BLM seeks public comment on proposal to update oil and gas rules
July 15, 2015
The Bureau of Land Management (BLM) released proposed, updated regulations on the measurement, accountability, and royalty payments for oil and gas production from Federal and Indian leases.
The BLM says the new proposed rules are aimed at preventing theft and loss of oil and gas resources and does not impose an unreasonable financial or regulatory burden on industry or the BLM.
Public comment on the rule is being sought for 60 days, through September 11, 2015.
"The proposed rule represents an important step in the BLMs modernization of its oil and gas regulations," said Assistant Secretary for Land and Minerals Management Janice M. Schneider. "These updates will help ensure that oil and gas produced from leases overseen by the BLM is properly measured, that American taxpayers receive fair value for public resources, and that Indian tribes and allottees, States and local governments receive the full royalties they are due."
The proposed rule will replace Onshore Oil and Gas Order Number 3 (Order 3), which has not been updated since 1989. The BLM says the old rule does not reflect modern industry operations or technology.
Order 3 sets minimum standards that oil and gas produced from leases overseen by the BLM are properly and securely handled. The BLM determined that updates to these standards were necessary based on its experience with oil and gas measurement in the field and the changes in technology and industry operations that have occurred since Order 3 was issued. The new rules will address production accountability.
"The BLMs rules concerning oil and gas measurement are over 25 years old and are long overdue for an update," said BLM Director Neil Kornze.
Specifically, the proposed rule would:
Establish uniform procedures for designating official points for oil and gas measurement for royalty accounting purposes, known as facility measurement points, that are applicable to new and existing leases;
Codify existing guidance related to approving commingling, i.e., the -combining of production from multiple leases, unit Participating Areas (PA), Communitized Areas (CA), or fee or State properties before the point of royalty measurement.
Establish conditions for the approval of off-lease oil and gas measurement;
Update requirements related to the use of valve and drain seals, prohibitions on the use of meter by-passes, and reporting requirements;
Require operators of new and existing oil and gas facilities to provide new site facility diagrams designed to help BLM meet its oversight responsibilities; and
Require purchasers and transporters to comply with the same standards as operators with respect to records.
The proposed rule is the next step in a process that the BLM began in 2011 with tribal consultation meetings and continued in 2013 with public listening sessions on potential changes to several of its existing Onshore Orders. The public listening sessions included representatives from Indian lands, environmental groups, other Federal agencies, and the oil and gas industry. Input from the listening sessions, stakeholder outreach, as well as tribal consultation meetings that have occurred since that time, helped inform the development of the proposed rule.
The BLM oil and gas management program is one of the most important mineral leasing programs in the Federal government. The total value of production is over $33 billion, which generates more than $3 billion in royalty revenue annually from oil and gas leasing activities on public lands (most of which is shared with state and local governments) and nearly $1 billion in royalty revenue from activities on tribal lands (all of which goes to tribes or individual allotees).
The proposed rule may be viewed online at: https://www.federalregister.gov/public-inspection.
The BLM encourages the public to participate in the process by submitting comments on the proposed rule by September 11, 2015.
Submit comments through one of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions at this Web site.
Mail: U.S. Department of the Interior, Director (630), Bureau of Land Management, Mail Stop 2134 LM, 1849 C Street NW, Washington, DC 20240 Attention: Regulatory Affairs.
Personal/messenger delivery: Bureau of Land Management, 20 M. Street SE, Room 2134 LM, Attention: Regulatory Affairs, Washington, DC 20003.