Outer Continental Shelf Lands Act; open and nondiscriminatory access to oil and gas pipelines , 17047-17062 [E7-6197]

Agencies

[Federal Register: April 6, 2007 (Volume 72, Number 66)]
[Proposed Rules]               
[Page 17047-17062]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06ap07-15]                         


[[Page 17047]]

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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 291

RIN 1010-AD17

 
Open and Nondiscriminatory Movement of Oil and Gas as Required by 
the Outer Continental Shelf Lands Act

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Proposed rule.

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SUMMARY: The Minerals Management Service (MMS) is proposing new 
regulations that would establish a process for a shipper transporting 
oil or gas production from Federal leases on the Outer Continental 
Shelf (OCS) to follow if it believes it has been denied open and 
nondiscriminatory access to pipelines on the OCS. The rule would 
provide MMS with tools to ensure that pipeline companies provide open 
and nondiscriminatory access to their pipelines.

DATES: MMS will consider all comments received by June 5, 2007. MMS 
will begin reviewing comments then and may not fully consider comments 
received after June 5, 2007. Comments on the reporting burden in this 
rulemaking should be submitted by May 7, 2007.

ADDRESSES: Mail or hand-carry comments to: Director, Minerals 
Management Service, Attention: Policy and Management Improvement, 1849 
C Street, NW., Mail Stop 4230, Washington, DC 20240-0001. You may 
submit comments by personal or messenger delivery to: 1849 C Street, 
NW., Room 4223, Washington, DC 20240-0001.
    You may also submit comments by any of the following methods. 
Please use ``Open and Nondiscriminatory Movement'' and the approved 
Regulatory Identification Number (RIN) 1010-AD17 as an identifier in 
your message. We will not return materials submitted as part of 
comments.
     Federal eRulemaking Portal: http://www.regulations.gov. 

Follow the instructions on the Web site for submitting comments.
     E-mail MMS at rules.comments@mms.gov. Use the RIN in the 
subject line. Include your name and return address in your e-mail 
message and mark your message for return receipt.
     Fax: 202-208-4891. Identify with the RIN.
     Please submit comments on any aspect of the reporting 
burden in this proposed rule to the Office of Management and Budget 
(OMB) either by e-mail (OIRA_DOCKET@omb.eop.gov) or by fax (202) 395-
6566 directly to the Office of Information and Regulatory Affairs, OMB, 
Attention: Desk Officer for the Department of the Interior. Please 
provide MMS with a copy of your comments so that we can summarize all 
written comments and address them in the final rule.

FOR FURTHER INFORMATION CONTACT: Scott Ellis, Policy and Appeals 
Division, at (303) 231-3652, Fax: (303) 233-2225, or e-mail at 
Scott.Ellis@mms.gov.


SUPPLEMENTARY INFORMATION:

I. Background

    Section 5(e) of the Outer Continental Shelf Lands Act (OCSLA), 43 
U.S.C. 1331-1356, states that rights-of-way through the submerged lands 
of the OCS, whether or not such lands are included in a mineral lease 
maintained or issued pursuant to that subchapter, may be granted by the 
Secretary of the Interior for pipeline purposes for the transportation 
of oil, natural gas, sulphur, or other minerals. The right-of-way may 
be granted in accordance with such regulations and upon such conditions 
as may be prescribed by the Secretary of the Interior, including the 
express condition that oil or gas pipelines shall transport or 
purchase, without discrimination, oil or natural gas produced from 
submerged lands or OCS lands. 43 U.S.C. 1334(e).
    Section 5(f) of the OCSLA mandates that every permit, license, 
easement, or right-of-way granted to a pipeline for transportation of 
oil or gas on or across the OCS must require that the pipeline 
``provide open and nondiscriminatory access to both owner and nonowner 
shippers.'' 43 U.S.C. 1334(f).
    The Federal Energy Regulatory Commission (FERC), exercising 
authority it claimed under the OCSLA, issued regulations requiring 
companies providing natural gas transportation service to periodically 
file information with FERC concerning their pricing and service 
structures. See Order No. 639, FERC Stats. & Regs. (CCH) ] 31,097 at 
31,514 (April 10, 2000); Order No. 639-A, FERC Stats. & Regs. (CCH) ] 
31,103 (July 26, 2000). FERC believed that the resulting transparency 
would enhance competitive and open access to gas transportation. Id. 
Several of the subject companies sought judicial relief from the 
orders, alleging that FERC did not have authority under OCSLA to issue 
the regulations.
    On October 10, 2003, the U. S. Court of Appeals for the District of 
Columbia Circuit, in Williams Cos. v. FERC, 345 F.3d 910 (D.C. Cir. 
2003), found that sections 5(e) and (f) of the OCSLA, 43 U.S.C. 1334(e) 
and (f), grant the FERC only limited authority to enforce open access 
rules on the OCS. The court found that enforcement of the requirement 
to provide open and nondiscriminatory access ``would be at the hands of 
the obligee of the conditions, the Secretary of the Interior (or 
possibly other persons that the conditions might specify).'' Id. at 
913-914.
    Specifically, the Court of Appeals concluded that FERC's role under 
43 U.S.C. 1334(e) is essentially limited to what are commonly known as 
``ratable take'' orders and capacity expansion orders. According to the 
court's decision, FERC's authority does not include the regulatory 
oversight described in FERC Orders 639 and 639-A. As a result, the FERC 
regulations issued under 18 CFR part 330 are ultra vires, and therefore 
not enforceable. MMS believes the court's decision means that the OCSLA 
provides the Secretary of the Interior the authority to issue and 
enforce rules to assure open and nondiscriminatory access to pipelines. 
43 U.S.C. 1334(e) and (f)(1)(A).
    To determine whether a need exists for regulations to assure open 
and nondiscriminatory access, MMS issued an Advance Notice of Proposed 
Rulemaking (ANPRM). See 69 FR 19137 (April 12, 2004). Subsequently, MMS 
held public meetings in Houston, Washington DC, and New Orleans to hear 
oral comments. MMS received written comments from 17 respondents. After 
considering all comments, MMS is proceeding with this proposed rule.
    The ANPRM requested discussion and comments on several topics. The 
commenters generally fell into two groups--shippers/producers and 
pipelines/transportation service providers. In most instances, these 
commenter groups submitted opposing views. However, on some issues 
there was general consensus. Specific topics regarding the issues 
raised in the ANPRM comments are addressed below in the applicable 
sections of this proposed rulemaking.

II. Section-by-Section Analysis, 30 CFR Part 291

    MMS proposes to include a new part 291 in its regulations. This 
part would implement complaint procedures and informal alternative 
processes to address allegations that a shipper has been denied open 
and nondiscriminatory access to a pipeline

[[Page 17048]]

contrary to sections 5(e) and (f) of the OCSLA.
    Pursuant to section 27 of the OCSLA, 43 U.S.C. 1353, and section 
342 of the Energy Policy Act of 2005, the United States is entitled to 
take its royalty in-kind, rather than in value. MMS's Royalty-in-Kind 
(RIK) production marketing process includes negotiating rates for 
transportation of the production to market. Some of that transportation 
will likely occur on pipelines subject to this rulemaking. This may 
raise the question of whether MMS, as a shipper of RIK production, can 
fairly decide other shipper's appeals alleging violations of the open 
and nondiscriminatory access provisions of OCSLA. Furthermore, it also 
may raise the issue of whether MMS can fairly decide a complaint 
brought by the RIK division.
    The MMS believes that this situation is similar to cases in which 
the MMS Director decides lessees' appeals of MMS Minerals Revenue 
Management (MRM) orders. Those appeals are filed under 30 CFR part 290, 
subpart B. Normally those orders require a company to pay monies. The 
MMS Director has delegated her authority to decide those appeals to the 
Associate Director, Policy and Management Improvement (PMI). MRM and 
PMI are separate programs that both report to the MMS Director. Any 
decisions regarding complaints on open access would also be decided by 
PMI. Appellants in those MRM cases may appeal any adverse MMS decision 
to the Interior Board of Land Appeals (IBLA) under 30 CFR part 290. 
Appellants' complaints of lack of due process or conflict of interest 
under this system have never been upheld. See e.g. Santa Fe Pacific 
Railroad Co., 90 IBLA 200, 220 (1986); Davis Exploration, 112 IBLA 254, 
260 (1989); Transco Exploration Co. & TXP Operating Co., 110 IBLA 282, 
311-12 (1989); W&T Offshore, Inc., 148 IBLA 323, 355-59 (1999).
    Appellants under these proposed rules at Sec.  291.112 would be 
able to avail themselves of the same IBLA review as current MRM 
appeals. Because the process proposed in this rulemaking is the same as 
that upheld repeatedly by the Department, the MMS believes that the 
proposed process will properly protect parties' rights.

Section 291.100 What Is the Purpose of This Part?

    This section would explain the purposes of this part. This part 
discusses the procedures for filing a complaint with the MMS Director 
alleging that a grantee or transporter, as defined below, has denied a 
shipper of production from the OCS open and nondiscriminatory access to 
a pipeline. The complaint procedures would include an explanation of 
the process that MMS would use to determine whether violations of the 
requirements of the OCSLA have occurred, and to remedy these 
violations. This part also would provide alternative informal means of 
reconciling pipeline access disputes through either Hotline-assisted 
procedures or Alternative Dispute Resolution (ADR).

Section 291.101 What Definitions Apply to This Part?

    This section would define terms applicable to this part.
    MMS would not define ``open access'' or ``nondiscriminatory 
access'' in this proposed rulemaking. Based upon the comments received 
in response to the ANPRM and at the public meetings, MMS believes 
``open access'' and ``nondiscriminatory access'' are fact-specific 
terms and their application is best left to be determined during 
adjudication of individual situations. MMS intends to apply a 
reasonableness standard when deciding complaints alleging violations of 
the OCSLA's open and nondiscriminatory access requirements. While a 
reasonableness standard is inherently broad, it provides the 
flexibility necessary to address the various and unique situations that 
may arise. MMS believes that trying to encompass the plethora of 
circumstances that could present themselves would result in a 
definition that is unmanageable and would ultimately result in 
resorting to exceptions to accommodate unforeseen circumstances. Like 
FERC's ``comparability standard'' used for its electric ``open access'' 
and ``undue discrimination'' adjudications, MMS's reasonableness 
standard may include comparability as an element when appropriate. 
However, MMS is not bound by, and does not intend to necessarily base 
its determinations of reasonableness on previous FERC decisions.
    ``Accessory'' would have the same definition as in 30 CFR part 250, 
subpart J--i.e., a platform, a major subsea manifold, or similar subsea 
structure attached to a right-of-way (ROW) pipeline to support pump 
stations, compressors, manifolds, etc. The site used for an accessory 
is part of the pipeline ROW grant. In the final rule, MMS may prescribe 
a definition different than that in 30 CFR part 250, subpart J.
    ``Appurtenance'' would have the same definition as in 30 CFR part 
250, subpart J--i.e., equipment, device, apparatus, or other object 
attached to a horizontal component or riser. Examples include anodes, 
valves, flanges, fittings, umbilicals, subsea manifolds, templates, 
pipeline end modules, pipeline end terminals, anode sleds, other sleds, 
and jumpers (other than jumpers connecting subsea wells to manifolds).
    MMS is currently in the process of rewriting its regulations at 30 
CFR part 250, subpart J. Those regulations are on a different schedule 
than this effort. We are proposing to use the same definitions as in 30 
CFR part 250, subpart J, in an effort to assure consistency between the 
two rules and eliminate any ambiguities. In the final rule, MMS may 
prescribe a definition different than that in 30 CFR part 250, subpart 
J.
    ``FERC pipeline'' would mean any pipeline under the jurisdiction of 
the Federal Energy Regulatory Commission under the Natural Gas Act, 15 
U.S.C. 717-717z, or the Department of Energy Organization Act, 49 
U.S.C. 60502. Although MMS believes it has jurisdiction over such 
pipelines for purposes of OCSLA's open and nondiscriminatory access 
requirement (see definition of ``OCSLA pipelines'' discussed below), it 
is necessary to distinguish FERC pipelines because, as discussed 
further below, MMS is proposing in this rulemaking to presume that FERC 
pipelines provide open and nondiscriminatory access.
    ``Grantee'' would mean any person or assignee to whom MMS has 
issued a pipeline permit, license, easement, right-of-way, or other 
grant of authority for transportation of oil or gas on or across the 
OCS under 30 CFR part 250, subpart J or 43 U.S.C. 1337(p), and any 
person who has an assignment of a permit, license, easement, right-of-
way or other grant of authority, or who has an assignment of any rights 
subject to any of those grants of authority. MMS is proposing this 
definition because section 5(f) of the OCSLA requires that ``every 
permit, license, easement, right-of-way or other grant of authority for 
the transportation by pipeline on or across the outer Continental Shelf 
of oil or gas shall require that the pipeline * * * provide open and 
nondiscriminatory access to both owner and nonowner shippers.'' 
Therefore, persons to whom MMS has granted such rights, and their 
assignees, would be grantees under the proposed rule, against whom 
shippers could file a complaint.
    When Congress enacted the Energy Policy Act of 2005, it amended the 
OCSLA by adding subsection (p) to 43 U.S.C. 1337. (Energy Policy Act of 
2005, section 388(a).) MMS has existing authority over all OCS 
pipelines for

[[Page 17049]]

which it has already issued a pipeline permit, license, easement, 
right-of-way, or other grant of authority for transportation of oil or 
gas across the OCS. However, subsection 388(a) of the Energy Policy Act 
of 2005 provides the Department of the Interior with additional 
authority to grant new pipeline easements or rights-of way on the OCS 
for transportation of oil or natural gas not already authorized by 
statute.
    ``IBLA'' would mean the Interior Board of Land Appeals.
    ``OCSLA pipeline'' would mean oil or gas pipelines for which MMS 
has issued a permit, license, easement, right-of-way, or other grant of 
authority under 30 CFR part 250, subpart J or 43 U.S.C. 1337(p).
    Again, this is the definition found in section 5(f) of the OCSLA 
quoted above. Any such pipelines would be under the jurisdiction of 
MMS. See also Williams Cos. v. FERC, 345 F.3d 910, 913-14 (D.C. Cir. 
2003), wherein the court found that enforcement of the statutory 
requirement ``would be at the hands of the obligee of the conditions, 
the Secretary of the Interior (or possibly other persons that the 
conditions might specify).''
    In response to the ANPRM, MMS received a broad range of comments 
regarding the Department of the Interior's (DOI) authority under the 
OCSLA. Both shippers and service providers expressed opinions 
concerning the actual authority granted to the DOI by the OCSLA. Areas 
of concern included jurisdiction over production-related facilities on 
offshore platforms; the regulation of pipelines subject to the Natural 
Gas Act and the Interstate Commerce Act; the exemption of deepwater 
ports from the OCSLA's open access requirements; the application of the 
OCSLA to both oil and gas pipelines; and the spectrum of pipelines that 
the DOI might regulate and whether any of these pipelines might be 
exempted from regulation.
    MMS believes that its authority to require that pipelines provide 
open and nondiscriminatory access to both owner and nonowner shippers 
extends to every pipeline transporting oil or gas on or across the OCS 
under a permit, license, easement, right-of-way, or other grant of 
authority, including leases. This includes right-of-way grantees, 
lessees, pipeline owners, pipeline operators, and all of their 
assignees, even when those pipelines are also regulated by FERC.
    One commenter stated that it believes that pipelines associated 
with deepwater ports are exempt from the open and nondiscriminatory 
access requirements of OCSLA. MMS believes that the commenter is 
correct in part. Our rationale is included in section III of this 
preamble and discusses why pipelines under the Deepwater Port Act are 
exempt from the pipeline access provisions of OCSLA.
    ``Outer Continental Shelf'' would have the same definition as in 
the OCSLA, 43 U.S.C. 1331--i.e., all submerged lands lying seaward and 
outside of the area of lands beneath navigable waters as defined in 
section 2 of the Submerged Lands Act, 43 U.S.C. 1301, and of which the 
subsoil and seabed appertain to the United States and are subject to 
its jurisdiction and control.
    ``Party'' would mean any person who files a complaint, any person 
who files an answer, and MMS. We are proposing to include MMS as a 
party because under this proposed rule, MMS has both enforcement and 
adjudicatory functions. It is not merely an impartial arbiter. For 
example, if MMS orders remedial action, MMS will be in the best 
position to defend that action.
    ``Person'' would mean an individual, corporation, government 
entity, partnership, association (including a trust or limited 
liability company), consortium, or joint venture (when established as a 
separate entity).
    ``Pipeline'' would mean the piping, risers, accessories and 
appurtenances installed for the purpose of transporting oil or gas.
    The requirements outlined in this proposed rule are intended to 
apply only to platforms and facilities directly related to the 
transportation of oil and gas production. MMS believes that under the 
plain language of OCSLA, production-related facilities on platforms, 
which include processing equipment for separating and treating 
production prior to transportation, are not covered by the open and 
nondiscriminatory access provisions. Therefore, MMS would only include 
appurtenances and accessories, as defined above, in the definition of 
pipeline.
    ``Serve'' would mean personally delivering a copy of the document 
to a person, or sending the document by U.S. mail or private delivery 
services that provide proof of delivery (such as return receipt 
requested). MMS is proposing that the party submitting a complaint as 
well as the answerer to a complaint provide a copy of its submittal to 
the other parties, including MMS. In order to provide proof of service 
and timely processing, MMS is proposing that correspondence be 
delivered by U.S. mail or private delivery services that provide proof 
of delivery (such as return receipt requested). MMS is requesting 
comments on whether there are other methods of delivery assurance that 
MMS should consider, including electronic transmission.
    ``Shipper'' would mean a person who contracts or wants to contract 
with a grantee or transporter to transport oil or gas through the 
grantee's or transporter's pipeline.
    ``Transportation'' would mean, for purposes of this part only, the 
movement of oil or gas through an OCSLA pipeline.
    The ANPRM requested discussion concerning whether, for the purposes 
of this rule, there is a need to define ``transportation'' and 
``gathering'' differently than those terms are defined in MMS royalty 
valuation regulations or FERC regulations. MMS is specifically 
proposing to use this definition of ``transportation'' in this part 
only to avoid any conflict with existing definitions of 
``transportation'' or ``gathering'' in MMS's royalty valuation 
regulations in 30 CFR part 206 or FERC regulations. MMS is not 
proposing a definition of ``gathering'' in this proposed rule because 
we believe that MMS has jurisdiction over all pipelines for which it 
has issued a permit, license, easement, right-of-way, or other grant of 
authority, whether or not those pipelines would be considered 
``gathering'' lines under the FERC's regulations.
    ``Transporter'' would mean, for purposes of this part only, any 
person who owns or operates an OCSLA oil or gas pipeline, for the 
reasons discussed in the definition of ``transportation.''

Section 291.102 May I Call the MMS Hotline to Informally Resolve an 
Allegation That Open and Nondiscriminatory Access Was Denied?

    With respect to informal resolution of disputes, comments received 
in response to the ANPRM generally recommended that MMS implement a 
light-handed approach. Therefore, MMS is proposing in this section to 
establish a toll-free Hotline to receive allegations of denial of open 
and nondiscriminatory access, and to allow shippers and transporters to 
request ADR in Sec.  291.103.
    In the ANPRM, MMS requested discussion concerning the usefulness of 
a Hotline to informally attempt to resolve shippers' and service 
providers' concerns regarding perceived instances of open and 
nondiscriminatory access violations. In general, shippers and service 
providers endorsed the concept of a Hotline as an informal mechanism 
for dispute identification and possible resolution. In this proposed 
rule, MMS

[[Page 17050]]

would establish a Hotline to receive informal allegations of denial of 
open access or discrimination in access in violation of the OCSLA. The 
Hotline's primary purpose would be to gather facts, evaluate 
allegations of denial of open access or discrimination in access, and 
recommend resolution options, including alternative dispute resolution 
(ADR).
    Proposed Sec.  291.102 would allow a shipper to attempt to 
informally resolve an allegation that it was denied open and 
nondiscriminatory access by calling the MMS Hotline. You (the shipper) 
could make the call to the MMS Hotline anonymously, and to the extent 
permitted by law, the MMS Hotline staff would treat all information it 
obtains as non-public and confidential. The proposed rule explains that 
the MMS Hotline staff would informally seek information from you and 
any grantee or transporter, as appropriate, and would attempt to 
resolve disputes without formal complaint proceedings. MMS agrees with 
commenters that the requirements for reporting a dispute using the 
Hotline should be kept to a minimum. Required information would include 
the location, pipeline, and a brief explanation of the reason(s) for 
believing that open access has been denied or that discrimination in 
access has occurred.
    The MMS Hotline staff could provide information to you and give 
informal oral advice. However, the advice given would not be binding on 
MMS or DOI. You could terminate your use of the MMS Hotline procedure 
at any time. If discussions assisted by the MMS Hotline staff were 
unsuccessful at resolving the matter, you could file a formal complaint 
under this part after notifying the MMS Hotline that you wish to file a 
formal complaint.

Section 291.103 May I Use Alternative Dispute Resolution to Informally 
Resolve an Allegation That Open and Nondiscriminatory Access Was 
Denied?

    Another informal option would allow the persons involved in the 
dispute to agree to non-binding ADR at their expense. ADR may be 
requested either by calling the MMS Hotline or by contacting the MMS 
Associate Director for Policy and Management Improvement.
    Under the proposed rule, either before or after a complaint is 
filed, persons involved in a dispute could elect to use one of the 
following to resolve their dispute:
     A contracted ADR provider;
     The DOI's Office of Collaborative Action and Dispute 
Resolution (CADR); or
     MMS employees trained in ADR facilitation techniques and 
certified by the CADR.

ADR facilitation is a service that uniquely benefits the participants 
by providing an opportunity for the participants to resolve their 
dispute without incurring substantial litigation costs. Thus, MMS is 
proposing to require participants in an ADR process to pay their 
respective shares of all costs and fees associated with any contracted 
or Departmental ADR provider.
    MMS proposes to recover its costs for providing an MMS facilitator. 
The costs of providing ADR facilitation are readily calculated and 
tracked. Thus, MMS is proposing to require participants in an ADR 
process to pay the actual costs of the service on a case-by-case basis. 
These costs would include both direct and indirect costs. Direct costs 
include such things as labor, material, and equipment. For example, 
direct costs would include the costs of the facilitator's time and any 
other MMS personnel time spent on related secretarial or other tasks. 
In addition to direct costs, MMS would recover indirect costs, such as 
rent and overhead. MMS would calculate indirect costs by applying to 
the direct cost figure an indirect cost ratio already determined in its 
accounting system.
    Authority for cost recovery is provided by the Independent Offices 
Appropriation Act of 1952, 31 U.S.C. 9701. This Act is a general law 
applicable Government-wide, that provides MMS authority to recover the 
costs of providing services to the non-federal sector. It requires 
implementation through rulemaking. There are several policy documents 
that provide guidance on the process of charging for service costs.
    These policy documents are in the Office of Management and Budget 
(OMB) Circular A-25, ``User Charges,'' and the Department of the 
Interior Departmental Manual (DM), 330 DM 1.3 & 6.4, ``Cost Recovery'' 
and ``User Charges.'' The general policy that governs charges for 
services provided states that a charge ``will be assessed against each 
identifiable recipient for special benefits derived from federal 
activities beyond those received by the general public'' (OMB Circular 
A-25). The Departmental Manual mirrors this policy (330 DM 1.3 A.).

Section 291.104 Who May File a Complaint?

    This section would explain who may file a complaint alleging a 
violation of the requirements of OCSLA section 5(e) and (f) that 
grantees and transporters provide open and nondiscriminatory access.
    MMS would propose to limit the filing of a complaint to any shipper 
who believes it has been denied open and nondiscriminatory access to an 
OCSLA pipeline.
    MMS intends to defer to the FERC on pipelines under the 
jurisdiction of the Natural Gas Act or Interstate Commerce Act. This 
deferral is based on MMS's presumption that because pipelines under the 
Natural Gas Act and Interstate Commerce Act are regulated by the FERC, 
``open access'' and ``nondiscriminatory access'' are being assured. 
Therefore, MMS would not consider complaints regarding a FERC pipeline 
that, for example, originates from a lease on the OCS and then 
transports production onshore to an adjacent state.
    MMS welcomes comments on the treatment of pipelines over which FERC 
exercises its Natural Gas Act or Interstate Commerce Act jurisdiction.

Section 291.105 What Must a Complaint Contain?

    This section would explain what a complaint must contain. In the 
ANPRM, MMS requested comments on the type of complaints it might 
receive. Review of the comments indicated that the types of complaints 
MMS might receive generally fell into two categories: (1) Rate 
discrimination and (2) denial of access. It became clear to MMS from 
the statements at the public meetings and written comments to the ANPRM 
that each complaint would be very fact-specific. Thus, MMS is not 
proposing to define categories of complaints it might receive in this 
proposed rulemaking. MMS would generally define a ``complaint'' to mean 
a comprehensive written brief stating the legal and factual basis for 
the allegation that a shipper was denied open and nondiscriminatory 
access with supporting material.
    Paragraph (a) would specify that a complaint must clearly identify 
the action or inaction which is alleged to violate 43 U.S.C. 1334(e) or 
(f)(1)(A). For example, in the case of rate discrimination, a shipper 
would have to allege that it was discriminated against by being charged 
a higher rate than other similarly situated shippers. General 
statements of dissatisfaction with high rates would not suffice.
    Paragraph (b) would require a complaint to explain how the action 
or inaction violates 43 U.S.C. 1334(e) or (f)(1)(A)--i.e., how the 
action or inaction denied the shipper open access or resulted in 
discrimination in access.
    Paragraph (c) would require a complaint to set forth how the action 
or

[[Page 17051]]

inaction affects the complainant's interests. In particular, it would 
require a complainant to make a good faith effort to quantify the 
financial impact or burden (if any) created as a result of the action 
or inaction. It also would require a complaint to explain other impacts 
of the action or inaction, such as practical, operational, or other 
non-financial impacts. This would be met by a statement of the harm the 
denial of open access or discrimination in access caused the shipper.
    Paragraph (d) would require a complainant to make a good faith 
effort to quantify the financial impact or burden (if any) created as a 
result of the action or inaction.
    Paragraph (e) would require that the complaint request specific 
relief or remedy. For a discussion of some of the specific remedies MMS 
believes are available, see the discussion of Sec.  291.112 below.
    Paragraph (f) would require that a complaint include all documents 
that support the facts in the complaint. MMS expects a complainant to 
provide all documents in its possession or which it can otherwise 
obtain. These documents should include, at a minimum, the relevant 
contracts and any affidavits necessary to support any particular 
factual allegations.
    In the ANPRM, MMS requested comments on whether interested parties 
would be more likely to participate in one type of complaint resolution 
process over another and what circumstances might affect this decision. 
Based on the responses, as discussed above, MMS is proposing informal 
processes to address disputes by utilizing an MMS Hotline process or 
ADR discussed in Sec. Sec.  291.102-291.103, and a formal process to 
address complaints described in this section and Sec. Sec.  209.106-
209.114 below.
    With respect to the formal process that MMS is proposing, shipper 
comments generally supported a formal regulatory process to address 
complaints, and pipeline comments generally did not. Specifically, some 
pipeline commenters questioned MMS's authority under the OCSLA to issue 
regulations concerning complaint resolution. Those commenters believe 
the OCSLA only provides for judicial review of such complaints under 43 
U.S.C. 1349-1350.
    MMS disagrees. The OCSLA specifically grants the Secretary of the 
Interior the authority to ``prescribe such rules and regulations as may 
be necessary to carry out the provisions of [the OCSLA].'' 43 U.S.C. 
1334(a). Nothing in section 1349 or section 1350 limits that rulemaking 
authority. Nor is there anything in section 1334(e) or (f) that exempts 
those provisions from the general grant of rulemaking authority.
    Moreover, based on comments received at the public meetings and in 
response to the ANPRM, MMS believes a formal process is necessary to 
assure that its decision to enforce the requirements of the OCSLA will 
be followed, and to give both parties a reason to participate in the 
informal process. Without the potential of some consequences, there is 
no reason for a pipeline owner to participate in a voluntary or an 
administrative process. Therefore, in Sec. Sec.  291.105-291.114, MMS 
is proposing a formal complaint process.
    In its consideration of the comments MMS received in response to 
the ANPRM, MMS recognized other possible formal complaint resolution 
processes. One of these would be to establish a process similar to the 
process employed by FERC as set forth in 18 CFR part 385. This process 
has the advantage of being familiar to both shippers and service 
providers. However, a FERC-mirrored process would impose new 
requirements on the DOI, including administrative hearing and appeals 
requirements. MMS is requesting comments on this or other possible 
variants.

Section 291.106 How Do I File a Complaint?

    This section would explain the process for filing a complaint. 
Paragraph (a) would explain that shippers filing complaints regarding 
OCSLA pipelines must file complaints with the MMS Director. As 
discussed above, decisions would be issued by the MMS Policy and 
Management Improvement office (PMI). Paragraph (b) would provide that 
the party filing the complaint must pay a nonrefundable processing fee 
of $7,500 to MMS. Under paragraph (c), you would have to serve your 
complaint on all parties named in the complaint. See discussion of 
``Serve'' in the definitions section above.
    Since MMS has not been involved in the processing of complaints of 
this type, it is interested in comments regarding whether there should 
be time limits placed on the filing of complaints following an action 
by a grantee or transporter denying open and nondiscriminatory access. 
MMS recognizes that the information necessary to effectively answer a 
complaint may become stale or even non-existent. On the other hand, 
should the mere passage of time be a limiting factor on whether a 
shipper can submit a complaint? MMS is requesting comments on this 
issue and may prescribe a time limit in the final rule.

Section 291.107 How Do I Answer a Complaint?

    The proposed rule would provide that, after a complaint is filed, 
those on whom a complaint was served could then submit a formal written 
answer responding to the allegations in the complaint. Paragraph (a) of 
this section would explain that if you have been served a complaint 
under Sec.  291.106(b), you may file an answer to the complaint within 
60 days of your receipt of the complaint. If you file your answer after 
60 days of your receipt of the complaint, MMS would have discretion not 
to consider your answer.
    The proposed rule would explain in paragraph (b) that for purposes 
of this part, an answer would mean a comprehensive written brief 
stating the legal and factual basis refuting the allegation in the 
complaint that you denied open access or nondiscriminatory access, 
together with supporting material.
    Paragraph (b)(1) would explain that you must attach a copy of the 
complaint to your answer or reference the assigned MMS docket number. 
This is to assist MMS in case management.
    Paragraph (b)(2) would require the answer to explain why the action 
or inaction alleged in the complaint does not violate 43 U.S.C. 1334(e) 
or (f)(1)(A).
    Paragraph (b)(3) would require answers to include all documents 
that support the facts in the answer in possession of, or otherwise 
obtainable by, the answerer, including, but not limited to, contracts 
and any affidavits necessary to support factual allegations. MMS is 
requesting comments on whether there is any other specific information 
that the answer should include.
    Paragraph (b)(4) would require that a copy of the answer be 
provided to all parties named in the complaint including the 
complainant.

Section 291.108 How Do I Pay the Processing Fee?

    This section would provide that you must pay your processing fees 
to the MMS Policy and Management Improvement office. Under paragraph 
(a) you would have to pay the processing fee or seek a fee waiver or 
reduction under Sec.  291.109. The party filing the complaint must pay 
a nonrefundable processing fee of $7,500 to MMS.
    You would be required to pay the nonrefundable processing fee by 
Electronic Funds Transfer, unless you requested, and MMS authorized, 
payment by check or an alternative method before the date the 
processing

[[Page 17052]]

fee would be due. The payment would have to include various specified 
forms of identification in order to properly account for the fee. We 
request comments on the amount of the processing fee, payment by 
Electronic Funds Transfer, and what form of identification should be 
included with fees.
    The Department's authority to recover its costs for the processing 
of complaints involving offshore pipeline access is the Independent 
Offices Appropriation Act of 1952, 31 U.S.C. 9701 (originally codified 
at 31 U.S.C. 483a) (IOAA). ``Office of Management and Budget (OMB) 
Circular No. A-25, 58 FR 38144 (adopted 1959; revised July 15, 1993), 
establishes federal policy regarding user charges under the IOAA.'' 
Interior Solicitor Opinion M-36987 (December 5, 1996). Further, the 
Department of the Interior Departmental Manual (DM) mandates cost 
recovery for special services: ``Departmental policy requires * * * 
that a charge, which recovers the bureau or office costs, be imposed 
for services which provide special benefits or privileges to an 
identifiable non-Federal recipient above and beyond those which accrue 
to the public at large.'' Id. (quoting 346 DM 1.2 A.); Cf. Federal 
Power Comm'n v. New England Power Co., 415 U.S. 345, 350 (1974) 
(describing the OMB Circular test at 6.a.(4) when no charge should be 
made as the proper construction of the IOAA). Thus, as part of this 
proposed rulemaking, we analyzed a previously proposed appeals rule's 
processing fees (that rule is discussed immediately below) for 
reasonableness according to the factors in IOAA section 501(b), 31 
U.S.C. 9701(b) and the guidance contained in the DM and OMB's Circular 
No. A-25.
    In promulgating regulations for similar processes (to complaints) 
for appeals of MMS-issued orders, the October 28, 1996, proposed 
appeals regulation also proposed payment of a processing fee. 61 FR 
33607 (1996). Several comments to that proposed appeals rule questioned 
MMS's authority to impose such fees. A similar concern logically exists 
for the processing of complaints here, even though the public has not 
yet had the opportunity to convey their comments. However, in addition 
to the authority under the IOAA, the United States Court of Appeals for 
the District of Columbia Circuit has upheld charging processing fees 
for administrative appeals. Ayuda, Inc. v. Attorney General, 848 F.2d 
1297 (D.C. Cir. 1988). See also, United Transportation Union-Illinois 
Legislative Board v. Surface Transportation Board, No. 97-1038, 1997 
U.S. App. LEXIS 37560, (D.C. Cir., Nov. 10, 1997) (decision published 
in table case format without opinion, reaffirming Ayuda) (reported in 
full text format at 1997 U.S. App. LEXIS 37560). In Ayuda the Circuit 
Court held that processing fees for administrative appeals ``are for a 
`service or thing of value' [under the IOAA, 31 U.S.C. 9701(a),] which 
provides the recipients with a special benefit.'' 848 F.2d at 1301.
    Unlike the circumstances and precedents established in Ayuda, the 
party seeking compliance (the complainant) under this rule normally is 
not the regulated party. However, there is no question that the 
complainant receives a ``special benefit'' from the services performed 
by MMS in processing the formal complaint. Therefore, this rule 
proposes that the party filing the complaint will pay the fee. We 
believe that this arrangement would fairly protect regulated parties 
from frivolous complaints while it would also ensure compliance with 
statutory and regulatory requirements. We request comments on the 
proposed fee.
    The four factors in the IOAA are ``(1) fair; and (2) based on--(A) 
the costs to the Government; (B) the value of the service or thing to 
the recipient; (C) public policy or interest served; and (D) other 
relevant facts.'' The factors mirror four of the six ``reasonableness 
factors'' contained in section 304(b) of the Federal Land Policy and 
Management Act of 1976 (FLPMA), 43 U.S.C. 1734(b). The ``reasonableness 
factors set out in FLPMA are: (a) ``Actual costs (exclusive of 
management overhead);'' (b) ``the monetary value of the rights or 
privileges sought by the applicant;'' (c) ``the efficiency to the 
government processing involved;'' (d) ``that portion of the cost 
incurred for the benefit of the general public interest rather than for 
the exclusive benefit of the applicant;'' (e) ``the public service 
provided;'' and (f) ``other factors relevant to determining the 
reasonableness of the costs.'' Although the factors contained in FLPMA 
apply only to onshore lands, because of the similarity between the 
factors used under both statutes and of the open-ended ``other relevant 
facts'' factor contained in IOAA, the Department believes that using 
the factors contained in section 304(b) to determine fees is eminently 
``fair'' under the authority of the IOAA.
    For the reasons set forth above, MMS proposes to implement the IOAA 
by applying each of the FLPMA factors for complaints processed under 
this proposed rule. We first estimated the actual cost for processing 
the complaint, and then considered each of the other FLPMA factors to 
see if any of them might cause the fee to be set at less than actual 
cost. We then considered whether any of the remaining factors acted as 
an enhancing factor that would mitigate against setting the fees at 
less than actual cost. We then decided the amount of the fee, which 
cannot be more than the actual processing cost. This method results in 
fees that are based upon the actual processing costs. Accordingly, for 
formal pipeline access complaints, the fee is proposed to be set at 
$7,500 and to be paid by the party filing the complaint.
Factor (a)--Actual Costs
    Actual costs means the financial measure of resources expended or 
used by MMS to process a complaint, including, but not limited to the 
costs to research and write the MMS Director's decision or take any 
other relevant action. Actual costs include both direct and indirect 
costs, exclusive of management overhead. Section 304(b) of FLPMA 
requires that management overhead be excluded from chargeable costs. 
Because we are implementing the IOAA by applying the FLPMA factors, 
management overhead costs are excluded from this analysis.
    MMS calculated the direct cost component of the actual costs to 
process a complaint by totaling agency expenditures for labor, 
material, and equipment usage. Based on the time it now takes to 
complete an appeals decision, we estimated the time it would take to 
perform the various phases of the proposed complaint process. We then 
multiplied the hours by $80, the average of MMS's personnel, material 
and equipment usage costs.
    MMS calculated the indirect cost component of actual costs by 
dividing the indirect costs such as rent and overhead associated with 
this process by the total program cost to arrive at an indirect cost 
percentage of 18.5%.
    MMS then multiplied the direct costs by 18.5% and added that figure 
to its direct costs to determine its total actual costs. This method of 
calculating costs is a generally accepted by both the public and 
private sectors.
    Our method of establishing actual costs involved estimating the 
average cost of processing an individual complaint. We concluded that 
while it might be possible to track costs and consider the 
reasonableness factors on a case-by-case basis, doing so would be time 
consuming and expensive.
    MMS's costs to process a complaint under this proposed rule would 
include the cost to consider the complaint in various phases at MMS. 
The first phase

[[Page 17053]]

would be the MMS Policy and Management Improvement office performing 
the following functions:
    (1) Receiving and date stamping each document;
    (2) Reviewing each complaint for completeness;
    (3) Docketing the complaint by entering the information into a 
computer-based tracking system;
    (4) Preparing and sending an acknowledgment letter or a denial 
letter as appropriate;
    (5) Preparing a complaint file; and
    (6) Reviewing each answer for completeness.

We estimated based on current processes that the average time to 
complete this phase would be 4 hours.
    The next phase would be researching and drafting the Director's 
decision. We estimated the average staff-hours the Policy and 
Management Improvement office currently spends on each appeal of MMS 
orders (discussed above) that results in a decision by the MMS Director 
to be 100 hours. However, unlike the current process where the appeals 
analyst only reviews a Statement of Reasons, in this process, the 
analyst would have to review a complaint and an answer, request 
additional information, as necessary, and review that information. The 
Policy and Management Improvement office also anticipates that 
initially it will be necessary for that Division to consult with MMS's 
Offshore Minerals Management program and Minerals Revenue Management 
program as part of the decision-making process. This is because the 
appeals analyst may need to use those programs' expertise to reach a 
decision. Accordingly, MMS estimates that the additional time it will 
need to process at least the first 5 complaints and answers, compared 
with an appeal of MMS-issued orders, will be 40 hours, for a total of 
140 hours for this phase.
    Thus, the total estimated average hours for MMS to spend on these 
phases is 4 hours for the docketing of the complaint and 140 hours for 
the preparing the MMS Director's decision, for a total of 144 hours per 
complaint. This estimate is based on current MMS time requirements for 
completing similar tasks. Using an estimate of $80 per hour based on an 
average of MMS's personnel, material and equipment-usage costs, we 
estimate the average direct cost burden for these requests would be 
$11,520 ($80/hour x 144 hours). MMS's indirect costs for the requests 
is $2,131 per appeal (18.5% indirect cost rate x $11,520) resulting in 
total estimated actual costs of $13,561 per average complaint.
Factor (b)--Monetary Value of the Rights and Privileges Sought
    The monetary value of rights and privileges sought means the 
objective worth of a complaint, in financial terms, to the complainant. 
The value to a complainant is gaining open or nondiscriminatory access 
to a pipeline if MMS determines that the complainant has been denied 
open or nondiscriminatory access. See e.g., Ayuda Inc. v. Attorney 
General, 848 F.2d 1297 at 1301 (1988) (value of having an incorrect 
action corrected). However, the monetary value of having MMS remedy a 
violation of OCSLA's requirement to provide open and nondiscriminatory 
access will vary depending on the specific facts of each complaint, 
which MMS cannot accurately estimate in advance of deciding any 
complaints. Moreover, most complaints will decide a legal question 
regarding what MMS believes is open access or discrimination that 
imparts value to both shippers and transporters, so the monetary value 
is not merely equal to the complainant's alleged loss. Therefore, we 
rejected the idea of trying to calculate monetary value on a case-by-
case basis for purposes of determining whether to increase or decrease 
the recovery of actual costs based on this factor. Instead, we have 
determined that consideration of this factor should include an 
examination of equitable considerations related to monetary value, 
rather than precise figures. However, given the nature of these 
complaints, we believe the monetary value to complainants of gaining 
access or having discriminatory actions cease would be great.
    A major equitable consideration is whether the level of cost 
reimbursement could burden the complainant to such an extent that the 
complaint would actually end up being of no monetary value to the 
complainant whatsoever. However, because we are providing a mechanism 
for fee waiver or reduction, and believe the monetary value of the 
relief sought would be considerably greater than the cost of filing a 
complaint in a vast majority of cases, we decided that this factor 
should not cause fees to be set below actual costs.
Factor (c)--Efficiency to the Government Processing Involved
    Efficiency to the Government processing means the ability of the 
United States to process a complaint with a minimum of waste, expense, 
and effort. Implicit in this factor is the establishment of a cost 
recovery process that does not cost more to operate than is necessary, 
and does not unduly increase the costs to be recovered. As noted in the 
above section on actual costs, we have estimated the cost to the 
government for the complaint process proposed in this rulemaking. 
However, we believe it would be inefficient to determine an adjustment 
factor to increase or decrease the recovery of actual costs on a case-
by-case basis.
    The procedures that we would use to process a complaint would be 
based on standardized steps for similar MMS transactions in order to 
eliminate duplication and extraneous procedures. However, some 
procedures would require processes in addition to those used under the 
current appeals process. These additional processes were accounted for 
under factor (a) above.
Factor (d)--Cost Incurred for the Benefit of the General Public 
Interest
    The cost incurred for the benefit of the general public interest 
(public benefit) means funds the United States expends, in connection 
with the processing of a complaint, for studies or data collection 
determined to have value or utility to the United States or the general 
public separate and apart from the document processing. It is important 
to note that this factor addresses funds expended in connection with a 
complaint. There is another level of public benefit that includes 
studies which we are required, by statute or regulation, to perform 
regardless of whether a complaint is received. The costs of such 
studies are excluded from any cost recovery calculations from the 
outset. Therefore, no reduction from costs recovered is necessary in 
relation to these studies.
    We concluded that the processing of a complaint would not as a rule 
produce studies or data collection that might benefit the public to any 
appreciable degree. Therefore, any possible benefits of such studies to 
the public are balanced by their possible benefits to the complainant. 
Accordingly, we made no adjustment to the fee recovered based on this 
factor.
Factor (e)--Public Service Provided
    Public service provided means direct benefits with significant 
public value that are expected as a result of a complaint. This factor 
is thus concerned with the benefit resulting from the ultimate decision 
in the complaint, while the previous factor related to the benefits of 
the document processing itself. Deciding a complaint provides a public 
service because the primary function of the complaint process is to 
ensure open and nondiscriminatory access as mandated by Congress in

[[Page 17054]]

sections 1334 (e) and (f)(1)(A). The value of the benefit to the public 
is great because ensuring open and nondiscriminatory access encourages 
production in new fields and prevents shut-in of existing wells. These 
in turn would further Congress' stated purpose of expeditious and 
orderly development of the OCS, 43 U.S.C. 1332, and the requirement 
that lessees diligently produce oil and gas from the lease. 43 U.S.C. 
1337(b)(4).
    Furthermore, comments received from the County of Santa Barbara 
stated that requiring open and nondiscriminatory access may decrease 
environmental degradation. ``Santa Barbara's policies * * * require 
equitable and nondiscriminatory access to onshore segments of pipelines 
that carry offshore oil and gas * * *. Application of these policies 
since the mid-1980's has substantially reduced the environmental 
impacts that would occur if every offshore operator installed their 
individual set of pipelines * * *.'' We agree. Therefore, we believe 
there would be a public benefit from avoiding potential environmental 
degradation. For these reasons, we decided that it was reasonable to 
set fees below actual costs on the basis of this factor.
Factor (f)--Other Factors
    The final reasonableness factor is other factors relevant to 
determining the reasonableness of the costs. Under this factor, we 
considered fees that other government entities charge for processing 
similar complaints (see October 28, 1996, proposed rulemaking, 61 FR at 
55609). Also, the paucity of anticipated complaints skews the 
programmatic costs for individual complaints. As discussed above, it 
will take the Policy and Management Improvement office an additional 40 
hours to process at least the first 5 complaints and answers than to 
process an appeal of a Minerals Revenue Management program order. 
However, after the Policy and Management Improvement office develops 
the expertise and case law, the time necessary to process a complaint 
should decrease. Accordingly, the first 5 complainants would bear the 
entire costs of the extra time necessary for the Policy and Management 
Improvement office to develop the expertise. We believe that it is more 
reasonable to spread those costs out over time, and, thus, reasonable 
to set fees below actual costs based on this factor.
    After considering all of the reasonableness factors, we concluded 
that the factors of public service (e) and other factors (f) make it 
reasonable to set the fees for filing a complaint at $7,500 instead of 
at the actual costs. None of the other factors mitigate against setting 
the fees at less than actual costs. Moreover, because the proposed fee 
of $7,500 would meet the reasonableness factors of FLPMA, they would 
also be fair under the IOAA.
    We invite comments concerning the proposed processing fee. 
Specifically, the MMS is requesting comments on the effect the proposed 
fees could have on the filing of complaints.

Section 291.109 Can I Ask for a Reduced Processing Fee?

    This section would allow complainants to request a fee waiver or 
reduction. We invite comments regarding the advisability of including 
procedures in the proposed rule for granting fee waivers or reductions. 
We have included fee waiver and reduction provisions because we believe 
that the payment of the $7,500 fee may cause undue hardship on small 
independent oil and gas producers/shippers and thus impede their access 
to the complaint process.
    While waiver procedures for complaints and appeals exist in some 
other agencies, they may not be applicable in instances such as this 
where there is an informal processing-fee free Hotline alternative and 
we have already reduced the fee to half of our actual costs. For 
example, waiver provisions in Department of Transportation Surface 
Transportation Board regulations apply to a fee schedule that includes 
fees ranging up to $23,300 for the filing of a formal complaint 49 CFR 
1002.2(c)-(f). See United Transportation Union-Illinois Legislative 
Board versus Surface Transportation Board, No. 97-1038, 1997 U.S. App. 
LEXIS 37560, (D.C. Cir. Nov. 10, 1997) (upheld a Surface Transportation 
Board fee for handling appeals, in part, because it ``provided a waiver 
mechanism for fees that would cause undue hardship''). Therefore, we 
invite comment on whether we should retain a fee waiver or reduction 
provision.

Section 291.110 Who May MMS Require To Produce Additional Information?

    The ANPRM requested comments on whether MMS could achieve its 
mandate of assuring open and nondiscriminatory access in the absence of 
routine information collection and the dissemination of some or all of 
that information. The comments received varied widely. Some commenters 
stated that the OCSLA does not provide MMS with the authority to 
require reporting. Others believed that MMS should implement the same 
type of information collection that the FERC had mandated in Orders 639 
and 639-A.
    MMS believes that without knowing the specifics of the number and 
type of instances of violations of the open and nondiscriminatory 
access requirements, the routine submittal of information is not 
justified at this time. In addition, MMS is not proposing to include 
reporting requirements because, if a shipper alleges discrimination in 
a complaint against a pipeline, it will need to provide documentation 
supporting that allegation. Likewise, it will be in a pipeline's best 
interest to provide documentation refuting the shipper's allegations of 
discrimination. Finally, because MMS is not defining ``open access'' or 
``nondiscriminatory access'' in the rulemaking, and because MMS 
believes complaints extend beyond rate issues, MMS anticipates that it 
will not need the majority of information FERC was gathering under 
Orders 639 and 639-A. Therefore, in the proposed rule, MMS does not 
propose any reporting requirements by service providers operating 
pipelines on the OCS similar to what the FERC imposed in Orders 639 and 
639-A.
    Rather, in paragraph (a) of this section, the proposed rule would 
allow MMS to require any lessee, operator of a lease or unit, shipper, 
grantee, or transporter (whether it is a shipper or not) to provide 
additional information that MMS believes is necessary to make a 
decision on whether open access or nondiscriminatory access was denied. 
MMS welcomes comments on whether it should be able to require 
information from persons who are not parties.
    Paragraph (b) would provide for enforcement of such requests if a 
party fails to provide additional information MMS requests under 
paragraph (a). Enforcement could include the assessment of civil 
penalties under 30 CFR part 250, subpart N, and dismissal of a 
complaint or factual findings adverse to a party on factual issues to 
which the information sought is relevant.
    Paragraph (c) would provide for enforcement of such requests if a 
lessee, operator of a lease or unit, shipper, grantee, or transporter, 
that is not a party fails to provide additional information MMS 
requests under paragraph (a). Enforcement may result in the assessment 
of civil penalties under 30 CFR part 250, subpart N.

Section 291.111 How May I Request That MMS Treat Information I Provide 
as Confidential?

    This section would allow any person who provides documents to MMS 
under

[[Page 17055]]

this part to claim that some or all of the information contained in the 
particular document is confidential. Confidentiality under this section 
would include documents that are exempt from disclosure under the 
Freedom of Information Act (FOIA), 5 U.S.C. 552, or protected by the 
Trade Secrets Act, 18 U.S.C. 1905, or otherwise exempt by law from 
public disclosure.
    In the ANPRM, MMS requested comments on how it should treat any 
collected information. MMS believes that in order to encourage 
participation in informal complaints, it is necessary to treat all 
submitted information as confidential to the extent allowed by law. 
Conversations with FERC reinforced this belief. With respect to 
information submitted during the formal complaint resolution process, 
MMS is proposing the submittal of complete and redacted versions of 
information in order to maintain the confidentiality of information 
when appropriate if a party requests that information be kept 
confidential and explains why it should be treated as confidential.
    MMS is proposing to retain the right to determine whether any claim 
of confidentiality is required by law. MMS would notify the person 
claiming confidentiality of its determination and to the extent 
permitted by law, would provide an opportunity to respond prior to any 
public disclosure.

Section 291.112 How Will MMS Decide Whether a Grantee or Transporter 
Has Provided Open and Nondiscriminatory Access?

    The MMS Director would review the pleadings and issue a decision 
including appropriate remedial actions as discussed below.
    MMS's Royalty-in-Kind (RIK) production marketing process includes 
negotiating rates for transportation. Some of that transportation will 
likely occur on pipelines subject to this rulemaking and presents the 
possibility that the RIK division may file a complaint. As discussed 
above, this raises the question of whether MMS, as a shipper of RIK 
production, can fairly decide other shipper's appeals alleging 
violations of the open and nondiscriminatory access provisions of 
OCSLA. See the discussion in Section II that concludes that MMS can 
fairly decide other shipper's appeals.

Section 291.113 What Actions May MMS Take To Remedy Denial of Open and 
Nondiscriminatory Access?

    If the MMS Director decides under Sec.  291.111 that the grantee or 
transporter has not provided open and nondiscriminatory access, then 
the decision would describe the actions MMS would take to remedy the 
denial of access. Actions MMS could take include ordering grantees and 
transporters to provide open and nondiscriminatory access to the 
complainant and assessing civil penalties of up to $10,000 per day 
under 30 CFR part 250, subpart N, for failure to provide open and 
nondiscriminatory access. Penalties would begin to accrue 60 days after 
the grantee or transporter received the order to provide access under 
this paragraph. The proposal also would allow MMS to request that the 
Department of Justice institute civil actions for a temporary 
restraining order, injunction, or other appropriate remedy to enforce 
the open and nondiscriminatory access requirements of 43 U.S.C. 1334(e) 
and (f)(1)(A), or to forfeit the right-of-way grant under 43 U.S.C. 
1334(e).

Section 291.114 How Do I Appeal to the IBLA?

    MMS is proposing to allow any party adversely affected by a final 
decision of the MMS Director under this part to appeal to IBLA under 
the procedures provided in 43 CFR part 4, subpart E.

Section 291.115 How Do I Exhaust Administrative Remedies?

    MMS is proposing to allow appeals to IBLA. If the MMS Director 
issues a decision, and does not expressly make the decision effective 
upon its issuance, then a party would need to appeal the decision to 
IBLA in order to exhaust administrative remedies. On the other hand, if 
the MMS Director expressly makes the decision effective upon issuance 
or if the Assistant Secretary for Land and Minerals Management issues 
or concurs in a decision under this part, then that is the Department's 
final decision. No further appeals would be needed to exhaust your 
administrative remedies, and none would be available.

III. Jurisdiction Under the Deepwater Port Act

    The Deepwater Port Act of 1974 defines a deepwater port as 
including ``all components and equipment, including pipelines, pumping 
stations, service platforms, buoys, mooring lines, and similar 
facilities to the extent they are located seaward of the high water 
mark.'' 33 U.S.C. 1502(9) (emphasis added). Under 33 U.S.C. 1503(b), 
the Secretary of Transportation ``issue[s] a license for the ownership, 
construction, and operation of a deepwater port''--including pipelines. 
Although the Secretary of the Interior, through MMS, issues a right-of-
way across the seabed for a pipeli