Oil, Gas, and Sulphur Operations and Leasing in the Outer Continental Shelf (OCS)-Recovery of Costs Related to the Regulation of Oil and Gas Activities on the OCS, 40904-40914 [E6-11405]

Download as PDF Federal Register / Vol. 71, No. 138 / Wednesday, July 19, 2006 / Rules and Regulations Issued on: July 14, 2006. Nicole R. Nason, Administrator. [FR Doc. 06–6354 Filed 7–18–06; 8:45 am] BILLING CODE 4910–59–C DEPARTMENT OF THE INTERIOR Minerals Management Service 30 CFR Parts 250, 251, and 280 RIN 1010–AD23 Oil, Gas, and Sulphur Operations and Leasing in the Outer Continental Shelf (OCS)—Recovery of Costs Related to the Regulation of Oil and Gas Activities on the OCS Minerals Management Service (MMS), Interior. ACTION: Final rule. mstockstill on PROD1PC68 with RULES AGENCY: SUMMARY: MMS is implementing regulations which impose new fees to process certain plans, applications, and permits. The service fees will offset VerDate Aug<31>2005 15:11 Jul 18, 2006 Jkt 208001 MMS’s costs of processing these plans, applications, and permits. DATES: Effective Date: This regulation becomes effective on September 1, 2006. FOR FURTHER INFORMATION CONTACT: Martin Heinze, Program Analyst, Offshore Minerals Management, Office of Planning, Budget and International Affairs at (703) 787–1010. SUPPLEMENTARY INFORMATION: Background: Federal agencies are generally authorized to recover the costs of providing services to non-Federal entities through the provisions of the Independent Offices Appropriation Act of 1952 (IOAA), 31 U.S.C. 9701. The Act requires implementation through rulemaking. There are several policy documents that provide MMS guidance on the process of charging applicants for service costs. The governing language concerning cost recovery can be found in OMB Circular No. A–25 which states in part, ‘‘The provisions of this Circular cover all Federal activities that convey special benefits to recipients beyond those accruing to the general public. * * * When a service (or privilege) provides special benefits to an PO 00000 Frm 00030 Fmt 4700 Sfmt 4700 identifiable recipient beyond those that accrue to the general public, a charge will be imposed (to recover the full cost to the Federal Government for providing the special benefit, or the market price). * * * The general policy is that user charges will be instituted through the promulgation of regulations.’’ The Department of the Interior (DOI) Manual mirrors this policy (330 DM 1.3 A.). In this rulemaking, ‘‘cost recovery’’ means reimbursement to MMS for its costs of performing a service by charging a fee to the identifiable applicant/beneficiary of the service. Further guidance is provided by Solicitor’s Opinion M–36987, ‘‘BLM’s Authority to Recover Costs of Minerals Document Processing’’ (December 5, 1996). As explained in that Solicitor’s Opinion, some costs, such as the costs of programmatic environmental studies and programmatic environmental assessments in support of a general agency program are not recoverable because they create an ‘‘independent public benefit’’ rather than a specific benefit to an identifiable recipient. E:\FR\FM\19JYR1.SGM 19JYR1 ER19JY06.001</GPH> 40904 mstockstill on PROD1PC68 with RULES Federal Register / Vol. 71, No. 138 / Wednesday, July 19, 2006 / Rules and Regulations On March 25, 2005, MMS published an advance notice of proposed rulemaking (ANPR) (70 FR 15246) to solicit comments on the Recovery of Costs Related to the Regulation of Oil and Gas Activities on the OCS. MMS addressed comments received in the ANPR in the proposed rule. On November 14, 2005, MMS published a proposed rule in the Federal Register titled, ‘‘Oil, Gas, and Sulphur Operations and Leasing in the Outer Continental Shelf (OCS)— Recovery of Costs Related to the Regulation of Oil and Gas Activities on the OCS,’’ (70 FR 69118). Through the proposed rule, MMS alerted the public that we seek to recover the costs of processing certain permits and applications through the rulemaking process. MMS believes that cost recovery for the MMS-provided service of reviewing and approving applications and permits is warranted because such service provides an identifiable recipient (the applicant) with direct benefits beyond those received by the general public. The proposed rule invited comments, recommendations, and specific remarks on a program of collecting fees for reviewing the following plans and permit applications regulated by 30 CFR parts 250, 251, and 280: • Exploration Plan (§ 250.211). • Development and Production Plan or Development Operations Coordination Document (§ 250.241). • Deep Water Operations Plan (§ 250.292). • Conservation Information Document (§ 250.296). • Application for Permit to Drill (APD; Form MMS–123). • Application for Permit to Modify (APM; Form MMS–124). • Facility Production Safety System Applications (installation and modification § 250.802). • Platform Applications (required by § 250.905 for the installation, modification/repair of a platform). • New Pipeline Application (Lease Term) § 250.1000. • Pipeline Application Modification (Lease Term and ROW § 250.1000). • Pipeline Repair Notification (§ 250.1008). • Surface Commingling and Measurement Application (§ 250.1204). • Application to Remove a Platform or Other Facility (required by § 250.1727). • Application to Decommission a Pipeline (Lease Term and ROW § 250.1751, § 250.1752). • Application for Permit to Conduct Geological or Geophysical Exploration for Mineral Resources or Scientific VerDate Aug<31>2005 15:11 Jul 18, 2006 Jkt 208001 Research in the Outer Continental Shelf (Form MMS–327). This was inadvertently listed in the proposed rule, at 70 FR 69121, as Geological and Geophysical (G&G) Permits: Permit for Geophysical Exploration for Mineral Resources or Scientific Research on the Outer Continental Shelf (Form MMS– 328); Permit for Geological Exploration for Mineral Resources or Scientific Research on the OCS (Form MMS–329). However, the correct form numbers were used in the actual proposed regulatory language. • Application for Permit to Conduct Geological or Geophysical Prospecting for Mineral Resources or Scientific Research in the Outer Continental Shelf Related to Minerals Other than Oil, Gas, and Sulphur (Form MMS–134). This was inadvertently listed in the proposed rule, at 70 FR 69121, as Sand and Gravel Permits: Permit for Geophysical Prospecting for Mineral Resources or Scientific Research on the Outer Continental Shelf Related to Minerals Other than Oil, Gas, and Sulphur (Form MMS–135); Permit for Geological Prospecting for Mineral Resources or Scientific Research on the Outer Continental Shelf Related to Minerals Other than Oil, Gas, and Sulphur (Form MMS–136). However, the correct form numbers were used in the actual proposed regulatory language. Summary of Changes to the Proposed Rule This final rule differs from the proposed rule published on November 14, 2005 (70 FR 69118), in the following respects: We added language in the fee table at § 250.125 to clarify that there is no fee for revisions to Exploration Plans, Development and Production Plans, and Development Operations Coordination Documents. We also added to the fee table a definition of the term ‘‘component’’ which is used in determining the fee level for New Facility Production Safety System Applications. We also corrected the fee table by inserting the existing fee of $2,350 for Pipeline Right-of-Way (ROW) Grant Applications in place of the lower fee that was erroneously inserted in the table in the proposed rule. The fee was addressed in MMS’s final rule published on August 25, 2005 (70 FR 49871), and it was not our intent to revisit this fee, but only make the fee table inclusive of all pertinent fees. We added a new paragraph (c) to § 250.125 to address how MMS will handle the service fee for the verbal approval of an Application for Permit to Modify (APM) (Form MMS–124). Verbal approvals are occasionally given for an PO 00000 Frm 00031 Fmt 4700 Sfmt 4700 40905 APM. Any action that would be considered a verbal permit approval will require either a paper permit application to follow the verbal approval or an eWell submittal within 72 hours. Payment must be received with the completed application. We also added a new section (§ 250.126 General payment instructions) which contains general instructions for paying service fees. This section explains how lessees and operators can pay service fees using both electronic funds transfer and nonelectronic funds transfer. This section clearly states that electronic funds transfer is the preferred payment method. We added fee language to § 250.1202(a) and § 250.1203(b) for liquid hydrocarbon and gas measurement applications. In the fee tables in both the preamble (70 FR 69120–69121) and at § 250.125 of the proposed rule, we listed the fees for ‘‘Complex Surface Commingling and Measurement Application’’ and ‘‘Simple Surface Commingling and Measurement Application.’’ However, while we cited in the tables to the section addressing surface commingling (§ 250.1204) and included the fee language at that section, we inadvertently left out the table citations to the measurement sections (§ 250.1202—Liquid hydrocarbon measurement—and § 250.1203—Gas measurement) and failed to include the fee language at those sections. We have concluded that the language in the tables in the proposed rule gave sufficient notice of our intent to charge the fees indicated therein for measurement applications. The citation in the tables in the proposed rule to the surface commingling section obviously did not account for our stated intent in the tables to charge the same fee for measurement applications, which are related to surface commingling but are addressed at the two preceding sections, § 250.1202 and § 250.1203. We have concluded that companies that engage in surface commingling and measurement activities are sufficiently aware of these sections that our statements in the tables were sufficient notice of our intent to charge measurement fees. We moved the definitions of simple and complex applications for surface commingling and measurement actions from § 250.1204(a) to § 250.1202(a), and cross-referenced the definitions in § 250.1203(b) and § 250.1204(a). We also revised the definition of a simple application by removing from the definition the following actions: platform removals; application E:\FR\FM\19JYR1.SGM 19JYR1 40906 Federal Register / Vol. 71, No. 138 / Wednesday, July 19, 2006 / Rules and Regulations mstockstill on PROD1PC68 with RULES cancellations; facility measurement point (FMP) status changes and meter updates. These actions were removed from the definition of simple application because they are not applications and do not require approval. Finally, we have added citations to § 250.1202(a) and § 250.1203(b) in the fee table at § 250.125 for complex and simple surface commingling and measure applications. We deleted the final sentence from proposed § 251.5 and from proposed § 280.12. The sentences simply stated that the time period for extensions was defined on the permit forms. We concluded that the permit forms are clear and there is no need to detail the content of those forms in the regulations. Comments on the Proposed Rule MMS received two comment letters from industry and none from the general public. One letter was from a consortium of eight trade organizations that represents numerous companies involved in the United States (U.S.) oil and gas industry. The other letter was from a large integrated oil and gas operator. Industry respondents stated that the total of lease bonuses, rentals, and royalty fees paid by industry adequately compensate MMS and the Federal Government for any service provided in the issuance of permits and that the proposed rule seeks to ‘‘double dip.’’ Additionally industry respondents stated that the proposed fees seem contrary to the administration’s national energy policy. They maintained that every dollar collected by MMS for the processing of applications and permits is a dollar that would not be spent producing energy on the OCS. MMS works closely with industry to ensure that energy production on the OCS will continue to contribute significantly to the nation’s energy supply. For example, MMS provides incentives for industry production of offshore oil and gas, such as royalty relief for deep-water and deep-gas development. The proposed service fees would not affect existing incentives and would only marginally add to the cost of operating offshore. The relevant mineral leasing law (the Outer Continental Shelf Lands Act (OCSLA)), which granted the Secretary the authority to issue leases offshore on the OCS, was not enacted as a cost recovery mechanism. The monies collected as bonuses, rentals, and royalties under those leases are not intended to compensate the government for administrative costs. They instead VerDate Aug<31>2005 15:11 Jul 18, 2006 Jkt 208001 reflect the value of the national interest in the resource and property. When a lease is issued, the working interest is conveyed to the lessee(s) to whom it is issued. The government reserves a royalty interest, which is a cost-free share of the production or the value of the production. Under the bidding system that is characteristic of most of the leases, the lessee pays a bonus to obtain the lease that is the result of competitive bidding. During the primary term of a lease and before the lease goes into production (in other words, during the time the lessor is not receiving any benefit from its retained royalty interest), the lessee must pay annual rentals. All of these obligations (royalties, bonus payments, and rentals) reflect the value of the lessor’s (i.e., the Federal government’s) property interest in the leased minerals. None of these obligations was ever intended to compensate the government for its administrative costs. In a related remark, industry respondents asserted that a document cited by MMS, OMB Circular No. A–25, provides that new user charges should not be imposed in cases where other revenues from individuals already finance the government services provided to them. The commenter appears to be citing paragraph 7.c. of OMB Circular No. A–25, which addresses excise taxes. The paragraph states that ‘‘[n]ew user charges should not be proposed in cases where an excise tax currently finances the government services that benefit specific individuals’’ (giving the example of a gasoline tax to finance highway construction). Royalties, bonus payments, and rentals are not taxes, but payments that reflect the value of the resources. Reference to this paragraph of the OMB Circular is thus inappropriate. One commenter challenged the methodology for calculating the fees and questioned whether the Fiscal Year 2004 baseline was a typical year, and whether there was outside quality control or auditing conducted over the cost estimation methodology. Additionally, the commenter stated that the inclusion of ‘‘indirect costs’’ was not appropriate since MMS would have incurred these costs whether or not a particular application was submitted. MMS believes that its cost recovery methodology was both reasonable and reliable and that external quality control or auditing was not necessary. MMS began tracking work activities in its financial system in FY 2003, thus FY 2004 was the second full year MMS costed its work activities within its financial system. We used the following PO 00000 Frm 00032 Fmt 4700 Sfmt 4700 guidance documents to determine the full cost of cost recovery activities: • Statement of Federal Financial Accounting Standards, Managerial Cost Accounting Concepts and Standards for the Federal Government (SFFAS #4); • OMB Circular A–25; and, • DOI cost recovery guidance, from the DOI Manual (330 DM 1.3A.). MMS employees code their time biweekly to work activities in the DOI Quicktime timekeeping system. Managers certify each employee’s time each pay period and are responsible for accurate timekeeping. Additionally, MMS managers revalidated employees’ time for FY 2004 during the fee calculation phase. When necessary, costs were adjusted if an employee’s time was incorrectly coded. The activity-based costing (ABC) methodology used by MMS is appropriate for our cost recovery needs and operating environment. MMS only included those costs (both direct and indirect) that supported the processing of plans, permits, and other applications. Especially in light of the managerial review of employees’ costs, MMS has confidence in the cost data used to calculate the full cost of processing applications in this rule. The commenter also stated that MMS should not have included indirect costs in the calculation because we would have incurred these indirect costs without the additional marginal cost of a particular application. As discussed above, OMB Circular A–25 directs agencies to recover full costs for providing special benefits. It also explains that ‘‘[f]ull cost includes all direct and indirect costs to any part of the Federal Government of providing a good, resource or service.’’ One comment suggested that MMS should improve its cost effectiveness. MMS will continue in its efforts to reduce costs through initiatives such as OCS Connect, a multi-year initiative to automate major business transactions and plan/application/permit reviews, resulting in more timely decisions. If business process changes significantly affect costs, MMS will recalculate its cost of service and propose new fees through the rulemaking process. One commenter requested a joint MMS-industry working group to address the fee collection process. The joint working group would find the best method to reduce the administrative burden for both MMS and industry. Suggestions included annual or other types of cumulative payments rather than the ‘‘piecemeal approach’’ in the proposed rule. MMS is directed by OMB Circular No. A–25 (section 6.a.2.(c)) to receive E:\FR\FM\19JYR1.SGM 19JYR1 mstockstill on PROD1PC68 with RULES Federal Register / Vol. 71, No. 138 / Wednesday, July 19, 2006 / Rules and Regulations payment in advance of processing an application. Cumulative payments or billing for past work is not possible. To simplify payments, MMS has implemented an online payment system through the U.S. Treasury, called PAY.GOV, for existing fees. This payment system will include the fees in this final rule. For applications submitted electronically through eWell or future e-Gov systems, an interactive credit card or Automated Clearing House (ACH) payment method will be used. The PAY.GOV Web site can be accessed through links on the MMS Offshore webpage at: http:// www.mms.gov/offshore/ or directly through PAY.GOV at: https:// www.pay.gov/paygov/. In light of these new payment options, MMS does not see the need for a working group at this time. However we are always open to industry suggestions. One commenter stated that the rule would significantly impact small businesses, including more than 70 percent of the companies that operate on the OCS. The commenter stated that all expenses and fees have business impacts. The fees paid to MMS for processing actions are directly proportional to the OCS activity by a company. Larger companies generally hold more leases which translates into a greater number of exploration plans, development permits, production, development and conservation activities, designation of operator, lease assignments, Applications for Permit to Drill (APDs), Applications for Permit to Modify (APMs), facility and structure permits, etc.—in short a greater number of activities for which fees will be charged under this rule and thus payment of a larger total number of fees. The smaller companies that operate on the OCS tend to buy already developed leases and generally don’t undertake significant exploration activities and they are thus not subject to many of the fees in this rule. Smaller companies tend to engage in both fewer actions and simpler types of actions, thereby incurring fewer fee costs. The most common applications submitted by small businesses have modest fees: APMs ($110), facility permit modifications ($80 to $530) and APDs ($1,850). As explained in the section discussing the Regulatory Flexibility Act, under Procedural Matters in this preamble, the greatest effect of fees in this rule on the offshore revenues of production companies would be less than 0.5 percent, and the effect on the vast majority of companies would be much less than that. In fact the impact on more than 87 percent of VerDate Aug<31>2005 15:11 Jul 18, 2006 Jkt 208001 companies is estimated to be less than 0.1 percent of OCS revenues. MMS consulted with the Small Business Administration (SBA) Office of Advocacy about the impact of OCS cost recovery fees. The Office of Advocacy concurred with the MMS assessment that the rule will not have a significant effect on a substantial number of small entities. A commenter challenged the MMS position that a ‘‘Statement of Energy Effects’’ is not needed, pursuant to Executive Order (E.O.) 13211, because MMS does not consider the rule to be a significant energy action. This rule meets none of the criteria for a significant energy action. E.O. 13211 Section 4(b) defines a significant energy action: ‘‘(b) Significant energy action’’ means any action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: (1)(i) that is a significant regulatory action under E.O. 12866 or any successor order; and, (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Moreover, E.O. 12866 defines a significant regulatory action, at section 3: (f) ’’Significant regulatory action’’ means any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in this Executive Order.’’ Of the above quoted thresholds, the only one that could potentially be at issue is paragraph (f)(3), regarding user fees. While this rule will have an effect on the level of fees paid to MMS it will not have a material budgetary impact because the agency’s overall operating appropriation will not change substantially. As these fees are appropriated for MMS operations, the amount appropriated for those operations from the General Fund of the PO 00000 Frm 00033 Fmt 4700 Sfmt 4700 40907 Treasury are being decreased. Thus, this rule only marginally changes the amount contributing to the MMS appropriation from fees relative to amounts contributing to the appropriation from the General Fund. Therefore, this rule is not a significant regulatory action under E.O. 12866. This rule also does not meet the additional threshold that must be met to trigger the need for a ‘‘Statement of Energy Effects’’ under E.O. 13211, because these fees are not ‘‘likely to have a significant adverse effect on the supply, distribution, or use of energy.’’ Compared to the normal costs of operations on the OCS, for example, drilling a well, the fees established in this rule are not significant. MMS’ economic analysis showed that the effect of these fees on the offshore revenues of production companies will be under 0.5 percent, and the effect on most companies will be much smaller. These are not amounts that are likely to have an adverse effect on any company’s economic standing and, consequently, they are not likely to adversely affect the supply, distribution, or use of energy. Thus a ‘‘Statement of Energy Effects’’ is not required. MMS received inquires on how a component is defined for new and modified facility production safety system applications. The service fee table was modified to include a definition of component. The definition follows the American Petroleum Institute’s (API) definition: A component is a piece of equipment or ancillary system that is protected by one or more of the safety devices required by API RP 14C (incorporated by reference as specified in § 250.198). Examples of components are; Wellheads, Flowlines, Injection Lines, Headers, Separators (Pressure Vessels) Atmospheric Vessels, Fired Vessels, Pumps, Compressors, Pipelines, Heat Exchangers, Buildings, as well as the Emergency Support System (Emergency Shutdown Stations, Pneumatic Fusible Element System and/ or other electrical based fire detection systems). Procedural Matters Regulatory Planning and Review (Executive Order (E.O.) 12866) This document is not a significant rule as determined by the Office of Management and Budget (OMB) and is not subject to review under E.O. 12866. (1) This rule would not have an annual effect of $100 million or more on the economy. It would not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or E:\FR\FM\19JYR1.SGM 19JYR1 40908 Federal Register / Vol. 71, No. 138 / Wednesday, July 19, 2006 / Rules and Regulations mstockstill on PROD1PC68 with RULES State, local, or tribal governments or communities. This proposed rule would establish fees based on cost recovery principles. Based on historical filings, we project the fees would raise revenue by approximately $16.5 million annually. (2) This rule would not create a serious inconsistency or otherwise interfere with action taken or planned by another agency because the costs incurred are for specific MMS services and other agencies are not involved in these aspects of the OCS Program. (3) This rule would not materially alter the budgetary impact of entitlements, grants, user fees or loan programs or the rights or obligations of their recipients. The only one of these that could potentially be at issue is user fees. While this rule will have an effect on the level of fees paid to MMS, it will not have a material budgetary impact because the agency’s overall operating appropriation will not change substantially. As these fees are appropriated for MMS operations, the amount appropriated for those operations from the General Fund of the Treasury are being decreased. Thus, this rule only marginally changes the amount contributing to the MMS appropriation from fees relative to the amounts contributing to the appropriation from the General Fund. (4) This rule would not raise novel legal or policy issues. Regulatory Flexibility Act (RFA) The Department, in consultation with the Office of Advocacy of the Small Business Administration (SBA), determined that this final rule will not have a significant economic effect on a substantial number of small entities under the RFA (5 U.S.C. 601 et seq.). The changes in this final rule will affect lessees and operators of leases and pipeline right-of-way holders on the OCS. This includes approximately 130 active Federal oil and gas lessees and 115 pipeline right-of-way holders. Small lessees that operate under this final rule fall under the SBA’s North American Industry Classification System (NAICS) codes 211111, Crude Petroleum and Natural Gas Extraction, and 213111, Drilling Oil and Gas Wells. For these NAICS code classifications, a small company is one with fewer than 500 employees. Based on these criteria, an estimated 70 percent of these companies are considered small. This final rule, therefore, will affect a substantial number of small entities. The fees proposed in the final rule will not have a significant economic effect on a substantial number of small entities because the fees are small VerDate Aug<31>2005 15:11 Jul 18, 2006 Jkt 208001 compared to normal costs of doing business on the OCS. For example, depending on water depth and well depth, cost estimates for drilling a well range from $5 million to $23 million. Thus, the proposed fees, ranging from $80 to $24,200, are dwarfed by the millions of dollars that industry already commits to exploration, development, production, and transportation. MMS conducted an analysis to study the potential impacts of these fees on small entities. MMS charted the 2004 production of all companies operating on the OCS. Using corresponding rolling annual average prices, MMS calculated each company’s Federal OCS gross revenues. Using MMS’s Technical Information Management System internal database (and other databases) with 2004 company data, plan/ application/permit fees were calculated and compared with each company’s calculated gross revenue. With the exception of one company, the fees in this rule would be less than 0.5 percent of the offshore revenues of any production company. The analysis showed that the effects of these fees on the offshore revenues of the vast majority of companies (more than 87 percent) would be less than 0.1 percent. The only exception was for one company for which the analysis indicated an effect of 0.98 percent in 2004. Looking at this company’s Federal OCS production and permit/plan activity in 2005 the fee impact would be 0.18 percent. This company’s OCS revenues increased by a factor of 4 between 2004 and 2005. We examined the reasons for the projected impact on this company and found that it was new to the Federal OCS. It is engaging in exploration and development activities before producing significant amounts of hydrocarbons. Only a few companies will find themselves in this position and MMS thus expects that the norm will be an impact of under 0.1 percent. Even an impact up to 0.5 percent is not significant compared to the normal cost of operating on the OCS. MMS cannot project revenue data for most of the 115 pipeline right-of-way holders. However, construction and operation of a pipeline on the OCS requires significant monetary investments and highly sophisticated technical expertise, and yields multimillion dollar revenues. Fees of a few thousand dollars will not significantly impact the finances of companies engaged in these activities. The only new fees for pipeline right-ofway holders in this rule are for pipeline modification ($3,650) and pipeline repair notification ($340). Pipeline rightof-way holders already pay a PO 00000 Frm 00034 Fmt 4700 Sfmt 4700 comparable existing fee of $2,350 for a pipeline grant application. We have concluded that the new fees for pipeline right-of-way holders will not have a significant economic effect on those entities. Additionally, the service fees established in the rule will apply in a non-discriminatory way to both large and small firms. Applying for MMS services provides a benefit to both a large and small applicant if the applicant decides to operate on the OCS. Your comments are important. The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established to receive comments from small businesses about Federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities and rate each agency’s responsiveness to small business. If you wish to comment on the actions of MMS, call 1–888–734–3247. You may comment to SBA without fear of retaliation. Disciplinary action for retaliation by an MMS employee may include suspension or termination from employment with DOI. Small Business Regulatory Enforcement Fairness Act (SBREFA) This final rule is not a major rule under the SBREFA (5 U.S.C. 804(2)). This final rule: (a) Will not have an annual effect on the economy of $100 million or more. (b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. (c) Will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. Leasing on the U.S. OCS is limited to residents of the U.S. or companies incorporated in the U.S. This final rule will not change that requirement. Unfunded Mandates Reform Act (UMRA) This final rule will not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The final rule will not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by the UMRA (2 U.S.C. 1531 et seq.) is not required. This is because the final rule will not affect State, local, or tribal governments, and the effect on the private sector is small. E:\FR\FM\19JYR1.SGM 19JYR1 Federal Register / Vol. 71, No. 138 / Wednesday, July 19, 2006 / Rules and Regulations Takings Implication Assessment (TIA) (Executive Order 12630) The final rule is not a governmental action capable of interference with constitutionally protected property rights. Thus, MMS did not need to prepare a TIA according to E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Federalism (Executive Order 13132) With respect to E.O. 13132, this final rule will not have federalism implications. This final rule will not substantially and directly affect the relationship between the Federal and State governments. To the extent that State and local governments have a role in OCS activities, this final rule will not affect that role. Civil Justice Reform (Executive Order 12988) With respect to E.O. 12988, MMS finds that this final rule will not unduly burden the judicial system and does meet the requirements of sections 3(a) and 3(b)(2) of the E.O. MMS consulted with the DOI Office of the Solicitor throughout this drafting process. Paperwork Reduction Act (PRA) This rulemaking relates to 30 CFR part 250, subparts A, B, D, E, F, H, I, J, L, P, and Q; 30 CFR part 251; and 30 CFR part 280. The final rulemaking affects the information collections for these regulations but would not change the approved burden hours; it would just add the associated fees. Therefore, OMB has ruled that there is no change in the information collection and that MMS does not need to make a formal submission by Form OMB 83–I for this rulemaking. We will submit Form OMB 83–C to add the fees in each collection when the rule becomes effective. OMB has approved the information collections for the affected regulations at: (1) 30 CFR part 250; subpart A, 1010– 0114; subpart B, 1010–0151; subpart D, 1010–0141; subpart E, 1010–0067; subpart F, 1010–0043; subpart H, 1010– 0059; subpart I, 1010–0149; subpart J, 1010–0050; subpart L 1010–0051; subpart P, 1010–0086, subpart Q, 1010– 0142; (2) 30 CFR part 251, 1010–0048; and (3) 30 CFR part 280, 1010–0072. National Environmental Policy Act (NEPA) of 1969 MMS has determined that this final rule is administrative and involves only procedural changes addressing fee requirements. Therefore, it is categorically excluded from environmental review under section 102(2)(C) of the NEPA, pursuant to 516 DM 2.3A and 516 DM 2, Appendix 1, Item 1.10. In addition, the final rule does not involve any of the 10 extraordinary circumstances for exceptions to categorical exclusions listed in 516 DM 2, Appendix 2. Pursuant to Council on Environmental Quality regulations (40 CFR 1508.4) and the environmental policies and procedures of the DOI, the term ’categorical exclusions’ means categories of action which an agency has determined do not individually or cumulatively have a significant effect on the human environment and therefore require neither an environmental assessment nor an environmental impact statement. Effects on the Nation’s Energy Supply (Executive Order 13211) Executive Order 13211 requires the agency to prepare a Statement of Energy Effects when it takes a regulatory action that is identified as a significant energy action. This final rule is not a significant energy action, and therefore would not require a Statement of Energy Effects because it: (1) Is not a significant regulatory action under E.O. 12866; (2) Is not likely to have a significant adverse effect on the supply, distribution, or use of energy; and (3) Has not been designated by the Administrator of the Office of Information and Regulatory Affairs, OMB, as a significant energy action. Consultation and Coordination With Indian Tribal Governments (Executive Order 13175) In accordance with E.O. 13175, this final rule will not have tribal implications that impose substantial direct compliance costs on Indian tribal governments. List of Subjects 30 CFR Part 250 Administrative practice and procedure, Continental shelf, Environmental impact statements, Environmental protection, Government contracts, Investigations, Oil and gas exploration, Penalties, Pipelines, Public lands—mineral resources, Public lands—rights-of-way, Reporting and recordkeeping requirements, Sulphur. 30 CFR Part 251 Continental shelf, Freedom of information, Oil and gas exploration, Public lands—mineral resources, Reporting and recordkeeping requirements, Research. 30 CFR Part 280 Continental shelf, Public lands— mineral resources, Reporting and recordkeeping requirements, Research. Dated: June 16, 2006. R.M. ‘‘Johnnie’’ Burton, Director, Minerals Management Service, Exercising the delegated authority of the Assistant Secretary, Land and Minerals Management. For the reasons stated in the preamble, the Minerals Management Service (MMS) amends 30 CFR parts 250, 251, and 280 as follows: I PART 250—OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER CONTINENTAL SHELF 1. The authority citation for 30 CFR part 250 continues to read as follows: I Authority: 43 U.S.C. 1331 et seq., 31 U.S.C. 9701. 2. In § 250.125, revise the table in paragraph (a); revise paragraph (b); and add new paragraph (c) to read as follows: I § 250.125 Service fees. (a) * * * SERVICE FEE TABLE mstockstill on PROD1PC68 with RULES Service—processing of the following Fee amount Change in Designation of Operator ................... Suspension of Operations/Suspension of Production (SOO/SOP) Request. Exploration Plan (EP) ......................................... $150 ................................................................. $1,800 .............................................................. § 250.143. § 250.171. $3,250 for each surface location, no fee for revisions. $3,750 for each well proposed, no fee for revisions. § 250.211. Development and Production Plan (DPP) or Development Operations Coordination Document (DOCD). VerDate Aug<31>2005 15:11 Jul 18, 2006 Jkt 208001 PO 00000 Frm 00035 Fmt 4700 Sfmt 4700 40909 30 CFR citation § 250.241(e). E:\FR\FM\19JYR1.SGM 19JYR1 40910 Federal Register / Vol. 71, No. 138 / Wednesday, July 19, 2006 / Rules and Regulations SERVICE FEE TABLE—Continued Service—processing of the following Fee amount 30 CFR citation Deepwater Operations Plan. .............................. Conservation Information Document .................. Application for Permit to Drill (APD; Form MMS–123). $3,150 .............................................................. $24,200 ............................................................ $1,850 Initial applications only, no fee for revisions. Application for Permit to Modify (APM; Form MMS–124). $110 ................................................................. New Facility Production Safety System Application for facility with more than 125 components. $4,750 A component is a piece of equipment or ancillary system that is protected by one or more of the safety devices required by API RP 14C (incorporated by reference as specified in § 250.198). (Additional fee of $12,500 will be charged if MMS deems it necessary to visit a facility offshore; and $6,500 to visit a facility in a shipyard). $1,150 (Additional fee of $7,850 will be charged if MMS deems it necessary to visit a facility offshore; and $4,500 to visit a facility in a shipyard). $570 ................................................................. § 250.292(p). § 250.296(a). § 250.410(d); § 250.411; § 250.460; § 250.513(b); § 250.515; § 250.1605; § 250.1617(a); § 250.1622. § 250.460; § 250.465(b); § 250.513(b); § 250.515; § 250.613(b); § 250.615; § 250.1618(a); § 250.1622; § 250.1704(g). § 250.802(e). New Facility Production Safety System Application for facility with 25–125 components. mstockstill on PROD1PC68 with RULES New Facility Production Safety System Application for facility with fewer than 25 components. Production Safety System Application—Modification with more than 125 components reviewed. Production Safety System Application—Modification with 25–125 components reviewed. Production Safety System Application—Modification with fewer than 25 components reviewed. Platform Application—Installation—under the Platform Verification Program. Platform Application—Installation—Fixed Structure Under the Platform Approval Program. Platform Application—Installation—Caisson/ Well Protector. Platform Application—Modification/Repair ......... New Pipeline Application (Lease Term) ............. Pipeline Application—Modification (Lease Term) Pipeline Application—Modification (ROW) ......... Pipeline Repair Notification. ............................... Pipeline Right-of-Way (ROW) Grant Application Pipeline Conversion of Lease Term to ROW ..... Pipeline ROW Assignment ................................. 500 Feet From Lease/Unit Line Production Request. Gas Cap Production Request ............................ Downhole Commingling Request ....................... Complex Surface Commingling and Measurement Application. Simple Surface Commingling and Measurement Application. Voluntary Unitization Proposal or Unit Expansion. Unitization Revision ............................................ Application to Remove a Platform or Other Facility. Application to Decommission a Pipeline (Lease Term). Application to Decommission a Pipeline (ROW) (b) Payment of the fees listed in paragraph (a) of this section must accompany the submission of the document for approval or be sent to an office identified by the Regional Director. Once a fee is paid, it is nonrefundable, even if an application or VerDate Aug<31>2005 15:11 Jul 18, 2006 Jkt 208001 § 250.802(e). § 250.802(e). $530 ................................................................. § 250.802(e). $190 ................................................................. § 250.802(e). $80 ................................................................... § 250.802(e). $19,900 ............................................................ § 250.905(k). $2,850 .............................................................. § 250.905(k). $1,450 .............................................................. § 250.905(k). $3,400 .............................................................. $3,100 .............................................................. $1,800 .............................................................. $3,650 .............................................................. $340 ................................................................. $2,350 .............................................................. $200 ................................................................. $170 ................................................................. $3,300 .............................................................. § 250.905(k). § 250.1000(b). § 250.1000 (b). § 250.1000 (b). § 250.1008 (e). § 250.1015. § 250.1015. § 250.1018. § 250.1101. $4,200 .............................................................. $4,900 .............................................................. $3,550 .............................................................. § 250.1101. § 250.1106. § 250.1202(a); § 250.1203(b); § 250.1204(a). $1,200 .............................................................. § 250.1202(a); § 250.1203(b); § 250.1204(a). $10,700 ............................................................ § 250.1303. $760 ................................................................. $4,100 .............................................................. § 250.1303. § 250.1727. $1,000 .............................................................. § 250.1751(a) or § 250.1752(a). $1,900 .............................................................. § 250.1751(a) or § 250.1752(a). other request is withdrawn. If your application is returned to you as incomplete, you are not required to submit a new fee when you submit the amended application. (c) Verbal approvals are occasionally given in special circumstances. Any PO 00000 Frm 00036 Fmt 4700 Sfmt 4700 action that will be considered a verbal permit approval requires either a paper permit application to follow the verbal approval or an electronic application submittal within 72 hours. Payment must be made with the completed paper or electronic application. E:\FR\FM\19JYR1.SGM 19JYR1 40911 Federal Register / Vol. 71, No. 138 / Wednesday, July 19, 2006 / Rules and Regulations 3. Add a new § 250.126 to read as follows: I § 250.126 General payment instructions. (a) Payment of fees associated with electronic applications. If you submitted an application through eWell or OCS Connect, you must use the interactive payment feature in that system. (b) Payment of fees for applications not submitted electronically. For applications not submitted electronically through eWell or OCS Connect, MMS prefers you to use credit card or automated clearing house (ACH) payments through the PAY.GOV Web site. (1) Payment using PAY.GOV Web site. The PAY.GOV Web site may be accessed through links on the MMS Offshore Web site at: http:// www.mms.gov/offshore/ homepage or directly through PAY.GOV at: https:// www.pay.gov/paygov/. If paying by credit card or ACH, you must include a copy of the PAY.GOV confirmation receipt page with your application. (2) MMS will also accept payments by any of the payment means listed in this section. Your payment must be payable to: ‘‘Department of the Interior— Minerals Management Service’’ or ‘‘DOI–MMS’’ and must include your MMS company number. MMS prefers that you use these payment documents in the order presented: (i) Commercial check drawn on a solvent bank; (ii) Certified check; (iii) Cashier’s check; (iv) Money order; or Title of documents (v) Bank draft drawn on a solvent bank or a Federal Reserve check. (c) Terms used in this section have the following meanings: (1) Automated Clearing House or ACH is a type of electronic fund transfer using the ACH network. (2) PAY.GOV is a U.S. Treasury payment system used by MMS to receive credit card and ACH payments for processing OCS plans, permits, and other related applications or documents. I 4. In § 250.198, in the table in paragraph (e), revise the entry for API RP 14C to read as follows: § 250.198 Documents incorporated by reference. * * * (e) * * * * * Incorporated by reference at * * * * * API RP 14C, Recommended Practice for Analysis, Design, Installation § 250.125(a), § 250.802(b), (e)(2); § 250.803(a), (b)(2)(i), (b)(4), and Testing of Basic Surface Safety Systems for Offshore Production (b)(5)(i), (b)(7), (b)(9)(v), (c)(2); § 250.804(a), (a)(6); § 250.1002(d); Platforms, Seventh Edition, March 2001, API Stock No. G14C07. § 250.1004(b)(9); § 250.1628(c), (d)(2); § 250.1629(b)(2), (b)(4)(v); and § 250.1630(a). * * * * * 5. In § 250.211, add a new paragraph (d) to read as follows: § 250.296 When and how must I submit a CID or a revision to a CID? § 250.211 (a) * * * The submission of your CID must be accompanied by payment of the service fee listed in § 250.125. * * * * * I What must the EP include? * * * * * (d) Service fee. You must include payment of the service fee listed in § 250.125. 6. In § 250.241, add a new paragraph (e) to read as follows: I § 250.241 include? § 250.410 a well? What must the DPP or DOCD * * * * * (e) Service fee. You must include payment of the service fee listed in § 250.125. 7. In § 250.292, revise paragraphs (n) and (o); and add a new paragraph (p) to read as follows: I § 250.292 What must the DWOP contain? mstockstill on PROD1PC68 with RULES * * * * * (n) A discussion of any new technology that affects hydrocarbon recovery systems; (o) A list of any alternate compliance procedures or departures for which you anticipate requesting approval; and (p) Payment of the service fee listed in § 250.125. 8. In § 250.296, add the following sentence at the end of paragraph (a): I VerDate Aug<31>2005 15:11 Jul 18, 2006 Jkt 208001 9. In § 250.410, revise the introductory paragraph and paragraph (d) to read as follows: I How do I obtain approval to drill You must obtain written approval from the District Manager before you begin drilling any well or before you sidetrack, bypass, or deepen a well. To obtain approval, you must: * * * * * (d) Submit the following to the District Manager: (1) An original and two complete copies of Form MMS–123, Application for Permit to Drill (APD), and Form MMS–123S, Supplemental APD Information Sheet; (2) A separate public information copy of forms MMS–123 and MMS– 123S that meets the requirements of § 250.127; and (3) Payment of the service fee listed in § 250.125. 10. In § 250.465, revise paragraph (b)(1) to read as follows: I PO 00000 Frm 00037 Fmt 4700 Sfmt 4700 * * § 250.465 When must I submit an Application for Permit to Modify (APM) or an End of Operations Report to MMS? * * * * * (b) * * * (1) Your APM (Form MMS–124) must contain a detailed statement of the proposed work that would materially change from the approved APD. The submission of your APM must be accompanied by payment of the service fee listed in § 250.125; * * * * * I 11. In § 250.513, revise the last sentence in paragraph (a), the introductory language of paragraph (b), and paragraphs (b)(3) and (b)(4) and adding paragraph (b)(5) to read as follows: § 250.513 Approval and reporting of wellcompletion operations. (a) * * * If the completion has not been approved or if the completion objective or plans have significantly changed, approval for these operations must be requested on Form MMS–124, Application for Permit to Modify (APM). (b) You must submit the following with Form MMS–124 (or with Form MMS–123; Form MMS–123S): * * * * * (3) For multiple completions, a partial electric log showing the zones proposed E:\FR\FM\19JYR1.SGM 19JYR1 40912 Federal Register / Vol. 71, No. 138 / Wednesday, July 19, 2006 / Rules and Regulations for completion, if logs have not been previously submitted; (4) When the well-completion is in a zone known to contain H2S or a zone where the presence of H2S is unknown, information pursuant to § 250.490 of this part; and (5) Payment of the service fee listed in § 250.125. * * * * * I 12. In § 250.613, revise the last sentence in paragraph (a), the introductory language of paragraph (b), and paragraphs (b)(2) and (b)(3) and adding paragraph (b)(4) to read as follows: § 250.613 Approval and reporting for wellworkover operations. (a) * * * Approval for these operations must be requested on Form MMS–124, Application for Permit to Modify. (b) You must submit the following with Form MMS–124: * * * * * (2) When changes in existing subsurface equipment are proposed, a schematic drawing of the well showing the zone proposed for workover and the workover equipment to be used; (3) Where the well-workover is in a zone known to contain H2S or a zone where the presence of H2S is unknown, information pursuant to § 250.490 of this part; and (4) Payment of the service fee listed in § 250.125. * * * * * I 13. In § 250.802, add a new paragraph (e)(7) to read as follows: § 250.802 Design, installation, and operation of surface production safety systems. * * * * (e) * * * (7) The service fee listed in § 250.125. The fee you must pay will be determined by the number of components involved in the review and approval process. 14. In § 250.905, revise the introductory language and table headings and add paragraph (k) to the table to read as follows: I § 250.905 How do I get approval for the installation, modification, or repair of my platform? The Platform Approval Program requires that you submit the information, documents, and fee listed in the following table for your proposed project. * Required submittal Required contents * * (k) Payment of the service fee listed in § 250.125. * * * ........................................................................... 15. In § 250.1000, revise paragraph (b) to read as follows: § 250.1008 I § 250.1000 General requirements. * * * * * (b) An application must be accompanied by payment of the service fee listed in § 250.125 and submitted to the Regional Supervisor and approval obtained before: (1) Installation, modification, or abandonment of a lease term pipeline; (2) Installation or modification of a right-of-way (other than lease term) pipeline; or (3) Modification or relinquishment of a pipeline right-of way. * * * * * I 16. In § 250.1008, revise paragraph (e) to read as follows: Other requirements Reports. * * 17. In § 250.1202, revise paragraph (a)(1) to read as follows: I * * * * * (e) The lessee or right-of-way holder must notify the Regional Supervisor before the repair of any pipeline or as soon as practicable. Your notification must be accompanied by payment of the service fee listed in § 250.125. You must submit a detailed report of the repair of a pipeline or pipeline component to the Regional Supervisor within 30 days after the completion of the repairs. In the report you must include the following: (1) Description of repairs; (2) Results of pressure test; and (3) Date returned to service. * * * * * § 250.1202 Liquid hydrocarbon measurement. (a) * * * (1) Submit a written application to, and obtain approval from, the Regional Supervisor before commencing liquid hydrocarbon production, or making any changes to the previously-approved measurement and/or allocation procedures. Your application (which may also include any relevant gas measurement and surface commingling requests) must be accompanied by payment of the service fee listed in § 250.125. The service fees are divided into two levels based on complexity as shown in the following table. Application type Actions (i) Simple applications .............................................................................. Applications to temporarily reroute production (for a duration not to exceed six months); Production tests prior to pipeline construction; Departures related to meter proving, well testing, or sampling frequency. Creation of new facility measurement points (FMPs); Association of leases or units with existing FMPs; Inclusion of production from additional structures; Meter updates which add buy-back gas meters or pigging meters; Other applications which request deviations from the approved allocation procedures. mstockstill on PROD1PC68 with RULES (ii) Complex applications .......................................................................... * * * * § 250.1203 * 18. In § 250.1203, revise paragraph (b)(1) to read as follows: I VerDate Aug<31>2005 15:11 Jul 18, 2006 Jkt 208001 * PO 00000 Gas measurement. * * (b) * * * Frm 00038 * Fmt 4700 * Sfmt 4700 (1) Submit a written application to, and obtain approval from, the Regional Supervisor before commencing gas production, or making any changes to E:\FR\FM\19JYR1.SGM 19JYR1 Federal Register / Vol. 71, No. 138 / Wednesday, July 19, 2006 / Rules and Regulations the previously-approved measurement and/or allocation procedures. Your application (which may also include any relevant liquid hydrocarbon measurement and surface commingling requests) must be accompanied by payment of the service fee listed in § 250.125. The service fees are divided into two levels based on complexity, see table in § 250.1202(a)(1). * * * * * I 19. In § 250.1204, revise paragraph (a)(1) to read as follows: § 250.1204 Surface commingling. (a) * * * (1) Submit a written application to, and obtain approval from, the Regional Supervisor before commencing the commingling of production or making any changes to the previously approved commingling procedures. Your application (which may also include any relevant liquid hydrocarbon and gas measurement requests) must be accompanied by payment of the service fee listed in § 250.125. The service fees are divided into two levels based on complexity, see table in § 250.1202(a)(1). * * * * * I 20. In § 250.1617, revise paragraph (a) to read as follows: § 250.1617 Application for permit to drill. (a) Before drilling a well under an approved Exploration Plan, Development and Production Plan, or Development Operations Coordination Document, you must file Form MMS– 123, APD, with the District Manager for approval. The submission of your APD must be accompanied by payment of the service fee listed in § 250.125. Before starting operations, you must receive written approval from the District Manager unless you received oral approval under § 250.140. * * * * * I 21. In § 250.1618, revise the section heading and paragraph (a) to read as follows: § 250.1618 modify. 40913 Application for permit to (a) You must submit requests for changes in plans, changes in major drilling equipment, proposals to deepen, sidetrack, complete, workover, or plug back a well, or engage in similar activities to the District Manager on Form MMS–124, Application for Permit to Modify (APM). The submission of your APM must be accompanied by payment of the service fee listed in § 250.125. Before starting operations associated with the change, you must receive written approval from the District Manager unless you received oral approval under § 250.140. * * * * * 22. In § 250.1704, revise paragraph (g) in the Decommissioning Applications and Reports Table to read as follows: I § 250.1704 When must I submit decommissioning applications and reports? * * * * * DECOMMISSIONING APPLICATIONS AND REPORTS TABLE Decommissioning applications and reports When to submit Instructions * * (g) Form MMS–124, Application for Permit to Modify (APM). The submission of your APM must be accompanied by payment of the service fee listed in § 250.125. * * * (1) Before you temporarily abandon or permanently plug a well or zone. (2) Within 30 days after you plug a well * * * (3) Before you install a subsea protective device. (4) Within 30 days after you complete a protective device trawl test. (5) Before you remove any casing stub or mud line suspension equipment and any subsea protective device. (6) Within 30 days after you complete site clearance verification activities. * * Include information required under §§ 250.1712 and 250.1721. Include information required under § 250.1717. Refer to § 250.1722(a). § 250.1751 How do I decommission a pipeline in place? 23. In § 250.1727, revise the introductory paragraph to read as follows: I * mstockstill on PROD1PC68 with RULES § 250.1727 What information must I include in my final application to remove a platform or other facility? You must submit to the Regional Supervisor, a final application for approval to remove a platform or other facility. Your application must be accompanied by payment of the service fee listed in § 250.125. If you are proposing to use explosives, provide three copies of the application. If you are not proposing to use explosives, provide two copies of the application. Include the following information in the final removal application, as applicable: * * * * * 24. In § 250.1751, revise paragraph (a) introductory text to read as follows: I VerDate Aug<31>2005 15:11 Jul 18, 2006 Jkt 208001 * * * * (a) Submit a pipeline decommissioning application in triplicate to the Regional Supervisor for approval. Your application must be accompanied by payment of the service fee listed in § 250.125. Your application must include the following information: * * * * * I 25. In § 250.1752, revise the introductory text of paragraph (a) to read as follows: § 250.1752 How do I remove a pipeline? * * * * * (a) Submit a pipeline removal application in triplicate to the Regional Supervisor for approval. Your application must be accompanied by payment of the service fee listed in PO 00000 Frm 00039 Fmt 4700 Sfmt 4700 Include information § 250.1722(d). Refer to § 250.1723. required under Include information § 250.1743(a). required under § 250.125. Your application must include the following information: * * * * * PART 251—GEOLOGICAL AND GEOPHYSICAL (G&G) EXPLORATIONS OF THE OUTER CONTINENTAL SHELF 26. The authority citation for part 251 is revised to read as follows: I Authority: 43 U.S.C. 1331 et seq., 31 U.S.C. 9701. 27. In § 251.5, revise paragraph (a) to read as follows: I § 251.5 Applying for permits or filing Notices. (a) Permits. You must submit a signed original and three copies of the MMS permit application form (Form MMS– 327). The form includes names of persons, type, location, purpose, and E:\FR\FM\19JYR1.SGM 19JYR1 40914 Federal Register / Vol. 71, No. 138 / Wednesday, July 19, 2006 / Rules and Regulations dates of activity, and environmental and other information. A nonrefundable service fee of $1,900 must accompany your application. * * * * * PART 280—PROSPECTING FOR MINERALS OTHER THAN OIL, GAS, AND SULPHUR ON THE OUTER CONTINENTAL SHELF 28. The authority citation for part 280 is revised to read as follows: I Authority: 43 U.S.C. 1331 et seq., 42 U.S.C. 4332 et seq., 31 U.S.C. 9701. 29. In § 280.12, revise paragraph (a) to read as follows: I § 280.12 What must I include in my application or notification? (a) Permits. You must submit to the Regional Director a signed original and three copies of the permit application form (Form MMS–134) at least 30 days before the startup date for activities in the permit area. If unusual circumstances prevent you from meeting this deadline, you must immediately contact the Regional Director to arrange an acceptable deadline. The form includes names of persons, type, location, purpose, and dates of activity, as well as environmental and other information. A nonrefundable service fee of $ 1,900 must accompany your application. * * * * * [FR Doc. E6–11405 Filed 7–18–06; 8:45 am] BILLING CODE 4310–MR–P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 100 [CGD05–06–043] RIN 1625–AA08 Special Local Regulations for Marine Events; Patapsco River, Inner Harbor, Baltimore, MD Coast Guard, DHS. Temporary final rule. AGENCY: mstockstill on PROD1PC68 with RULES ACTION: SUMMARY: The Coast Guard is establishing special local regulations during the ‘‘Catholic Charities Dragon Boat Races’’, a marine event to be held September 9, 2006 on the waters of the Patapsco River, Inner Harbor, Baltimore, MD. These special local regulations are necessary to provide for the safety of life on navigable waters during the event. This action is intended to temporarily VerDate Aug<31>2005 15:11 Jul 18, 2006 Jkt 208001 restrict vessel traffic in a portion of the Baltimore Inner Harbor during the event. DATES: This rule is effective from 5:30 a.m. to 6:30 p.m. on September 9, 2006. ADDRESSES: Documents indicated in this preamble as being available in the docket, are part of docket (CGD05–06– 043) and are available for inspection or copying at Commander (dpi), Fifth Coast Guard District, 431 Crawford Street, Portsmouth, Virginia 23704– 5004, between 9 a.m. and 2 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Dennis Sens, Project Manager, Fifth Coast Guard District, Inspections and Investigations Branch, at (757) 398– 6204. SUPPLEMENTARY INFORMATION: Regulatory Information On May 4, 2006, we published a notice of proposed rulemaking (NPRM) entitled Special Local Regulations for Marine Events; Patapsco River, Inner Harbor, Baltimore, MD in the Federal Register (71 FR 26285). We received no letters commenting on the proposed rule. No public meeting was requested, and none was held. Background and Purpose On September 9, 2006, Associated Catholic Charities, Inc. will sponsor Dragon Boat Races in the Inner Harbor at Baltimore, MD. The event will consist of 40 teams rowing Chinese Dragon Boats in heats of 2 to 4 boats for a distance of 400 meters. Due to the need for vessel control during the event, the Coast Guard will temporarily restrict vessel traffic in the event area to provide for the safety of participants, spectators and other transiting vessels. Discussion of Comments and Changes The Coast Guard did not receive comments in response to the notice of proposed rulemaking (NPRM) published in the Federal Register. Accordingly, the Coast Guard is establishing temporary special local regulations on specified waters of the Patapsco River, Inner Harbor, Baltimore, Maryland. Regulatory Evaluation This rule is not a ‘‘significant regulatory action’’ under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not ‘‘significant’’ under the regulatory policies and procedures of PO 00000 Frm 00040 Fmt 4700 Sfmt 4700 the Department of Homeland Security (DHS). We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary. Although this regulation will prevent traffic from transiting a portion of the Baltimore Inner Harbor during the event, the effect of this regulation will not be significant due to the limited duration that the regulated area will be in effect and the extensive advance notifications that will be made to the maritime community via the Local Notice to Mariners, marine information broadcasts, and area newspapers, so mariners can adjust their plans accordingly. Additionally, the regulated area has been narrowly tailored to impose the least impact on general navigation yet provide the level of safety deemed necessary. Vessel traffic will be able to transit the regulated area at slow speed between heats, when the Coast Guard Patrol Commander deems it is safe to do so. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601–612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term ‘‘small entities’’ comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not have a significant economic impact on a substantial number of small entities. This rule would affect the following entities, some of which might be small entities: the owners or operators of vessels intending to transit or anchor in the affected portions of the Baltimore Inner Harbor during the event. Although this regulation prevents traffic from transiting a portion of the Baltimore Inner Harbor during the event, this rule would not have a significant economic impact on a substantial number of small entities for the following reasons. This rule would be in effect for only a limited period. Vessel traffic will be able to transit the regulated area between heats, when the Coast Guard Patrol Commander deems it is safe to do so. Before the enforcement period, we will issue maritime advisories so mariners can adjust their plans accordingly. E:\FR\FM\19JYR1.SGM 19JYR1

Agencies

[Federal Register Volume 71, Number 138 (Wednesday, July 19, 2006)]
[Rules and Regulations]
[Pages 40904-40914]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-11405]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Parts 250, 251, and 280

RIN 1010-AD23


Oil, Gas, and Sulphur Operations and Leasing in the Outer 
Continental Shelf (OCS)--Recovery of Costs Related to the Regulation of 
Oil and Gas Activities on the OCS

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Final rule.

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SUMMARY: MMS is implementing regulations which impose new fees to 
process certain plans, applications, and permits. The service fees will 
offset MMS's costs of processing these plans, applications, and 
permits.

DATES: Effective Date: This regulation becomes effective on September 
1, 2006.

FOR FURTHER INFORMATION CONTACT: Martin Heinze, Program Analyst, 
Offshore Minerals Management, Office of Planning, Budget and 
International Affairs at (703) 787-1010.

SUPPLEMENTARY INFORMATION: 
    Background: Federal agencies are generally authorized to recover 
the costs of providing services to non-Federal entities through the 
provisions of the Independent Offices Appropriation Act of 1952 (IOAA), 
31 U.S.C. 9701. The Act requires implementation through rulemaking. 
There are several policy documents that provide MMS guidance on the 
process of charging applicants for service costs. The governing 
language concerning cost recovery can be found in OMB Circular No. A-25 
which states in part, ``The provisions of this Circular cover all 
Federal activities that convey special benefits to recipients beyond 
those accruing to the general public. * * * When a service (or 
privilege) provides special benefits to an identifiable recipient 
beyond those that accrue to the general public, a charge will be 
imposed (to recover the full cost to the Federal Government for 
providing the special benefit, or the market price). * * * The general 
policy is that user charges will be instituted through the promulgation 
of regulations.'' The Department of the Interior (DOI) Manual mirrors 
this policy (330 DM 1.3 A.).
    In this rulemaking, ``cost recovery'' means reimbursement to MMS 
for its costs of performing a service by charging a fee to the 
identifiable applicant/beneficiary of the service. Further guidance is 
provided by Solicitor's Opinion M-36987, ``BLM's Authority to Recover 
Costs of Minerals Document Processing'' (December 5, 1996). As 
explained in that Solicitor's Opinion, some costs, such as the costs of 
programmatic environmental studies and programmatic environmental 
assessments in support of a general agency program are not recoverable 
because they create an ``independent public benefit'' rather than a 
specific benefit to an identifiable recipient.

[[Page 40905]]

    On March 25, 2005, MMS published an advance notice of proposed 
rulemaking (ANPR) (70 FR 15246) to solicit comments on the Recovery of 
Costs Related to the Regulation of Oil and Gas Activities on the OCS. 
MMS addressed comments received in the ANPR in the proposed rule.
    On November 14, 2005, MMS published a proposed rule in the Federal 
Register titled, ``Oil, Gas, and Sulphur Operations and Leasing in the 
Outer Continental Shelf (OCS)--Recovery of Costs Related to the 
Regulation of Oil and Gas Activities on the OCS,'' (70 FR 69118). 
Through the proposed rule, MMS alerted the public that we seek to 
recover the costs of processing certain permits and applications 
through the rulemaking process. MMS believes that cost recovery for the 
MMS-provided service of reviewing and approving applications and 
permits is warranted because such service provides an identifiable 
recipient (the applicant) with direct benefits beyond those received by 
the general public.
    The proposed rule invited comments, recommendations, and specific 
remarks on a program of collecting fees for reviewing the following 
plans and permit applications regulated by 30 CFR parts 250, 251, and 
280:
     Exploration Plan (Sec.  250.211).
     Development and Production Plan or Development Operations 
Coordination Document (Sec.  250.241).
     Deep Water Operations Plan (Sec.  250.292).
     Conservation Information Document (Sec.  250.296).
     Application for Permit to Drill (APD; Form MMS-123).
     Application for Permit to Modify (APM; Form MMS-124).
     Facility Production Safety System Applications 
(installation and modification Sec.  250.802).
     Platform Applications (required by Sec.  250.905 for the 
installation, modification/repair of a platform).
     New Pipeline Application (Lease Term) Sec.  250.1000.
     Pipeline Application Modification (Lease Term and ROW 
Sec.  250.1000).
     Pipeline Repair Notification (Sec.  250.1008).
     Surface Commingling and Measurement Application (Sec.  
250.1204).
     Application to Remove a Platform or Other Facility 
(required by Sec.  250.1727).
     Application to Decommission a Pipeline (Lease Term and ROW 
Sec.  250.1751, Sec.  250.1752).
     Application for Permit to Conduct Geological or 
Geophysical Exploration for Mineral Resources or Scientific Research in 
the Outer Continental Shelf (Form MMS-327). This was inadvertently 
listed in the proposed rule, at 70 FR 69121, as Geological and 
Geophysical (G&G) Permits: Permit for Geophysical Exploration for 
Mineral Resources or Scientific Research on the Outer Continental Shelf 
(Form MMS-328); Permit for Geological Exploration for Mineral Resources 
or Scientific Research on the OCS (Form MMS-329). However, the correct 
form numbers were used in the actual proposed regulatory language.
     Application for Permit to Conduct Geological or 
Geophysical Prospecting for Mineral Resources or Scientific Research in 
the Outer Continental Shelf Related to Minerals Other than Oil, Gas, 
and Sulphur (Form MMS-134). This was inadvertently listed in the 
proposed rule, at 70 FR 69121, as Sand and Gravel Permits: Permit for 
Geophysical Prospecting for Mineral Resources or Scientific Research on 
the Outer Continental Shelf Related to Minerals Other than Oil, Gas, 
and Sulphur (Form MMS-135); Permit for Geological Prospecting for 
Mineral Resources or Scientific Research on the Outer Continental Shelf 
Related to Minerals Other than Oil, Gas, and Sulphur (Form MMS-136). 
However, the correct form numbers were used in the actual proposed 
regulatory language.

Summary of Changes to the Proposed Rule

    This final rule differs from the proposed rule published on 
November 14, 2005 (70 FR 69118), in the following respects:
    We added language in the fee table at Sec.  250.125 to clarify that 
there is no fee for revisions to Exploration Plans, Development and 
Production Plans, and Development Operations Coordination Documents. We 
also added to the fee table a definition of the term ``component'' 
which is used in determining the fee level for New Facility Production 
Safety System Applications. We also corrected the fee table by 
inserting the existing fee of $2,350 for Pipeline Right-of-Way (ROW) 
Grant Applications in place of the lower fee that was erroneously 
inserted in the table in the proposed rule. The fee was addressed in 
MMS's final rule published on August 25, 2005 (70 FR 49871), and it was 
not our intent to revisit this fee, but only make the fee table 
inclusive of all pertinent fees.
    We added a new paragraph (c) to Sec.  250.125 to address how MMS 
will handle the service fee for the verbal approval of an Application 
for Permit to Modify (APM) (Form MMS-124). Verbal approvals are 
occasionally given for an APM. Any action that would be considered a 
verbal permit approval will require either a paper permit application 
to follow the verbal approval or an eWell submittal within 72 hours. 
Payment must be received with the completed application.
    We also added a new section (Sec.  250.126 General payment 
instructions) which contains general instructions for paying service 
fees. This section explains how lessees and operators can pay service 
fees using both electronic funds transfer and non-electronic funds 
transfer. This section clearly states that electronic funds transfer is 
the preferred payment method.
    We added fee language to Sec.  250.1202(a) and Sec.  250.1203(b) 
for liquid hydrocarbon and gas measurement applications. In the fee 
tables in both the preamble (70 FR 69120-69121) and at Sec.  250.125 of 
the proposed rule, we listed the fees for ``Complex Surface Commingling 
and Measurement Application'' and ``Simple Surface Commingling and 
Measurement Application.'' However, while we cited in the tables to the 
section addressing surface commingling (Sec.  250.1204) and included 
the fee language at that section, we inadvertently left out the table 
citations to the measurement sections (Sec.  250.1202--Liquid 
hydrocarbon measurement--and Sec.  250.1203--Gas measurement) and 
failed to include the fee language at those sections.
    We have concluded that the language in the tables in the proposed 
rule gave sufficient notice of our intent to charge the fees indicated 
therein for measurement applications. The citation in the tables in the 
proposed rule to the surface commingling section obviously did not 
account for our stated intent in the tables to charge the same fee for 
measurement applications, which are related to surface commingling but 
are addressed at the two preceding sections, Sec.  250.1202 and Sec.  
250.1203. We have concluded that companies that engage in surface 
commingling and measurement activities are sufficiently aware of these 
sections that our statements in the tables were sufficient notice of 
our intent to charge measurement fees.
    We moved the definitions of simple and complex applications for 
surface commingling and measurement actions from Sec.  250.1204(a) to 
Sec.  250.1202(a), and cross-referenced the definitions in Sec.  
250.1203(b) and Sec.  250.1204(a). We also revised the definition of a 
simple application by removing from the definition the following 
actions: platform removals; application

[[Page 40906]]

cancellations; facility measurement point (FMP) status changes and 
meter updates. These actions were removed from the definition of simple 
application because they are not applications and do not require 
approval. Finally, we have added citations to Sec.  250.1202(a) and 
Sec.  250.1203(b) in the fee table at Sec.  250.125 for complex and 
simple surface commingling and measure applications.
    We deleted the final sentence from proposed Sec.  251.5 and from 
proposed Sec.  280.12. The sentences simply stated that the time period 
for extensions was defined on the permit forms. We concluded that the 
permit forms are clear and there is no need to detail the content of 
those forms in the regulations.

Comments on the Proposed Rule

    MMS received two comment letters from industry and none from the 
general public. One letter was from a consortium of eight trade 
organizations that represents numerous companies involved in the United 
States (U.S.) oil and gas industry. The other letter was from a large 
integrated oil and gas operator.
    Industry respondents stated that the total of lease bonuses, 
rentals, and royalty fees paid by industry adequately compensate MMS 
and the Federal Government for any service provided in the issuance of 
permits and that the proposed rule seeks to ``double dip.'' 
Additionally industry respondents stated that the proposed fees seem 
contrary to the administration's national energy policy. They 
maintained that every dollar collected by MMS for the processing of 
applications and permits is a dollar that would not be spent producing 
energy on the OCS.
    MMS works closely with industry to ensure that energy production on 
the OCS will continue to contribute significantly to the nation's 
energy supply. For example, MMS provides incentives for industry 
production of offshore oil and gas, such as royalty relief for deep-
water and deep-gas development. The proposed service fees would not 
affect existing incentives and would only marginally add to the cost of 
operating offshore.
    The relevant mineral leasing law (the Outer Continental Shelf Lands 
Act (OCSLA)), which granted the Secretary the authority to issue leases 
offshore on the OCS, was not enacted as a cost recovery mechanism. The 
monies collected as bonuses, rentals, and royalties under those leases 
are not intended to compensate the government for administrative costs. 
They instead reflect the value of the national interest in the resource 
and property. When a lease is issued, the working interest is conveyed 
to the lessee(s) to whom it is issued. The government reserves a 
royalty interest, which is a cost-free share of the production or the 
value of the production. Under the bidding system that is 
characteristic of most of the leases, the lessee pays a bonus to obtain 
the lease that is the result of competitive bidding. During the primary 
term of a lease and before the lease goes into production (in other 
words, during the time the lessor is not receiving any benefit from its 
retained royalty interest), the lessee must pay annual rentals. All of 
these obligations (royalties, bonus payments, and rentals) reflect the 
value of the lessor's (i.e., the Federal government's) property 
interest in the leased minerals. None of these obligations was ever 
intended to compensate the government for its administrative costs.
    In a related remark, industry respondents asserted that a document 
cited by MMS, OMB Circular No. A-25, provides that new user charges 
should not be imposed in cases where other revenues from individuals 
already finance the government services provided to them. The commenter 
appears to be citing paragraph 7.c. of OMB Circular No. A-25, which 
addresses excise taxes. The paragraph states that ``[n]ew user charges 
should not be proposed in cases where an excise tax currently finances 
the government services that benefit specific individuals'' (giving the 
example of a gasoline tax to finance highway construction). Royalties, 
bonus payments, and rentals are not taxes, but payments that reflect 
the value of the resources. Reference to this paragraph of the OMB 
Circular is thus inappropriate.
    One commenter challenged the methodology for calculating the fees 
and questioned whether the Fiscal Year 2004 baseline was a typical 
year, and whether there was outside quality control or auditing 
conducted over the cost estimation methodology. Additionally, the 
commenter stated that the inclusion of ``indirect costs'' was not 
appropriate since MMS would have incurred these costs whether or not a 
particular application was submitted.
    MMS believes that its cost recovery methodology was both reasonable 
and reliable and that external quality control or auditing was not 
necessary. MMS began tracking work activities in its financial system 
in FY 2003, thus FY 2004 was the second full year MMS costed its work 
activities within its financial system. We used the following guidance 
documents to determine the full cost of cost recovery activities:
     Statement of Federal Financial Accounting Standards, 
Managerial Cost Accounting Concepts and Standards for the Federal 
Government (SFFAS 4);
     OMB Circular A-25; and,
     DOI cost recovery guidance, from the DOI Manual (330 DM 
1.3A.).
    MMS employees code their time biweekly to work activities in the 
DOI Quicktime timekeeping system. Managers certify each employee's time 
each pay period and are responsible for accurate timekeeping. 
Additionally, MMS managers revalidated employees' time for FY 2004 
during the fee calculation phase. When necessary, costs were adjusted 
if an employee's time was incorrectly coded.
    The activity-based costing (ABC) methodology used by MMS is 
appropriate for our cost recovery needs and operating environment. MMS 
only included those costs (both direct and indirect) that supported the 
processing of plans, permits, and other applications. Especially in 
light of the managerial review of employees' costs, MMS has confidence 
in the cost data used to calculate the full cost of processing 
applications in this rule.
    The commenter also stated that MMS should not have included 
indirect costs in the calculation because we would have incurred these 
indirect costs without the additional marginal cost of a particular 
application. As discussed above, OMB Circular A-25 directs agencies to 
recover full costs for providing special benefits. It also explains 
that ``[f]ull cost includes all direct and indirect costs to any part 
of the Federal Government of providing a good, resource or service.''
    One comment suggested that MMS should improve its cost 
effectiveness. MMS will continue in its efforts to reduce costs through 
initiatives such as OCS Connect, a multi-year initiative to automate 
major business transactions and plan/application/permit reviews, 
resulting in more timely decisions. If business process changes 
significantly affect costs, MMS will recalculate its cost of service 
and propose new fees through the rulemaking process.
    One commenter requested a joint MMS-industry working group to 
address the fee collection process. The joint working group would find 
the best method to reduce the administrative burden for both MMS and 
industry. Suggestions included annual or other types of cumulative 
payments rather than the ``piecemeal approach'' in the proposed rule.
    MMS is directed by OMB Circular No. A-25 (section 6.a.2.(c)) to 
receive

[[Page 40907]]

payment in advance of processing an application. Cumulative payments or 
billing for past work is not possible. To simplify payments, MMS has 
implemented an online payment system through the U.S. Treasury, called 
PAY.GOV, for existing fees. This payment system will include the fees 
in this final rule. For applications submitted electronically through 
eWell or future e-Gov systems, an interactive credit card or Automated 
Clearing House (ACH) payment method will be used. The PAY.GOV Web site 
can be accessed through links on the MMS Offshore webpage at: http://
www.mms.gov/offshore/ or directly through PAY.GOV at: https://
www.pay.gov/paygov/. In light of these new payment options, MMS does 
not see the need for a working group at this time. However we are 
always open to industry suggestions.
    One commenter stated that the rule would significantly impact small 
businesses, including more than 70 percent of the companies that 
operate on the OCS. The commenter stated that all expenses and fees 
have business impacts.
    The fees paid to MMS for processing actions are directly 
proportional to the OCS activity by a company. Larger companies 
generally hold more leases which translates into a greater number of 
exploration plans, development permits, production, development and 
conservation activities, designation of operator, lease assignments, 
Applications for Permit to Drill (APDs), Applications for Permit to 
Modify (APMs), facility and structure permits, etc.--in short a greater 
number of activities for which fees will be charged under this rule and 
thus payment of a larger total number of fees. The smaller companies 
that operate on the OCS tend to buy already developed leases and 
generally don't undertake significant exploration activities and they 
are thus not subject to many of the fees in this rule. Smaller 
companies tend to engage in both fewer actions and simpler types of 
actions, thereby incurring fewer fee costs. The most common 
applications submitted by small businesses have modest fees: APMs 
($110), facility permit modifications ($80 to $530) and APDs ($1,850). 
As explained in the section discussing the Regulatory Flexibility Act, 
under Procedural Matters in this preamble, the greatest effect of fees 
in this rule on the offshore revenues of production companies would be 
less than 0.5 percent, and the effect on the vast majority of companies 
would be much less than that. In fact the impact on more than 87 
percent of companies is estimated to be less than 0.1 percent of OCS 
revenues.
    MMS consulted with the Small Business Administration (SBA) Office 
of Advocacy about the impact of OCS cost recovery fees. The Office of 
Advocacy concurred with the MMS assessment that the rule will not have 
a significant effect on a substantial number of small entities.
    A commenter challenged the MMS position that a ``Statement of 
Energy Effects'' is not needed, pursuant to Executive Order (E.O.) 
13211, because MMS does not consider the rule to be a significant 
energy action. This rule meets none of the criteria for a significant 
energy action. E.O. 13211 Section 4(b) defines a significant energy 
action:

    ``(b) Significant energy action'' means any action by an agency 
(normally published in the Federal Register) that promulgates or is 
expected to lead to the promulgation of a final rule or regulation, 
including notices of inquiry, advance notices of proposed 
rulemaking, and notices of proposed rulemaking:
    (1)(i) that is a significant regulatory action under E.O. 12866 
or any successor order; and,
    (ii) is likely to have a significant adverse effect on the 
supply, distribution, or use of energy; or
    (2) that is designated by the Administrator of the Office of 
Information and Regulatory Affairs as a significant energy action.

    Moreover, E.O. 12866 defines a significant regulatory action, at 
section 3:
    (f) ''Significant regulatory action'' means any regulatory 
action that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.''

    Of the above quoted thresholds, the only one that could potentially 
be at issue is paragraph (f)(3), regarding user fees. While this rule 
will have an effect on the level of fees paid to MMS it will not have a 
material budgetary impact because the agency's overall operating 
appropriation will not change substantially. As these fees are 
appropriated for MMS operations, the amount appropriated for those 
operations from the General Fund of the Treasury are being decreased. 
Thus, this rule only marginally changes the amount contributing to the 
MMS appropriation from fees relative to amounts contributing to the 
appropriation from the General Fund. Therefore, this rule is not a 
significant regulatory action under E.O. 12866.
    This rule also does not meet the additional threshold that must be 
met to trigger the need for a ``Statement of Energy Effects'' under 
E.O. 13211, because these fees are not ``likely to have a significant 
adverse effect on the supply, distribution, or use of energy.'' 
Compared to the normal costs of operations on the OCS, for example, 
drilling a well, the fees established in this rule are not significant. 
MMS' economic analysis showed that the effect of these fees on the 
offshore revenues of production companies will be under 0.5 percent, 
and the effect on most companies will be much smaller. These are not 
amounts that are likely to have an adverse effect on any company's 
economic standing and, consequently, they are not likely to adversely 
affect the supply, distribution, or use of energy. Thus a ``Statement 
of Energy Effects'' is not required.
    MMS received inquires on how a component is defined for new and 
modified facility production safety system applications. The service 
fee table was modified to include a definition of component. The 
definition follows the American Petroleum Institute's (API) definition: 
A component is a piece of equipment or ancillary system that is 
protected by one or more of the safety devices required by API RP 14C 
(incorporated by reference as specified in Sec.  250.198). Examples of 
components are; Wellheads, Flowlines, Injection Lines, Headers, 
Separators (Pressure Vessels) Atmospheric Vessels, Fired Vessels, 
Pumps, Compressors, Pipelines, Heat Exchangers, Buildings, as well as 
the Emergency Support System (Emergency Shutdown Stations, Pneumatic 
Fusible Element System and/or other electrical based fire detection 
systems).

Procedural Matters

Regulatory Planning and Review (Executive Order (E.O.) 12866)

    This document is not a significant rule as determined by the Office 
of Management and Budget (OMB) and is not subject to review under E.O. 
12866.
    (1) This rule would not have an annual effect of $100 million or 
more on the economy. It would not adversely affect in a material way 
the economy, productivity, competition, jobs, the environment, public 
health or safety, or

[[Page 40908]]

State, local, or tribal governments or communities. This proposed rule 
would establish fees based on cost recovery principles. Based on 
historical filings, we project the fees would raise revenue by 
approximately $16.5 million annually.
    (2) This rule would not create a serious inconsistency or otherwise 
interfere with action taken or planned by another agency because the 
costs incurred are for specific MMS services and other agencies are not 
involved in these aspects of the OCS Program.
    (3) This rule would not materially alter the budgetary impact of 
entitlements, grants, user fees or loan programs or the rights or 
obligations of their recipients. The only one of these that could 
potentially be at issue is user fees. While this rule will have an 
effect on the level of fees paid to MMS, it will not have a material 
budgetary impact because the agency's overall operating appropriation 
will not change substantially. As these fees are appropriated for MMS 
operations, the amount appropriated for those operations from the 
General Fund of the Treasury are being decreased. Thus, this rule only 
marginally changes the amount contributing to the MMS appropriation 
from fees relative to the amounts contributing to the appropriation 
from the General Fund.
    (4) This rule would not raise novel legal or policy issues.

Regulatory Flexibility Act (RFA)

    The Department, in consultation with the Office of Advocacy of the 
Small Business Administration (SBA), determined that this final rule 
will not have a significant economic effect on a substantial number of 
small entities under the RFA (5 U.S.C. 601 et seq.).
    The changes in this final rule will affect lessees and operators of 
leases and pipeline right-of-way holders on the OCS. This includes 
approximately 130 active Federal oil and gas lessees and 115 pipeline 
right-of-way holders. Small lessees that operate under this final rule 
fall under the SBA's North American Industry Classification System 
(NAICS) codes 211111, Crude Petroleum and Natural Gas Extraction, and 
213111, Drilling Oil and Gas Wells. For these NAICS code 
classifications, a small company is one with fewer than 500 employees. 
Based on these criteria, an estimated 70 percent of these companies are 
considered small. This final rule, therefore, will affect a substantial 
number of small entities.
    The fees proposed in the final rule will not have a significant 
economic effect on a substantial number of small entities because the 
fees are small compared to normal costs of doing business on the OCS. 
For example, depending on water depth and well depth, cost estimates 
for drilling a well range from $5 million to $23 million. Thus, the 
proposed fees, ranging from $80 to $24,200, are dwarfed by the millions 
of dollars that industry already commits to exploration, development, 
production, and transportation.
    MMS conducted an analysis to study the potential impacts of these 
fees on small entities. MMS charted the 2004 production of all 
companies operating on the OCS. Using corresponding rolling annual 
average prices, MMS calculated each company's Federal OCS gross 
revenues. Using MMS's Technical Information Management System internal 
database (and other databases) with 2004 company data, plan/
application/permit fees were calculated and compared with each 
company's calculated gross revenue.
    With the exception of one company, the fees in this rule would be 
less than 0.5 percent of the offshore revenues of any production 
company. The analysis showed that the effects of these fees on the 
offshore revenues of the vast majority of companies (more than 87 
percent) would be less than 0.1 percent. The only exception was for one 
company for which the analysis indicated an effect of 0.98 percent in 
2004. Looking at this company's Federal OCS production and permit/plan 
activity in 2005 the fee impact would be 0.18 percent. This company's 
OCS revenues increased by a factor of 4 between 2004 and 2005. We 
examined the reasons for the projected impact on this company and found 
that it was new to the Federal OCS. It is engaging in exploration and 
development activities before producing significant amounts of 
hydrocarbons. Only a few companies will find themselves in this 
position and MMS thus expects that the norm will be an impact of under 
0.1 percent. Even an impact up to 0.5 percent is not significant 
compared to the normal cost of operating on the OCS.
    MMS cannot project revenue data for most of the 115 pipeline right-
of-way holders. However, construction and operation of a pipeline on 
the OCS requires significant monetary investments and highly 
sophisticated technical expertise, and yields multimillion dollar 
revenues. Fees of a few thousand dollars will not significantly impact 
the finances of companies engaged in these activities. The only new 
fees for pipeline right-of-way holders in this rule are for pipeline 
modification ($3,650) and pipeline repair notification ($340). Pipeline 
right-of-way holders already pay a comparable existing fee of $2,350 
for a pipeline grant application. We have concluded that the new fees 
for pipeline right-of-way holders will not have a significant economic 
effect on those entities.
    Additionally, the service fees established in the rule will apply 
in a non-discriminatory way to both large and small firms. Applying for 
MMS services provides a benefit to both a large and small applicant if 
the applicant decides to operate on the OCS.
    Your comments are important. The Small Business and Agriculture 
Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were 
established to receive comments from small businesses about Federal 
agency enforcement actions. The Ombudsman will annually evaluate the 
enforcement activities and rate each agency's responsiveness to small 
business. If you wish to comment on the actions of MMS, call 1-888-734-
3247. You may comment to SBA without fear of retaliation. Disciplinary 
action for retaliation by an MMS employee may include suspension or 
termination from employment with DOI.

Small Business Regulatory Enforcement Fairness Act (SBREFA)

    This final rule is not a major rule under the SBREFA (5 U.S.C. 
804(2)). This final rule:
    (a) Will not have an annual effect on the economy of $100 million 
or more.
    (b) Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    (c) Will not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. 
Leasing on the U.S. OCS is limited to residents of the U.S. or 
companies incorporated in the U.S. This final rule will not change that 
requirement.

Unfunded Mandates Reform Act (UMRA)

    This final rule will not impose an unfunded mandate on State, 
local, or tribal governments or the private sector of more than $100 
million per year. The final rule will not have a significant or unique 
effect on State, local, or tribal governments or the private sector. A 
statement containing the information required by the UMRA (2 U.S.C. 
1531 et seq.) is not required. This is because the final rule will not 
affect State, local, or tribal governments, and the effect on the 
private sector is small.

[[Page 40909]]

Takings Implication Assessment (TIA) (Executive Order 12630)

    The final rule is not a governmental action capable of interference 
with constitutionally protected property rights. Thus, MMS did not need 
to prepare a TIA according to E.O. 12630, Governmental Actions and 
Interference with Constitutionally Protected Property Rights.

Federalism (Executive Order 13132)

    With respect to E.O. 13132, this final rule will not have 
federalism implications. This final rule will not substantially and 
directly affect the relationship between the Federal and State 
governments. To the extent that State and local governments have a role 
in OCS activities, this final rule will not affect that role.

Civil Justice Reform (Executive Order 12988)

    With respect to E.O. 12988, MMS finds that this final rule will not 
unduly burden the judicial system and does meet the requirements of 
sections 3(a) and 3(b)(2) of the E.O. MMS consulted with the DOI Office 
of the Solicitor throughout this drafting process.

Paperwork Reduction Act (PRA)

    This rulemaking relates to 30 CFR part 250, subparts A, B, D, E, F, 
H, I, J, L, P, and Q; 30 CFR part 251; and 30 CFR part 280. The final 
rulemaking affects the information collections for these regulations 
but would not change the approved burden hours; it would just add the 
associated fees. Therefore, OMB has ruled that there is no change in 
the information collection and that MMS does not need to make a formal 
submission by Form OMB 83-I for this rulemaking. We will submit Form 
OMB 83-C to add the fees in each collection when the rule becomes 
effective.
    OMB has approved the information collections for the affected 
regulations at:
    (1) 30 CFR part 250; subpart A, 1010-0114; subpart B, 1010-0151; 
subpart D, 1010-0141; subpart E, 1010-0067; subpart F, 1010-0043; 
subpart H, 1010-0059; subpart I, 1010-0149; subpart J, 1010-0050; 
subpart L 1010-0051; subpart P, 1010-0086, subpart Q, 1010-0142;
    (2) 30 CFR part 251, 1010-0048; and
    (3) 30 CFR part 280, 1010-0072.

National Environmental Policy Act (NEPA) of 1969

    MMS has determined that this final rule is administrative and 
involves only procedural changes addressing fee requirements. 
Therefore, it is categorically excluded from environmental review under 
section 102(2)(C) of the NEPA, pursuant to 516 DM 2.3A and 516 DM 2, 
Appendix 1, Item 1.10.
    In addition, the final rule does not involve any of the 10 
extraordinary circumstances for exceptions to categorical exclusions 
listed in 516 DM 2, Appendix 2. Pursuant to Council on Environmental 
Quality regulations (40 CFR 1508.4) and the environmental policies and 
procedures of the DOI, the term 'categorical exclusions' means 
categories of action which an agency has determined do not individually 
or cumulatively have a significant effect on the human environment and 
therefore require neither an environmental assessment nor an 
environmental impact statement.[FEDREG][VOL]*[/VOL][NO]*[/NO][DATE]*[/
DATE][RULES][RULE][PREAMB][AGENCY]*[/AGENCY][SUBJECT]*[/SUBJECT][/
PREAMB][SUPLINF][HED]*[/HED]

Effects on the Nation's Energy Supply (Executive Order 13211)

    Executive Order 13211 requires the agency to prepare a Statement of 
Energy Effects when it takes a regulatory action that is identified as 
a significant energy action. This final rule is not a significant 
energy action, and therefore would not require a Statement of Energy 
Effects because it:
    (1) Is not a significant regulatory action under E.O. 12866;
    (2) Is not likely to have a significant adverse effect on the 
supply, distribution, or use of energy; and
    (3) Has not been designated by the Administrator of the Office of 
Information and Regulatory Affairs, OMB, as a significant energy 
action.

Consultation and Coordination With Indian Tribal Governments (Executive 
Order 13175)

    In accordance with E.O. 13175, this final rule will not have tribal 
implications that impose substantial direct compliance costs on Indian 
tribal governments.

List of Subjects

30 CFR Part 250

    Administrative practice and procedure, Continental shelf, 
Environmental impact statements, Environmental protection, Government 
contracts, Investigations, Oil and gas exploration, Penalties, 
Pipelines, Public lands--mineral resources, Public lands--rights-of-
way, Reporting and recordkeeping requirements, Sulphur.

30 CFR Part 251

    Continental shelf, Freedom of information, Oil and gas exploration, 
Public lands--mineral resources, Reporting and recordkeeping 
requirements, Research.

30 CFR Part 280

    Continental shelf, Public lands--mineral resources, Reporting and 
recordkeeping requirements, Research.

    Dated: June 16, 2006.
R.M. ``Johnnie'' Burton,
Director, Minerals Management Service, Exercising the delegated 
authority of the Assistant Secretary, Land and Minerals Management.

0
For the reasons stated in the preamble, the Minerals Management Service 
(MMS) amends 30 CFR parts 250, 251, and 280 as follows:

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

0
1. The authority citation for 30 CFR part 250 continues to read as 
follows:

    Authority: 43 U.S.C. 1331 et seq., 31 U.S.C. 9701.


0
2. In Sec.  250.125, revise the table in paragraph (a); revise 
paragraph (b); and add new paragraph (c) to read as follows:


Sec.  250.125  Service fees.

    (a) * * *

                            Service Fee Table
------------------------------------------------------------------------
 Service--processing of the
          following                Fee amount          30 CFR citation
------------------------------------------------------------------------
Change in Designation of      $150................  Sec.   250.143.
 Operator.
Suspension of Operations/     $1,800..............  Sec.   250.171.
 Suspension of Production
 (SOO/SOP) Request.
Exploration Plan (EP).......  $3,250 for each       Sec.   250.211.
                               surface location,
                               no fee for
                               revisions.
Development and Production    $3,750 for each well  Sec.   250.241(e).
 Plan (DPP) or Development     proposed, no fee
 Operations Coordination       for revisions.
 Document (DOCD).

[[Page 40910]]

 
Deepwater Operations Plan...  $3,150..............  Sec.   250.292(p).
Conservation Information      $24,200.............  Sec.   250.296(a).
 Document.
Application for Permit to     $1,850 Initial        Sec.   250.410(d);
 Drill (APD; Form MMS-123).    applications only,    Sec.   250.411;
                               no fee for            Sec.   250.460;
                               revisions.            Sec.   250.513(b);
                                                     Sec.   250.515;
                                                     Sec.   250.1605;
                                                     Sec.   250.1617(a);
                                                     Sec.   250.1622.
Application for Permit to     $110................  Sec.   250.460; Sec.
 Modify (APM; Form MMS-124).                           250.465(b); Sec.
                                                      250.513(b); Sec.
                                                     250.515; Sec.
                                                     250.613(b); Sec.
                                                     250.615; Sec.
                                                     250.1618(a); Sec.
                                                     250.1622; Sec.
                                                     250.1704(g).
New Facility Production       $4,750 A component    Sec.   250.802(e).
 Safety System Application     is a piece of
 for facility with more than   equipment or
 125 components.               ancillary system
                               that is protected
                               by one or more of
                               the safety devices
                               required by API RP
                               14C (incorporated
                               by reference as
                               specified in Sec.
                               250.198).
                               (Additional fee of
                               $12,500 will be
                               charged if MMS
                               deems it necessary
                               to visit a facility
                               offshore; and
                               $6,500 to visit a
                               facility in a
                               shipyard).
New Facility Production       $1,150 (Additional    Sec.   250.802(e).
 Safety System Application     fee of $7,850 will
 for facility with 25-125      be charged if MMS
 components.                   deems it necessary
                               to visit a facility
                               offshore; and
                               $4,500 to visit a
                               facility in a
                               shipyard).
New Facility Production       $570................  Sec.   250.802(e).
 Safety System Application
 for facility with fewer
 than 25 components.
Production Safety System      $530................  Sec.   250.802(e).
 Application--Modification
 with more than 125
 components reviewed.
Production Safety System      $190................  Sec.   250.802(e).
 Application--Modification
 with 25-125 components
 reviewed.
Production Safety System      $80.................  Sec.   250.802(e).
 Application--Modification
 with fewer than 25
 components reviewed.
Platform Application--        $19,900.............  Sec.   250.905(k).
 Installation--under the
 Platform Verification
 Program.
Platform Application--        $2,850..............  Sec.   250.905(k).
 Installation--Fixed
 Structure Under the
 Platform Approval Program.
Platform Application--        $1,450..............  Sec.   250.905(k).
 Installation--Caisson/Well
 Protector.
Platform Application--        $3,400..............  Sec.   250.905(k).
 Modification/Repair.
New Pipeline Application      $3,100..............  Sec.   250.1000(b).
 (Lease Term).
Pipeline Application--        $1,800..............  Sec.   250.1000 (b).
 Modification (Lease Term).
Pipeline Application--        $3,650..............  Sec.   250.1000 (b).
 Modification (ROW).
Pipeline Repair               $340................  Sec.   250.1008 (e).
 Notification..
Pipeline Right-of-Way (ROW)   $2,350..............  Sec.   250.1015.
 Grant Application.
Pipeline Conversion of Lease  $200................  Sec.   250.1015.
 Term to ROW.
Pipeline ROW Assignment.....  $170................  Sec.   250.1018.
500 Feet From Lease/Unit      $3,300..............  Sec.   250.1101.
 Line Production Request.
Gas Cap Production Request..  $4,200..............  Sec.   250.1101.
Downhole Commingling Request  $4,900..............  Sec.   250.1106.
Complex Surface Commingling   $3,550..............  Sec.   250.1202(a);
 and Measurement Application.                        Sec.   250.1203(b);
                                                     Sec.   250.1204(a).
Simple Surface Commingling    $1,200..............  Sec.   250.1202(a);
 and Measurement Application.                        Sec.   250.1203(b);
                                                     Sec.   250.1204(a).
Voluntary Unitization         $10,700.............  Sec.   250.1303.
 Proposal or Unit Expansion.
Unitization Revision........  $760................  Sec.   250.1303.
Application to Remove a       $4,100..............  Sec.   250.1727.
 Platform or Other Facility.
Application to Decommission   $1,000..............  Sec.   250.1751(a)
 a Pipeline (Lease Term).                            or Sec.
                                                     250.1752(a).
Application to Decommission   $1,900..............  Sec.   250.1751(a)
 a Pipeline (ROW).                                   or Sec.
                                                     250.1752(a).
------------------------------------------------------------------------

    (b) Payment of the fees listed in paragraph (a) of this section 
must accompany the submission of the document for approval or be sent 
to an office identified by the Regional Director. Once a fee is paid, 
it is nonrefundable, even if an application or other request is 
withdrawn. If your application is returned to you as incomplete, you 
are not required to submit a new fee when you submit the amended 
application.
    (c) Verbal approvals are occasionally given in special 
circumstances. Any action that will be considered a verbal permit 
approval requires either a paper permit application to follow the 
verbal approval or an electronic application submittal within 72 hours. 
Payment must be made with the completed paper or electronic 
application.

[[Page 40911]]


0
3. Add a new Sec.  250.126 to read as follows:


Sec.  250.126  General payment instructions.

    (a) Payment of fees associated with electronic applications. If you 
submitted an application through eWell or OCS Connect, you must use the 
interactive payment feature in that system.
    (b) Payment of fees for applications not submitted electronically. 
For applications not submitted electronically through eWell or OCS 
Connect, MMS prefers you to use credit card or automated clearing house 
(ACH) payments through the PAY.GOV Web site.
    (1) Payment using PAY.GOV Web site. The PAY.GOV Web site may be 
accessed through links on the MMS Offshore Web site at: http://
www.mms.gov/offshore/ homepage or directly through PAY.GOV at: https://
www.pay.gov/paygov/. If paying by credit card or ACH, you must include 
a copy of the PAY.GOV confirmation receipt page with your application.
    (2) MMS will also accept payments by any of the payment means 
listed in this section. Your payment must be payable to: ``Department 
of the Interior--Minerals Management Service'' or ``DOI-MMS'' and must 
include your MMS company number. MMS prefers that you use these payment 
documents in the order presented:
    (i) Commercial check drawn on a solvent bank;
    (ii) Certified check;
    (iii) Cashier's check;
    (iv) Money order; or
    (v) Bank draft drawn on a solvent bank or a Federal Reserve check.
    (c) Terms used in this section have the following meanings:
    (1) Automated Clearing House or ACH is a type of electronic fund 
transfer using the ACH network.
    (2) PAY.GOV is a U.S. Treasury payment system used by MMS to 
receive credit card and ACH payments for processing OCS plans, permits, 
and other related applications or documents.

0
4. In Sec.  250.198, in the table in paragraph (e), revise the entry 
for API RP 14C to read as follows:


Sec.  250.198  Documents incorporated by reference.

* * * * *
    (e) * * *

------------------------------------------------------------------------
           Title of documents              Incorporated by reference at
------------------------------------------------------------------------
 
                                * * * * *
API RP 14C, Recommended Practice for     Sec.   250.125(a), Sec.
 Analysis, Design, Installation and       250.802(b), (e)(2); Sec.
 Testing of Basic Surface Safety          250.803(a), (b)(2)(i), (b)(4),
 Systems for Offshore Production          (b)(5)(i), (b)(7), (b)(9)(v),
 Platforms, Seventh Edition, March        (c)(2); Sec.   250.804(a),
 2001, API Stock No. G14C07.              (a)(6); Sec.   250.1002(d);
                                          Sec.   250.1004(b)(9); Sec.
                                          250.1628(c), (d)(2); Sec.
                                          250.1629(b)(2), (b)(4)(v); and
                                          Sec.   250.1630(a).
 
                              * * * * * * *
------------------------------------------------------------------------



0
5. In Sec.  250.211, add a new paragraph (d) to read as follows:


Sec.  250.211  What must the EP include?

* * * * *
    (d) Service fee. You must include payment of the service fee listed 
in Sec.  250.125.

0
6. In Sec.  250.241, add a new paragraph (e) to read as follows:


Sec.  250.241  What must the DPP or DOCD include?

* * * * *
    (e) Service fee. You must include payment of the service fee listed 
in Sec.  250.125.

0
7. In Sec.  250.292, revise paragraphs (n) and (o); and add a new 
paragraph (p) to read as follows:


Sec.  250.292  What must the DWOP contain?

* * * * *
    (n) A discussion of any new technology that affects hydrocarbon 
recovery systems;
    (o) A list of any alternate compliance procedures or departures for 
which you anticipate requesting approval; and
    (p) Payment of the service fee listed in Sec.  250.125.

0
8. In Sec.  250.296, add the following sentence at the end of paragraph 
(a):


Sec.  250.296  When and how must I submit a CID or a revision to a CID?

    (a) * * * The submission of your CID must be accompanied by payment 
of the service fee listed in Sec.  250.125.
* * * * *

0
9. In Sec.  250.410, revise the introductory paragraph and paragraph 
(d) to read as follows:


Sec.  250.410  How do I obtain approval to drill a well?

    You must obtain written approval from the District Manager before 
you begin drilling any well or before you sidetrack, bypass, or deepen 
a well. To obtain approval, you must:
* * * * *
    (d) Submit the following to the District Manager:
    (1) An original and two complete copies of Form MMS-123, 
Application for Permit to Drill (APD), and Form MMS-123S, Supplemental 
APD Information Sheet;
    (2) A separate public information copy of forms MMS-123 and MMS-
123S that meets the requirements of Sec.  250.127; and
    (3) Payment of the service fee listed in Sec.  250.125.

0
10. In Sec.  250.465, revise paragraph (b)(1) to read as follows:


Sec.  250.465  When must I submit an Application for Permit to Modify 
(APM) or an End of Operations Report to MMS?

* * * * *
    (b) * * *
    (1) Your APM (Form MMS-124) must contain a detailed statement of 
the proposed work that would materially change from the approved APD. 
The submission of your APM must be accompanied by payment of the 
service fee listed in Sec.  250.125;
* * * * *

0
11. In Sec.  250.513, revise the last sentence in paragraph (a), the 
introductory language of paragraph (b), and paragraphs (b)(3) and 
(b)(4) and adding paragraph (b)(5) to read as follows:


Sec.  250.513  Approval and reporting of well-completion operations.

    (a) * * * If the completion has not been approved or if the 
completion objective or plans have significantly changed, approval for 
these operations must be requested on Form MMS-124, Application for 
Permit to Modify (APM).
    (b) You must submit the following with Form MMS-124 (or with Form 
MMS-123; Form MMS-123S):
* * * * *
    (3) For multiple completions, a partial electric log showing the 
zones proposed

[[Page 40912]]

for completion, if logs have not been previously submitted;
    (4) When the well-completion is in a zone known to contain 
H2S or a zone where the presence of H2S is 
unknown, information pursuant to Sec.  250.490 of this part; and
    (5) Payment of the service fee listed in Sec.  250.125.
* * * * *

0
12. In Sec.  250.613, revise the last sentence in paragraph (a), the 
introductory language of paragraph (b), and paragraphs (b)(2) and 
(b)(3) and adding paragraph (b)(4) to read as follows:


Sec.  250.613  Approval and reporting for well-workover operations.

    (a) * * * Approval for these operations must be requested on Form 
MMS-124, Application for Permit to Modify.
    (b) You must submit the following with Form MMS-124:
* * * * *
    (2) When changes in existing subsurface equipment are proposed, a 
schematic drawing of the well showing the zone proposed for workover 
and the workover equipment to be used;
    (3) Where the well-workover is in a zone known to contain 
H2S or a zone where the presence of H2S is 
unknown, information pursuant to Sec.  250.490 of this part; and
    (4) Payment of the service fee listed in Sec.  250.125.
* * * * *

0
13. In Sec.  250.802, add a new paragraph (e)(7) to read as follows:


Sec.  250.802  Design, installation, and operation of surface 
production safety systems.

* * * * *
    (e) * * *
    (7) The service fee listed in Sec.  250.125. The fee you must pay 
will be determined by the number of components involved in the review 
and approval process.

0
14. In Sec.  250.905, revise the introductory language and table 
headings and add paragraph (k) to the table to read as follows:


Sec.  250.905  How do I get approval for the installation, 
modification, or repair of my platform?

    The Platform Approval Program requires that you submit the 
information, documents, and fee listed in the following table for your 
proposed project.

------------------------------------------------------------------------
     Required submittal         Required contents    Other requirements
------------------------------------------------------------------------
 
                              * * * * * * *
(k) Payment of the service    ....................  ....................
 fee listed in Sec.
 250.125.
------------------------------------------------------------------------


0
15. In Sec.  250.1000, revise paragraph (b) to read as follows:


Sec.  250.1000  General requirements.

* * * * *
    (b) An application must be accompanied by payment of the service 
fee listed in Sec.  250.125 and submitted to the Regional Supervisor 
and approval obtained before:
    (1) Installation, modification, or abandonment of a lease term 
pipeline;
    (2) Installation or modification of a right-of-way (other than 
lease term) pipeline; or
    (3) Modification or relinquishment of a pipeline right-of way.
* * * * *

0
16. In Sec.  250.1008, revise paragraph (e) to read as follows:


Sec.  250.1008  Reports.

* * * * *
    (e) The lessee or right-of-way holder must notify the Regional 
Supervisor before the repair of any pipeline or as soon as practicable. 
Your notification must be accompanied by payment of the service fee 
listed in Sec.  250.125. You must submit a detailed report of the 
repair of a pipeline or pipeline component to the Regional Supervisor 
within 30 days after the completion of the repairs. In the report you 
must include the following:
    (1) Description of repairs;
    (2) Results of pressure test; and
    (3) Date returned to service.
* * * * *

0
17. In Sec.  250.1202, revise paragraph (a)(1) to read as follows:


Sec.  250.1202  Liquid hydrocarbon measurement.

    (a) * * *
    (1) Submit a written application to, and obtain approval from, the 
Regional Supervisor before commencing liquid hydrocarbon production, or 
making any changes to the previously-approved measurement and/or 
allocation procedures. Your application (which may also include any 
relevant gas measurement and surface commingling requests) must be 
accompanied by payment of the service fee listed in Sec.  250.125. The 
service fees are divided into two levels based on complexity as shown 
in the following table.

------------------------------------------------------------------------
            Application type                         Actions
------------------------------------------------------------------------
(i) Simple applications................  Applications to temporarily
                                          reroute production (for a
                                          duration not to exceed six
                                          months); Production tests
                                          prior to pipeline
                                          construction; Departures
                                          related to meter proving, well
                                          testing, or sampling
                                          frequency.
(ii) Complex applications..............  Creation of new facility
                                          measurement points (FMPs);
                                          Association of leases or units
                                          with existing FMPs; Inclusion
                                          of production from additional
                                          structures; Meter updates
                                          which add buy-back gas meters
                                          or pigging meters; Other
                                          applications which request
                                          deviations from the approved
                                          allocation procedures.
------------------------------------------------------------------------

* * * * *

0
18. In Sec.  250.1203, revise paragraph (b)(1) to read as follows:


Sec.  250.1203  Gas measurement.

* * * * *
    (b) * * *
    (1) Submit a written application to, and obtain approval from, the 
Regional Supervisor before commencing gas production, or making any 
changes to

[[Page 40913]]

the previously-approved measurement and/or allocation procedures. Your 
application (which may also include any relevant liquid hydrocarbon 
measurement and surface commingling requests) must be accompanied by 
payment of the service fee listed in Sec.  250.125. The service fees 
are divided into two levels based on complexity, see table in Sec.  
250.1202(a)(1).
* * * * *

0
19. In Sec.  250.1204, revise paragraph (a)(1) to read as follows:


Sec.  250.1204  Surface commingling.

    (a) * * *
    (1) Submit a written application to, and obtain approval from, the 
Regional Supervisor before commencing the commingling of production or 
making any changes to the previously approved commingling procedures. 
Your application (which may also include any relevant liquid 
hydrocarbon and gas measurement requests) must be accompanied by 
payment of the service fee listed in Sec.  250.125. The service fees 
are divided into two levels based on complexity, see table in Sec.  
250.1202(a)(1).
* * * * *

0
20. In Sec.  250.1617, revise paragraph (a) to read as follows:


Sec.  250.1617  Application for permit to drill.

    (a) Before drilling a well under an approved Exploration Plan, 
Development and Production Plan, or Development Operations Coordination 
Document, you must file Form MMS-123, APD, with the District Manager 
for approval. The submission of your APD must be accompanied by payment 
of the service fee listed in Sec.  250.125. Before starting operations, 
you must receive written approval from the District Manager unless you 
received oral approval under Sec.  250.140.
* * * * *

0
21. In Sec.  250.1618, revise the section heading and paragraph (a) to 
read as follows:


Sec.  250.1618  Application for permit to modify.

    (a) You must submit requests for changes in plans, changes in major 
drilling equipment, proposals to deepen, sidetrack, complete, workover, 
or plug back a well, or engage in similar activities to the District 
Manager on Form MMS-124, Application for Permit to Modify (APM). The 
submission of your APM must be accompanied by payment of the service 
fee listed in Sec.  250.125. Before starting operations associated with 
the change, you must receive written approval from the District Manager 
unless you received oral approval under Sec.  250.140.
* * * * *

0
22. In Sec.  250.1704, revise paragraph (g) in the Decommissioning 
Applications and Reports Table to read as follows:


Sec.  250.1704  When must I submit decommissioning applications and 
reports?

* * * * *

             Decommissioning Applications and Reports Table
------------------------------------------------------------------------
Decommissioning applications
         and reports             When to submit         Instructions
------------------------------------------------------------------------
 
                              * * * * * * *
(g) Form MMS-124,             (1) Before you        Include information
 Application for Permit to     temporarily abandon   required under Sec.
 Modify (APM). The             or permanently plug    Sec.   250.1712
 submission of your APM must   a well or zone.       and 250.1721.
 be accompanied by payment    (2) Within 30 days    Include information
 of the service fee listed     after you plug a      required under Sec.
 in Sec.   250.125.            well * * *.             250.1717.
                              (3) Before you        Refer to Sec.
                               install a subsea      250.1722(a).
                               protective device.
                              (4) Within 30 days    Include information
                               after you complete    required under Sec.
                               a protective device     250.1722(d).
                               trawl test.
                              (5) Before you        Refer to Sec.
                               remove any casing     250.1723.
                               stub or mud line
                               suspension
                               equipment and any
                               subsea protective
                               device.
                              (6) Within 30 days    Include information
                               after you complete    required under Sec.
                               site clearance          250.1743(a).
                               verification
                               activities.
------------------------------------------------------------------------



0
23. In Sec.  250.1727, revise the introductory paragraph to read as 
follows:


Sec.  250.1727  What information must I include in my final application 
to remove a platform or other facility?

    You must submit to the Regional Supervisor, a final application for 
approval to remove a platform or other facility. Your application must 
be accompanied by payment of the service fee listed in Sec.  250.125. 
If you are proposing to use explosives, provide three copies of the 
application. If you are not proposing to use explosives, provide two 
copies of the application. Include the following information in the 
final removal application, as applicable:
* * * * *

0
24. In Sec.  250.1751, revise paragraph (a) introductory text to read 
as follows:


Sec.  250.1751  How do I decommission a pipeline in place?

* * * * *
    (a) Submit a pipeline decommissioning application in triplicate to 
the Regional Supervisor for approval. Your application must be 
accompanied by payment of the service fee listed in Sec.  250.125. Your 
application must include the following information:
* * * * *

0
25. In Sec.  250.1752, revise the introductory text of paragraph (a) to 
read as follows:


Sec.  250.1752  How do I remove a pipeline?

* * * * *
    (a) Submit a pipeline removal application in triplicate to the 
Regional Supervisor for approval. Your application must be accompanied 
by payment of the service fee listed in Sec.  250.125. Your application 
must include the following information:
* * * * *

PART 251--GEOLOGICAL AND GEOPHYSICAL (G&G) EXPLORATIONS OF THE 
OUTER CONTINENTAL SHELF

0
26. The authority citation for part 251 is revised to read as follows:

    Authority: 43 U.S.C. 1331 et seq., 31 U.S.C. 9701.


0
27. In Sec.  251.5, revise paragraph (a) to read as follows:


Sec.  251.5  Applying for permits or filing Notices.

    (a) Permits. You must submit a signed original and three copies of 
the MMS permit application form (Form MMS-327). The form includes names 
of persons, type, location, purpose, and

[[Page 40914]]

dates of activity, and environmental and other information. A 
nonrefundable service fee o