Agency Information Collection Activities: Federal Oil and Gas Valuation; Comment Request, 36325-36336 [2016-13206]

Download as PDF sradovich on DSK3TPTVN1PROD with NOTICES Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Notices population of wolves on the island for at least the next 20 years, which is the anticipated life of the plan. The wolf population range and number of breeding pairs to be maintained on the island would be determined based on best available science and professional judgement. This action would occur as soon as possible following a signed record of decision. Under Alternative D, the NPS would not take immediate action and would continue current management, allowing natural processes to continue. One or more resource indicators and thresholds would be developed to evaluate the condition of key resources, which could include moose or vegetation-based parameters. If a threshold is met, wolves would be brought to Isle Royale as a one-time event (per alternative B) or through multiple introductions (per alternative C). The NPS will not select an alternative for implementation until after a final EIS is completed. Given the revised scope of the EIS, actions to manage moose, such as culling or translocation of moose, as well as actions to manage vegetation, such as fire, direct restoration, or other tools, will not be considered in this EIS. After a decision is made regarding whether and how to bring wolves to Isle Royale, the NPS will monitor conditions on the island, and will initiate additional planning processes to address other aspects of the island ecosystem, such as the moose population and forest community, if such planning processes are deemed necessary. All comments received during the scoping period that was announced in the July 2015 NOI are available online at https://parkplanning.nps.gov/ ISROwolves and will be considered. If you would like to provide additional comments regarding the revised scope of the plan, you may do so through the following methods. The preferred method for submitting comments is on the NPS PEPC Web site at https://parkplanning.nps.gov/ ISROwolves. You may also mail or hand-deliver your comments to Superintendent Phyllis Green, Isle Royale National Park, ISRO Wolves, 800 East Lakeshore Drive, Houghton, Michigan 49931–1896. The NPS will consider all additional comments received or postmarked no later than 30days from the date this NOI is published in the Federal Register. Comments submitted after that date will be considered to the extent practicable. Comments will not be accepted by fax, email, or any other way than those specified above. Bulk comments in any format (hard copy or electronic) VerDate Sep<11>2014 16:36 Jun 03, 2016 Jkt 238001 submitted on behalf of others will not be accepted. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware 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 your personal identifying information from public review, we cannot guarantee that we will be able to do so. Cameron H. Sholly, Regional Director, Midwest Region. [FR Doc. 2016–13184 Filed 6–3–16; 8:45 am] BILLING CODE 4310–MA–P 36325 2. Email comments to Mr. Luis Aguilar, Regulatory Specialist, at luis.aguilar@onrr.gov. 3. Hand-carry or mail comments, using an overnight courier service, to ONRR. Our courier address is Building 85, Room A–614, Denver Federal Center, West 6th Ave. and Kipling St., Denver, Colorado 80225. FOR FURTHER INFORMATION CONTACT: For any questions, contact Mr. Luis Aguilar, telephone (303) 231–3418, or email at luis.aguilar@onrr.gov. You may also contact Mr. Aguilar to obtain copies, at no cost, of (1) the ICR, (2) any associated forms, and (3) the regulations that require us to collect the information. SUPPLEMENTARY INFORMATION: I Abstract DEPARTMENT OF THE INTERIOR Office of Natural Resources Revenue [Docket No. ONRR–2012–0006; DS63642000 DR2PS0000.CH7000 167D0102R2] Agency Information Collection Activities: Federal Oil and Gas Valuation; Comment Request Office of Natural Resources Revenue (ONRR), Interior. ACTION: Notice of an extension. AGENCY: To comply with the Paperwork Reduction Act of 1995 (PRA), ONRR is inviting comments on a collection of information requests that we will submit to the Office of Management and Budget (OMB) for review and approval. This Information Collection Request (ICR) covers the paperwork requirements in the regulations under title 30, Code of Federal Regulations (CFR), parts 1202, 1204, and 1206. This ICR pertains to Federal oil and gas valuation regulations, which include transportation and processing regulatory allowance limits and accounting and auditing relief for marginal properties. Also, there is one form (ONRR–4393) associated with this information collection. DATES: Submit written comments on or before August 5, 2016. ADDRESSES: You may submit comments on this ICR to ONRR by using one of the following three methods (please reference ‘‘ICR 1012–0005’’ in your comments): 1. Electronically go to https:// www.regulations.gov. In the entry titled ‘‘Enter Keyword or ID,’’ enter ‘‘ONRR– 2012–0005’’ and then click ‘‘Search.’’ Follow the instructions to submit public comments. ONRR will post all comments. SUMMARY: PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 The Secretary of the United States Department of the Interior is responsible for mineral resource development on Federal and Indian lands and the Outer Continental Shelf (OCS). The Secretary’s responsibility, according to various laws, is to manage mineral resource production from Federal and Indian lands and the OCS, collect the royalties and other mineral revenues due, and distribute the funds collected under those laws. We have posted those laws pertaining to mineral leases on Federal and Indian lands and the OCS at https:// www.onrr.gov/Laws_R_D/PubLaws/ default.htm. The Secretary also has a trust responsibility to manage Indian lands and seek advice and information from Indian beneficiaries. ONRR performs the minerals revenue management functions for the Secretary and assists the Secretary in carrying out the Department’s trust responsibility for Indian lands. You can find the information collections covered in this ICR at 30 CFR parts: • 1202, subparts C and D, which pertain to Federal oil and gas royalties. • 1204, subpart C, which pertains to accounting and auditing relief for marginal properties. • 1206, subparts C and D, which pertain to Federal oil and gas product valuation. 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 mineral lease laws require the lessee, or his designee, to report various kinds of information to the lessor relative to the E:\FR\FM\06JNN1.SGM 06JNN1 36326 Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Notices 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. Information Collections ONRR uses the information that we collect in this ICR to ensure that lessees accurately value and appropriately pay royalties on oil and gas produced from 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. A. Federal Oil and Gas Valuation Regulations The valuation regulations at 30 CFR part 1206, subparts C and D, mandate that companies collect and submit information used to value their Federal oil and gas, including (1) transportation and processing allowances and (2) regulatory allowance limit information. Companies report certain data on form ONRR–2014, Report of Sales and Royalty Remittance. The information that we request is the minimum necessary to carry out our mission and places the least possible burden on respondents. If ONRR does not collect this information, both Federal and State governments may incur a loss of royalties. Transportation and Processing Regulatory Allowance Limits: Lessees may deduct actual costs of transportation and processing from Federal royalties. The lessees report these allowances on form ONRR–2014. For oil and gas, regulations establish the allowable limit on transportation allowance deductions at 50 percent of the value of the oil or gas. For gas only, regulations establish the allowable limit on processing allowance deductions at 662⁄3 percent of the value of each gas plant product. Request to Exceed Regulatory Allowance Limitation, form ONRR– 4393: Lessees may request to exceed regulatory limitations. Upon proper application from the lessee, ONRR may approve oil or gas transportation allowance in excess of 50 percent or gas processing allowance in excess of 662⁄3 percent on Federal leases. Lessees use form ONRR–4393 for both Federal and Indian leases to request to exceed allowance limitations. This ICR covers only Federal leases; therefore, we have not included burden hours of form ONRR–4393 for Indian leases in this ICR. We include burden hours for form ONRR–4393 for Indian leases in OMB Control Number 1012–0002. B. Accounting and Auditing Relief for Marginal Properties In 2004, we amended our regulations to comply with section 7 of the Federal Oil and Gas Royalty Simplification and Fairness Act of 1996. These regulations provide guidance for lessees and designees seeking accounting and auditing relief for qualifying Federal marginal properties. Under the regulations, both ONRR and the State concerned must approve any relief granted for a marginal property. OMB Approval We will request OMB approval to continue to collect, from companies, lessees, and designees, information used (1) to value their Federal oil and gas, including (a) transportation and processing allowances and (b) regulatory allowance limit information and (2) to request accounting and auditing relief approval for qualifying Federal marginal properties. If ONRR does not collect this information, this would limit the Secretary’s ability to discharge fiduciary duties and may also result in loss of royalty payments. ONRR protects the proprietary information that we receive, and we do not collect items of a sensitive nature. ONRR requires lessees to respond to information collections relating to valuation requirements. II. Data Title: 30 CFR parts 1202, 1204, and 1206, Federal Oil and Gas Valuation. OMB Control Number: 1012–0005. Bureau Form Number: Form ONRR– 4393. Frequency: Annually and on occasion. Estimated Number and Description of Respondents: 120 Federal lessees/ designees and 7 States for Federal oil and gas. Estimated Annual Reporting and Recordkeeping ‘‘Hour’’ Burden: 9,518 hours. We have not included in our estimates certain requirements performed in the normal course of business and considered as usual and customary. We display the estimated annual burden hours by CFR section and paragraph in the following chart: RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS 30 CFR 1202, 1204, 1206, and 1210 Reporting and recordkeeping requirement Hour burden Average number of annual responses Annual burden hours PART 1202—ROYALTIES Subpart C—Federal and Indian Oil 1202.101 ................................. Standards for reporting and paying royalties ......................... 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 1012–0004. sradovich on DSK3TPTVN1PROD with NOTICES Subpart D—Federal Gas 1202.152(a) and (b) ................ VerDate Sep<11>2014 16:36 Jun 03, 2016 Standards for reporting and paying royalties on gas ............. (a)(1) If you are responsible for reporting production or royalties you must: (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 Jkt 238001 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 Burden covered under OMB Control Number 1012–0004. E:\FR\FM\06JNN1.SGM 06JNN1 36327 Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued 30 CFR 1202, 1204, 1206, and 1210 Reporting and recordkeeping requirement Hour burden Average number of annual responses Annual burden hours (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 1204—ALTERNATIVES FOR MARGINAL PROPERTIES Subpart C—Accounting and Auditing Relief What is the cumulative royalty reports and payments relief option? (b) To use the cumulative royalty reports and payments relief option, you must do all of the following: (1) Notify ONRR in writing by January 31 of the calendar year for which you begin taking your relief . . . 1204.202(b)(2) and (b)(3) ....... (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; (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 . . . Burden covered under OMB Control Number 1012–0004. 1204.202(b)(4), (b)(5), (c), (d)(1), (d)(2), (e)(1), and (e)(2). (b)(4) Report one line of cumulative royalty information on Form ONRR–2014 for the calendar year . . . And (5) Report allowances on Form ONRR–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 ONRR receives it . . . (d) If you take relief you are not qualified for, you may be liable for civil penalties. Also you must: (1) Pay ONRR late payment interest determined under 30 CFR 1218.54 . . . (2) Amend your Form ONRR–2014 . . . (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 . . . Burden covered under OMB Control Number 1012–0004. 1204.203(b), 1204.205(a) and (b), and 1204.206(a)(3)(i) and (b)(1). What is the other relief option? (b) You must request approval from ONRR . . . before taking relief under this option. 200 1 200 1204.208(c)(1), (d)(1), and (e) sradovich on DSK3TPTVN1PROD with NOTICES 1204.202(b)(1) ........................ May a State decide that it will or will not allow one or both of the relief options under this subpart? (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 Director for Office of Natural Resources Revenue, 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 Director for Office of Natural Resources Revenue, in writing, of its intent to allow one or both of the relief options . . . 40 7 280 VerDate Sep<11>2014 16:36 Jun 03, 2016 Jkt 238001 PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 40 E:\FR\FM\06JNN1.SGM 06JNN1 1 40 36328 Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued 30 CFR 1202, 1204, 1206, and 1210 Reporting and recordkeeping requirement Average number of annual responses Hour burden Annual burden hours (e) If a State does not notify ONRR . . . the State will be deemed to have decided not to allow either of the relief options . . . 1204.209(b) ............................. What if a property ceases to qualify for relief obtained under this subpart? (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 ONRR in writing by December 31 that the relief for the property has terminated . . . 1204.210(c) and (d) ................ What if a property is approved as part of anonqualifying agreement? (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 § 1204.202(b). (d) If you owe additional royalties based on the retroactive agreement approval and do not pay your royalty by the date due in § 1204.202(b), you will owe late payment interest determined under § 1218.54 from the date your payment was due under § 1204.202(b)(2) until the date ONRR receives it. Burden covered under OMB Control Number 1012–0004. 1204.214(b)(1) and (b)(2) ....... Is minimum royalty due on a property for which I took relief? (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: (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 (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. Burden covered under OMB Control Number 1012–0004. Accounting and Auditing Relief Subtotal. ................................................................................................. 6 ........................ 1 10 6 526 Part 1206—Product Valuation Subpart C—Federal Oil How do I calculate royalty value for oil that I or my affiliate sell(s) under an arm’s-length contract? (e) If you value oil under paragraph (a) of this section: (1) ONRR 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. 1206.103(a)(1), (a)(2), and (a)(3). sradovich on DSK3TPTVN1PROD with NOTICES 1206.102(e)(1) ........................ How do I value oil that is not sold under an arm’s-length contract? This section explains how to value oil that you may not value under § 1206.102 or that you elect under § 1206.102(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 ONRR approval. (a) Production from leases in California or Alaska. Value is the average of the daily mean ANS spot prices published in any ONRR-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 . . . VerDate Sep<11>2014 16:36 Jun 03, 2016 Jkt 238001 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 E:\FR\FM\06JNN1.SGM AUDIT PROCESS. See note. 45 06JNN1 5 225 36329 Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Reporting and recordkeeping requirement 1206.103(a)(4) ........................ (a)(4) After you select an ONRR-approved publication, you may not select a different publication more often than once every 2 years, . . . 8 2 16 1206.103(b)(1) ........................ (b) Production from leases in the Rocky Mountain Region . . . (1) If you have an ONRR-approved tendering program, you must value oil . . . 400 2 800 1206.103(b)(1)(ii) .................... (b)(1)(ii) If you do not have an ONRR-approved tendering program, you may elect to value your oil under either paragraph (b)(2) or (b)(3) of this section . . . 400 2 800 1206.103(b)(4) ........................ (4) If you demonstrate to ONRR’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 ONRR Director may establish an alternative valuation method. 400 2 800 1206.103(c)(1) ........................ (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 § 1206.112. 50 10 500 1206.103(e)(1) and (e)(2) ....... (e) Production delivered to your refinery and the NYMEX price or ANS spot price is an unreasonable value. (1) . . . you may apply to the ONRR Director to establish a value (2) You must provide adequate documentation and evidence demonstrating the market value at the refinery. . . . representing the market at the refinery if: . . . 330 2 660 1206.105 ................................. What records must I keep to support my calculations of value under this subpart? If you determine the value of your oil under this subpart, you must retain all data relevant to the determination of royalty value . . . 1206.107(a) ............................. How do I request a value determination? (a) You may request a value determination from ONRR . . . 40 10 400 1206.109(c)(2) ........................ When may I take a transportation allowance in determining value? (c) Limits on transportation allowances. (2) You may ask ONRR to approve a transportation allowance in excess of the limitation in paragraph (c)(1) of this section . . . Your application for exception (using Form ONRR–4393, Request to Exceed Regulatory Allowance Limitation) must contain all relevant and supporting documentation necessary for ONRR to make a determination . . . 8 2 16 1206.110(a) ............................. How do I determine a transportation allowance under an arm’s-length transportation contract? (a) . . . You must be able to demonstrate that your or your affiliate’s contract is at arm’s length. . . . 1206.110(d)(3) ........................ sradovich on DSK3TPTVN1PROD with NOTICES 30 CFR 1202, 1204, 1206, and 1210 (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 ONRR a cost allocation method . . . 20 2 40 1206.110(e) ............................. (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 ONRR. 20 1 20 VerDate Sep<11>2014 16:36 Jun 03, 2016 Jkt 238001 PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 Hour burden Annual burden hours Burden covered under OMB Control Number 1012–0004. E:\FR\FM\06JNN1.SGM AUDIT PROCESS. See note. 06JNN1 36330 Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Reporting and recordkeeping requirement 1206.110(e)(1) and (e)(2) ....... (e)(1) . . . If ONRR rejects your cost allocation, you must amend your Form ONRR–2014 . . . (2) You must submit your initial proposal, including all available data, within 3 months after first claiming the allocated deductions on Form ONRR–2014. 1206.110(g)(2) ........................ (g) If your arm’s-length sales contract includes a provision reducing the contract price by a transportation factor, . . . (2) You must obtain ONRR approval before claiming a transportation factor in excess of 50 percent of the base price of the product. 5 1 5 1206.111(g) ............................. How do I determine a transportation allowance if I do not have an arm’s-length transportation contract or arm’slength tariff? (g) To compute depreciation, you may elect to use either . . . After you make an election, you may not change methods without ONRR approval . . . 30 1 30 1206.111(k)(2) ........................ (k)(2) You may propose to ONRR a cost allocation method on the basis of the values . . . 30 1 30 1206.111(l)(1) and (l)(3) ......... (l)(1) Where you transport both gaseous and liquid products through the same transportation system, you must propose a cost allocation procedure to ONRR . . . (3) You must submit your initial proposal, including all available data, within 3 months after first claiming the allocated deductions on Form ONRR–2014. 20 1 20 1206.111(l)(2) ......................... (l)(2) . . . If ONRR rejects your cost allocation, you must amend your Form ONRR–2104 for the months that you used the rejected method and pay any additional royalty and interest due. 1206.112(a)(1)(ii) .................... What adjustments and transportation allowances apply when I value oil production from my lease using NYMEX prices or ANS spot prices? (a)(1)(ii) . . . under an exchange agreement that is not at arm’s length, you must obtain approval from ONRR for a location and quality differential . . . 80 1 80 1206.112(a)(1)(ii) .................... (a)(1)(ii) . . . If ONRR 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 . . . 20 2 40 1206.112(a)(3) and (a)(4) ....... sradovich on DSK3TPTVN1PROD with NOTICES 30 CFR 1202, 1204, 1206, and 1210 (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 ONRR 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 ONRR 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 . . . 80 4 320 VerDate Sep<11>2014 16:36 Jun 03, 2016 Jkt 238001 PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 Hour burden Annual burden hours Burden covered under OMB Control Number 1012–0004. Burden covered under OMB Control Number 1012–0004. E:\FR\FM\06JNN1.SGM 06JNN1 36331 Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses 30 CFR 1202, 1204, 1206, and 1210 Reporting and recordkeeping requirement 1206.112(b)(3) ........................ (b)(3) . . . you may propose an alternative differential to ONRR. . . . If ONRR 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 . . . 80 4 320 1206.112(c)(2) ........................ (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 onetenth percent difference in sulfur content, unless ONRR approves a higher adjustment. 80 2 160 1206.114 ................................. What are my reporting requirements under an arm’s-length transportation contract? You or your affiliate must use a separate entry on Form ONRR–2014 to notify ONRR of an allowance based on transportation costs you or your affiliate incur. Hour burden Annual burden hours Burden covered under OMB Control Number 1012–0004. ONRR may require you or your affiliate to submit arm’slength transportation contracts, production agreements, operating agreements, and related documents . . . AUDIT PROCESS. See note. 1206.115(a) ............................. What are my reporting requirements under a non-arm’slength transportation arrangement? (a) You or your affiliate must use a separate entry on Form ONRR–2014 to notify ONRR of an allowance based on transportation costs you or your affiliate incur. Burden covered under OMB Control Number 1012–0004. 1206.115(c) ............................. (c) ONRR may require you or your affiliate to submit all data used to calculate the allowance deduction . . . AUDIT PROCESS. See note. Subpart D—Federal Gas Valuation standards—unprocessed gas ................................ (b)(1)(i) . . . The lessee shall have the burden of demonstrating that its contract is arm’s-length. . . . (iii) . . . When ONRR determines that the value may be unreasonable, ONRR will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee’s value. 1206.152(b)(2) ........................ (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; . . . 1206.152(b)(3) ........................ (b)(3) ONRR may require a lessee to certify that its arm’slength contract provisions include all of the consideration to be paid by the buyer, either directly or indirectly, for the gas. AUDIT PROCESS. See note. 1206.152(e)(1) ........................ (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 . . . Burden covered under OMB Control Number 1012–0004. 1206.152(e)(2) ........................ sradovich on DSK3TPTVN1PROD with NOTICES 1206.152(b)(1)(i) and (b)(1)(iii) 206.152(e)(2) Any Federal lessee will make available upon request to the authorized ONRR 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. AUDIT PROCESS. See note. 1206.152(e)(3) ........................ (e)(3) A lessee shall notify ONRR if it has determined value pursuant to paragraph (c)(2) or (c)(3) of this section . . . VerDate Sep<11>2014 16:36 Jun 03, 2016 Jkt 238001 PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 AUDIT PROCESS. See note. 80 E:\FR\FM\06JNN1.SGM 10 06JNN1 1 10 80 100 36332 Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Reporting and recordkeeping requirement 1206.152(g) ............................. (g) The lessee may request a value determination from ONRR . . . The lessee shall submit all available data relevant to its proposal . . . 1206.153(b)(1)(i) and (b)(1)(iii) Valuation standards—processed gas .................................... (b)(1)(i) . . . The lessee shall have the burden of demonstrating that its contract is arm’s-length . . . (iii) . . . When ONRR determines that the value may be unreasonable, ONRR will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee’s value. 1206.153(b)(2) ........................ (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; . . . 1206.153(b)(3) ........................ (b)(3) ONRR may require a lessee to certify that its arm’slength 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. AUDIT PROCESS. See note. 1206.153(e)(1) ........................ (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 . . . Burden covered under OMB Control Number 1012–0004. 1206.153(e)(2) ........................ (e)(2) Any Federal lessee will make available upon request to the authorized ONRR 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. AUDIT PROCESS. See note. 1206.153(e)(3) ........................ (e)(2) A lessee shall notify ONRR if it has determined any value pursuant to paragraph (c)(2) or (c)(3) of this section . . . 10 2 20 1206.153(g) ............................. 206.153(g) The lessee may request a value determination from ONRR . . . The lessee shall submit all available data relevant to its proposal . . . 80 15 1,200 1206.154(c)(4) ........................ Determination of quantities and qualities for computing royalties. (c)(4) . . . A lessee may request ONRR approval of other methods for determining the quantity of residue gas and gas plant products allocable to each lease . . . 40 1 40 1206.156(c)(3) ........................ Transportation allowances—general ...................................... (c)(3) Upon request of a lessee, ONRR 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 ONRR–4393, Request to Exceed Regulatory Allowance Limitation) must contain all relevant and supporting documentation necessary for ONRR to make a determination. . . . 40 7 280 1206.157(a)(1)(i) ..................... sradovich on DSK3TPTVN1PROD with NOTICES 30 CFR 1202, 1204, 1206, and 1210 Determination of transportation allowances ........................... (a) Arm’s-length transportation contracts. (1)(i) . . . The lessee shall have the burden of demonstrating that its contract is arm’s-length . . . Hour burden The lessee must claim a transportation allowance by reporting it on a separate line entry on the Form ONRR–2014. VerDate Sep<11>2014 16:36 Jun 03, 2016 Jkt 238001 PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 40 Annual burden hours 5 200 AUDIT PROCESS. See note. 80 1 80 AUDIT PROCESS. See note. Burden covered under OMB Control Number 1012–0004. E:\FR\FM\06JNN1.SGM 06JNN1 36333 Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Reporting and recordkeeping requirement 1206.157(a)(1)(iii) ................... (a)(1)(iii) . . . When ONRR determines that the value of the transportation may be unreasonable, ONRR will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee’s transportation costs. 1206.157(a)(2)(ii) .................... (a)(2)(ii) . . . the lessee may propose to ONRR a cost allocation method on the basis of the values of the products transported . . . 40 1 40 1206.157(a)(3) ........................ (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 ONRR . . . The lessee shall submit all relevant data to support its proposal . . . 40 1 40 1206.157(a)(5) ........................ (a)(5) . . . The transportation factor may not exceed 50 percent of the base price of the product without ONRR approval. 10 3 30 1206.157(b)(1) ........................ (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 ONRR–2014 . . . 1206.157(b)(2)(iv) and (b)(2)(iv)(A). (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 ONRR. (A) . . . After an election is made, the lessee may not change methods without ONRR approval . . . 100 1 100 1206.157(b)(3)(i) ..................... (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 ONRR approval. 100 1 100 1206.157(b)(3)(ii) .................... (b)(3)(ii) . . . the lessee may propose to the ONRR a cost allocation method on the basis of the values of the products transported . . . 100 1 100 1206.157(b)(4) ........................ (b)(4) Where both gaseous and liquid products are transported through the same transportation system, the lessee shall propose a cost allocation procedure to ONRR . . . The lessee shall submit all relevant data to support its proposal . . . 100 1 100 1206.157(b)(5) ........................ (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. 100 1 100 1206.157(c)(1)(i) ..................... (c) Reporting Requirements. (1) Arm’s-length contracts. (i) You must use a separate entry on Form ONRR–2014 to notify ONRR of a transportation allowance. Burden covered under OMB Control Number 1012–0004. 1206.157(c)(1)(ii) .................... (c)(1)(ii) ONRR may require you to submit arm’s-length transportation contracts, production agreements, operating agreements, and related documents . . . AUDIT PROCESS. See note. 1206.157(c)(2)(i) ..................... sradovich on DSK3TPTVN1PROD with NOTICES 30 CFR 1202, 1204, 1206, and 1210 (c)(2) Non-arm’s-length or no contract. (i) You must use a separate entry on Form ONRR–2014 to notify ONRR of a transportation allowance. Burden covered under OMB Control Number 1012–0004. 1206.157(c)(2)(iii) .................... (c)(2)(iii) ONRR may require you to submit all data used to calculate the allowance deduction . . . AUDIT PROCESS. See note. Jkt 238001 06JNN1 VerDate Sep<11>2014 16:36 Jun 03, 2016 PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 Hour burden Annual burden hours AUDIT PROCESS. See note. Burden covered under OMB Control Number 1012–0004. E:\FR\FM\06JNN1.SGM 36334 Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued 30 CFR 1202, 1204, 1206, and 1210 Reporting and recordkeeping requirement Hour burden Average number of annual responses Annual burden hours 1206.157(e)(2), (e)(3), and (f)(1). (e) Adjustments. (2) For lessees transporting production from onshore Federal leases, the lessee must submit a corrected Form ONRR–2014 to reflect actual costs, together with any payment, in accordance with instructions provided by ONRR. (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 ONRR–2014 to reflect actual costs, together with its payments, in accordance with instructions provided by ONRR . . . (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 ONRR–2014 by the amount of that payment. You must modify Form ONRR–2014 by the amount received or credited for the affected reporting period and pay any resulting royalty and late payment interest due; Burden covered under OMB Control Number 1012–0004. 1206.158(c)(3) ........................ Processing allowances—general ........................................... (c)(3) Upon request of a lessee, ONRR may approve a processing allowance in excess of the limitation prescribed by paragraph (c)(2) of this section . . . An application for exception (using Form ONRR–4393, Request to Exceed Regulatory Allowance Limitation) shall contain all relevant and supporting documentation for ONRR to make a determination . . . 80 10 800 1206.158(d)(2)(i) ..................... (d)(2)(i) If the lessee incurs extraordinary costs for processing gas production from a gas production operation, it may apply to ONRR for an allowance for those costs . . . 80 1 80 1206.158(d)(2)(ii) .................... (d)(2)(ii) . . . to retain the authority to deduct the allowance the lessee must report the deduction to ONRR in a form and manner prescribed by ONRR. 1206.159(a)(1)(i) ..................... Determination of processing allowances. Burden covered under OMB Control Number 1012–0004. AUDIT PROCESS. See note. The lessee must claim a processing allowance by reporting it on a separate line entry on the Form ONRR–2014. Burden covered under OMB Control Number 1012–0004. 1206.159(a)(1)(iii) ................... (a)(1)(iii) . . . When ONRR determines that the value of the processing may be unreasonable, ONRR will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee’s processing costs. AUDIT PROCESS. See note. 1206.159(a)(3) ........................ (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 ONRR . . . The lessee shall submit all relevant data to support its proposal . . . 1206.159(b)(1) ........................ sradovich on DSK3TPTVN1PROD with NOTICES (a) Arm’s-length processing contracts ................................... (1)(i) . . . The lessee shall have the burden of demonstrating that its contract is arm’s-length . . . (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 ONRR–2014 . . . 1206.159(b)(2)(iv) and (b)(2)(iv)(A). (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 ONRR. (A) . . . After an election is made, the lessee may not change methods without ONRR approval . . . VerDate Sep<11>2014 19:19 Jun 03, 2016 Jkt 238001 PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 20 1 20 Burden covered under OMB Control Number 1012–0004. E:\FR\FM\06JNN1.SGM 100 06JNN1 1 100 36335 Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses 30 CFR 1202, 1204, 1206, and 1210 Reporting and recordkeeping requirement 1206.159(b)(4) ........................ (b)(4) A lessee may apply to ONRR for an exception from the requirements that it compute actual costs in accordance with paragraphs (b)(1) through (b)(3) of this section . . . 1206.159(c)(1)(i) ..................... (c) Reporting requirements—(1) Arm’s-length contracts. (i) The lessee must notify ONRR of an allowance based on incurred costs by using a separate line entry on the Form ONRR–2014. Burden covered under OMB Control Number 1012–0004. 1206.159(c)(1)(ii) .................... (c)(1)(ii) ONRR may require that a lessee submit arm’slength processing contracts and related documents . . . AUDIT PROCESS. See note. 1206.159(c)(2)(i) ..................... (c)(2) Non-arm’s-length or no contract. (i) The lessee must notify ONRR of an allowance based on incurred costs by using a separate line entry on the Form ONRR–2014. Burden covered under OMB Control Number 1012–0004. 1206.159(c)(2)(iii) .................... (c)(2)(iii) Upon request by ONRR, the lessee shall submit all data used to prepare the allowance deduction . . . AUDIT PROCESS. See note. 1206.159(e)(2) and (e)(3) ....... (e) Adjustments . . . (2) For lessees processing production from onshore Federal leases, the lessee must submit a corrected Form ONRR–2014 to reflect actual costs, together with any payment, in accordance with instructions provided by ONRR. (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 ONRR–2014 to reflect actual costs, together with its payment, in accordance with instructions provided by ONRR . . . Burden covered under OMB Control Number 1012–0004. Oil and Gas Valuation Subtotal. ................................................................................................. ........................ 123 8992 ................................................................................................. ........................ 133 9518 TOTAL ...................... Hour burden 100 Annual burden hours 1 100 sradovich on DSK3TPTVN1PROD with NOTICES Note: AUDIT PROCESS—The Office of Regulatory Affairs determined that the audit process is exempt from the Paperwork Reduction Act of 1995 because ONRR staff asks non-standard questions to resolve exceptions. This 60-day Federal Register notice burden chart shows an adjustment increase of +320 burden hours. This adjustment is based on analyzed historical data since 2013 for the transportation and processing allowances (1206.156(c)(3) and 1206.158(c)(3)). The transportation processing allowance increased from 120 to 280 burden hours and the processing allowance increased from 640 to 800 burden hours for a total increase of +320 annual burden hours. Estimated Annual Reporting and Recordkeeping ‘‘Non-hour’’ Cost Burden: We have not identified a ‘‘nonhour’’ cost burden associated with the collection of information. Public Disclosure Statement: The PRA (44 U.S.C. 3501 et seq.) provides that an agency may not conduct or sponsor, and a person does not have to respond to, a collection of information unless it displays a currently valid OMB control number. VerDate Sep<11>2014 16:36 Jun 03, 2016 Jkt 238001 III. Request for Comments Section 3506(c)(2)(A) of the PRA requires each agency to ‘‘* * * provide 60-day notice in the Federal Register * * * and otherwise consult with members of the public and affected 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 information that ONRR collects; 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 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 ‘‘non-hour cost’’ burden to respondents or record-keepers 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 that you use to estimate (1) major cost factors, including system and technology acquisition, (2) expected useful life of capital equipment, (3) discount rate(s), and (4) the period over which you incur costs. Capital and startup costs include, among other items, computers and software that you purchase to prepare for collecting information and 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 E:\FR\FM\06JNN1.SGM 06JNN1 36336 Federal Register / Vol. 81, No. 108 / Monday, June 6, 2016 / Notices collection; (iii) for reasons other than to provide information or keep records for the Federal 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. We also will post the ICR at https://www.onrr.gov/ Laws_R_D/FRNotices/ICR0136.htm. Public Comment Policy: ONRR will post all comments, including names and addresses of respondents at https:// www.regulations.gov. Before including Personally Identifiable Information (PII), such as your address, phone number, email address, or other personal information in your comment(s), you should be aware that your entire comment (including PII) may be made available to the public at any time. While you may ask us, in your comment, to withhold PII from public view, we cannot guarantee that we will be able to do so. 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 Office of Management and Budget control number. Dated: May 26, 2016. Gregory J. Gould, Director, Office of Natural Resources Revenue. BILLING CODE 4335–30–P DEPARTMENT OF THE INTERIOR Office of Natural Resources Revenue [Docket No. ONRR–2011–0019; DS63642000 DR2000000.CH7000 167D0102R2] Major Portion Prices and Due Date for Additional Royalty Payments on Indian Gas Production in Designated Areas Not Associated With an Index Zone Office of Natural Resources Revenue (ONRR). ACTION: Withdrawal. AGENCY: On April 28, 2016, ONRR published (at 81 FR 25419) a notice of the due date for industry to pay additional royalties based on the major portion prices, titled ‘‘Major Portion Prices and Due Date for Additional Royalty Payments on Indian Gas Production in Designated Areas Not Associated with an Index Zone.’’ Unfortunately, due to an incorrect date in said notice, it is necessary to sradovich on DSK3TPTVN1PROD with NOTICES VerDate Sep<11>2014 16:36 Jun 03, 2016 Jkt 238001 Dated: May 25, 2016. Gregory J. Gould, Director, Office of Natural Resources Revenue. [FR Doc. 2016–13207 Filed 6–3–16; 8:45 am] BILLING CODE 4335–30–P DEPARTMENT OF THE INTERIOR Bureau of Ocean Energy Management [Docket No. BOEM–2016–0027; MMAA104000] Atlantic Wind Lease Sale 6 (ATLW–6) for Commercial Leasing for Wind Power on the Outer Continental Shelf Offshore New York—Proposed Sale Notice Bureau of Ocean Energy Management (BOEM or ‘‘the Bureau’’), Interior. ACTION: Proposed Sale Notice for Commercial Leasing for Wind Power on the Outer Continental Shelf Offshore New York. AGENCY: This document is the Proposed Sale Notice (PSN) for the sale of one commercial wind energy lease on the Outer Continental Shelf (OCS) offshore New York, pursuant to 30 CFR 585.216. BOEM proposes to offer Lease OCS–A 0512 for sale using an ascending bidding auction format. In this PSN, you will find information pertaining to the area available for leasing, proposed lease provisions and conditions, auction details, the lease form, criteria for evaluating competing bids, award procedures, appeal procedures, and lease execution. BOEM invites public comment during a 60-day comment period following publication of this notice. The issuance of a lease resulting from this proposed sale would not constitute an approval of projectspecific plans to develop offshore wind energy resources. Such plans, expected to be submitted by the auction winner, will be subject to subsequent environmental and technical reviews prior to a decision to proceed with development. DATES: Comments should be submitted electronically or postmarked no later than August 5, 2016. All comments received or postmarked during the SUMMARY: [FR Doc. 2016–13206 Filed 6–3–16; 8:45 am] SUMMARY: withdraw the notice and re-publish a corrected version. This notice withdraws the April 28, 2016, notice in question. FOR FURTHER INFORMATION CONTACT: For questions on technical issues, contact Mr. Luis Aguilar, Regulatory Specialist, ONRR, telephone (303) 231–3418, or email Luis.Aguilar@onrr.gov. PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 comment period will be made available to the public and considered prior to publication of the Final Sale Notice (FSN). All entities interested in participating in the lease sale who have not previously been qualified by BOEM to participate in this lease sale must submit the required qualification materials by the end of the 60-day comment period for this notice. All qualification materials must be postmarked no later than August 5, 2016. Entities that have already been qualified to participate in this lease sale are not required to take any additional action to affirm their interest. ADDRESSES: Potential auction participants, Federal, state, and local government agencies, tribal governments, and other interested parties are requested to submit their written comments on the PSN in one of the following ways: 1. Electronically: https:// www.regulations.gov. In the entry entitled, ‘‘Enter Keyword or ID’’, enter BOEM–2016–0027 then click ‘‘search.’’ Follow the instructions to submit public comments. 2. Written Comments: In written form, delivered by hand or by mail, enclosed in an envelope labeled, ‘‘Comments on New York PSN’’ to: BOEM Office of Renewable Energy Programs, 45600 Woodland Road, VAM–OREP, Sterling, Virginia 20166, (703) 787–1320. 3. Qualifications Materials: Those submitting qualifications materials should contact Erin C. Trager, BOEM Office of Renewable Energy Programs, 45600 Woodland Road, VAM–OREP, Sterling, Virginia 20166, (703) 787– 1320, or Erin.Trager@boem.gov. If you wish to protect the confidentiality of your qualification materials, clearly mark the relevant sections and request that BOEM treat them as confidential. Please label privileged or confidential information with the caption ‘‘Contains Confidential Information’’ and consider submitting such information as a separate attachment. Treatment of confidential information is addressed in the section of this PSN entitled ‘‘Protection of Privileged or Confidential Information.’’ Information that is not labeled as privileged or confidential will be regarded by BOEM as suitable for public release. FOR FURTHER INFORMATION CONTACT: Erin C. Trager, BOEM Office of Renewable Energy Programs, 45600 Woodland Road, VAM–OREP, Sterling, Virginia 20166, (703) 787–1320 or Erin.Trager@ boem.gov. Authority: This PSN is published pursuant to subsection 8(p) of the OCS Lands Act (43 E:\FR\FM\06JNN1.SGM 06JNN1

Agencies

[Federal Register Volume 81, Number 108 (Monday, June 6, 2016)]
[Notices]
[Pages 36325-36336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-13206]

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DEPARTMENT OF THE INTERIOR

Office of Natural Resources Revenue

[Docket No. ONRR-2012-0006; DS63642000 DR2PS0000.CH7000 167D0102R2]

Agency Information Collection Activities: Federal Oil and Gas
Valuation; Comment Request

AGENCY: Office of Natural Resources Revenue (ONRR), Interior.

ACTION: Notice of an extension.

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SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), ONRR
is inviting comments on a collection of information requests that we
will submit to the Office of Management and Budget (OMB) for review and
approval. This Information Collection Request (ICR) covers the
paperwork requirements in the regulations under title 30, Code of
Federal Regulations (CFR), parts 1202, 1204, and 1206. This ICR
pertains to Federal oil and gas valuation regulations, which include
transportation and processing regulatory allowance limits and
accounting and auditing relief for marginal properties. Also, there is
one form (ONRR-4393) associated with this information collection.

DATES: Submit written comments on or before August 5, 2016.

ADDRESSES: You may submit comments on this ICR to ONRR by using one of
the following three methods (please reference ``ICR 1012-0005'' in your
comments):
1. Electronically go to https://www.regulations.gov. In the entry
titled ``Enter Keyword or ID,'' enter ``ONRR-2012-0005'' and then click
``Search.'' Follow the instructions to submit public comments. ONRR
will post all comments.
2. Email comments to Mr. Luis Aguilar, Regulatory Specialist, at
luis.aguilar@onrr.gov.
3. Hand-carry or mail comments, using an overnight courier service,
to ONRR. Our courier address is Building 85, Room A-614, Denver Federal
Center, West 6th Ave. and Kipling St., Denver, Colorado 80225.

FOR FURTHER INFORMATION CONTACT: For any questions, contact Mr. Luis
Aguilar, telephone (303) 231-3418, or email at luis.aguilar@onrr.gov.
You may also contact Mr. Aguilar to obtain copies, at no cost, of (1)
the ICR, (2) any associated forms, and (3) the regulations that require
us to collect the information.

SUPPLEMENTARY INFORMATION:

I Abstract

The Secretary of the United States Department of the Interior is
responsible for mineral resource development on Federal and Indian
lands and the Outer Continental Shelf (OCS). The Secretary's
responsibility, according to various laws, is to manage mineral
resource production from Federal and Indian lands and the OCS, collect
the royalties and other mineral revenues due, and distribute the funds
collected under those laws. We have posted those laws pertaining to
mineral leases on Federal and Indian lands and the OCS at https://www.onrr.gov/Laws_R_D/PubLaws/default.htm.
The Secretary also has a trust responsibility to manage Indian
lands and seek advice and information from Indian beneficiaries. ONRR
performs the minerals revenue management functions for the Secretary
and assists the Secretary in carrying out the Department's trust
responsibility for Indian lands.
You can find the information collections covered in this ICR at 30
CFR parts:
1202, subparts C and D, which pertain to Federal oil and
gas royalties.
1204, subpart C, which pertains to accounting and auditing
relief for marginal properties.
1206, subparts C and D, which pertain to Federal oil and
gas product valuation.

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 mineral lease
laws require the lessee, or his designee, to report various kinds of
information to the lessor relative to the

[[Page 36326]]

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.

Information Collections

ONRR uses the information that we collect in this ICR to ensure
that lessees accurately value and appropriately pay royalties on oil
and gas produced from 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.
A. Federal Oil and Gas Valuation Regulations
The valuation regulations at 30 CFR part 1206, subparts C and D,
mandate that companies collect and submit information used to value
their Federal oil and gas, including (1) transportation and processing
allowances and (2) regulatory allowance limit information. Companies
report certain data on form ONRR-2014, Report of Sales and Royalty
Remittance. The information that we request is the minimum necessary to
carry out our mission and places the least possible burden on
respondents. If ONRR does not collect this information, both Federal
and State governments may incur a loss of royalties.
Transportation and Processing Regulatory Allowance Limits: Lessees
may deduct actual costs of transportation and processing from Federal
royalties. The lessees report these allowances on form ONRR-2014. For
oil and gas, regulations establish the allowable limit on
transportation allowance deductions at 50 percent of the value of the
oil or gas. For gas only, 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 ONRR-4393:
Lessees may request to exceed regulatory limitations. Upon proper
application from the lessee, ONRR may approve oil or gas transportation
allowance in excess of 50 percent or gas processing allowance in excess
of 66\2/3\ percent on Federal leases. Lessees use form ONRR-4393 for
both Federal and Indian leases to request to exceed allowance
limitations. This ICR covers only Federal leases; therefore, we have
not included burden hours of form ONRR-4393 for Indian leases in this
ICR. We include burden hours for form ONRR-4393 for Indian leases in
OMB Control Number 1012-0002.
B. Accounting and Auditing Relief for Marginal Properties
In 2004, we amended our regulations to comply with section 7 of the
Federal Oil and Gas Royalty Simplification and Fairness Act of 1996.
These regulations provide guidance for lessees and designees seeking
accounting and auditing relief for qualifying Federal marginal
properties. Under the regulations, both ONRR and the State concerned
must approve any relief granted for a marginal property.

OMB Approval

We will request OMB approval to continue to collect, from
companies, lessees, and designees, information used (1) to value their
Federal oil and gas, including (a) transportation and processing
allowances and (b) regulatory allowance limit information and (2) to
request accounting and auditing relief approval for qualifying Federal
marginal properties. If ONRR does not collect this information, this
would limit the Secretary's ability to discharge fiduciary duties and
may also result in loss of royalty payments. ONRR protects the
proprietary information that we receive, and we do not collect items of
a sensitive nature.
ONRR requires lessees to respond to information collections
relating to valuation requirements.

II. Data

Title: 30 CFR parts 1202, 1204, and 1206, Federal Oil and Gas
Valuation.
OMB Control Number: 1012-0005.
Bureau Form Number: Form ONRR-4393.
Frequency: Annually and on occasion.
Estimated Number and Description of Respondents: 120 Federal
lessees/designees and 7 States for Federal oil and gas.
Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 9,518
hours.
We have not included in our estimates certain requirements
performed in the normal course of business and considered as usual and
customary. We display the estimated annual burden hours by CFR section
and paragraph in the following chart:

Respondents' Estimated Annual Burden Hours
----------------------------------------------------------------------------------------------------------------
Average
Reporting and recordkeeping number of Annual burden
30 CFR 1202, 1204, 1206, and 1210 requirement Hour burden annual hours
responses
----------------------------------------------------------------------------------------------------------------
PART 1202--ROYALTIES
----------------------------------------------------------------------------------------------------------------
Subpart C--Federal and Indian Oil
----------------------------------------------------------------------------------------------------------------
1202.101........................... Standards for reporting and Burden covered under OMB Control Number 1012-
paying royalties. 0004.
Oil volumes are to be
reported in barrels of
clean oil of 42 standard
U.S. gallons (231 cubic
inches each) at 60 [deg]F
. . ..
----------------------------------------------------------------------------------------------------------------
Subpart D--Federal Gas
----------------------------------------------------------------------------------------------------------------
1202.152(a) and (b)................ Standards for reporting and Burden covered under OMB Control Number 1012-
paying royalties on gas. 0004.
(a)(1) If you are
responsible for reporting
production or royalties
you must:.
(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

[[Page 36327]]

(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 1204--ALTERNATIVES FOR MARGINAL PROPERTIES
----------------------------------------------------------------------------------------------------------------
Subpart C--Accounting and Auditing Relief
----------------------------------------------------------------------------------------------------------------
1204.202(b)(1)..................... What is the cumulative 40 1 40
royalty reports and
payments relief option?
(b) To use the cumulative
royalty reports and
payments relief option,
you must do all of the
following:
(1) Notify ONRR in writing
by January 31 of the
calendar year for which
you begin taking your
relief . . .
----------------------------------------------------------------------------------------------------------------
1204.202(b)(2) and (b)(3).......... (b)(2) Submit your royalty Burden covered under OMB Control Number 1012-
report and payment . . . 0004.
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; (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 . . .
----------------------------------------------------------------------------------------------------------------
1204.202(b)(4), (b)(5), (c), (b)(4) Report one line of Burden covered under OMB Control Number 1012-
(d)(1), (d)(2), (e)(1), and (e)(2). cumulative royalty 0004.
information on Form ONRR-
2014 for the calendar year
. . . And
(5) Report allowances on
Form ONRR-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 ONRR
receives it . . .
(d) If you take relief you
are not qualified for, you
may be liable for civil
penalties.
Also you must: (1) Pay ONRR
late payment interest
determined under 30 CFR
1218.54 . . . (2) Amend
your Form ONRR-2014 . . ..
(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 . . .
----------------------------------------------------------------------------------------------------------------
1204.203(b), 1204.205(a) and (b), What is the other relief 200 1 200
and 1204.206(a)(3)(i) and (b)(1). option?
(b) You must request
approval from ONRR . . .
before taking relief under
this option..
----------------------------------------------------------------------------------------------------------------
1204.208(c)(1), (d)(1), and (e).... May a State decide that it 40 7 280
will or will not allow one
or both of the relief
options under this
subpart?
(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
Director for Office of
Natural Resources Revenue,
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 Director for Office of
Natural Resources Revenue,
in writing, of its intent
to allow one or both of
the relief options . . .

[[Page 36328]]

(e) If a State does not
notify ONRR . . . the
State will be deemed to
have decided not to allow
either of the relief
options . . .
----------------------------------------------------------------------------------------------------------------
1204.209(b)........................ What if a property ceases 6 1 6
to qualify for relief
obtained under this
subpart?
(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 ONRR in writing by
December 31 that the
relief for the property
has terminated . . .
----------------------------------------------------------------------------------------------------------------
1204.210(c) and (d)................ What if a property is Burden covered under OMB Control Number 1012-
approved as part of 0004.
anonqualifying agreement?
(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 Sec.
1204.202(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. 1204.202(b),
you will owe late payment
interest determined under
Sec. 1218.54 from the
date your payment was due
under Sec.
1204.202(b)(2) until the
date ONRR receives it.
----------------------------------------------------------------------------------------------------------------
1204.214(b)(1) and (b)(2).......... Is minimum royalty due on a Burden covered under OMB Control Number 1012-
property for which I took 0004.
relief?
(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:.
(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
(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.
----------------------------------------------------------------------------------------------------------------
Accounting and Auditing Relief ........................... .............. 10 526
Subtotal.
----------------------------------------------------------------------------------------------------------------
Part 1206--Product Valuation
----------------------------------------------------------------------------------------------------------------
Subpart C--Federal Oil
----------------------------------------------------------------------------------------------------------------
1206.102(e)(1)..................... How do I calculate royalty AUDIT PROCESS. See note.
value for oil that I or my
affiliate sell(s) under an
arm's-length contract?
(e) If you value oil under
paragraph (a) of this
section: (1) ONRR 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.
----------------------------------------------------------------------------------------------------------------
1206.103(a)(1), (a)(2), and (a)(3). How do I value oil that is 45 5 225
not sold under an arm's-
length contract?
This section explains how
to value oil that you may
not value under Sec.
1206.102 or that you elect
under Sec. 1206.102(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 ONRR approval.
(a) Production from leases
in California or Alaska.
Value is the average of
the daily mean ANS spot
prices published in any
ONRR-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 . . .
----------------------------------------------------------------------------------------------------------------

[[Page 36329]]

1206.103(a)(4)..................... (a)(4) After you select an 8 2 16
ONRR-approved publication,
you may not select a
different publication more
often than once every 2
years, . . .
----------------------------------------------------------------------------------------------------------------
1206.103(b)(1)..................... (b) Production from leases 400 2 800
in the Rocky Mountain
Region . . .
(1) If you have an ONRR-
approved tendering
program, you must value
oil . . .
----------------------------------------------------------------------------------------------------------------
1206.103(b)(1)(ii)................. (b)(1)(ii) If you do not 400 2 800
have an ONRR-approved
tendering program, you may
elect to value your oil
under either paragraph
(b)(2) or (b)(3) of this
section . . .
----------------------------------------------------------------------------------------------------------------
1206.103(b)(4)..................... (4) If you demonstrate to 400 2 800
ONRR'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 ONRR
Director may establish an
alternative valuation
method.
----------------------------------------------------------------------------------------------------------------
1206.103(c)(1)..................... (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. 1206.112.
----------------------------------------------------------------------------------------------------------------
1206.103(e)(1) and (e)(2).......... (e) Production delivered to 330 2 660
your refinery and the
NYMEX price or ANS spot
price is an unreasonable
value. (1) . . . you may
apply to the ONRR Director
to establish a value (2)
You must provide adequate
documentation and evidence
demonstrating the market
value at the refinery. . .
. representing the market
at the refinery if: . . .
----------------------------------------------------------------------------------------------------------------
1206.105........................... What records must I keep to Burden covered under OMB Control Number 1012-
support my calculations of 0004.
value under this subpart?
If you determine the value
of your oil under this
subpart, you must retain
all data relevant to the
determination of royalty
value . . .
----------------------------------------------------------------------------------------------------------------
1206.107(a)........................ How do I request a value 40 10 400
determination?
(a) You may request a value
determination from ONRR .
. .
----------------------------------------------------------------------------------------------------------------
1206.109(c)(2)..................... When may I take a 8 2 16
transportation allowance
in determining value?
(c) Limits on
transportation allowances.
(2) You may ask ONRR to
approve a transportation
allowance in excess of the
limitation in paragraph
(c)(1) of this section . .
. Your application for
exception (using Form ONRR-
4393, Request to Exceed
Regulatory Allowance
Limitation) must contain
all relevant and
supporting documentation
necessary for ONRR to make
a determination . . .
----------------------------------------------------------------------------------------------------------------
1206.110(a)........................ How do I determine a AUDIT PROCESS. See note.
transportation allowance
under an arm's-length
transportation contract?
(a) . . . You must be able
to demonstrate that your
or your affiliate's
contract is at arm's
length. . . ..
----------------------------------------------------------------------------------------------------------------
1206.110(d)(3)..................... (d) If your arm's-length 20 2 40
transportation contract
includes more than one
liquid product, and the
transportation costs
attributable to each
product cannot be
determined . . .
(3) You may propose to ONRR
a cost allocation method .
. .
----------------------------------------------------------------------------------------------------------------
1206.110(e)........................ (e) If your arm's-length 20 1 20
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 ONRR.
----------------------------------------------------------------------------------------------------------------

[[Page 36330]]

1206.110(e)(1) and (e)(2).......... (e)(1) . . . If ONRR Burden covered under OMB Control Number 1012-
rejects your cost 0004.
allocation, you must amend
your Form ONRR-2014 . . .
(2) You must submit your
initial proposal,
including all available
data, within 3 months
after first claiming the
allocated deductions on
Form ONRR-2014.
----------------------------------------------------------------------------------------------------------------
1206.110(g)(2)..................... (g) If your arm's-length 5 1 5
sales contract includes a
provision reducing the
contract price by a
transportation factor, . .
.
(2) You must obtain ONRR
approval before claiming a
transportation factor in
excess of 50 percent of
the base price of the
product.
----------------------------------------------------------------------------------------------------------------
1206.111(g)........................ How do I determine a 30 1 30
transportation allowance
if I do not have an arm's-
length transportation
contract or arm's-length
tariff?
(g) To compute
depreciation, you may
elect to use either . . .
After you make an
election, you may not
change methods without
ONRR approval . . .
----------------------------------------------------------------------------------------------------------------
1206.111(k)(2)..................... (k)(2) You may propose to 30 1 30
ONRR a cost allocation
method on the basis of the
values . . .
----------------------------------------------------------------------------------------------------------------
1206.111(l)(1) and (l)(3).......... (l)(1) Where you transport 20 1 20
both gaseous and liquid
products through the same
transportation system, you
must propose a cost
allocation procedure to
ONRR . . .
(3) You must submit your
initial proposal,
including all available
data, within 3 months
after first claiming the
allocated deductions on
Form ONRR-2014.
----------------------------------------------------------------------------------------------------------------
1206.111(l)(2)..................... (l)(2) . . . If ONRR Burden covered under OMB Control Number 1012-
rejects your cost 0004.
allocation, you must amend
your Form ONRR-2104 for
the months that you used
the rejected method and
pay any additional royalty
and interest due.
----------------------------------------------------------------------------------------------------------------
1206.112(a)(1)(ii)................. What adjustments and 80 1 80
transportation allowances
apply when I value oil
production from my lease
using NYMEX prices or ANS
spot prices?
(a)(1)(ii) . . . under an
exchange agreement that is
not at arm's length, you
must obtain approval from
ONRR for a location and
quality differential . . .
----------------------------------------------------------------------------------------------------------------
1206.112(a)(1)(ii)................. (a)(1)(ii) . . . If ONRR 20 2 40
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
. . .
----------------------------------------------------------------------------------------------------------------
1206.112(a)(3) and (a)(4).......... (a)(3) If you transport or 80 4 320
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 ONRR
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 ONRR
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 . . .
----------------------------------------------------------------------------------------------------------------

[[Page 36331]]

1206.112(b)(3)..................... (b)(3) . . . you may 80 4 320
propose an alternative
differential to ONRR. . .
. If ONRR 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
. . .
----------------------------------------------------------------------------------------------------------------
1206.112(c)(2)..................... (c)(2) . . . If quality 80 2 160
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
ONRR approves a higher
adjustment.
----------------------------------------------------------------------------------------------------------------
1206.114........................... What are my reporting
requirements under an
arm's-length
transportation contract?
You or your affiliate must Burden covered under OMB Control Number 1012-
use a separate entry on 0004.
Form ONRR-2014 to notify
ONRR of an allowance based
on transportation costs
you or your affiliate
incur.
----------------------------------------------------------------------------
ONRR may require you or AUDIT PROCESS. See note.
your affiliate to submit
arm's-length
transportation contracts,
production agreements,
operating agreements, and
related documents . . .
----------------------------------------------------------------------------------------------------------------
1206.115(a)........................ What are my reporting Burden covered under OMB Control Number 1012-
requirements under a non- 0004.
arm's-length
transportation
arrangement?
(a) You or your affiliate
must use a separate entry
on Form ONRR-2014 to
notify ONRR of an
allowance based on
transportation costs you
or your affiliate incur.
----------------------------------------------------------------------------------------------------------------
1206.115(c)........................ (c) ONRR may require you or AUDIT PROCESS. See note.
your affiliate to submit
all data used to calculate
the allowance deduction .
. .
----------------------------------------------------------------------------------------------------------------
Subpart D--Federal Gas
----------------------------------------------------------------------------------------------------------------
1206.152(b)(1)(i) and (b)(1)(iii).. Valuation standards-- AUDIT PROCESS. See note.
unprocessed gas.
(b)(1)(i) . . . The lessee
shall have the burden of
demonstrating that its
contract is arm's-length.
. . . (iii) . . . When
ONRR determines that the
value may be unreasonable,
ONRR will notify the
lessee and give the lessee
an opportunity to provide
written information
justifying the lessee's
value.
----------------------------------------------------------------------------------------------------------------
1206.152(b)(2)..................... (b)(2) . . . The lessee 80 1 80
must request a value
determination in
accordance with paragraph
(g) of this section for
gas sold pursuant to a
warranty contract; . . .
----------------------------------------------------------------------------------------------------------------
1206.152(b)(3)..................... (b)(3) ONRR 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.
----------------------------------------------------------------------------------------------------------------
1206.152(e)(1)..................... (e)(1) Where the value is Burden covered under OMB Control Number 1012-
determined pursuant to 0004.
paragraph (c) of this
section, the lessee shall
retain all data relevant
to the determination of
royalty value . . .
----------------------------------------------------------------------------------------------------------------
1206.152(e)(2)..................... 206.152(e)(2) Any Federal AUDIT PROCESS. See note.
lessee will make available
upon request to the
authorized ONRR 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.
----------------------------------------------------------------------------------------------------------------
1206.152(e)(3)..................... (e)(3) A lessee shall 10 10 100
notify ONRR if it has
determined value pursuant
to paragraph (c)(2) or
(c)(3) of this section . .
.
----------------------------------------------------------------------------------------------------------------

[[Page 36332]]

1206.152(g)........................ (g) The lessee may request 40 5 200
a value determination from
ONRR . . . The lessee
shall submit all available
data relevant to its
proposal . . .
----------------------------------------------------------------------------------------------------------------
1206.153(b)(1)(i) and (b)(1)(iii).. Valuation standards-- AUDIT PROCESS. See note.
processed gas.
(b)(1)(i) . . . The lessee
shall have the burden of
demonstrating that its
contract is arm's-length .
. .
(iii) . . . When ONRR
determines that the value
may be unreasonable, ONRR
will notify the lessee and
give the lessee an
opportunity to provide
written information
justifying the lessee's
value.
----------------------------------------------------------------------------------------------------------------
1206.153(b)(2)..................... (b)(2) . . . The lessee 80 1 80
must request a value
determination in
accordance with paragraph
(g) of this section for
gas sold pursuant to a
warranty contract; . . .
----------------------------------------------------------------------------------------------------------------
1206.153(b)(3)..................... (b)(3) ONRR 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.
----------------------------------------------------------------------------------------------------------------
1206.153(e)(1)..................... (e)(1) Where the value is Burden covered under OMB Control Number 1012-
determined pursuant to 0004.
paragraph (c) of this
section, the lessee shall
retain all data relevant
to the determination of
royalty value . . .
----------------------------------------------------------------------------------------------------------------
1206.153(e)(2)..................... (e)(2) Any Federal lessee AUDIT PROCESS. See note.
will make available upon
request to the authorized
ONRR 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.
----------------------------------------------------------------------------------------------------------------
1206.153(e)(3)..................... (e)(2) A lessee shall 10 2 20
notify ONRR if it has
determined any value
pursuant to paragraph
(c)(2) or (c)(3) of this
section . . .
----------------------------------------------------------------------------------------------------------------
1206.153(g)........................ 206.153(g) The lessee may 80 15 1,200
request a value
determination from ONRR .
. . The lessee shall
submit all available data
relevant to its proposal .
. .
----------------------------------------------------------------------------------------------------------------
1206.154(c)(4)..................... Determination of quantities 40 1 40
and qualities for
computing royalties.
(c)(4) . . . A lessee may
request ONRR approval of
other methods for
determining the quantity
of residue gas and gas
plant products allocable
to each lease . . .
----------------------------------------------------------------------------------------------------------------
1206.156(c)(3)..................... Transportation allowances-- 40 7 280
general.
(c)(3) Upon request of a
lessee, ONRR 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 ONRR-
4393, Request to Exceed
Regulatory Allowance
Limitation) must contain
all relevant and
supporting documentation
necessary for ONRR to make
a determination. . . .
----------------------------------------------------------------------------------------------------------------
1206.157(a)(1)(i).................. Determination of
transportation allowances.
(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 .
. .
----------------------------------------------------------------------------
The lessee must claim a Burden covered under OMB Control Number 1012-
transportation allowance 0004.
by reporting it on a
separate line entry on the
Form ONRR-2014.
----------------------------------------------------------------------------------------------------------------

[[Page 36333]]

1206.157(a)(1)(iii)................ (a)(1)(iii) . . . When ONRR AUDIT PROCESS. See note.
determines that the value
of the transportation may
be unreasonable, ONRR will
notify the lessee and give
the lessee an opportunity
to provide written
information justifying the
lessee's transportation
costs.
----------------------------------------------------------------------------------------------------------------
1206.157(a)(2)(ii)................. (a)(2)(ii) . . . the lessee 40 1 40
may propose to ONRR a cost
allocation method on the
basis of the values of the
products transported . . .
----------------------------------------------------------------------------------------------------------------
1206.157(a)(3)..................... (a)(3) If an arm's-length 40 1 40
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
ONRR . . . The lessee
shall submit all relevant
data to support its
proposal . . .
----------------------------------------------------------------------------------------------------------------
1206.157(a)(5)..................... (a)(5) . . . The 10 3 30
transportation factor may
not exceed 50 percent of
the base price of the
product without ONRR
approval.
----------------------------------------------------------------------------------------------------------------
1206.157(b)(1)..................... (b) Non-arm's-length or no Burden covered under OMB Control Number 1012-
contract. (1) The lessee 0004.
must claim a
transportation allowance
by reporting it on a
separate line entry on the
Form ONRR-2014 . . .
----------------------------------------------------------------------------------------------------------------
1206.157(b)(2)(iv) and (b)(2)(iv) . . . After a 100 1 100
(b)(2)(iv)(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 ONRR.
(A) . . . After an election
is made, the lessee may
not change methods without
ONRR approval . . .
----------------------------------------------------------------------------------------------------------------
1206.157(b)(3)(i).................. (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 ONRR
approval.
----------------------------------------------------------------------------------------------------------------
1206.157(b)(3)(ii)................. (b)(3)(ii) . . . the lessee 100 1 100
may propose to the ONRR a
cost allocation method on
the basis of the values of
the products transported .
. .
----------------------------------------------------------------------------------------------------------------
1206.157(b)(4)..................... (b)(4) Where both gaseous 100 1 100
and liquid products are
transported through the
same transportation
system, the lessee shall
propose a cost allocation
procedure to ONRR . . .
The lessee shall submit
all relevant data to
support its proposal . . .
----------------------------------------------------------------------------------------------------------------
1206.157(b)(5)..................... (b)(5) You may apply for an 100 1 100
exception from the
requirement to compute
actual costs under
paragraphs (b)(1) through
(b)(4) of this section.
----------------------------------------------------------------------------------------------------------------
1206.157(c)(1)(i).................. (c) Reporting Requirements. Burden covered under OMB Control Number 1012-
(1) Arm's-length 0004.
contracts. (i) You must
use a separate entry on
Form ONRR-2014 to notify
ONRR of a transportation
allowance.
----------------------------------------------------------------------------------------------------------------
1206.157(c)(1)(ii)................. (c)(1)(ii) ONRR may require AUDIT PROCESS. See note.
you to submit arm's-length
transportation contracts,
production agreements,
operating agreements, and
related documents . . .
----------------------------------------------------------------------------------------------------------------
1206.157(c)(2)(i).................. (c)(2) Non-arm's-length or Burden covered under OMB Control Number 1012-
no contract. (i) You must 0004.
use a separate entry on
Form ONRR-2014 to notify
ONRR of a transportation
allowance.
----------------------------------------------------------------------------------------------------------------
1206.157(c)(2)(iii)................ (c)(2)(iii) ONRR may AUDIT PROCESS. See note.
require you to submit all
data used to calculate the
allowance deduction . . .
----------------------------------------------------------------------------------------------------------------

[[Page 36334]]

1206.157(e)(2), (e)(3), and (f)(1). (e) Adjustments. (2) For Burden covered under OMB Control Number 1012-
lessees transporting 0004.
production from onshore
Federal leases, the lessee
must submit a corrected
Form ONRR-2014 to reflect
actual costs, together
with any payment, in
accordance with
instructions provided by
ONRR. (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
ONRR-2014 to reflect
actual costs, together
with its payments, in
accordance with
instructions provided by
ONRR . . .
(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 ONRR-
2014 by the amount of that
payment. You must modify
Form ONRR-2014 by the
amount received or
credited for the affected
reporting period and pay
any resulting royalty and
late payment interest due;
----------------------------------------------------------------------------------------------------------------
1206.158(c)(3)..................... Processing allowances-- 80 10 800
general.
(c)(3) Upon request of a
lessee, ONRR may approve a
processing allowance in
excess of the limitation
prescribed by paragraph
(c)(2) of this section . .
. An application for
exception (using Form ONRR-
4393, Request to Exceed
Regulatory Allowance
Limitation) shall contain
all relevant and
supporting documentation
for ONRR to make a
determination . . .
----------------------------------------------------------------------------------------------------------------
1206.158(d)(2)(i).................. (d)(2)(i) If the lessee 80 1 80
incurs extraordinary costs
for processing gas
production from a gas
production operation, it
may apply to ONRR for an
allowance for those costs
. . .
----------------------------------------------------------------------------------------------------------------
1206.158(d)(2)(ii)................. (d)(2)(ii) . . . to retain Burden covered under OMB Control Number 1012-
the authority to deduct 0004.
the allowance the lessee
must report the deduction
to ONRR in a form and
manner prescribed by ONRR.
----------------------------------------------------------------------------------------------------------------
1206.159(a)(1)(i).................. Determination of processing
allowances.
----------------------------------------------------------------------------
(a) Arm's-length processing AUDIT PROCESS. See note.
contracts.
(1)(i) . . . The lessee
shall have the burden of
demonstrating that its
contract is arm's-length .
. .
----------------------------------------------------------------------------
The lessee must claim a Burden covered under OMB Control Number 1012-
processing allowance by 0004.
reporting it on a separate
line entry on the Form
ONRR-2014.
----------------------------------------------------------------------------------------------------------------
1206.159(a)(1)(iii)................ (a)(1)(iii) . . . When ONRR AUDIT PROCESS. See note.
determines that the value
of the processing may be
unreasonable, ONRR will
notify the lessee and give
the lessee an opportunity
to provide written
information justifying the
lessee's processing costs.
----------------------------------------------------------------------------------------------------------------
1206.159(a)(3)..................... (a)(3) If an arm's-length 20 1 20
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 ONRR . . .
The lessee shall submit
all relevant data to
support its proposal . . .
----------------------------------------------------------------------------------------------------------------
1206.159(b)(1)..................... (b) Non-arm's-length or no Burden covered under OMB Control Number 1012-
contract. (1) . . . The 0004.
lessee must claim a
processing allowance by
reflecting it as a
separate line entry on the
Form ONRR-2014 . . .
----------------------------------------------------------------------------------------------------------------
1206.159(b)(2)(iv) and (b)(2)(iv) . . . When a 100 1 100
(b)(2)(iv)(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 ONRR.
(A) . . . After an election
is made, the lessee may
not change methods without
ONRR approval . . .
----------------------------------------------------------------------------------------------------------------

[[Page 36335]]

1206.159(b)(4)..................... (b)(4) A lessee may apply 100 1 100
to ONRR for an exception
from the requirements that
it compute actual costs in
accordance with paragraphs
(b)(1) through (b)(3) of
this section . . .
----------------------------------------------------------------------------------------------------------------
1206.159(c)(1)(i).................. (c) Reporting requirements-- Burden covered under OMB Control Number 1012-
(1) Arm's-length 0004.
contracts. (i) The lessee
must notify ONRR of an
allowance based on
incurred costs by using a
separate line entry on the
Form ONRR-2014.
----------------------------------------------------------------------------------------------------------------
1206.159(c)(1)(ii)................. (c)(1)(ii) ONRR may require AUDIT PROCESS. See note.
that a lessee submit arm's-
length processing
contracts and related
documents . . .
----------------------------------------------------------------------------------------------------------------
1206.159(c)(2)(i).................. (c)(2) Non-arm's-length or Burden covered under OMB Control Number 1012-
no contract. (i) The 0004.
lessee must notify ONRR of
an allowance based on
incurred costs by using a
separate line entry on the
Form ONRR-2014.
----------------------------------------------------------------------------------------------------------------
1206.159(c)(2)(iii)................ (c)(2)(iii) Upon request by AUDIT PROCESS. See note.
ONRR, the lessee shall
submit all data used to
prepare the allowance
deduction . . .
----------------------------------------------------------------------------------------------------------------
1206.159(e)(2) and (e)(3).......... (e) Adjustments . . . (2) Burden covered under OMB Control Number 1012-
For lessees processing 0004.
production from onshore
Federal leases, the lessee
must submit a corrected
Form ONRR-2014 to reflect
actual costs, together
with any payment, in
accordance with
instructions provided by
ONRR. (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 ONRR-2014
to reflect actual costs,
together with its payment,
in accordance with
instructions provided by
ONRR . . .
----------------------------------------------------------------------------------------------------------------
Oil and Gas Valuation Subtotal. ........................... .............. 123 8992
----------------------------------------------------------------------------------------------------------------
TOTAL...................... ........................... .............. 133 9518
----------------------------------------------------------------------------------------------------------------
Note: AUDIT PROCESS--The Office of Regulatory Affairs determined that the audit process is exempt from the
Paperwork Reduction Act of 1995 because ONRR staff asks non-standard questions to resolve exceptions.

This 60-day Federal Register notice burden chart shows an
adjustment increase of +320 burden hours. This adjustment is based on
analyzed historical data since 2013 for the transportation and
processing allowances (1206.156(c)(3) and 1206.158(c)(3)). The
transportation processing allowance increased from 120 to 280 burden
hours and the processing allowance increased from 640 to 800 burden
hours for a total increase of +320 annual burden hours.
Estimated Annual Reporting and Recordkeeping ``Non-hour'' Cost
Burden: We have not identified a ``non-hour'' cost burden associated
with the collection of information.
Public Disclosure Statement: The PRA (44 U.S.C. 3501 et seq.)
provides that an agency may not conduct or sponsor, and a person does
not have to respond to, a collection of information unless it displays
a currently valid OMB control number.

III. Request for Comments

Section 3506(c)(2)(A) of the PRA requires each agency to ``* * *
provide 60-day notice in the Federal Register * * * and otherwise
consult with members of the public and affected 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 information that ONRR collects; 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 record-keepers
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 that you use to estimate (1) major cost factors,
including system and technology acquisition, (2) expected useful life
of capital equipment, (3) discount rate(s), and (4) the period over
which you incur costs. Capital and startup costs include, among other
items, computers and software that you purchase to prepare for
collecting information and 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

[[Page 36336]]

collection; (iii) for reasons other than to provide information or keep
records for the Federal 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. We also will post the ICR at
https://www.onrr.gov/Laws_R_D/FRNotices/ICR0136.htm.
Public Comment Policy: ONRR will post all comments, including names
and addresses of respondents at https://www.regulations.gov. Before
including Personally Identifiable Information (PII), such as your
address, phone number, email address, or other personal information in
your comment(s), you should be aware that your entire comment
(including PII) may be made available to the public at any time. While
you may ask us, in your comment, to withhold PII from public view, we
cannot guarantee that we will be able to do so.
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 Office of Management and Budget control number.

Dated: May 26, 2016.
Gregory J. Gould,
Director, Office of Natural Resources Revenue.
[FR Doc. 2016-13206 Filed 6-3-16; 8:45 am]
BILLING CODE 4335-30-P

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