

Subpart I Platforms and Structures To inform MMS with information regarding the design, fabrication, and

(1010-0058). installation of platforms on the OCS. To ensure the structural

integrity of platforms installed on the OCS.

Subpart J Pipelines and Pipeline Rights- To provide MMS with information regarding the design, installation, and

of-Way (1010-0050). operation of pipelines on the OCS. To ensure that pipeline operations

are safe and protect the human, marine, and coastal environment.

Subpart K Oil and Gas Production Rates To inform MMS of production rates for hydrocarbons produced on the OCS.

(1010-0041). To ensure that produced hydrocarbons, including those that are

commingled, are measured accurately at secure locations for the

purpose of determining royalty payments.

Subpart L Oil and Gas Production To inform MMS of the measurement of production, commingling of

Measurement, Surface Commingling, and hydrocarbons, and site security plans. To ensure that produced

Security (1010-0051). hydrocarbons are measured and commingled to provide for accurate

royalty payments and security is maintained.

Subpart M Unitization (1010-0068)...... To inform MMS of the unitization of leases. To ensure that unitization

prevents waste, conserves natural resources, and protects correlative

rights.

Subpart N Remedies and Penalties (Not The requirements in Subpart N are exempt from the Paperwork Reduction

applicable). Act of 1995 in accordance with 5 CFR 1320.4.

Subpart O Training (1010-0078)......... To inform MMS of training program curricula, course schedules, and

attendance. To ensure that training programs are technically accurate

and sufficient to meet safety and environmental requirements, and that

workers are properly trained to operate on the OCS.

Subpart P Sulphur Operations (1010- To inform MMS of sulphur exploration and development operations on the

0086). OCS. To ensure that OCS sulphur operations are safe; protect the

human, marine, and coastal environment; and will result in diligent

exploration, development, and production of sulphur leases.

Form MMS-123, Application for Permit to To inform MMS of the procedures and equipment to be used in drilling

Drill Subpart D, E, P (1010-0044). operations. To ensure that drilling and well-completion are safe and

protect the environment, use adequate equipment, conform with

provisions of the lease, and the public is informed.

Form MMS-124, Sundry Notices & Reports To inform MMS of well-completion and well-workover operations, changes

on Wells Subpart D, E, F, G, P (1010- to any ongoing well operations, and well abandonment operations. To

0045). ensure that MMS has up-to-date and accurate informa tion on OCS

drilling and other lease operations; operations are safe and protect

the human, marine, and coastal environment; abandoned sites are

cleared of obstructions; and the public is informed.

Form MMS-125, Well Summary Report To inform MMS of the results of well-completion or well-workover

Subpart D, E, F, P (1010-0046). operations or changes in well status or condition. To ensure that MMS

has up-to-date and accurate information on the status and condition of

wells.

Form MMS-126, Well Potential Test

Report & Request for Maximum

Production Rate (MPR).

Subpart K (1010-0039).................. To inform MMS of the production potential of an oil or gas well and to

verify a requested production rate. To ensure that production results

in ultimate full recovery of hydrocarbons and energy resources are

produced at a prudent rate.

Form MMS-127, Request for Reservoir To inform MMS of data concerning oil and gas well-completion in a rate-

Maximum Efficiency Rate (MER) Subpart sensitive reservoir and to verify requested efficiency rate. To ensure

K (1010-0018). that reservoirs are classified correctly and the requested production

rate will not waste oil or gas.

Form MMS-128, Semi annual Well Test To inform MMS of the status and capacity of gas wells and verify

Report Subpart K (1010-0017). production capacity. To ensure that depletion of reservoirs results in

greatest ultimate recovery of hydrocarbons.

Form MMS-132, Evacuation Statistics To inform MMS in the event of a major disruption in the availability

Subpart A (used in the GOM Region) and supply of natural gas and oil due to natural occurrences/

(1010-0030). hurricanes. To advise the U.S. Coast Guard of rescue needs, and to

alert the news media and interested public entities when production is

shut in and when resumed.

----------------------------------------------------------------------------------------------------------------

5. Sections 250.52, 250.53, 250.77, 250.78, 250.97 and 250.98 are

removed and reserved.

PART 256--LEASING OF SULPHUR OR OIL AND GAS IN THE OUTER

CONTINENTAL SHELF

6. The authority citation for part 256 is revised to read as

follows:

Authority: 43 U.S.C. 1331 et seq., 42 U.S.C. 6213.

7. Section 256.1, is revised to read as follows:

Sec. 256.1 Purpose.

The purpose of the regulations in this part is to establish the

procedures under which the Secretary of the Interior (Secretary) will

exercise the authority to administer a leasing program for oil, gas and

sulphur. The procedures under which the Secretary will exercise the

authority to administer a program to grant rights-of-way, rights-of-

use, and easements are addressed in other parts of this chapter.

8. Section 256.4, Authority, is revised to read as follows:

Sec. 256.4 Authority.

The outer Continental Shelf Lands Act (OCSLA) (43 U.S.C. 1331 et

seq.) authorizes the Secretary of the Interior to issue, on a

competitive basis, leases for oil and gas, and sulphur, in submerged

lands of the outer Continental Shelf (OCS). The Act authorizes the

Secretary to grant rights-of-way, rights-of-use, and easements through

the submerged lands of the OCS. The Energy Policy and Conservation Act

of 1975 (42 U.S.C. 6213), prohibits joint bidding by major oil and gas

producers.

[[Page 7356]]

9. Section 256.35, Qualifications of lessees, is amended by adding

paragraph (c) as follows:

Sec. 256.35 Qualification of lessees.

* * * * *

lease assignments if your operating performance is unacceptable

according to 30 CFR 250.12.

10. Section 256.73 is revised to read as follows:

Sec. 256.73 Effect of suspensions on lease term.

(a) Normally, a suspension extends the term of a lease. The

extension is equal to the length of time the suspension is in effect.

The suspension will not extend the lease term when the Regional

Supervisor directs a suspension because of:

(1) Gross negligence; or

(2) A willful violation of a provision of the lease or governing

regulations.

(b) MMS issues suspensions for a period of up to 5 years. The

Regional Supervisor will set the length of the suspension based on the

conditions of the individual case involved. MMS may grant consecutive

suspensions. For more information on suspension of operations or

production refer to 30 CFR 250.19.

[FR Doc. 98-3533 Filed 2-12-98; 8:45 am]

BILLING CODE 4310-MR-P

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.