Oil and Gas and Sulphur Operations in the Outer Continental Shelf-Lease Continuation Through Operations, 26741-26744 [2017-11985]

Agencies

• DEPARTMENT OF THE INTERIOR
• Bureau of Safety and Environmental Enforcement

[Federal Register Volume 82, Number 110 (Friday, June 9, 2017)]
[Rules and Regulations]
[Pages 26741-26744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-11985]


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DEPARTMENT OF THE INTERIOR

Bureau of Safety and Environmental Enforcement

30 CFR Part 250

[17XE1700DX EX1SF0000.DAQ000 EEEE50000]
RIN 1014-AA35


Oil and Gas and Sulphur Operations in the Outer Continental 
Shelf--Lease Continuation Through Operations

AGENCY: Bureau of Safety and Environmental Enforcement, Interior.

ACTION: Final rule.

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SUMMARY: As specifically mandated by the Consolidated Appropriations 
Act of 2017, this final rule revises the requirements contained in the 
Bureau of Safety and Environmental Enforcement regulations relating to 
maintaining a lease beyond its primary term through continuous 
operations by changing all of the references to the period of time 
before which a lease expires due to cessation of operations from ``180 
days'' and ``180th day'' to a ``year'' and from ``180-day period'' to a 
``1-year period.''

DATES:  This rule is effective on June 9, 2017.

FOR FURTHER INFORMATION CONTACT: Dennis Yang, Regulations and Standards 
Branch, Bureau of Safety and Environmental Enforcement, (713) 220-9203 
or by email: regs@bsee.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    On May 5, 2017, the President signed into law the Consolidated 
Appropriations Act of 2017 (``the CAA''), Public Law 115-31. Section 
121 (``Continuous Operations'') of the CAA directs the Secretary of the 
Interior to revise 30 CFR 250.180. Specifically, Section 121 of the CAA 
states that, ``[n]ot later than 30 days after the date of enactment of 
this Act, the Secretary of the Interior shall amend the regulations 
issued under section 250.180 of title 30, Code of Federal Regulations. 
. . .'' Section 121 also specifies the precise language that must be 
used in revising Sec.  250.180. Within the Department of the Interior 
(Department), the Assistant Secretary for Land and Minerals Management 
(ASLMM), is responsible for promulgating and revising the regulations 
in 30 CFR part 250 administered by the Bureau of Safety and 
Environmental Enforcement (BSEE); thus, the BSEE and the ASLMM are 
responsible for implementing the statutorily mandated revisions to 
Sec.  250.180.
    The current provisions of Sec.  250.180 state that a lease expires 
if the lessee or operator stops conducting operations (drilling, well-
reworking, or production in paying quantities) during the last 180 days 
of the lease term or on a lease that has continued beyond its primary 
term, unless the operator resumes operations, or receives a Suspension 
of Operations (SOO) or a Suspension of Production (SOP) from the 
Regional Supervisor, within 180 days from stopping operations. The 
regulatory revisions mandated by Section 121 extend the existing 180 
day periods to one year.
    Section 121 of the CAA requires the Department to amend Sec.  
250.180 not later than 30 days after the enactment of the CAA (i.e., by 
June 4, 2017). It also mandates the precise wording of the revisions 
that must be made to Sec.  250.180. Therefore, it is both unnecessary 
and impracticable for the BSEE to publish a notice of proposed 
rulemaking and to provide an opportunity for public comment before 
issuing a final rule. For these reasons, it is appropriate and 
necessary to publish a final rule in order to comply with the statute.

Section-by-Section Discussion

Revisions to Sec.  250.171 (How do I request a suspension?)

    Although Section 121 of the CAA does not explicitly require 
amendment of any other provision of the BSEE's regulations, the BSEE 
has determined that this final rule must also amend the introductory 
paragraph of Sec.  250.171 to align it with the language modifications 
that Congress mandated for Sec.  250.180.

[[Page 26742]]

As previously stated, Sec.  250.180 provides that a leaseholder may 
request that the BSEE Regional Supervisor issue a suspension to prevent 
lease expiration following passage of the identified period of time 
(formerly 180 days and now one year) permitted between leaseholding 
operations near the end of or after the primary term. Section 250.171 
establishes the procedures for requesting a suspension, and the 
introductory sentence to that section specifies (among other things) 
that a request must be received by the BSEE ``before the . . . end of 
the 180-day period following the last leaseholding operation. . . .'' 
This requirement is clearly based on the 180-day period provided in 
existing Sec.  250.180. If Sec.  250.171 was not revised to conform to 
the changes to Sec.  250.180, it would require suspension applications 
be filed six months before the lease would expire as a result of the 
statutory revision. To avoid this unintended consequence, it follows 
that Sec.  250.171 must be revised to conform to the mandated revisions 
to Sec.  250.180. This involves striking the reference to ``180-day 
period'' in Sec.  250.171 and inserting in its place the words ``1-year 
period.'' This amendment of Sec.  250.171 is essential to maintaining 
consistency with Sec.  250.180, preserving the logical connection 
between the two sections, and preventing any potential future 
confusion.

Revisions to Sec.  250.180 (What am I required to do to keep my lease 
term in effect?)

    This final rule amends Sec.  250.180 to implement the revisions 
mandated by Section 121 of the CAA. The revisions entail: Striking each 
reference to ``180 days'' and inserting in its place ``year''; striking 
each reference to ``180th day'' and inserting in its place ``year''; 
and striking each reference to ``180-day period'' and inserting in its 
place ``1-year period.'' The effect of changing the references from 
``180 days'' to one year will be to extend the length of time (absent a 
suspension issued by the Regional Supervisor) that an Outer Continental 
Shelf (OCS) lease will remain in effect, beyond its primary term, 
following cessation of production or other leaseholding operations. The 
mandated changes to Sec.  250.180 will provide operators with more time 
and flexibility to evaluate information (e.g., review prior well data, 
plan an additional well, obtain Authorization for Expenditure approval) 
to determine if they will perform another leaseholding operation. This 
change will be of interest and potential benefit to current and future 
holders of OCS leases and to other entities in the offshore oil and gas 
industry.
    The term ``year'' as used in revised Sec.  250.180 refers to the 
365-day (or 366-day during leap years) period after the end of the last 
leaseholding operation. It does not refer to the end of a specific 
calendar year. For example, ``. . . before the end of the year after 
you stop operations'' means before the end of the 365-day (or 366-day) 
period after the operator stops operations as opposed to meaning before 
midnight on December 31st of the current (or subsequent) calendar year.

II. Procedural Matters

A. Administrative Procedure Act (5 U.S.C. 551, et seq.)

    Section 121 of the CAA mandates the revision of 30 CFR 250.180 
within 30 days of the CAA's enactment (May 5, 2017) and the exact 
wording that must be used in revising Sec.  250.180. Congress has 
provided the BSEE with no discretion in how to revise the final rule. 
Therefore, it is impracticable and unnecessary for the BSEE to provide 
prior notice and opportunity to comment on this rulemaking. Even if 
time permitted the BSEE to provide such prior notice, any comments 
submitted by the public could not change the final outcome of this 
rulemaking.
    Similarly, as previously explained, this final rule also revises 
Sec.  250.171, using the same language that Congress mandated for Sec.  
250.180, in order to preserve the logical connection and consistency 
between these two closely-related sections. Failure to so revise Sec.  
250.171 at this time would create unnecessary conflict between the 
language of that section and Sec.  250.180 and result in needless 
confusion and uncertainty in the regulated community. For these 
reasons, and in accordance with 5 U.S.C. 553(b)(3)(B), the BSEE for 
good cause finds that prior notice and public comment are unnecessary 
for this rulemaking.
    Moreover, good cause for proceeding directly to a final rule also 
exists because Congress expressly directed the BSEE to amend its 
regulations within 30 days, making prior notice and comment highly 
impracticable.
    In accordance with 5 U.S.C. 553(d)(3), the BSEE also finds good 
cause to make this final rule effective immediately when published in 
the Federal Register in order to comply with the statutory mandate to 
amend Sec.  250.180 within 30 days of the date of enactment of the CAA 
(May 5, 2017). If Congress had meant merely that this rule should be 
published within 30 days, and need not take effect until a later date, 
it presumably would have said so. Instead, it expressly required that 
the regulations be amended within that time frame. In addition, since 
this final rule will not require the regulated members of the public to 
adjust their operations to comply with the terms of the rule, there is 
no need to postpone its effectiveness to a later date.

B. Regulatory Planning and Review (E.O. 12866 and 13563)

    Section 6(b)(1) of Executive Order (E.O.) 12866 provides that the 
Office of Management and Budget (OMB) Office of Information and 
Regulatory Affairs (OIRA) may review only actions identified by the 
agency or by OIRA as significant regulatory actions. A ``significant 
regulatory action,'' as defined in E.O. 12866, is any regulatory action 
that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this E.O.
    This final rule does not meet the definition of a ``significant 
regulatory action,'' and therefore OIRA review is not necessary.
    E.O. 13563 reaffirms the principles of E.O. 12866 while calling for 
improvements in the Nation's regulatory system to promote 
predictability, to reduce uncertainty, and to use the best, most 
innovative, and least burdensome tools for achieving regulatory ends. 
E.O. 13563 directs agencies to consider regulatory approaches that 
reduce burdens and maintain flexibility and freedom of choice for the 
public where these approaches are relevant, feasible, and consistent 
with regulatory objectives. This rulemaking is consistent with the 
principles and requirements of E.O. 13563.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires an agency to prepare 
a regulatory flexibility analysis for all rules for which an agency is 
required to

[[Page 26743]]

first publish a proposed rule, unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. (See 5 U.S.C. 603(a) and 604(a)). Because 
Section 121 of the CAA requires the Department to amend Sec.  250.180 
with specified language not later than 30 days after the enactment of 
the CAA, the BSEE is not required to publish a proposed rule before 
publication of this final rule. Thus, the RFA does not apply to this 
rulemaking.

D. Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under the Small Business Regulatory 
Enforcement Fairness Act (5 U.S.C. 804(2)). This rule:
    (1) Will not have an annual effect on the economy of $100 million 
or more.
    (2) Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    (3) Will not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises.

E. Unfunded Mandates Reform Act of 1995

    This rule will not impose an unfunded mandate on State, local, or 
tribal governments, or the private sector of more than $100 million per 
year. This rule will not have a significant or unique effect on State, 
local, or tribal governments or the private sector. In addition, this 
rule implements requirements specifically mandated by statute (i.e., 
the amendatory language set forth in Section 121 of the CAA). 
Therefore, a statement containing the information required by the 
Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.) is not required.

F. Takings Implication Assessment (E.O. 12630)

    This rule does not effect a taking of private property or otherwise 
have takings implications under E.O. 12630. Therefore, a takings 
implication assessment is not required.

G. Federalism (E.O. 13132)

    Under the criteria in E.O. 13132, this rule does not have 
sufficient federalism implications to warrant the preparation of a 
federalism summary impact statement. Therefore, a federalism summary 
impact statement is not required.

H. Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of E.O. 12988. 
Specifically, this rule:
    (1) Meets the criteria of section 3(a) requiring that all 
regulations be reviewed to eliminate errors and ambiguity and be 
written to minimize litigation; and
    (2) Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

I. Consultation With Indian Tribes (E.O. 13175 and Departmental Policy)

    The Department of the Interior strives to strengthen its 
government-to-government relationship with Indian tribes through a 
commitment to consultation with Indian tribes and recognition of their 
right to self-governance and tribal sovereignty. We have evaluated this 
rule under the Department of the Interior's consultation policy, under 
Departmental Manual Part 512 Chapters 4 and 5, and under the criteria 
in E.O. 13175. We have determined that this rule has no substantial 
direct effects on federally recognized Indian tribes or any Alaska 
Native Corporation established pursuant to the Alaska Native Claims 
Settlement Act (ANCSA) (43 U.S.C. 1601 et seq.) and that consultation 
under the Department of the Interior's tribal consultation policy is 
not required.

J. Paperwork Reduction Act of 1995

    This rule does not contain any new information collection 
requirements, and a submission to the OMB under the Paperwork Reduction 
Act (44 U.S.C. 3501 et seq.) is not required. We may not conduct or 
sponsor, and you are not required to respond to, a collection of 
information unless it displays a currently valid OMB control number.

K. National Environmental Policy Act of 1969

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. A detailed statement 
under the National Environmental Policy Act of 1969 (NEPA) is not 
required because the rule is covered by a categorical exclusion (see 43 
CFR 46.210(i)) in that this rule is ``of an administrative, financial, 
legal, technical, or procedural nature. . . .'' Further, we have also 
determined that the rule does not involve any of the extraordinary 
circumstances listed in 43 CFR 46.215 that would require further 
analysis under NEPA.

L. Effects on the Energy Supply (E.O. 13211)

    This rule is not a significant energy action under the definition 
in E.O. 13211. Therefore, a Statement of Energy Effects is not 
required.

M. Data Quality Act

    In developing this final rule, we did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Pub. L. 106-554, app. C Sec.  515).

N. Regulatory Reform (E.O. 13771, E.O. 13783, and E.O. 13795)

    The BSEE has reviewed this final rule for compliance with E.O. 
13771 (``Reducing Regulation and Controlling Regulatory Costs''), which 
requires Federal agencies to offset the number and cost of new 
regulations through the repeal, revocation, or revision of existing 
regulations. As provided in OMB Memorandum M-17-21 (``Implementing E.O. 
13771''), a ``regulatory action'' subject to E.O. 13771 is a 
significant regulatory action as defined in section 3(f) of E.O. 12866 
that has been finalized and that imposes total costs greater than zero. 
For the reasons identified in the previous sections, this final rule is 
not a significant regulatory action under E.O. 12866 and thus does not 
require any offsetting deregulatory action. In fact, this rule is a 
``deregulatory action'' under E.O. 13771 because its total costs will 
be less than zero considering the rule provides more time and 
flexibility for operators to plan and conduct operations than the 
existing regulation and thus reduces associated administrative and 
operational burdens. E.O. 13771 deregulatory actions are not limited to 
those defined as significant under E.O. 12866. In addition, in 
accordance with OMB Memorandum M-17-21, even if this final rule were a 
``significant regulatory action,'' it would be exempt from the E.O. 
13771 offset requirements because it is a statutorily required action.
    The BSEE has also determined that this final rule is not subject to 
review under E.O. 13783 (``Promoting Energy Independence and Economic 
Growth''), which requires Federal agencies to review all agency actions 
that potentially burden the development or use of domestically produced 
energy resources, including oil and natural gas. As provided in Section 
2(a) of E.O. 13783, this final rule is not subject to review because it 
is mandated by law. Moreover, this rule would not be subject to review 
under that E.O. because it does not burden the development or use

[[Page 26744]]

of oil or natural gas, as ``burden'' is defined in section 2(b) of E.O. 
13783. In fact, this rule is deregulatory in nature and will decrease 
existing burdens on offshore producers of oil and natural gas.
    The BSEE has also reviewed this final rule for consistency with 
E.O. 13795 (``Implementing an America-First Offshore Energy 
Strategy''), which requires the Department to take certain actions to 
encourage energy exploration and production, including on the OCS, 
while ensuring that those exploration and production activities are 
safe and environmentally responsible. Specifically, the BSEE has 
determined that this rule is necessary because it is both required by 
law and is consistent with the policy set forth in section 2 of E.O. 
13795.

List of Subjects in 30 CFR Part 250

    Administrative practice and procedure, Continental shelf, 
Environmental impact statements, Environmental protection, Government 
contracts, Incorporation by reference, Investigations, Oil and gas 
exploration, Penalties, Pipelines, Continental Shelf--mineral 
resources, Continental shelf--rights-of-way, Reporting and 
recordkeeping requirements, Sulfur.

Katharine S. MacGregor,
Acting Assistant Secretary--Land and Minerals Management.

    For the reasons stated in the preamble, the Bureau of Safety and 
Environmental Enforcement (BSEE) amends 30 CFR part 250 as follows:

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

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

    Authority:  30 U.S.C. 1751, 31 U.S.C. 9701, 33 U.S.C. 
1321(j)(1)(C), 43 U.S.C. 1334.


0
2. In Sec.  250.171, revise the introductory text to read as follows:


Sec.  250.171  How do I request a suspension?

    You must submit your request for a suspension to the Regional 
Supervisor, and BSEE must receive the request before the end of the 
lease term (i.e., end of primary term, end of the 1-year period 
following the last leaseholding operation, and end of a current 
suspension). Your request must include:
* * * * *

0
3. In Sec.  250.180, revise paragraphs (a)(1), (b), (d), (e), (g), and 
(j) to read as follows:


Sec.  250.180  What am I required to do to keep my lease term in 
effect?

    (a) * * *
    (1) You must submit a report to the District Manager according to 
paragraphs (h) and (i) of this section whenever production begins 
initially, whenever production ceases during the last year of the 
primary term, and whenever production resumes during the last year of 
the primary term.
* * * * *
    (b) If you stop conducting operations during the last year of your 
primary lease term, your lease will expire unless you either resume 
operations or receive an SOO or an SOP from the Regional Supervisor 
under Sec.  250.172, Sec.  250.173, Sec.  250.174, or Sec.  250.175 
before the end of the year after you stop operations.
* * * * *
    (d) If you stop conducting operations on a lease that has continued 
beyond its primary term, your lease will expire unless you resume 
operations or receive an SOO or an SOP from the Regional Supervisor 
under Sec.  250.172, Sec.  250.173, Sec.  250.174, or Sec.  250.175 
before the end of the year after you stop operations.
    (e) You may ask the Regional Supervisor to allow you more than a 
year to resume operations on a lease continued beyond its primary term 
when operating conditions warrant. The request must be in writing and 
explain the operating conditions that warrant a longer period. In 
allowing additional time, the Regional Supervisor must determine that 
the longer period is in the National interest, and it conserves 
resources, prevents waste, or protects correlative rights.
* * * * *
    (g) If your lease is continued beyond its primary term, you must 
submit a report to the District Manager under paragraphs (h) and (i) of 
this section whenever production begins initially, whenever production 
ceases, whenever production resumes before the end of the 1-year period 
after having ceased, or whenever drilling or well-reworking operations 
begin before the end of the 1-year period.
* * * * *
    (j) For leases continued beyond the primary term, you must 
immediately report to the District Manager if operations do not begin 
before the end of the 1-year period.

[FR Doc. 2017-11985 Filed 6-7-17; 11:15 am]
 BILLING CODE 4310-MR-P