Agency Information Collection Activities: Proposed Collection, Comment Request, 47969-47980 [E8-18963]

Download as PDF Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices right-of-way, WYW–38612, issued to Big Horn County for road purposes; and right-of-way, WYW–128844, issued to Big Horn County for road purposes; and right-of-way, WYW–165789, issued to PacifiCorp for a powerline; a right-ofway, WYW–044411, issued to PacifiCorp for a powerline; a right-ofway, WYW–138721,issued to TCT West for a buried cable; a right-of-way, WYW–112026, issued to WAPA for a powerline; a right-of-way, WYW–94163, issued to PacifiCorp for a powerline; and a right-of-way, WYW–0313050, issued to Qwest for a telephone line. Specific covenants required by the Federal Aviation Administration will also be included in the conveyance and are available by contacting the office listed below. The conveyance is consistent with the Cody Resource Management Plan. The land is not required for any other Federal purpose. Upon publication of this notice in the Federal Register, the above described land will be segregated from all forms of appropriation under the public land laws, including the general mining laws, except applications for airport purposes and leasing under the mineral leasing laws. For a period of 45 days from the date of publication of this notice in the Federal Register, interested parties may submit comments to the BLM, Branch of Fluid Mineral Operations, Lands, & Appraisal, (Attn: Janelle Wrigley), Wyoming State Office, P.O. Box 1828, Cheyenne, Wyoming 82003. Only written comments submitted by postal service or overnight mail to the Wyoming State Office will be considered properly filed. Electronic mail, facsimile or telephone comments will not be considered properly filed. Any adverse comments will be evaluated by the State Director, who may sustain, vacate, or modify this realty action. In the absence of any objection, this proposed realty action will become final. Dated: July 25, 2008. Tamara J. Gertsch, Realty Officer. [FR Doc. E8–18901 Filed 8–14–08; 8:45 am] mstockstill on PROD1PC66 with NOTICES BILLING CODE 4310–22–P VerDate Aug<31>2005 19:03 Aug 14, 2008 Jkt 214001 DEPARTMENT OF THE INTERIOR Minerals Management Service [Docket No. MMS–2008–MRM–0031] Agency Information Collection Activities: Proposed Collection, Comment Request Minerals Management Service (MMS), Interior. ACTION: Notice of an extension of a currently approved information collection (OMB Control Number 1010– 0136). AGENCY: SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), we are inviting comments on a collection of information that we will submit to the Office of Management and Budget (OMB) for review and approval. This information collection request (ICR) pertains to valuation of oil and gas produced from Federal onshore and offshore leases. We changed the title of this ICR to meet OMB requirements and to reflect the consolidation of two ICRs relating to Federal oil and gas valuation. The new title of this ICR is ‘‘30 CFR Parts 202, 204, and 206, Federal Oil and Gas Valuation.’’ In this extension, we are consolidating the following ICRs, which allows programwide review of Federal oil and gas leases: • 1010–0136, previously titled ‘‘30 CFR Part 202—Royalties, Subpart C— Federal and Indian Oil and Subpart D— Federal Gas; and Part 206—Product Valuation, Subpart C—Federal Oil and Subpart D—Federal Gas;’’ and • 1010–0155, previously titled ‘‘30 CFR Part 204—Alternatives for Marginal Properties, Subpart C—Accounting and Auditing Relief.’’ DATES: Submit written comments on or before October 14, 2008. ADDRESSES: You may submit comments by the following methods: • Electronically go to http:// www.regulations.gov. In the ‘‘Comment or Submission’’ column, enter ‘‘MMS– 2008–MRM–0031’’ to view supporting and related materials for this ICR. Click on ‘‘Send a comment or submission’’ link to submit public comments. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site’s ‘‘User Tips’’ link. All comments submitted will be posted to the docket. • Mail comments to Hyla Hurst, Regulatory Specialist, Minerals Management Service, Minerals Revenue Management, P.O. Box 25165, MS PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 47969 302B2, Denver, Colorado 80225. Please reference ICR 1010–0136 in your comments. • Hand-carry comments or use an overnight courier service. Our courier address is Building 85, Room A–614, Denver Federal Center, West 6th Ave. and Kipling Blvd., Denver, Colorado 80225. Please reference ICR 1010–0136 in your comments. FOR FURTHER INFORMATION CONTACT: Hyla Hurst, telephone (303) 231–3495, or email hyla.hurst@mms.gov. You may also contact Hyla Hurst to obtain copies, at no cost, of (1) the ICR, (2) any associated forms, and (3) the regulations that require the subject collection of information. SUPPLEMENTARY INFORMATION: Title: 30 CFR Parts 202, 204, and 206, Federal Oil and Gas Valuation. OMB Control Number: 1010–0136. Bureau Form Number: Form MMS– 4393. Abstract: The Secretary of the U.S. Department of the Interior is responsible for mineral resource development on Federal and Indian lands and the Outer Continental Shelf (OCS). Under the Mineral Leasing Act (30 U.S.C. 1923), the Indian Mineral Development Act of 1982 (25 U.S.C. 2103), and the Outer Continental Shelf Lands Act (43 U.S.C. 1353), the Secretary is responsible for managing the production of minerals from Federal and Indian lands and the OCS, collecting royalties and other mineral revenues from lessees who produce minerals, and distributing the funds collected in accordance with applicable laws. The MMS performs the mineral revenue management functions for the Secretary. Applicable public laws pertaining to mineral leases on Federal and Indian lands are located at http://www.mrm.mms.gov/Laws_R_D/ PublicLawsAMR.htm. General Information When a company or an individual enters into a lease to explore, develop, produce, and dispose of minerals from Federal or Indian lands, that company or individual agrees to pay the lessor a share in an amount or value of production from the leased lands. The lessee is required to report various kinds of information to the lessor relative to the disposition of the leased minerals. Such information is generally available within the records of the lessee or others involved in developing, transporting, processing, purchasing, or selling of such minerals. We use the information collected in this ICR to ensure that royalty is accurately valued and appropriately paid on oil and gas produced from E:\FR\FM\15AUN1.SGM 15AUN1 47970 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices Federal onshore and offshore leases. Please refer to the chart for all reporting requirements and associated burden hours. All data submitted is subject to subsequent audit and adjustment. Valuation Regulations The valuation regulations at 30 CFR part 206, subparts C and D, require companies to collect and/or submit information used to value their Federal oil and gas, including transportation and processing allowance limit information. This is accomplished on Form MMS–2014, Report of Sales and Royalty Remittance (OMB Control Number 1010–0140, expires November 30, 2009). The information requested is the minimum necessary to carry out our mission and places the least possible burden on respondents. If the information is not collected, a loss of royalties may result for both Federal and state governments. Transportation and Processing Regulatory Allowance Limits The reasonable, actual costs of transportation and processing may be deducted from Federal royalties. Regulatory Allowance Limit for Transportation Under certain circumstances, lessees are authorized to deduct from royalty payments the reasonable, actual costs of transporting the royalty portion of produced oil and gas from the lease to a processing or sales point not in the immediate lease area. For oil and gas, regulations establish the allowable limit on transportation allowance deductions at 50 percent of the value of the oil or gas at the point of sale. Regulatory Allowance Limit for Processing When gas is processed for the recovery of gas plant products, lessees may claim a processing allowance. Regulations establish the allowable limit on processing allowance deductions at 662⁄3 percent of the value of each gas plant product. A state may decide in advance if it will allow either or both relief options for each particular year. After consulting with the state concerned, we will approve, deny, or modify requests in writing. Under the regulations, both MMS and the state concerned must approve any accounting and auditing relief granted for a marginal property. Request to Exceed Regulatory Allowance Limitation, Form MMS–4393 Lessees may request to exceed regulatory limitations. Upon proper application from the lessee, we may approve an oil or gas transportation allowance in excess of 50 percent or a gas processing allowance in excess of 662⁄3 percent on Federal leases. To request permission to exceed a regulatory allowance limit, lessees must submit a letter to MMS explaining why a higher allowance limit is necessary and provide supporting documentation, including a completed Form MMS– 4393. This form provides us with the data necessary to identify the properties and time periods for which the lessee is requesting to exceed the regulatory limits. OMB Approval Accounting and Auditing Relief for Marginal Properties We amended our regulations in 2004 to provide guidance to lessees and designees seeking accounting and auditing relief for Federal marginal properties. There are two types of relief: (1) cumulative royalty reports and payments relief; and (2) other relief. Under 30 CFR 204.202, MMS requires notification from lessees who request to take the cumulative royalty reporting and payment relief option. Under 30 CFR 204.203, MMS requires a relief request from lessees who want to obtain any other type of accounting and auditing relief. We are requesting OMB approval to continue to collect this information. Not collecting this information would limit the Secretary’s ability to discharge his/ her duties and may also result in loss of royalty payments. Proprietary information submitted to MMS under this collection is protected, and no items of a sensitive nature are included in this information collection. For information collections relating to valuation requirements, responses are mandatory. For the remaining information collections in this ICR, responses are voluntary; only those lessees who request approval to exceed the regulatory limits on transportation and processing allowances or to obtain the benefits of accounting and auditing relief for marginal properties must supply this information. Frequency of Response: Annually and on occasion. Estimated Number and Description of Respondents: 102 Federal lessees/ designees and 4 states. Estimated Annual Reporting and Recordkeeping ‘‘Hour’’ Burden: 21,055 hours. We have not included in our estimates certain requirements performed in the normal course of business and considered usual and customary. The following chart shows the estimated burden hours by CFR section and paragraph: RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS Citation 30 CFR 202 and 206 Reporting and recordkeeping requirement Hour burden Average number of annual responses Annual burden hours PART 202S—ROYALTIES Subpart C—Federal and Indian Oil § 202.101 mstockstill on PROD1PC66 with NOTICES 202.101 ................................... Standards for reporting and paying royalties. 202.101 Oil volumes are to be reported in barrels of clean oil of 42 standard U.S. gallons (231 cubic inches each) at 60 °F, * * *. Burden covered under OMB Control Number 1010–0140 (expires 11/30/2009). Subpart D—Federal Gas § 202.152 202.152(a) and (b) .................. VerDate Aug<31>2005 19:03 Aug 14, 2008 Standards for reporting and paying royalties on gas. 202.152(a)(1) If you are responsible for reporting production or royalties you must: Jkt 214001 PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 Burden covered under OMB Control Number 1010–0140. E:\FR\FM\15AUN1.SGM 15AUN1 47971 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Citation 30 CFR 202 and 206 Reporting and recordkeeping requirement Hour burden Average number of annual responses Annual burden hours (i) Report gas volumes and British thermal unit (Btu) heating values, if applicable, under the same degree of water saturation; (ii) Report gas volumes in units of 1,000 cubic feet (mcf); and (iii) Report gas volumes and Btu heating value at a standard pressure base of 14.73 pounds per square inch absolute (psia) and a standard temperature base of 60 °F. * * * (b) Residue gas and gas plant product volumes shall be reported as specified in this paragraph. * * * PART 204—ALTERNATIVES FOR MARGINAL PROPERTIES Subpart C—Accounting and Auditing Relief § 204.202 What is the cumulative royalty reports and payments relief option? 204.202(b)(1) .......................... 204.202(b) To use the cumulative royalty reports and payments relief option, you must do all of the following: (1) Notify MMS in writing by January 31 of the calendar year for which you begin taking your relief. * * * 204.202(b)(2) .......................... 204.202(b)(2) Submit your royalty report and payment * * *by the end of February of the year following the calendar year for which you reported annually. * * * If you have an estimated payment on file, you must submit your royalty report and payment by the end of March of the year following the calendar year for which you reported annually; 40 1 40 Burden covered under OMB Control Number 1010–0140. (3) Use the sales month prior to the month that you submit your annual report and payment * * * for the entire previous calendar year’s production for which you are paying annually. * * * 204.202(b)(4), (b)(5), (c), (d)(1), (d)(2), (e)(1), and (e)(2). 204.202(b) To use the cumulative royalty reports and payments relief option, you must * * * Burden covered under OMB Control Number 1010–0140. (4) Report one line of cumulative royalty information on Form MMS–2014 for the calendar year * * * and (5) Report allowances on Form MMS–2014 on the same annual basis as the royalties for your marginal property production. (c) If you do not pay your royalty by the date due in paragraph (b) of this section, you will owe late payment interest * * * from the date your payment was due under this section until the date MMS receives it. * * * (e) If you dispose of your ownership interest in a marginal property for which you have taken relief * * * you must: (1) Report and pay royalties for the portion of the calendar year for which you had an ownership interest; and (2) Make the report and payment by the end of the month after you dispose of the ownership interest in the marginal property. If you do not report and pay timely, you will owe interest * * * from the date the payment was due. * * * § 204.203 mstockstill on PROD1PC66 with NOTICES 204.203(b) ............................... 204.203(b) You must request approval from MMS * * * before taking relief under this option. § 204.205 204.205(a) and (b) .................. VerDate Aug<31>2005 19:22 Aug 14, 2008 What is the other relief option? PO 00000 1 How do I obtain accounting and auditing relief? 204.205(a) To take cumulative reports and payments relief under § 204.202, you must notify MMS in writing by January 31 of the calendar year for which you begin taking your relief. * * * Jkt 214001 200 Frm 00096 Fmt 4703 Sfmt 4703 Burden covered under § 204.203(b). E:\FR\FM\15AUN1.SGM 15AUN1 200 47972 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Citation 30 CFR 202 and 206 Reporting and recordkeeping requirement Average number of annual responses Hour burden Annual burden hours (b) To obtain other relief under § 204.203, you must file a written request for relief with MMS. * * * § 204.206 204.206(a)(3)(i) and (b)(1) ...... What will MMS do when it receives my request for other relief? 204.206 When MMS receives your request for other relief under § 204.205(b), it will notify you in writing as follows: Burden covered under § 204.203(b). (a) If your request for relief is complete, MMS may either approve, deny, or modify your request in writing after consultation with any State. * * * (3) If MMS modifies your relief request, MMS will notify you of the modifications. (i) You have 60 days from your receipt of MMS’s notice to either accept or reject any modification(s) in writing. * * * (b) If your request for relief is not complete, MMS will notify you in writing. * * * (1) You must submit the missing information within 60 days of your receipt of MMS’s notice. * * * § 204.208 May a State decide that it will or will not allow one or both of the relief options under this subpart? 204.208(c)(1) and (d)(1) ......... 204.208(c) If a State decides * * * that it will or will not allow one or both of the relief options * * * within 30 days * * * the State must: (1) Notify the Associate Director for Minerals Revenue Management, MMS, in writing, of its intent to allow or not allow one or both of the relief options. * * * (d) If a State decides in advance * * * that it will not allow one or both of the relief options * * * the State must: (1) Notify the Associate Director for Minerals Revenue Management, MMS, in writing, of its intent to allow one or both of the relief options. * * * § 204.209 204.209(b) ............................... 4 160 1 6 What if a property ceases to qualify for relief obtained under this subpart? 204.209(b) If a property is no longer eligible for relief * * * the relief for the property terminates as of December 31 of that calendar year. You must notify MMS in writing by December 31 that the relief for the property has terminated. * * * § 204.210 204.210(c) and (d) .................. 40 6 What if a property is approved as part of a nonqualifying agreement? 204.210(c) * * * the volumes on which you report and pay royalty * * * must be amended to reflect all volumes produced on or allocated to your lease under the nonqualifying agreement as modified by BLM. * * * Report and pay royalties for your production using the procedures in § 204.202(b). Burden covered under OMB Control Number 1010–0140. (d) If you owe additional royalties based on the retroactive agreement approval and do not pay your royalty by the date due in § 204.202(b), you will owe late payment interest determined under 30 CFR 218.54 from the date your payment was due under § 204.202(b)(2) until the date MMS receives it. § 204.214(b) mstockstill on PROD1PC66 with NOTICES 204.214(b)(1) and (b)(2) ......... Is minimum royalty due on a property for which I took relief? 204.214(b) If you pay minimum royalty on production from a marginal property during a calendar year for which you are taking cumulative royalty reports and payment relief, and: Burden covered under OMB Control Number 1010–0140. (1) The annual payment you owe under this subpart is greater than the minimum royalty you paid, you must pay the difference between the minimum royalty you paid and your annual payment due under this subpart; or VerDate Aug<31>2005 19:22 Aug 14, 2008 Jkt 214001 PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 E:\FR\FM\15AUN1.SGM 15AUN1 47973 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Citation 30 CFR 202 and 206 Reporting and recordkeeping requirement Average number of annual responses Hour burden Annual burden hours (2) The annual payment you owe under this subpart is less than the minimum royalty you paid, you are not entitled to a credit because you must pay at least the minimum royalty amount on your lease each year. PART 206—PRODUCT VALUATION Subpart C—Federal Oil § 206.102 How do I calculate royalty value for oil that I or my affiliate sell(s) under an arm’s-length contract? 206.102(e)(1) .......................... 206.102(e) If you value oil under paragraph (a) of this section: (1) MMS may require you to certify that your or your affiliate’s arm’s-length contract provisions include all of the consideration the buyer must pay, either directly or indirectly, for the oil. § 206.103 206.103(a) ............................... 206.103(a)(4) .......................... 206.103(b)(1) .......................... 206.103(b)(1)(ii) ...................... 206.103(b)(4) .......................... 206.103(c)(1) .......................... 206.103(e)(1) and (2) ............. mstockstill on PROD1PC66 with NOTICES VerDate Aug<31>2005 19:03 Aug 14, 2008 How do I value oil that is not sold under an arm’s-length contract? 206.103 This section explains how to value oil that you may not value under § 206.102 or that elect under § 206.102(d) to value under this section. First determine whether paragraph (a), (b), or (c) of this section applies to production from your lease, or whether you may apply paragraph (d) or (e) with MMS approval. (a) Production from leases in California or Alaska. Value is the average of the daily mean ANS spot prices published in any MMS-approved publication during the trading month most concurrent with the production month. * * * (1) To calculate the daily mean spot price. * * * (2) Use only the days. * * * (3) You must adjust the value. * * * 206.103(a)(4) After you select an MMS-approved publication, you may not select a different publication more often than once every 2 years, * * *. 206.103(b) Production from leases in the Rocky Mountain Region. * * * (1) If you have an MMS-approved tendering program, you must value oil. * * * 206.103(b)(1)(ii) If you do not have an MMS-approved tendering program, you may elect to value your oil under either paragraph (b)(2) or (b)(3) of this section. * * * 206.103(b)(4) If you demonstrate to MMS’s satisfaction that paragraphs (b)(1) through (b)(3) of this section result in an unreasonable value for your production as a result of circumstances regarding that production, the MMS Director may establish an alternative valuation method. 206.103(c) Production from leases not located in California, Alaska or the Rocky Mountain Region. (1) Value is the NYMEX price, plus the roll, adjusted for applicable location and quality differentials and transportation costs under § 206.112. 206.103(e) Production delivered to your refinery and the NYMEX price or ANS spot price is an unreasonable value. (1) * * * you may apply to the MMS Director to establish a value representing the market at the refinery if: * * *. (2) You must provide adequate documentation and evidence demonstrating the market value at the refinery. * * * § 206.105 206.105 ................................... AUDIT PROCESS. See note. 45 5 225 8 2 16 400 2 800 400 2 800 400 2 800 50 10 500 330 2 660 What records must I keep to support my calculations of value under this subpart? 206.105 If you determine the value of your oil under this subpart, you must retain all data relevant to the determination of royalty value. * * * Jkt 214001 PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 Burden covered under OMB Control Number 1010–0140. E:\FR\FM\15AUN1.SGM 15AUN1 47974 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Citation 30 CFR 202 and 206 Reporting and recordkeeping requirement § 206.107 206.107(a) ............................... 206.109(c)(2) .......................... § 206.110 § 206.111 8 2 660 330 1 330 206.110(e)(1) * * * If MMS rejects your cost allocation, you must amend your Form MMS–2014 * * * AUDIT PROCESS. See note. Burden covered under OMB Control Number 1010–0140. (2) You must submit your initial proposal, including all available data, within 3 months after first claiming the allocated deductions on Form MMS–2014. 206.110(g) If your arm’s-length sales includes a provision reducing the contract price by a transportation factor, * * * (2) You must obtain MMS approval before claiming a transportation factor in excess of 50 percent of the base price of the product. 330 1 330 How do I determine a transportation allowance if I do not have an arm’s-length transportation contract or arm’s-length tariff? 206.111(g) ............................... 206.111(k)(2) .......................... 206.111(l)(1) ........................... 206.111(l)(2) ........................... 206.111(l)(3) ........................... § 206.112 1 8 206.110(d) If your arm’s-length transportation contract includes more than one liquid product, and the transportation costs attributable to each product cannot be determined. * * * (3) You may propose to MMS a cost allocation method. * * * 206.110(e) If your arm’s-length transportation contract includes both gaseous and liquid products, and the transportation costs attributable to each product cannot be determined from the contract, then you must propose an allocation procedure to MMS. 206.110(g)(2) .......................... 2,640 How do I determine a transportation allowance under an arm’s-length transportation contract? 206.110(a) * * * You must be able to demonstrate that you or your affiliate’s contract is at arm’s length. * * * 206.110(e)(1) and (2) ............. 8 330 206.109(c) Limits on transportation allowances. (2) You may ask MMS to approve a transportation allowance in excess of the limitation in paragraph (c)(1) of this section. * * * Your application for exception (using Form MMS– 4393, Request to Exceed Regulatory Allowance Limitation) must contain all relevant and supporting documentation necessary for MMS to make a determination. * * * 206.110(d)(3) .......................... mstockstill on PROD1PC66 with NOTICES 330 When may I take a transportation allowance in determining value? 206.110(a) ............................... 206.110(e) ............................... Annual burden hours How do I request a value determination? 206.107(a) You may request a value determination from MMS. * * * § 206.109 Average number of annual responses Hour burden 206.111(g) To compute depreciation, you may elect to use either * * * After you make an election, you may not change methods without MMS approval. * * * 206.111(k)(2) You may propose to MMS a cost allocation method on the basis of the values * * * 206.111(l)(1) Where you transport both gaseous and liquid products through the same transportation system, you must propose a cost allocation procedure to MMS. 206.111(l)(2) * * * If MMS rejects your cost allocation, you must amend your Form MMS–2104 for the months that you used the rejected method and pay any additional royalty and interest due. 206.111(l)(3) You must submit your initial proposal, including all available data, within 3 months after first claiming the allocated deductions on Form MMS–2014. 330 1 330 330 1 330 330 1 330 Burden covered under OMB Control Number 1010–0140. Burden covered under § 206.111(l)(1). What adjustments and transportation allowances apply when I value oil production from my lease using NYMEX prices or ANS spot prices? 206.112(a)(1)(ii) ...................... VerDate Aug<31>2005 19:03 Aug 14, 2008 206.112(a)(1)(ii) * * * under an exchange agreement that is not at arm’s length, you must obtain approval from MMS for a location and quality differential. * * * Jkt 214001 PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 E:\FR\FM\15AUN1.SGM 330 15AUN1 1 330 47975 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Annual burden hours Reporting and recordkeeping requirement 206.112(a)(1)(ii) ...................... 206.112(a)(1)(ii) * * * If MMS prescribes a different differential, you must apply. * * * You must pay any additional royalties owed * * * plus the late payment interest from the original royalty due date, or you may report a credit. * * * 330 2 660 206.112(a)(3) and (4) ............. 206.112(a)(3) If you transport or exchange at arm’s length (or both transport and exchange) at least 20 percent, but not all, of your oil produced from the lease to a market center, determine the adjustment between the lease and the market center for the oil that is not transported or exchanged (or both transported and exchanged) to or through a market center as follows: * * *. (4) If you transport or exchange (or both transport and exchange) less than 20 percent of your crude oil produced from the lease between the lease and a market center, you must propose to MMS an adjustment between the lease and the market center for the portion of the oil that you do not transport or exchange (or both transport and exchange) to a market center. * * * If MMS prescribes a different adjustment. * * * You must pay any additional royalties owed * * * plus the late payment interest from the original royalty due date, or you may report a credit. * * * 206.112(b)(3) * * * you may propose an alternative differential to MMS. * * * If MMS prescribes a different differential * * *. You must pay any additional royalties owed * * * plus the late payment interest from the original royalty due date, or you may report a credit. * * * 206.112(c)(2) * * * If quality bank adjustments do not incorporate or provide for adjustments for sulfur content, you may make sulfur adjustments, based on the quality of the representative crude oil at the market center, of 5.0 cents per one-tenth percent difference in sulfur content, unless MMS approves a higher adjustment. 330 4 1,320 330 4 1,320 330 2 660 206.112(b)(3) .......................... 206.112(c)(2) .......................... § 206.114 206.114 ................................... 206.114 ................................... § 206.115 206.115(a) ............................... 206.115(c) ............................... Hour burden Average number of annual responses Citation 30 CFR 202 and 206 What are my reporting requirements under an arm’s-length transportation contract? 206.114 You or your affiliate must use a separate entry on Form MMS–2014 to notify MMS of an allowance based on transportation costs you or your affiliate incur. 206.114 MMS may require you or your affiliate to submit arm’s-length transportation contracts, production agreements, operating agreements, and related documents. Burden covered under OMB Control Number 1010–0140. AUDIT PROCESS. See note. What are my reporting requirements under a non-arm’s-length transportation arrangement? 206.115(a) You or your affiliate must use a separate entry on Form MMS–2014 to notify MMS of an allowance based on transportation costs you or your affiliate incur. 206.115(c) MMS may require you or your affiliate to submit all data used to calculate the allowance deduction. * * * Burden covered under OMB Control Number 1010–0140. AUDIT PROCESS. See note. Subpart D—Federal Gas § 206.152 mstockstill on PROD1PC66 with NOTICES 206.152(b)(1)(i) and (iii) .......... 206.152(b)(2) .......................... VerDate Aug<31>2005 19:03 Aug 14, 2008 Valuation standards-unprocessed gas. 206.152(b)(1)(i) * * * The lessee shall have the burden of demonstrating that its contract is arm’s-length. * * * AUDIT PROCESS. See note. (iii) * * * When MMS determines that the value may be unreasonable, MMS will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee’s value. 206.152(b)(2) * * * The lessee must request a value determination in accordance with paragraph (g) of this section for gas sold pursuant to a warranty contract; * * *. Jkt 214001 PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 E:\FR\FM\15AUN1.SGM 330 15AUN1 1 330 47976 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Citation 30 CFR 202 and 206 Reporting and recordkeeping requirement 206.152(b)(3) .......................... 206.152(b)(3) MMS may require a lessee to certify that its arm’s-length contract provisions include all of the consideration to be paid by the buyer, either directly or indirectly, for the gas. 206.152(e)(1) Where the value is determined pursuant to paragraph (c) of this section, the lessee shall retain all data relevant to the determination of royalty value. * * * 206.152(e)(2) Any Federal lessee will make available upon request to the authorized MMS or State representatives, to the Office of the Inspector General of the Department of the Interior, or other person authorized to receive such information, arm’s-length sales and volume data for likequality production sold, purchased or otherwise obtained by the lessee from the field or area or from nearby fields or areas. 206.152(e)(1) .......................... 206.152(e)(2) .......................... 206.152(e)(3) .......................... 206.152(g) ............................... AUDIT PROCESS. See note. 330 206.153(b)(3) MMS may require a lessee to certify that its arm’s-length contract provisions include all of the consideration to be paid by the buyer, either directly or indirectly, for the residue gas or gas plant product. 206.153(e)(1) Where the value is determined pursuant to paragraph (c) of this section, the lessee shall retain all data relevant to the determination of royalty value. * * * 206.153(e)(2) Any Federal lessee will make available upon request to the authorized MMS or State representatives, to the Office of the Inspector General of the Department of the Interior, or other persons authorized to receive such information, arm’s-length sales and volume data for like-quality residue gas and gas plant products sold, purchased or otherwise obtained by the lessee from the same processing plant or from nearby processing plants. 206.153(e)(3) .......................... 206.153(g) ............................... VerDate Aug<31>2005 19:03 Aug 14, 2008 660 6 1,980 1 330 AUDIT PROCESS. See note. 330 AUDIT PROCESS. See note. Burden covered under OMB Control Number 1010–0140. AUDIT PROCESS. See note. 206.153(e)(2) A lessee shall notify MMS if it has determined any value pursuant to paragraph (c)(2) or (c)(3) of this section. * * * 206.153(g) The lessee may request a value determination from MMS. * * * The lessee shall submit all available data relevant to its proposal. * * * § 206.154 206.154(c)(4) .......................... 2 330 206.153(b)(2) * * * The lessee must request a value determination in accordance with paragraph (g) of this section for gas sold pursuant to a warranty contract; * * *. 206.153(b)(3) .......................... mstockstill on PROD1PC66 with NOTICES Burden covered under OMB Control Number 1010–0140. 206.153(b)(1)(i) * * * The lessee shall have the burden of demonstrating that its contract is arm’s-length. * * * 206.153(b)(2) .......................... 206.153(e)(2) .......................... Annual burden hours Valuation standards—processed gas. (iii) * * * When MMS determines that the value may be unreasonable, MMS will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee’s value. 206.153(e)(1) .......................... Average number of annual responses AUDIT PROCESS. See note. 206.152(e)(3) A lessee shall notify MMS if it has determined value pursuant to paragraph (c)(2) or (c)(3) of this section. * * * 206.152(g) The lessee may request a value determination from MMS. * * * The lessee shall submit all available data relevant to its proposal. * * * § 206.153 206.153(b)(1)(i) and (iii) .......... Hour burden 2 660 330 4 1,320 1 330 Determination of quantities and qualities for computing royalties. 206.154(c)(4) * * * A lessee may request MMS approval of other methods for determining the quantity of residue gas and gas plant products allocable to each lease. * * * Jkt 214001 330 PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 E:\FR\FM\15AUN1.SGM 330 15AUN1 47977 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Citation 30 CFR 202 and 206 Reporting and recordkeeping requirement § 206.156 206.156(c)(3) .......................... 206.157(a)(1)(i) ....................... 206.157(a)(1)(i) ....................... 206.157(a)(1)(iii) ..................... 206.157(a)(2)(ii) ...................... 206.157(a)(3) .......................... 206.157(a)(5) .......................... 206.157(a) Arm’s-length transportation contracts. (1)(i) * * * The lessee shall have the burden of demonstrating that its contract is arm’s-length. * * * 206.157(a)(1)(i) * * * The lessee must claim a transportation allowance by reporting it on a separate line entry on the Form MMS–2014. 206.157(a)(1)(iii) * * * When MMS determines that the value of the transportation may be unreasonable, MMS will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee’s transportation costs. 206.157(b) Non-arm’s-length or no contract. (1) The lessee must claim a transportation allowance by reporting it on a separate line entry on the Form MMS–2014. * * * 206.157(b)(4) .......................... 206.157(b)(5) .......................... 206.157(c)(1)(i) ....................... VerDate Aug<31>2005 19:03 Aug 14, 2008 206.157(c) Reporting Requirements. (1) Arm’s-length contracts. (i) You must use a separate entry on Form MMS– 2014 to notify MMS of a transportation allowance. Jkt 214001 PO 00000 24 Burden covered under OMB Control Number 1010–0140. AUDIT PROCESS. See note. 330 Frm 00102 Fmt 4703 Sfmt 4703 1 330 330 1 330 100 206.157(b)(2)(iv) After a lessee has elected to use either method for a transportation system, the lessee may not later elect to change to the other alternative without approval of the MMS. (A) After an election is made, the lessee may not change methods without MMS approval. * * * 206.157(b)(3)(i) * * * Except as provided in this paragraph, the lessee may not take an allowance for transporting a product which is not royalty bearing without MMS approval. 206.157(b)(3)(ii) * * * the lessee may propose to the MMS a cost allocation method on the basis of the values of the products transported. * * * 206.157(b)(4) Where both gaseous and liquid products are transported through the same transportation system, the lessee shall propose a cost allocation procedure to MMS. * * * The lessee shall submit all relevant data to support its proposal. * * * 206.157(b)(5) You may apply for an exception from the requirement to compute actual costs under paragraphs (b)(1) through (b)(4) of this section. 206.157(b)(3)(ii) ...................... 3 AUDIT PROCESS. See note. 206.157(a)(2)(ii) * * * the lessee may propose to MMS a cost allocation method on the basis of the values of the products transported. * * * 206.157(a)(3) If an arm’s-length transportation contract includes both gaseous and liquid products and the transportation costs attributable to each cannot be determined from the contract, the lessee shall propose an allocation procedure to MMS. * * * The lessee shall submit all relevant data to support its proposal. * * * 206.157(a)(5) * * * The transportation factor may not exceed 50 percent of the base price of the product without MMS approval. 206.157(b)(2)(iv) and (b)(2)(iv)(A). mstockstill on PROD1PC66 with NOTICES 8 Determination of transportation allowances. 206.157(b)(1) .......................... 206.157(b)(3)(i) ....................... Annual burden hours Transportation allowances-general. 206.156(c)(3) Upon request of a lessee, MMS may approve a transportation allowance deduction in excess of the limitation prescribed by paragraphs (c)(1) and (c)(2) of this section. * * * An application for exception (using Form MMS–4393, Request to Exceed Regulatory Allowance Limitation) shall contain all relevant and supporting documentation necessary for MMS to make a determination. * * * § 206.157 Average number of annual responses Hour burden 1 100 Burden covered under OMB Control Number 1010–0140. 100 1 100 100 1 100 100 1 100 100 1 100 100 1 100 Burden covered under OMB Control Number 1010–0140. E:\FR\FM\15AUN1.SGM 15AUN1 47978 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Citation 30 CFR 202 and 206 Reporting and recordkeeping requirement 206.157(c)(1)(ii) ...................... 206.157(c)(1)(ii) The MMS may require you to submit arm’s-length transportation contracts, production agreements, operating agreements, and related documents. * * * 206.157(c)(2) Non-arm’s-length or no contract. (i) You must use a separate entry on Form MMS–2014 to notify MMS of a transportation allowance. 206.157(c)(2)(iii) The MMS may require you to submit all data used to calculate the allowance deduction. * * * 206.157(e) Adjustments. (2) For lessees transporting production from onshore Federal leases, the lessee must submit a corrected Form MMS–2014 to reflect actual costs, together with any payment, in accordance with instructions provided by MMS. 206.157(c)(2)(i) ....................... 206.157(c)(2)(iii) ...................... 206.157(e)(2), (e)(3), and (f)(1). Average number of annual responses Hour burden Annual burden hours AUDIT PROCESS. See note. Burden covered under OMB Control Number 1010–0140. AUDIT PROCESS. See note. Burden covered under OMB Control Number 1010–0140. (3) For lessees transporting gas production from leases on the OCS, if the lessee’s estimated transportation allowance exceeds the allowance based on actual costs, the lessee must submit a corrected Form MMS–2014 to reflect actual costs, together with its payments, in accordance with instructions provided by MMS. * * * (f) Allowable costs in determining transportation allowances. * * * (1) Firm demand charges paid to pipelines * * * if you receive a payment or credit from the pipeline for penalty refunds, rate case refunds, or other reasons, you must reduce the firm demand charge claimed on the Form MMS–2014 by the amount of that payment. You must modify Form MMS–2014 by the amount received or credited for the affected reporting period and pay any resulting royalty and late payment interest due; § 206.158 206.158(c)(3) .......................... 206.158(d)(2)(i) ....................... 206.158(d)(2)(ii) ...................... 206.158(c)(3) Upon request of a lessee, MMS may approve a processing allowance in excess of the limitation prescribed by paragraph (c)(2) of this section. * * * An application for exception (using Form MMS–4393, Request to Exceed Regulatory Allowance Limitation) shall contain all relevant and supporting documentation for MMS to make a determination. * * * 206.158(d)(2)(i) If the lessee incurs extraordinary costs for processing gas production from a gas production operation, it may apply to MMS for an allowance for those costs. * * * 206.158(d)(2)(ii) * * * to retain the authority to deduct the allowance the lessee must report the deduction to MMS in a form and manner prescribed by MMS. § 206.159 206.159(a)(1)(i) ....................... Processing allowances—general. 8 12 96 40 2 80 Burden covered under OMB Control Number 1010–0140. Determination of processing allowances. 206.159(a) Arm’s-length processing contracts. AUDIT PROCESS. See note. (1)(i) * * * The lessee shall have the burden of demonstrating that its contract is arm’s-length. * * * 206.159(a)(1)(i) ....................... mstockstill on PROD1PC66 with NOTICES 206.159(a)(1)(iii) ..................... VerDate Aug<31>2005 19:47 Aug 14, 2008 206.159(a)(1)(i) * * * The lessee must claim a processing allowance by reporting it on a separate line entry on the Form MMS–2014. 206.159(a)(1)(iii) * * * When MMS determines that the value of the processing may be unreasonable, MMS will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee’s processing costs. Jkt 214001 PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 Burden covered under OMB Control Number 1010–0140. AUDIT PROCESS. See note. E:\FR\FM\15AUN1.SGM 15AUN1 47979 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Citation 30 CFR 202 and 206 Reporting and recordkeeping requirement 206.159(a)(3) .......................... 206.159(a)(3) If an arm’s-length processing contract includes more than one gas plant product and the processing costs attributable to each product cannot be determined from the contract, the lessee shall propose an allocation procedure to MMS. * * * The lessee shall submit all relevant data to support its proposal. * * * 206.159(b)(1) .......................... 206.159(b) Non-arm’s-length or no contract. (1) * * * The lessee must claim a processing allowance by reflecting it as a separate line entry on the Form MMS–2014. * * * 206.159(b)(2)(iv) and (b)(2)(iv)(A). 206.159(b)(2)(iv) * * * When a lessee has elected to use either method for a processing plant, the lessee may not later elect to change to the alternative without approval of the MMS. (A) * * * After an election is made, the lessee may not change methods without MMS approval. * * * 206.159(b)(4) A lessee may apply to MMS for an exception from the requirements that it compute actual costs in accordance with paragraphs (b)(1) through (b)(3) of this section. * * * 206.159(b)(4) .......................... Hour burden Average number of annual responses 330 Annual burden hours 1 330 Burden covered under OMB Control Number 1010–0140. 100 1 100 100 1 100 206.159(c)(1)(i) ....................... 206.159(c) Reporting requirements—(1) Arm’s-length contracts. (i) The lessee must notify MMS of an allowance based on incurred costs by using a separate line entry on the Form MMS–2014. Burden covered under OMB Control Number 1010–0140. 206.159(c)(1)(ii) ...................... 206.159(c)(1)(ii) The MMS may require that a lessee submit arm’s-length processing contracts and related documents. * * * 206.159(c)(2) Non-arm’s-length or no contract. AUDIT PROCESS. See note. 206.159(c)(2)(i) ....................... Burden covered under OMB Control Number 1010–0140. (i) The lessee must notify MMS of an allowance based on incurred costs by using a separate line entry on the Form MMS–2014. 206.159(c)(2)(iii) ...................... 206.159(e)(2) and (3) ............. 206.159(c)(2)(iii) Upon request by MMS, the lessee shall submit all data used to prepare the allowance deduction. * * * 206.159(e) Adjustments. AUDIT PROCESS. See note. Burden covered under OMB Control Number 1010–0140. (2) For lessees processing production from onshore Federal leases, the lessee must submit a corrected Form MMS– 2014 to reflect actual costs, together with any payment, in accordance with instructions provided by MMS. (3) For lessees processing gas production from leases on the OCS, if the lessee’s estimated processing allowance exceeds the allowance based on actual costs, the lessee must submit a corrected Form MMS–2014 to reflect actual costs, together with its payment, in accordance with instructions provided by MMS. * * * mstockstill on PROD1PC66 with NOTICES Total ................................. ............................................................................................ Note: AUDIT PROCESS—The Office of Regulatory Affairs determined that the audit process is exempt from the Paperwork Reduction Act of 1995 because MMS staff asks non-standard questions to resolve exceptions. Estimated Annual Reporting and Recordkeeping ‘‘Non-hour Cost’’ Burden: We have identified no ‘‘nonhour cost’’ burden associated with the collection of information. VerDate Aug<31>2005 20:07 Aug 14, 2008 Jkt 214001 Public Disclosure Statement: The PRA (44 U.S.C. 3501 et seq.) provides that an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. Comments: Before submitting an ICR to OMB, PRA Section 3506(c)(2)(A) requires each agency ‘‘* * * to provide notice * * * and otherwise consult with members of the public and affected PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 ........................ 106 21,055 agencies concerning each proposed collection of information * * *.’’ Agencies must specifically solicit comments to: (a) Evaluate whether the proposed collection of information is necessary for the agency to perform its duties, including whether the information is useful; (b) evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information; (c) enhance the quality, usefulness, and clarity of the E:\FR\FM\15AUN1.SGM 15AUN1 mstockstill on PROD1PC66 with NOTICES 47980 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices information to be collected; and (d) minimize the burden on the respondents, including the use of automated collection techniques or other forms of information technology. The PRA also requires agencies to estimate the total annual reporting ‘‘non-hour cost’’ burden to respondents or recordkeepers resulting from the collection of information. If you have costs to generate, maintain, and disclose this information, you should comment and provide your total capital and startup cost components or annual operation, maintenance, and purchase of service components. You should describe the methods you use to estimate major cost factors, including system and technology acquisition, expected useful life of capital equipment, discount rate(s), and the period over which you incur costs. Capital and startup costs include, among other items, computers and software you purchase to prepare for collecting information; monitoring, sampling, and testing equipment; and record storage facilities. Generally, your estimates should not include equipment or services purchased: (i) Before October 1, 1995; (ii) to comply with requirements not associated with the information collection; (iii) for reasons other than to provide information or keep records for the Government; or (iv) as part of customary and usual business or private practices. We will summarize written responses to this notice and address them in our ICR submission for OMB approval, including appropriate adjustments to the estimated burden. We will provide a copy of the ICR to you without charge upon request. The ICR also will be posted at http://www.mrm.mms.gov/ Laws_R_D/FRNotices/FRInfColl.htm. Public Comment Policy: We will post all comments in response to this notice at http://www.mrm.mms.gov/Laws_R_D/ FRNotices/FRInfColl.htm. We also will make copies of the comments available for public view, including names and addresses of respondents, during regular business hours at our offices in Lakewood, Colorado. Before including your address, phone number, e-mail address, or other personal identifying information in your comment, be advised that your entire comment— including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold from public view your personal identifying information, we cannot guarantee that we will be able to do so. MMS Information Collection Clearance Officer: Arlene Bajusz, (202) 208–7744. VerDate Aug<31>2005 20:07 Aug 14, 2008 Jkt 214001 Dated: August 11, 2008. Gregory J. Gould, Associate Director for Minerals Revenue Management. [FR Doc. E8–18963 Filed 8–14–08; 8:45 am] BILLING CODE 4310–MR–P DEPARTMENT OF JUSTICE Notice of Lodging Consent Decree Under the Clean Air Act Pursuant to 28 CFR 50.7, notice is hereby given that, on August 12, 2008, a proposed Consent Decree in United States v. Salt River Project Agricultural Improvement and Power District [‘‘SRP’’], Civil Action No. 2:08-cv-1479JAT (D. Ariz.), was lodged with the United States District Court for the District of Arizona. The Consent Decree addresses alleged violations of the Clean Air Act, 42 U.S.C. 7401–7671 et seq., and state and federal implementing regulations, which occurred at Units 1 and 2 of the Coronado Generating Station, a coal-fired power plant owned and operated by SRP in St. Johns, Arizona. The alleged violations arise from the construction of modifications to the power plant without obtaining appropriate permits under the Prevention of Significant Deterioration provisions of the Clean Air Act, 42 U.S.C. 7475, and Title V of the Act, 42 U.S.C. 7661 et seq., and without installing and applying best available control technology at the plant to control emissions of various air pollutants. The proposed Consent Decree would resolve the claims alleged in the Complaint filed in this matter in exchange for SRP’s commitment to perform injunctive relief including: (1) Installation of appropriate pollution control technology to control emissions of nitrogen oxides (NOX), sulfur dioxide (SO2), and particulate matter (PM)— including flue gas desulfurization devices to control SO2 on Units 1 and 2 at the Coronado Station and installation of selective catalytic reduction to control NOX on one of the two units; (2) meet specified emission rates or removal efficiencies for SO2, NOX, and PM; (3) comply with a plantwide emissions cap for NOX; and (4) perform $4 million worth of projects to mitigate the alleged effects of its past violations. The proposed Consent Decree also requires SRP to pay a $950,000 civil penalty. The Department of Justice will receive comments relating to the proposed Consent Decree for period of thirty (30) days from the date of this publication. Comments should be addressed to the PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 Assistant Attorney General, Environment and Natural Resources Division, and mailed either electronically to pubcommentees.enrd@usdoj.gov or in hard copy to the United States Department of Justice, P.O. Box 7611, Ben Franklin Station, Washington, DC 20044–7611. Comments should refer to United States v. Salt River Project Agricultural Improvement and Power District, Civil Action No. 2:08-cv-1479-JAT (D.Ariz.) and D.J. Ref. No. 90–5–2–1–09174. The Consent Decree may be examined at: (1) The offices of the United States Attorney, Two Renaissance Square, 40 N. Central Avenue, Suite 1200, Phoenix, AZ 85004–4408; and (2) the offices of the U.S. Environmental Protection Agency, Region 9, 75 Hawthorne St., San Francisco, CA 94105. During the public comment period, the Consent Decree may also be examined on the following Web site: http:// www.usdoj.gov/enrd/Consent_ Decrees.html. A copy of the Consent Decree may also be obtained by mail from the Department of Justice Consent Decree Library, P.O. Box 7611, Washington, DC 20044–7611 or by faxing or e-mailing a request to Tonia Fleetwood (tonia.fleetwood@usdoj.gov), fax no. (202) 514–0097, phone confirmation number (202) 514–1547. In requesting a copy from the Consent Decree Library, please enclose a check in the amount of $18.00 (72 pages at 25 cents per page reproduction costs) payable to the U.S. Treasury. Maureen M. Katz, Assistant Chief, Environmental Enforcement Section, Environment and Natural Resources Division. [FR Doc. E8–18925 Filed 8–14–08; 8:45 am] BILLING CODE 4410–15–P DEPARTMENT OF LABOR Mine Safety and Health Administration Petition for Modification Mine Safety and Health Administration, Labor. ACTION: Notice of petition for modification of existing mandatory safety standard. AGENCY: SUMMARY: Section 101(c) of the Federal Mine Safety and Health Act of 1977 and 30 CFR Part 44 govern the application, processing, and disposition of petitions for modification. This notice is a summary of a petition for modification filed by the party listed below to modify the application of the existing mandatory safety standard published in E:\FR\FM\15AUN1.SGM 15AUN1

Agencies

[Federal Register Volume 73, Number 159 (Friday, August 15, 2008)]
[Notices]
[Pages 47969-47980]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-18963]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

[Docket No. MMS-2008-MRM-0031]


Agency Information Collection Activities: Proposed Collection, 
Comment Request

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of an extension of a currently approved information 
collection (OMB Control Number 1010-0136).

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

SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), we 
are inviting comments on a collection of information that we will 
submit to the Office of Management and Budget (OMB) for review and 
approval. This information collection request (ICR) pertains to 
valuation of oil and gas produced from Federal onshore and offshore 
leases. We changed the title of this ICR to meet OMB requirements and 
to reflect the consolidation of two ICRs relating to Federal oil and 
gas valuation. The new title of this ICR is ``30 CFR Parts 202, 204, 
and 206, Federal Oil and Gas Valuation.'' In this extension, we are 
consolidating the following ICRs, which allows programwide review of 
Federal oil and gas leases:
     1010-0136, previously titled ``30 CFR Part 202--Royalties, 
Subpart C--Federal and Indian Oil and Subpart D--Federal Gas; and Part 
206--Product Valuation, Subpart C--Federal Oil and Subpart D--Federal 
Gas;'' and
     1010-0155, previously titled ``30 CFR Part 204--
Alternatives for Marginal Properties, Subpart C--Accounting and 
Auditing Relief.''

DATES: Submit written comments on or before October 14, 2008.

ADDRESSES: You may submit comments by the following methods:
     Electronically go to http://www.regulations.gov. In the 
``Comment or Submission'' column, enter ``MMS-2008-MRM-0031'' to view 
supporting and related materials for this ICR. Click on ``Send a 
comment or submission'' link to submit public comments. Information on 
using Regulations.gov, including instructions for accessing documents, 
submitting comments, and viewing the docket after the close of the 
comment period, is available through the site's ``User Tips'' link. All 
comments submitted will be posted to the docket.
     Mail comments to Hyla Hurst, Regulatory Specialist, 
Minerals Management Service, Minerals Revenue Management, P.O. Box 
25165, MS 302B2, Denver, Colorado 80225. Please reference ICR 1010-0136 
in your comments.
     Hand-carry comments or use an overnight courier service. 
Our courier address is Building 85, Room A-614, Denver Federal Center, 
West 6th Ave. and Kipling Blvd., Denver, Colorado 80225. Please 
reference ICR 1010-0136 in your comments.

FOR FURTHER INFORMATION CONTACT: Hyla Hurst, telephone (303) 231-3495, 
or e-mail hyla.hurst@mms.gov. You may also contact Hyla Hurst to obtain 
copies, at no cost, of (1) the ICR, (2) any associated forms, and (3) 
the regulations that require the subject collection of information.

SUPPLEMENTARY INFORMATION:
    Title: 30 CFR Parts 202, 204, and 206, Federal Oil and Gas 
Valuation.
    OMB Control Number: 1010-0136.
    Bureau Form Number: Form MMS-4393.
    Abstract: The Secretary of the U.S. Department of the Interior is 
responsible for mineral resource development on Federal and Indian 
lands and the Outer Continental Shelf (OCS). Under the Mineral Leasing 
Act (30 U.S.C. 1923), the Indian Mineral Development Act of 1982 (25 
U.S.C. 2103), and the Outer Continental Shelf Lands Act (43 U.S.C. 
1353), the Secretary is responsible for managing the production of 
minerals from Federal and Indian lands and the OCS, collecting 
royalties and other mineral revenues from lessees who produce minerals, 
and distributing the funds collected in accordance with applicable 
laws. The MMS performs the mineral revenue management functions for the 
Secretary. Applicable public laws pertaining to mineral leases on 
Federal and Indian lands are located at http://www.mrm.mms.gov/Laws_
R_D/PublicLawsAMR.htm.

General Information

    When a company or an individual enters into a lease to explore, 
develop, produce, and dispose of minerals from Federal or Indian lands, 
that company or individual agrees to pay the lessor a share in an 
amount or value of production from the leased lands. The lessee is 
required to report various kinds of information to the lessor relative 
to the disposition of the leased minerals. Such information is 
generally available within the records of the lessee or others involved 
in developing, transporting, processing, purchasing, or selling of such 
minerals.
    We use the information collected in this ICR to ensure that royalty 
is accurately valued and appropriately paid on oil and gas produced 
from

[[Page 47970]]

Federal onshore and offshore leases. Please refer to the chart for all 
reporting requirements and associated burden hours. All data submitted 
is subject to subsequent audit and adjustment.

Valuation Regulations

    The valuation regulations at 30 CFR part 206, subparts C and D, 
require companies to collect and/or submit information used to value 
their Federal oil and gas, including transportation and processing 
allowance limit information. This is accomplished on Form MMS-2014, 
Report of Sales and Royalty Remittance (OMB Control Number 1010-0140, 
expires November 30, 2009). The information requested is the minimum 
necessary to carry out our mission and places the least possible burden 
on respondents. If the information is not collected, a loss of 
royalties may result for both Federal and state governments.

Transportation and Processing Regulatory Allowance Limits

    The reasonable, actual costs of transportation and processing may 
be deducted from Federal royalties.

Regulatory Allowance Limit for Transportation

    Under certain circumstances, lessees are authorized to deduct from 
royalty payments the reasonable, actual costs of transporting the 
royalty portion of produced oil and gas from the lease to a processing 
or sales point not in the immediate lease area. For oil and gas, 
regulations establish the allowable limit on transportation allowance 
deductions at 50 percent of the value of the oil or gas at the point of 
sale.

Regulatory Allowance Limit for Processing

    When gas is processed for the recovery of gas plant products, 
lessees may claim a processing allowance. Regulations establish the 
allowable limit on processing allowance deductions at 66\2/3\ percent 
of the value of each gas plant product.

Request to Exceed Regulatory Allowance Limitation, Form MMS-4393

    Lessees may request to exceed regulatory limitations. Upon proper 
application from the lessee, we may approve an oil or gas 
transportation allowance in excess of 50 percent or a gas processing 
allowance in excess of 66\2/3\ percent on Federal leases. To request 
permission to exceed a regulatory allowance limit, lessees must submit 
a letter to MMS explaining why a higher allowance limit is necessary 
and provide supporting documentation, including a completed Form MMS-
4393. This form provides us with the data necessary to identify the 
properties and time periods for which the lessee is requesting to 
exceed the regulatory limits.

Accounting and Auditing Relief for Marginal Properties

    We amended our regulations in 2004 to provide guidance to lessees 
and designees seeking accounting and auditing relief for Federal 
marginal properties. There are two types of relief: (1) cumulative 
royalty reports and payments relief; and (2) other relief. Under 30 CFR 
204.202, MMS requires notification from lessees who request to take the 
cumulative royalty reporting and payment relief option. Under 30 CFR 
204.203, MMS requires a relief request from lessees who want to obtain 
any other type of accounting and auditing relief.
    A state may decide in advance if it will allow either or both 
relief options for each particular year. After consulting with the 
state concerned, we will approve, deny, or modify requests in writing. 
Under the regulations, both MMS and the state concerned must approve 
any accounting and auditing relief granted for a marginal property.

OMB Approval

    We are requesting OMB approval to continue to collect this 
information. Not collecting this information would limit the 
Secretary's ability to discharge his/her duties and may also result in 
loss of royalty payments. Proprietary information submitted to MMS 
under this collection is protected, and no items of a sensitive nature 
are included in this information collection.
    For information collections relating to valuation requirements, 
responses are mandatory. For the remaining information collections in 
this ICR, responses are voluntary; only those lessees who request 
approval to exceed the regulatory limits on transportation and 
processing allowances or to obtain the benefits of accounting and 
auditing relief for marginal properties must supply this information.
    Frequency of Response: Annually and on occasion.
    Estimated Number and Description of Respondents: 102 Federal 
lessees/designees and 4 states.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 
21,055 hours.
    We have not included in our estimates certain requirements 
performed in the normal course of business and considered usual and 
customary. The following chart shows the estimated burden hours by CFR 
section and paragraph:

                                   Respondents' Estimated Annual Burden Hours
----------------------------------------------------------------------------------------------------------------
                                                                                  Average number
 Citation 30 CFR 202 and 206      Reporting and recordkeeping       Hour burden      of annual     Annual burden
                                          requirement                                responses         hours
----------------------------------------------------------------------------------------------------------------
                                              PART 202S--ROYALTIES
                                        Subpart C--Federal and Indian Oil
----------------------------------------------------------------------------------------------------------------
                          Sec.   202.101 Standards for reporting and paying royalties.
----------------------------------------------------------------------------------------------------------------
202.101......................  202.101 Oil volumes are to be      Burden covered under OMB Control Number 1010-
                                reported in barrels of clean oil  0140 (expires 11/30/2009).
                                of 42 standard U.S. gallons (231
                                cubic inches each) at 60 [deg]F,
                                * * *.
----------------------------------------------------------------------------------------------------------------
                                             Subpart D--Federal Gas
----------------------------------------------------------------------------------------------------------------
                       Sec.   202.152 Standards for reporting and paying royalties on gas.
----------------------------------------------------------------------------------------------------------------
202.152(a) and (b)...........  202.152(a)(1) If you are           Burden covered under OMB Control Number 1010-
                                responsible for reporting         0140.
                                production or royalties you
                                must:

[[Page 47971]]

 
                               (i) Report gas volumes and
                                British thermal unit (Btu)
                                heating values, if applicable,
                                under the same degree of water
                                saturation;
                               (ii) Report gas volumes in units
                                of 1,000 cubic feet (mcf); and
                               (iii) Report gas volumes and Btu
                                heating value at a standard
                                pressure base of 14.73 pounds
                                per square inch absolute (psia)
                                and a standard temperature base
                                of 60 [deg]F. * * *
                               (b) Residue gas and gas plant
                                product volumes shall be
                                reported as specified in this
                                paragraph. * * *
----------------------------------------------------------------------------------------------------------------
                                 PART 204--ALTERNATIVES FOR MARGINAL PROPERTIES
                                    Subpart C--Accounting and Auditing Relief
----------------------------------------------------------------------------------------------------------------
                Sec.   204.202 What is the cumulative royalty reports and payments relief option?
----------------------------------------------------------------------------------------------------------------
204.202(b)(1)................  204.202(b) To use the cumulative               40               1              40
                                royalty reports and payments
                                relief option, you must do all
                                of the following:
                               (1) Notify MMS in writing by
                                January 31 of the calendar year
                                for which you begin taking your
                                relief. * * *
                                                                 -----------------------------------------------
204.202(b)(2)................  204.202(b)(2) Submit your royalty  Burden covered under OMB Control Number 1010-
                                report and payment * * *by the    0140.
                                end of February of the year
                                following the calendar year for
                                which you reported annually. * *
                                * If you have an estimated
                                payment on file, you must submit
                                your royalty report and payment
                                by the end of March of the year
                                following the calendar year for
                                which you reported annually;
                                                                 -----------------------------------------------
                               (3) Use the sales month prior to
                                the month that you submit your
                                annual report and payment * * *
                                for the entire previous calendar
                                year's production for which you
                                are paying annually. * * *
                                                                 -----------------------------------------------
204.202(b)(4), (b)(5), (c),    204.202(b) To use the cumulative   Burden covered under OMB Control Number 1010-
 (d)(1), (d)(2), (e)(1), and    royalty reports and payments      0140.
 (e)(2).                        relief option, you must * * *
                                                                 -----------------------------------------------
                               (4) Report one line of cumulative
                                royalty information on Form MMS-
                                2014 for the calendar year * * *
                                and
                               (5) Report allowances on Form MMS-
                                2014 on the same annual basis as
                                the royalties for your marginal
                                property production.
                               (c) If you do not pay your
                                royalty by the date due in
                                paragraph (b) of this section,
                                you will owe late payment
                                interest * * * from the date
                                your payment was due under this
                                section until the date MMS
                                receives it. * * *
                               (e) If you dispose of your
                                ownership interest in a marginal
                                property for which you have
                                taken relief * * * you must:
                               (1) Report and pay royalties for
                                the portion of the calendar year
                                for which you had an ownership
                                interest; and
                               (2) Make the report and payment
                                by the end of the month after
                                you dispose of the ownership
                                interest in the marginal
                                property. If you do not report
                                and pay timely, you will owe
                                interest * * * from the date the
                                payment was due. * * *
----------------------------------------------------------------------------------------------------------------
                                 Sec.   204.203 What is the other relief option?
----------------------------------------------------------------------------------------------------------------
204.203(b)...................  204.203(b) You must request                   200               1             200
                                approval from MMS * * * before
                                taking relief under this option.
----------------------------------------------------------------------------------------------------------------
                         Sec.   204.205 How do I obtain accounting and auditing relief?
----------------------------------------------------------------------------------------------------------------
204.205(a) and (b)...........  204.205(a) To take cumulative      Burden covered under Sec.   204.203(b).
                                reports and payments relief
                                under Sec.   204.202, you must
                                notify MMS in writing by January
                                31 of the calendar year for
                                which you begin taking your
                                relief. * * *
                                                                 -----------------------------------------------

[[Page 47972]]

 
                               (b) To obtain other relief under
                                Sec.   204.203, you must file a
                                written request for relief with
                                MMS. * * *
----------------------------------------------------------------------------------------------------------------
                  Sec.   204.206 What will MMS do when it receives my request for other relief?
----------------------------------------------------------------------------------------------------------------
204.206(a)(3)(i) and (b)(1)..  204.206 When MMS receives your     Burden covered under Sec.   204.203(b).
                                request for other relief under
                                Sec.   204.205(b), it will
                                notify you in writing as
                                follows:
                                                                 -----------------------------------------------
                               (a) If your request for relief is
                                complete, MMS may either
                                approve, deny, or modify your
                                request in writing after
                                consultation with any State. * *
                                *
                               (3) If MMS modifies your relief
                                request, MMS will notify you of
                                the modifications.
                               (i) You have 60 days from your
                                receipt of MMS's notice to
                                either accept or reject any
                                modification(s) in writing. * *
                                *
                               (b) If your request for relief is
                                not complete, MMS will notify
                                you in writing. * * *
                               (1) You must submit the missing
                                information within 60 days of
                                your receipt of MMS's notice. *
                                * *
----------------------------------------------------------------------------------------------------------------
  Sec.   204.208 May a State decide that it will or will not allow one or both of the relief options under this
                                                    subpart?
----------------------------------------------------------------------------------------------------------------
204.208(c)(1) and (d)(1).....  204.208(c) If a State decides * *              40               4             160
                                * that it will or will not allow
                                one or both of the relief
                                options * * * within 30 days * *
                                * the State must:
                               (1) Notify the Associate Director
                                for Minerals Revenue Management,
                                MMS, in writing, of its intent
                                to allow or not allow one or
                                both of the relief options. * *
                                *
                               (d) If a State decides in advance
                                * * * that it will not allow one
                                or both of the relief options *
                                * * the State must:
                               (1) Notify the Associate Director
                                for Minerals Revenue Management,
                                MMS, in writing, of its intent
                                to allow one or both of the
                                relief options. * * *
----------------------------------------------------------------------------------------------------------------
           Sec.   204.209 What if a property ceases to qualify for relief obtained under this subpart?
----------------------------------------------------------------------------------------------------------------
204.209(b)...................  204.209(b) If a property is no                  6               1               6
                                longer eligible for relief * * *
                                the relief for the property
                                terminates as of December 31 of
                                that calendar year. You must
                                notify MMS in writing by
                                December 31 that the relief for
                                the property has terminated. * *
                                *
----------------------------------------------------------------------------------------------------------------
               Sec.   204.210 What if a property is approved as part of a nonqualifying agreement?
----------------------------------------------------------------------------------------------------------------
204.210(c) and (d)...........  204.210(c) * * * the volumes on    Burden covered under OMB Control Number 1010-
                                which you report and pay royalty  0140.
                                * * * must be amended to reflect
                                all volumes produced on or
                                allocated to your lease under
                                the nonqualifying agreement as
                                modified by BLM. * * * Report
                                and pay royalties for your
                                production using the procedures
                                in Sec.   204.202(b).
                                                                 -----------------------------------------------
                               (d) If you owe additional
                                royalties based on the
                                retroactive agreement approval
                                and do not pay your royalty by
                                the date due in Sec.
                                204.202(b), you will owe late
                                payment interest determined
                                under 30 CFR 218.54 from the
                                date your payment was due under
                                Sec.   204.202(b)(2) until the
                                date MMS receives it.
----------------------------------------------------------------------------------------------------------------
                 Sec.   204.214(b) Is minimum royalty due on a property for which I took relief?
----------------------------------------------------------------------------------------------------------------
204.214(b)(1) and (b)(2).....  204.214(b) If you pay minimum      Burden covered under OMB Control Number 1010-
                                royalty on production from a      0140.
                                marginal property during a
                                calendar year for which you are
                                taking cumulative royalty
                                reports and payment relief, and:
                                                                 -----------------------------------------------
                               (1) The annual payment you owe
                                under this subpart is greater
                                than the minimum royalty you
                                paid, you must pay the
                                difference between the minimum
                                royalty you paid and your annual
                                payment due under this subpart;
                                or

[[Page 47973]]

 
                               (2) The annual payment you owe
                                under this subpart is less than
                                the minimum royalty you paid,
                                you are not entitled to a credit
                                because you must pay at least
                                the minimum royalty amount on
                                your lease each year.
----------------------------------------------------------------------------------------------------------------
                                           PART 206--PRODUCT VALUATION
                                             Subpart C--Federal Oil
----------------------------------------------------------------------------------------------------------------
  Sec.   206.102 How do I calculate royalty value for oil that I or my affiliate sell(s) under an arm's-length
                                                    contract?
----------------------------------------------------------------------------------------------------------------
206.102(e)(1)................  206.102(e) If you value oil under  AUDIT PROCESS. See note.
                                paragraph (a) of this section:
                                (1) MMS may require you to
                                certify that your or your
                                affiliate's arm's-length
                                contract provisions include all
                                of the consideration the buyer
                                must pay, either directly or
                                indirectly, for the oil.
----------------------------------------------------------------------------------------------------------------
               Sec.   206.103 How do I value oil that is not sold under an arm's-length contract?
----------------------------------------------------------------------------------------------------------------
206.103(a)...................  206.103 This section explains how              45               5             225
                                to value oil that you may not
                                value under Sec.   206.102 or
                                that elect under Sec.
                                206.102(d) to value under this
                                section. First determine whether
                                paragraph (a), (b), or (c) of
                                this section applies to
                                production from your lease, or
                                whether you may apply paragraph
                                (d) or (e) with MMS approval.
                               (a) Production from leases in
                                California or Alaska. Value is
                                the average of the daily mean
                                ANS spot prices published in any
                                MMS-approved publication during
                                the trading month most
                                concurrent with the production
                                month. * * *
                               (1) To calculate the daily mean
                                spot price. * * *
                               (2) Use only the days. * * *
                               (3) You must adjust the value. *
                                * *
206.103(a)(4)................  206.103(a)(4) After you select an               8               2              16
                                MMS-approved publication, you
                                may not select a different
                                publication more often than once
                                every 2 years, * * *.
206.103(b)(1)................  206.103(b) Production from leases             400               2             800
                                in the Rocky Mountain Region. *
                                * * (1) If you have an MMS-
                                approved tendering program, you
                                must value oil. * * *
206.103(b)(1)(ii)............  206.103(b)(1)(ii) If you do not               400               2             800
                                have an MMS-approved tendering
                                program, you may elect to value
                                your oil under either paragraph
                                (b)(2) or (b)(3) of this
                                section. * * *
206.103(b)(4)................  206.103(b)(4) If you demonstrate              400               2             800
                                to MMS's satisfaction that
                                paragraphs (b)(1) through (b)(3)
                                of this section result in an
                                unreasonable value for your
                                production as a result of
                                circumstances regarding that
                                production, the MMS Director may
                                establish an alternative
                                valuation method.
206.103(c)(1)................  206.103(c) Production from leases              50              10             500
                                not located in California,
                                Alaska or the Rocky Mountain
                                Region. (1) Value is the NYMEX
                                price, plus the roll, adjusted
                                for applicable location and
                                quality differentials and
                                transportation costs under Sec.
                                 206.112.
206.103(e)(1) and (2)........  206.103(e) Production delivered               330               2             660
                                to your refinery and the NYMEX
                                price or ANS spot price is an
                                unreasonable value.
                               (1) * * * you may apply to the
                                MMS Director to establish a
                                value representing the market at
                                the refinery if: * * *.
                               (2) You must provide adequate
                                documentation and evidence
                                demonstrating the market value
                                at the refinery. * * *
----------------------------------------------------------------------------------------------------------------
         Sec.   206.105 What records must I keep to support my calculations of value under this subpart?
----------------------------------------------------------------------------------------------------------------
206.105......................  206.105 If you determine the       Burden covered under OMB Control Number 1010-
                                value of your oil under this      0140.
                                subpart, you must retain all
                                data relevant to the
                                determination of royalty value.
                                * * *
----------------------------------------------------------------------------------------------------------------

[[Page 47974]]

 
                             Sec.   206.107 How do I request a value determination?
----------------------------------------------------------------------------------------------------------------
206.107(a)...................  206.107(a) You may request a                  330               8           2,640
                                value determination from MMS. *
                                * *
----------------------------------------------------------------------------------------------------------------
                 Sec.   206.109 When may I take a transportation allowance in determining value?
----------------------------------------------------------------------------------------------------------------
206.109(c)(2)................  206.109(c) Limits on                            8               1               8
                                transportation allowances. (2)
                                You may ask MMS to approve a
                                transportation allowance in
                                excess of the limitation in
                                paragraph (c)(1) of this
                                section. * * * Your application
                                for exception (using Form MMS-
                                4393, Request to Exceed
                                Regulatory Allowance Limitation)
                                must contain all relevant and
                                supporting documentation
                                necessary for MMS to make a
                                determination. * * *
----------------------------------------------------------------------------------------------------------------
   Sec.   206.110 How do I determine a transportation allowance under an arm's-length transportation contract?
----------------------------------------------------------------------------------------------------------------
206.110(a)...................  206.110(a) * * * You must be able  AUDIT PROCESS. See note.
                                to demonstrate that you or your
                                affiliate's contract is at arm's
                                length. * * *
                                                                 -----------------------------------------------
206.110(d)(3)................  206.110(d) If your arm's-length               330               2             660
                                transportation contract includes
                                more than one liquid product,
                                and the transportation costs
                                attributable to each product
                                cannot be determined. * * *
                               (3) You may propose to MMS a cost
                                allocation method. * * *
206.110(e)...................  206.110(e) If your arm's-length               330               1             330
                                transportation contract includes
                                both gaseous and liquid
                                products, and the transportation
                                costs attributable to each
                                product cannot be determined
                                from the contract, then you must
                                propose an allocation procedure
                                to MMS.
                                                                 -----------------------------------------------
206.110(e)(1) and (2)........  206.110(e)(1) * * * If MMS         Burden covered under OMB Control Number 1010-
                                rejects your cost allocation,     0140.
                                you must amend your Form MMS-
                                2014 * * *
                                                                 -----------------------------------------------
                               (2) You must submit your initial
                                proposal, including all
                                available data, within 3 months
                                after first claiming the
                                allocated deductions on Form MMS-
                                2014.
206.110(g)(2)................  206.110(g) If your arm's-length               330               1             330
                                sales includes a provision
                                reducing the contract price by a
                                transportation factor, * * *
                               (2) You must obtain MMS approval
                                before claiming a transportation
                                factor in excess of 50 percent
                                of the base price of the
                                product.
----------------------------------------------------------------------------------------------------------------
  Sec.   206.111 How do I determine a transportation allowance if I do not have an arm's-length transportation
                                        contract or arm's-length tariff?
----------------------------------------------------------------------------------------------------------------
206.111(g)...................  206.111(g) To compute                         330               1             330
                                depreciation, you may elect to
                                use either * * * After you make
                                an election, you may not change
                                methods without MMS approval. *
                                * *
206.111(k)(2)................  206.111(k)(2) You may propose to              330               1             330
                                MMS a cost allocation method on
                                the basis of the values * * *
206.111(l)(1)................  206.111(l)(1) Where you transport             330               1             330
                                both gaseous and liquid products
                                through the same transportation
                                system, you must propose a cost
                                allocation procedure to MMS.
                                                                 -----------------------------------------------
206.111(l)(2)................  206.111(l)(2) * * * If MMS         Burden covered under OMB Control Number 1010-
                                rejects your cost allocation,     0140.
                                you must amend your Form MMS-
                                2104 for the months that you
                                used the rejected method and pay
                                any additional royalty and
                                interest due.
206.111(l)(3)................  206.111(l)(3) You must submit      Burden covered under Sec.   206.111(l)(1).
                                your initial proposal, including
                                all available data, within 3
                                months after first claiming the
                                allocated deductions on Form MMS-
                                2014.
----------------------------------------------------------------------------------------------------------------
  Sec.   206.112 What adjustments and transportation allowances apply when I value oil production from my lease
                                     using NYMEX prices or ANS spot prices?
----------------------------------------------------------------------------------------------------------------
206.112(a)(1)(ii)............  206.112(a)(1)(ii) * * * under an              330               1             330
                                exchange agreement that is not
                                at arm's length, you must obtain
                                approval from MMS for a location
                                and quality differential. * * *

[[Page 47975]]

 
206.112(a)(1)(ii)............  206.112(a)(1)(ii) * * * If MMS                330               2             660
                                prescribes a different
                                differential, you must apply. *
                                * * You must pay any additional
                                royalties owed * * * plus the
                                late payment interest from the
                                original royalty due date, or
                                you may report a credit. * * *
                                                                 -----------------------------------------------
206.112(a)(3) and (4)........  206.112(a)(3) If you transport or             330               4           1,320
                                exchange at arm's length (or
                                both transport and exchange) at
                                least 20 percent, but not all,
                                of your oil produced from the
                                lease to a market center,
                                determine the adjustment between
                                the lease and the market center
                                for the oil that is not
                                transported or exchanged (or
                                both transported and exchanged)
                                to or through a market center as
                                follows: * * *.
                               (4) If you transport or exchange
                                (or both transport and exchange)
                                less than 20 percent of your
                                crude oil produced from the
                                lease between the lease and a
                                market center, you must propose
                                to MMS an adjustment between the
                                lease and the market center for
                                the portion of the oil that you
                                do not transport or exchange (or
                                both transport and exchange) to
                                a market center. * * * If MMS
                                prescribes a different
                                adjustment. * * * You must pay
                                any additional royalties owed *
                                * * plus the late payment
                                interest from the original
                                royalty due date, or you may
                                report a credit. * * *
206.112(b)(3)................  206.112(b)(3) * * * you may                   330               4           1,320
                                propose an alternative
                                differential to MMS. * * * If
                                MMS prescribes a different
                                differential * * *. You must pay
                                any additional royalties owed *
                                * * plus the late payment
                                interest from the original
                                royalty due date, or you may
                                report a credit. * * *
206.112(c)(2)................  206.112(c)(2) * * * If quality                330               2             660
                                bank adjustments do not
                                incorporate or provide for
                                adjustments for sulfur content,
                                you may make sulfur adjustments,
                                based on the quality of the
                                representative crude oil at the
                                market center, of 5.0 cents per
                                one-tenth percent difference in
                                sulfur content, unless MMS
                                approves a higher adjustment.
----------------------------------------------------------------------------------------------------------------
        Sec.   206.114 What are my reporting requirements under an arm's-length transportation contract?
----------------------------------------------------------------------------------------------------------------
206.114......................  206.114 You or your affiliate      Burden covered under OMB Control Number 1010-
                                must use a separate entry on      0140.
                                Form MMS-2014 to notify MMS of
                                an allowance based on
                                transportation costs you or your
                                affiliate incur.
206.114......................  206.114 MMS may require you or     AUDIT PROCESS. See note.
                                your affiliate to submit arm's-
                                length transportation contracts,
                                production agreements, operating
                                agreements, and related
                                documents.
----------------------------------------------------------------------------------------------------------------
     Sec.   206.115 What are my reporting requirements under a non-arm's-length transportation arrangement?
----------------------------------------------------------------------------------------------------------------
206.115(a)...................  206.115(a) You or your affiliate   Burden covered under OMB Control Number 1010-
                                must use a separate entry on      0140.
                                Form MMS-2014 to notify MMS of
                                an allowance based on
                                transportation costs you or your
                                affiliate incur.
206.115(c)...................  206.115(c) MMS may require you or  AUDIT PROCESS. See note.
                                your affiliate to submit all
                                data used to calculate the
                                allowance deduction. * * *
----------------------------------------------------------------------------------------------------------------
                                             Subpart D--Federal Gas
----------------------------------------------------------------------------------------------------------------
                               Sec.   206.152 Valuation standards-unprocessed gas.
----------------------------------------------------------------------------------------------------------------
206.152(b)(1)(i) and (iii)...  206.152(b)(1)(i) * * * The lessee  AUDIT PROCESS. See note.
                                shall have the burden of
                                demonstrating that its contract
                                is arm's-length. * * *
                                                                 -----------------------------------------------
                               (iii) * * * When MMS determines
                                that the value may be
                                unreasonable, MMS will notify
                                the lessee and give the lessee
                                an opportunity to provide
                                written information justifying
                                the lessee's value.
206.152(b)(2)................  206.152(b)(2) * * * The lessee                330               1             330
                                must request a value
                                determination in accordance with
                                paragraph (g) of this section
                                for gas sold pursuant to a
                                warranty contract; * * *.
                                                                 -----------------------------------------------

[[Page 47976]]

 
206.152(b)(3)................  206.152(b)(3) MMS may require a    AUDIT PROCESS. See note.
                                lessee to certify that its arm's-
                                length contract provisions
                                include all of the consideration
                                to be paid by the buyer, either
                                directly or indirectly, for the
                                gas.
206.152(e)(1)................  206.152(e)(1) Where the value is   Burden covered under OMB Control Number 1010-
                                determined pursuant to paragraph  0140.
                                (c) of this section, the lessee
                                shall retain all data relevant
                                to the determination of royalty
                                value. * * *
206.152(e)(2)................  206.152(e)(2) Any Federal lessee   AUDIT PROCESS. See note.
                                will make available upon request
                                to the authorized MMS or State
                                representatives, to the Office
                                of the Inspector General of the
                                Department of the Interior, or
                                other person authorized to
                                receive such information, arm's-
                                length sales and volume data for
                                like-quality production sold,
                                purchased or otherwise obtained
                                by the lessee from the field or
                                area or from nearby fields or
                                areas.
                                                                 -----------------------------------------------
206.152(e)(3)................  206.152(e)(3) A lessee shall                  330               2             660
                                notify MMS if it has determined
                                value pursuant to paragraph
                                (c)(2) or (c)(3) of this
                                section. * * *
206.152(g)...................  206.152(g) The lessee may request             330               6           1,980
                                a value determination from MMS.
                                * * * The lessee shall submit
                                all available data relevant to
                                its proposal. * * *
----------------------------------------------------------------------------------------------------------------
                               Sec.   206.153 Valuation standards--processed gas.
----------------------------------------------------------------------------------------------------------------
206.153(b)(1)(i) and (iii)...  206.153(b)(1)(i) * * * The lessee
                                shall have the burden of
                                demonstrating that its contract
                                is arm's-length. * * *
                                                                 -----------------------------------------------
                               (iii) * * * When MMS determines    AUDIT PROCESS. See note.
                                that the value may be
                                unreasonable, MMS will notify
                                the lessee and give the lessee
                                an opportunity to provide
                                written information justifying
                                the lessee's value.
                                                                 -----------------------------------------------
206.153(b)(2)................  206.153(b)(2) * * * The lessee                330               1             330
                                must request a value
                                determination in accordance with
                                paragraph (g) of this section
                                for gas sold pursuant to a
                                warranty contract; * * *.
                                                                 -----------------------------------------------
206.153(b)(3)................  206.153(b)(3) MMS may require a    AUDIT PROCESS. See note.
                                lessee to certify that its arm's-
                                length contract provisions
                                include all of the consideration
                                to be paid by the buyer, either
                                directly or indirectly, for the
                                residue gas or gas plant
                                product.
206.153(e)(1)................  206.153(e)(1) Where the value is   Burden covered under OMB Control Number 1010-
                                determined pursuant to paragraph  0140.
                                (c) of this section, the lessee
                                shall retain all data relevant
                                to the determination of royalty
                                value. * * *
206.153(e)(2)................  206.153(e)(2) Any Federal lessee   AUDIT PROCESS. See note.
                                will make available upon request
                                to the authorized MMS or State
                                representatives, to the Office
                                of the Inspector General of the
                                Department of the Interior, or
                                other persons authorized to
                                receive such information, arm's-
                                length sales and volume data for
                                like-quality residue gas and gas
                                plant products sold, purchased
                                or otherwise obtained by the
                                lessee from the same processing
                                plant or from nearby processing
                                plants.
                                                                 -----------------------------------------------
206.153(e)(3)................  206.153(e)(2) A lessee shall                  330               2             660
                                notify MMS if it has determined
                                any value pursuant to paragraph
                                (c)(2) or (c)(3) of this
                                section. * * *
206.153(g)...................  206.153(g) The lessee may request             330               4           1,320
                                a value determination from MMS.
                                * * * The lessee shall submit
                                all available data relevant to
                                its proposal. * * *
----------------------------------------------------------------------------------------------------------------
                Sec.   206.154 Determination of quantities and qualities for computing royalties.
----------------------------------------------------------------------------------------------------------------
206.154(c)(4)................  206.154(c)(4) * * * A lessee may              330               1             330
                                request MMS approval of other
                                methods for determining the
                                quantity of residue gas and gas
                                plant products allocable to each
                                lease. * * *
----------------------------------------------------------------------------------------------------------------

[[Page 47977]]

 
                                Sec.   206.156 Transportation allowances-general.
----------------------------------------------------------------------------------------------------------------
206.156(c)(3)................  206.156(c)(3) Upon request of a                 8               3              24
                                lessee, MMS may approve a
                                transportation allowance
                                deduction in excess of the
                                limitation prescribed by
                                paragraphs (c)(1) and (c)(2) of
                                this section. * * * An
                                application for exception (using
                                Form MMS-4393, Request to Exceed
                                Regulatory Allowance Limitation)
                                shall contain all relevant and
                                supporting documentation
                                necessary for MMS to make a
                                determination. * * *
----------------------------------------------------------------------------------------------------------------
                           Sec.   206.157 Determination of transportation allowances.
----------------------------------------------------------------------------------------------------------------
206.157(a)(1)(i).............  206.157(a) Arm's-length            AUDIT PROCESS. See note.
                                transportation contracts. (1)(i)
                                * * * The lessee shall have the
                                burden of demonstrating that its
                                contract is arm's-length. * * *
206.157(a)(1)(i).............  206.157(a)(1)(i) * * * The lessee  Burden covered under OMB Control Number 1010-
                                must claim a transportation       0140.
                                allowance by reporting it on a
                                separate line entry on the Form
                                MMS-2014.
206.157(a)(1)(iii)...........  206.157(a)(1)(iii) * * * When MMS  AUDIT PROCESS. See note.
                                determines that the value of the
                                transportation may be
                                unreasonable, MMS will notify
                                the lessee and give the lessee
                                an opportunity to provide
                                written information justifying
                                the lessee's transportation
                                costs.
                                                                 -----------------------------------------------
206.157(a)(2)(ii)............  206.157(a)(2)(ii) * * * the                   330               1             330
                                lessee may propose to MMS a cost
                                allocation method on the basis
                                of the values of the products
                                transported. * * *
206.157(a)(3)................  206.157(a)(3) If an arm's-length              330               1             330
                                transportation contract includes
                                both gaseous and liquid products
                                and the transportation costs
                                attributable to each cannot be
                                determined from the contract,
                                the lessee shall propose an
                                allocation procedure to MMS. * *
                                * The lessee shall submit all
                                relevant data to support its
                                proposal. * * *
206.157(a)(5)................  206.157(a)(5) * * * The                       100               1             100
                                transportation factor may not
                                exceed 50 percent of the base
                                price of the product without MMS
                                approval.
                                                                 -----------------------------------------------
206.157(b)(1)................  206.157(b) Non-arm's-length or no  Burden covered under OMB Control Number 1010-
                                contract. (1) The lessee must     0140.
                                claim a transportation allowance
                                by reporting it on a separate
                                line entry on the Form MMS-2014.
                                * * *
                                                                 -----------------------------------------------
206.157(b)(2)(iv) and          206.157(b)(2)(iv) After a lessee              100               1             100
 (b)(2)(iv)(A).                 has elected to use either method
                                for a transportation system, the
                                lessee may not later elect to
                                change to the other alternative
                                without approval of the MMS.
                               (A) After an election is made,
                                the lessee may not change
                                methods without MMS approval. *
                                * *
                                                                 -----------------------------------------------
206.157(b)(3)(i).............  206.157(b)(3)(i) * * * Except as              100               1             100
                                provided in this paragraph, the
                                lessee may not take an allowance
                                for transporting a product which
                                is not royalty bearing without
                                MMS approval.
206.157(b)(3)(ii)............  206.157(b)(3)(ii) * * * the                   100               1             100
                                lessee may propose to the MMS a
                                cost allocation method on the
                                basis of the values of the
                                products transported. * * *
206.157(b)(4)................  206.157(b)(4) Where both gaseous              100               1             100
                                and liquid products are
                                transported through the same
                                transportation syste