Waste Prevention, Production Subject to Royalties, and Resource Conservation; Delay and Suspension of Certain Requirements, 58050-58073 [2017-26389]

Download as PDF 58050 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations DEPARTMENT OF THE INTERIOR Bureau of Land Management 43 CFR Parts 3160 and 3170 [18X.LLWO310000.L13100000.PP0000] RIN 1004–AE54 Waste Prevention, Production Subject to Royalties, and Resource Conservation; Delay and Suspension of Certain Requirements Bureau of Land Management, Interior. ACTION: Final rule. AGENCY: The Bureau of Land Management (BLM) is promulgating a final rule (2017 final delay rule) to temporarily suspend or delay certain requirements contained in the rule published in the Federal Register on November 18, 2016, entitled, ‘‘Waste Prevention, Production Subject to Royalties, and Resource Conservation’’ (2016 final rule) until January 17, 2019. The BLM has concerns regarding the statutory authority, cost, complexity, feasibility, and other implications of the 2016 final rule, and therefore intends to avoid imposing likely considerable and immediate compliance costs on operators for requirements that may be rescinded or significantly revised in the near future. The 2017 final delay rule does not substantively change the 2016 final rule, but simply postpones implementation of the compliance requirements for certain provisions of the 2016 final rule for 1 year. DATES: This rule is effective on January 8, 2018. FOR FURTHER INFORMATION CONTACT: Catherine Cook, Acting Division Chief, Fluid Minerals Division, 202–912–7145, or ccook@blm.gov, for information regarding the substance of today’s final delay rule or information about the BLM’s Fluid Minerals program. For questions relating to regulatory process issues, contact Faith Bremner, Regulatory Analyst, at 202–912–7441, or fbremner@blm.gov. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Relay Service (FRS) at 1–800–877–8339, 24 hours a day, 7 days a week, to leave a message or question with the above individuals. You will receive a reply during normal business hours. SUPPLEMENTARY INFORMATION: sradovich on DSK3GMQ082PROD with RULES2 SUMMARY: I. Background II. Discussion of the Final Delay Rule III. Procedural Matters I. Background The BLM’s onshore oil and gas management program is a major VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 contributor to our nation’s oil and gas production. The BLM manages more than 245 million acres of Federal land and 700 million acres of subsurface estate, making up nearly a third of the nation’s mineral estate. In fiscal year (FY) 2016, sales volumes from Federal onshore production lands accounted for 9 percent of domestic natural gas production, and 5 percent of total U.S. oil production. Over $1.9 billion in royalties were collected from all oil, natural gas, and natural gas liquids transactions in FY 2016 on Federal and Indian lands. Royalties from Federal lands are shared with States. Royalties from Indian lands are collected for the benefit of the Indian owners. In response to oversight reviews and a recognition of increased flaring from Federal and Indian leases, the BLM developed the 2016 final rule entitled, ‘‘Waste Prevention, Production Subject to Royalties, and Resource Conservation,’’ which was published in the Federal Register on November 18, 2016. See 81 FR 83008 (Nov. 18, 2016). The rule replaced the BLM’s existing policy at that time, Notice to Lessees and Operators of Onshore Federal and Indian Oil and Gas Leases, Royalty or Compensation for Oil and Gas Lost (NTL–4A). The 2016 final rule was intended to: Reduce waste of natural gas from venting, flaring, and leaks during oil and natural gas production activities on onshore Federal and Indian leases; clarify when produced gas lost through venting, flaring, or leaks is subject to royalties; and clarify when oil and gas production may be used royalty free onsite. The 2016 final rule became effective on January 17, 2017. Many of the 2016 final rule’s provisions are to be phased in over time, and are to become operative on January 17, 2018. Since late January 2017, the President has issued several Executive Orders that necessitate a review of the 2016 final rule by the Department. On January 30, 2017, the President issued Executive Order 13771, entitled, ‘‘Reducing Regulation and Controlling Regulatory Costs,’’ which requires Federal agencies to take proactive measures to reduce the costs associated with complying with Federal regulations. In addition, on March 28, 2017, the President issued Executive Order 13783, entitled, ‘‘Promoting Energy Independence and Economic Growth.’’ Section 7(b) of Executive Order 13783 directs the Secretary of the Interior to review four specific rules, including the 2016 final rule, for consistency with the policy articulated in section 1 of the Order and, ‘‘if appropriate,’’ to publish proposed rules suspending, revising, or rescinding those rules. Among other things, section PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 1 of Executive Order 13783 states that ‘‘[i]t is in the national interest to promote clean and safe development of our Nation’s vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation.’’ To implement Executive Order 13783, on March 29, 2017, Secretary of the Interior Ryan Zinke issued Secretarial Order No. 3349, entitled, ‘‘American Energy Independence,’’ which, among other things, directs the BLM to review the 2016 final rule to determine whether it is fully consistent with the policy set forth in section 1 of Executive Order 13783. The BLM conducted an initial review of the 2016 final rule and found that it is inconsistent with the policy in section 1 of Executive Order 13783. The BLM found that some provisions of the 2016 final rule add considerable regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation. For example, despite the rule’s assertions, many of the 2016 final rule’s requirements would pose a particular compliance burden to operators of marginal or low-producing wells. There is newfound concern that this additional burden would jeopardize the ability of operators to maintain or economically operate these wells. Reexamination of the 2016 final rule is also needed because the BLM is not confident that all provisions of the 2016 final rule would survive judicial review. Immediately after the 2016 final rule was issued, petitions for judicial review of the rule were filed by industry groups and certain States with significant BLMmanaged Federal and Indian minerals. See Wyoming v. U.S. Dep’t of the Interior, Case No. 2:16–cv–00285–SWS (D. Wyo.). Although the court denied motions for a preliminary injunction, it did express concerns that the BLM may have usurped the authority of the Environmental Protection Agency (EPA) and the States under the Clean Air Act, and questioned whether it was appropriate for the 2016 final rule to be justified based on its environmental and societal benefits, rather than on its resource conservation benefits alone. Moreover, questions have been raised over to what extend Federal regulations should apply to leases in communitization agreements when Federal mineral ownership is very small. The BLM is evaluating these issues as part of its reexamination of the rule. Reexamination of the 2016 final rule is warranted to reassess the rule’s estimated costs and benefits. In the E:\FR\FM\08DER2.SGM 08DER2 sradovich on DSK3GMQ082PROD with RULES2 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations Regulatory Impact Analysis (RIA) for the 2016 final rule (2016 RIA), the BLM estimated that the requirements of the 2016 final rule would impose compliance costs, not including potential cost savings for product recovery, of approximately $114 million to $279 million per year (2016 RIA at 4). Certain States, tribes, and many oil and gas companies and trade associations have argued, in comments and in the litigation following the issuance of the 2016 final rule, that the BLM underestimated the compliance costs of the 2016 final rule and that the costs would inhibit oil and gas development on Federal and Indian lands, thereby reducing royalties and harming State and tribal economies. The BLM is reexamining these issues to determine whether the 2016 RIA may have underestimated costs. Apart from this concern over costs, the 2016 RIA also may have overestimated benefits by the use of a social cost of methane that attempts to account for global rather than domestic climate change impacts. Section 5 of Executive Order 13783, issued by the President on March 28, 2017, disbanded the earlier Interagency Working Group on Social Cost of Greenhouse Gases (IWG) and withdrew the Technical Support Documents upon which the RIA for the 2016 final rule relied for the valuation of changes in methane emissions. The Executive Order further directed agencies to ensure that estimates of the social cost of greenhouse gases used in regulatory analyses ‘‘are based on the best available science and economics’’ and are consistent with the guidance contained in Office of Management and Budget (OMB) Circular A–4, ‘‘including with respect to the consideration of domestic versus international impacts and the consideration of appropriate discount rates’’ (E.O. 13783, Section 5(c)). The BLM is reassessing its estimates of the rule’s benefits taking into account the Executive Order’s directives. The BLM also believes that a number of specific assumptions underlying the analysis supporting the 2016 final rule warrant reconsideration. For example, the BLM is reconsidering whether it was appropriate to assume that all marginal wells would receive exemptions from the rule’s requirements and whether this assumption might have masked adverse impacts of the 2016 final rule on production from marginal wells. The BLM is also reconsidering whether it was appropriate to assume that there would be no delay in the BLM’s review of Applications for Permits to Drill (APDs) as a result of reviewing Sundry Notices requesting exemptions from the VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 rule’s requirements, and that there would be no impact on production due to operators waiting on the BLM to review and approve such requests for exemptions. The BLM is reconsidering whether it was appropriate to assume that there would be no reservoir damage if an operator uses temporary well shutins to comply with the 2016 final rule’s capture percentage requirements, and whether it was correct to assume that the capture percentage requirements would not have a disproportionate impact on small operators, who might have fewer wells with which to average volumes of allowable flaring. Finally, the BLM has concerns that its costbenefit analysis for the leak detection and repair (LDAR) requirements in the 2016 final rule—which used data from the EPA’s OOOOa rule (40 CFR part 60, subpart OOOOa)—was not based on the best available information and science. The BLM is reviewing the effectiveness of LDAR requirements to determine whether more accurate data is available. Following up on its initial review, the BLM is currently reviewing the 2016 final rule to develop an appropriate proposed revision—to be promulgated through notice-and-comment rulemaking—that would propose to align the 2016 final rule with the policies set forth in section 1 of Executive Order 13783. Today’s final delay rule temporarily suspends or delays certain requirements contained in the 2016 final rule until January 17, 2019. As noted above, the BLM has concerns regarding the statutory authority, cost, complexity, feasibility, and other implications of the 2016 final rule, and therefore wants to avoid imposing temporary or permanent compliance costs on operators for requirements that might be rescinded or significantly revised in the near future. The BLM also wishes to avoid expending scarce agency resources on implementation activities (internal training, operator outreach/education, developing clarifying guidance, etc.) for such potentially transitory requirements. For certain requirements in the 2016 final rule that have yet to be implemented, this final delay rule will temporarily postpone the implementation dates until January 17, 2019, or for 1 year. For certain requirements in the 2016 final rule that are currently in effect, this final delay rule will temporarily suspend their effectiveness until January 17, 2019. A detailed discussion of the suspensions and delays is provided below. The BLM has attempted to tailor this final delay rule to target the requirements of the 2016 final rule for which immediate PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 58051 regulatory relief is particularly justified. Although the requirements of the 2016 final rule that are not suspended under this final delay rule may ultimately be revised in the near future, the BLM is not suspending them because it does not, at this time, believe that suspension is necessary, because the cost and other implications do not pose immediate concerns for operators. This final delay rule temporarily suspends or delays all of the requirements in the 2016 final rule that the BLM estimated would pose an immediate compliance burden to operators and generate benefits of gas savings or reductions in methane emissions. The 2017 final delay rule does not suspend or delay the requirements in subpart 3178 related to the royalty-free use of natural gas, but the only estimated compliance costs associated with those requirements are for minor and rarely occurring administrative burdens. In addition, for the most part, the 2017 final delay rule suspends or delays the administrative burdens associated with subpart 3179. Only four of the 24 information collection activities remain, and the burdens associated with these remaining items are not substantial. The BLM promulgated the 2016 final rule, and now will suspend and delay certain provisions of that rule, pursuant to its authority under the following statutes: The Mineral Leasing Act of 1920 (30 U.S.C. 181–287), the Mineral Leasing Act for Acquired Lands of 1947 (30 U.S.C. 351–360), the Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1701–1758), the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701–1785), the Indian Mineral Leasing Act of 1938 (25 U.S.C. 396a–g), the Indian Mineral Development Act of 1982 (25 U.S.C. 2101–2108), and the Act of March 3, 1909 (25 U.S.C. 396). These statutes authorize the Secretary of the Interior to promulgate such rules and regulations as may be necessary to carry out the statutes’ various purposes.1 Today’s action temporarily suspending certain requirements of the 2016 final rule does not leave unregulated the venting and flaring of gas from Federal and Indian oil and gas leases. Indeed, regulations from the BLM, the EPA, and the States will operate to address venting and flaring during the period of the suspension. The BLM’s venting and flaring 1 See, e.g., 30 U.S.C. 189 (MLA); 30 U.S.C. 359 (MLAAL); 30 U.S.C. 1751(a) (FOGRMA); 43 U.S.C. 1740 (FLPMA); 25 U.S.C. 396d (IMLA); 25 U.S.C. 2107 (IMDA); 25 U.S.C. 396. See also Clean Air Council v. Pruitt, 862 F.3d 1, 13 (D.C. Cir. 2017) (recognizing that ‘‘[a]gencies obviously have broad discretion to reconsider a regulation at any time’’ through notice and comment rulemaking). E:\FR\FM\08DER2.SGM 08DER2 sradovich on DSK3GMQ082PROD with RULES2 58052 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations regulations that will remain in effect during the 1-year suspension period include: Definitions clarifying when lost gas is ‘‘avoidably lost,’’ and therefore subject to royalties (§ 3179.4); restrictions on the practice of venting (§ 3179.6); limitations on royalty-free venting and flaring during initial production testing (§ 3179.103); limitations on royalty-free flaring during subsequent well tests (§ 3179.104); and restrictions on royalty-free venting and flaring during ‘‘emergencies’’ (§ 3179.105). The BLM also notes that States with significant Federal oil and gas production have regulations that restrict flaring and these regulations apply to Federal oil and gas operations in those States. See, e.g., 20 Alaska Admin. Code § 25.235; Mont. Admin. R. 36.22.1220–.1221; New Mexico Administrative Code section 19.15.18.12; North Dakota Century Code section 38–08–06.4; North Dakota Industrial Commission Order 24665; 055–3 Wyo. Code R. § 39; Utah Administrative Code R649–3–20. Finally, as discussed elsewhere in this document, EPA regulations in 40 CFR 60 subparts OOOO and OOOOa address natural gas emissions from new, modified, and reconstructed equipment on oil and gas leases. On October 5, 2017, the BLM published its proposed rule and sought comment on whether to suspend the implementation of certain requirements in the 2016 final rule until January 17, 2019 (82 FR 46458). Issues of particular interest to the BLM included the necessity of the proposed suspensions and delays, the costs and benefits associated with the proposed suspensions and delays, and whether suspension of other requirements of the 2016 final rule were warranted. The BLM was also interested in the appropriate length of the proposed suspension and delays and wanted to know whether the period should be longer or shorter (e.g., 6 months, 18 months, or 2 years). The BLM allowed a 30-day comment period for the proposed delay rule to afford the public a meaningful opportunity to comment on its narrow proposal, involving a straightforward temporary suspension and delay of certain provisions of the 2016 final rule. The BLM has engaged in stakeholder outreach in the course of developing this final delay rule. On October 16 and 17, 2017, the BLM sent correspondence to tribal governments to solicit their views to inform the development of this final delay rule. The BLM issued a proposed delay rule on September 28, 2017, which was published on October 5, 2017, and accepted public comments VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 through November 6, 2017. The BLM received over 158,000 public comments on the proposed rule, including approximately 750 unique comments. II. Discussion of the Final Rule A. Section-by-Section Discussion 43 CFR 3162.3–1(j)—Drilling Applications and Plans In the 2016 final rule, the BLM added a paragraph (j) to 43 CFR 3162.3–1, which presently requires that when submitting an APD for an oil well, an operator must also submit a wasteminimization plan. Submission of the plan is required for approval of the APD, but the plan is not itself part of the APD, and the terms of the plan are not enforceable against the operator. The purpose of the waste-minimization plan is for the operator to set forth a strategy for how the operator will comply with the requirements of 43 CFR subpart 3179 regarding the control of waste from venting and flaring from oil wells. The waste-minimization plan must include information regarding: The anticipated completion date(s) of the proposed oil well(s); a description of anticipated production from the well(s); certification that the operator has provided one or more midstream processing companies with information about the operator’s production plans, including the anticipated completion dates and gas production rates of the proposed well or wells; and identification of a gas pipeline to which the operator plans to connect. Additional information is required when an operator cannot identify a gas pipeline with sufficient capacity to accommodate the anticipated production from the proposed well, including: A gas pipeline system location map showing the proposed well(s); the name and location of the gas processing plant(s) closest to the proposed well(s); all existing gas trunklines within 20 miles of the well, and proposed routes for connection to a trunkline; the total volume of produced gas, and percentage of total produced gas, that the operator is currently venting or flaring from wells in the same field and any wells within a 20-mile radius of that field; and a detailed evaluation, including estimates of costs and returns, of potential on-site capture approaches. In the 2016 RIA, the BLM estimated that the administrative burden of the waste-minimization plan requirements would be roughly $1 million per year for the industry and $180,000 per year for the BLM (2016 RIA at 96 and 100). The BLM is currently reviewing concerns raised by operators that the PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 requirements of § 3162.3–1(j) may impose an unnecessary burden and can be reduced. The BLM is also evaluating concerns raised by the operators that § 3162.3–1(j) is infeasible because some of the required information is in the possession of a midstream company that is not in a position to share it with the operator prior to the operator’s submission of an APD. The BLM is considering narrowing the required information and is considering whether submission of a State wasteminimization plan, such as those required by New Mexico and North Dakota, would serve the purpose of § 3162.3–1(j). The BLM is therefore suspending the waste minimization plan requirement of § 3162.3–1(j) until January 17, 2019. This final delay rule revises § 3162.3– 1 by adding ‘‘Beginning January 17, 2019’’ to the beginning of paragraph (j). The rest of this paragraph remains the same as in the 2016 final rule and the introductory paragraph is repeated in this final delay rule text only for context. 43 CFR 3179.7—Gas Capture Requirement In the 2016 final rule, the BLM sought to constrain routine flaring through the imposition of a ‘‘capture percentage’’ requirement, requiring operators to capture a certain percentage of the gas they produce, after allowing for a certain volume of flaring per well. The capture-percentage requirement would become more stringent over a period of years, beginning with an 85 percent capture requirement (5,400 Mcf per well flaring allowable) in January 2018, and eventually reaching a 98 percent capture requirement (750 Mcf per well flaring allowable) in January 2026. An operator would choose whether to comply with the capture targets on each of the operator’s leases, units or communitized areas, or on a county-wide or state-wide basis. In the 2016 RIA, the BLM estimated that this requirement would impose costs of up to $162 million per year and generate cost savings from product recovery of up to $124 million per year, with both costs and cost savings increasing as the requirements increased in stringency (2016 RIA at 49). The BLM is currently considering concerns raised by operators that the capture-percentage requirement of § 3179.7 is unnecessarily complex and infeasible in some regions because it may cause wells to be shut-in repeatedly (or otherwise cease production if the lease(s) does not allow for a shut in) until sufficient gas infrastructure is in place. The BLM is considering whether E:\FR\FM\08DER2.SGM 08DER2 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations the NTL–4A framework can be applied in a manner that addresses any inappropriate levels of flaring, and whether market-based incentives (i.e., royalty obligations) could improve capture in a more straightforward and efficient manner. Finally, the BLM is considering whether the need for a complex capture-percentage requirement could be obviated through other BLM efforts to facilitate pipeline development. Since meeting this requirement requires operators to incur significant costs rather than require operators to institute new processes and adjust their plans for development to meet a capture-percentage requirement that may be rescinded or revised as a result of the BLM’s review, the BLM is delaying for 1 year the compliance dates for § 3179.7’s capture requirements. This final delay rule will allow the BLM sufficient time to more thoroughly explore through notice-and-comment rulemaking whether the capture percentage requirements should be rescinded or revised and would prevent operators from being unnecessarily burdened by regulatory requirements that are subject to change. This final delay rule revises the compliance dates in paragraphs (b), (b)(1) through (b)(4), and (c)(2)(i) through (vii) of § 3179.7 to begin January 17, 2019. Paragraphs (c), (c)(1), and the introductory text of (c)(2) remain the same as in the 2016 final rule and are repeated in this final delay rule text only for context. sradovich on DSK3GMQ082PROD with RULES2 43 CFR 3179.9—Measuring and Reporting Volumes of Gas Vented and Flared From Wells Section 3179.9 requires operators to estimate (using estimation protocols) or measure (using a metering device) all flared and vented gas, whether royaltybearing or royalty-free. This section further provides that specific requirements apply when the operator is flaring 50 Mcf or more of gas per day from a high-pressure flare stack or manifold, based on estimated volumes from the previous 12 months, or based on estimated volumes over the life of the flare, whichever is shorter. Under the 2016 final rule, § 3179.9(b) would have required the operator, as of January 17, 2018, if the volume threshold is met, to measure the volume of the flared gas, or calculate the volume of the flared gas based on the results of a regularly performed gas-to-oil ratio test, so as to allow the BLM to independently verify the volume, rate, and heating value of the flared gas. In the 2016 RIA, the BLM estimated that this requirement would impose VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 costs of about $4 million to $7 million per year (2016 RIA at 52). The BLM is presently reviewing concerns raised by operators that the additional accuracy associated with the measurement and estimation required by § 3179.9(b) does not justify the burden it would place on operators and that the requirement is infeasible because current technology does not reliably measure low pressure, low volume, fluctuating gas flow. The BLM is considering whether it would make more sense to allow the BLM to require measurement or estimation on a caseby-case basis, rather than imposing a blanket requirement on all operators. In order to avoid immediate and potentially unnecessary compliance costs on the part of operators, this final delay rule delays the compliance date in § 3179.9 until January 17, 2019. This final delay rule revises the compliance date in § 3179.9(b)(1). The rest of paragraph (b)(1) remains the same as in the 2016 final rule and is repeated in this final delay rule text only for context. 43 CFR 3179.10—Determinations Regarding Royalty-Free Flaring Section 3179.10(a) provides that approvals to flare royalty free that were in effect as of January 17, 2017, will continue in effect until January 17, 2018. The purpose of this provision was to provide a transition period for operators who were operating under existing approvals for royalty-free flaring. Because the BLM’s review of the 2016 final rule could result in rescission or substantial revision of the rule, the BLM believes that terminating preexisting flaring approvals in January 2018 would impose an immediate cost, be premature and disruptive, and would introduce needless regulatory uncertainty for operators with existing flaring approvals. The BLM therefore extends the end of the transition period provided for in § 3179.10(a) to January 17, 2019. This final delay rule also revises the date in paragraph (a) and replaces ‘‘as of the effective date of this rule’’ with ‘‘as of January 17, 2017,’’ which is the effective date of the 2016 final rule, for clarity. Aside from these two changes, this final delay rule does not otherwise revise paragraph (a), but the rest of the paragraph remains the same as in the 2016 final rule and is repeated in this final delay rule text only for context. 43 CFR 3179.101—Well Drilling Section 3179.101(a) requires that gas reaching the surface as a normal part of drilling operations be used or disposed of in one of four ways: (1) Captured and PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 58053 sold; (2) Directed to a flare pit or flare stack; (3) Used in the operations on the lease, unit, or communitized area; or (4) Injected. Section 3179.101(a) also specifies that gas may not be vented, except under the circumstances specified in § 3179.6(b) or when it is technically infeasible to use or dispose of the gas in one of the ways specified above. Section 3179.101(b) states that gas lost as a result of a loss of well control will be classified as avoidably lost if the BLM determines that the loss of well control was due to operator negligence. The BLM is currently reviewing concerns raised by operators that § 3179.101 is unnecessary in light of existing BLM requirements, infeasible in the situations where flares may be used on drilling wells because of insufficient gas to burn, and creates a risk to safety. The BLM has existing regulations that require the operator to flare gas during drilling operations, see Onshore Oil and Gas Order No. 2—Drilling Operations, Section III.C.7. The requirements state that ‘‘All flare systems shall be designed to gather and burn all gas. . . . The flare system shall have an effective method for ignition. Where noncombustible gas is likely or expected to be vented, the system shall be provided supplemental fuel for ignition and to maintain a continuous flare.’’ Because § 3179.101 includes the primary method of gas disposition, which is also required by Onshore Oil and Gas Order No. 2—Drilling Operations, Section III.C.7, the primary effect of § 3179.101, therefore, may be to impose a regulatory constraint on operators in exceptional circumstances where the operator must make a casespecific judgment about how to safely and effectively dispose of the gas. Further, in addition to the existing requirements regulating well drilling operations, the available data suggest that potential gas losses during a welldrilling operation is very small. According to EPA’s Greenhouse Gas Inventory, drilling a well generates only small amounts of uncontrolled gas (2016 RIA at 149 and 151). These data indicate either that operators are already operating in a manner consistent with § 3179.101 or that the amount of potential gas losses from these operations is very small. The BLM is therefore suspending the effectiveness of § 3179.101 until January 17, 2019, while the BLM completes its review of § 3179.101 and decides whether to propose permanently revising or rescinding it through noticeand-comment rulemaking. This final delay rule adds a new paragraph (c) making it clear that the E:\FR\FM\08DER2.SGM 08DER2 58054 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES2 operator must comply with § 3179.101 beginning January 17, 2019. This action does not impact the operator’s compliance with Onshore Oil and Gas Order No. 2—Drilling Operations, Section III.C.7. 43 CFR 3179.102—Well Completion and Related Operations Section 3179.102 addresses gas that reaches the surface during wellcompletion, post-completion, and fluidrecovery operations after a well has been hydraulically fractured or refractured. It requires the gas to be used or disposed of in one of four ways: (1) Captured and sold; (2) Directed to a flare pit or stack, subject to a volumetric limitation in § 3179.103; (3) Used in the lease operations; or (4) Injected. Section 3179.102 specifies that gas may not be vented, except under the narrow circumstances specified in § 3179.6(b) or when it is technically infeasible to use or dispose of the gas in one of the four ways specified above. Section 3179.102(b) provides that an operator will be deemed to be in compliance with its gas capture and disposition requirements if the operator is in compliance with the requirements for control of gas from well completions established under Environmental Protection Agency (EPA) regulations 40 CFR part 60, subparts OOOO or OOOOa regulations, or if the well is not a ‘‘well affected facility’’ under those regulations. The BLM is concerned that § 3179.102 imposes an immediate cost on operators and is currently reviewing it to determine whether it is necessary, in light of current operator practices and the analogous EPA regulations. Operators dispose of gas during well completions and related operations consistent with § 3179.102(a) either to comply with EPA or State regulations. EPA regulations at 40 CFR part 60, subparts OOOO and OOOOa, address the disposition of gas from oil and gas well completions using hydraulic fracturing, which are the vast majority of well completions occurring on Federal and Indian lands. The BLM believes that over 90 percent of wells on Federal and Indian lands are completed using hydraulic fracturing. Therefore, most of the well completions and related operations that would otherwise be covered by § 3179.102 would actually be exempted under § 3179.102(b). The EPA regulations also exempt from its coverage a small portion of well completions that, according to EPA’s Greenhouse Gas Inventory, generate only small amounts of uncontrolled gas (2016 RIA at 149 and 151). These data indicate either that operators are already VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 operating in a manner consistent with § 3179.102(a) or that the amount of potential gas losses from these operations is very small. Considering the overlap with EPA regulations (40 CFR part 60, subparts OOOO and OOOOa), the primary effect of § 3179.102 may be to generate confusion about regulatory compliance during well-drilling and related operations. The BLM is therefore suspending the effectiveness of § 3179.102 until January 17, 2019, while the BLM completes its review of § 3179.102 and decides whether to permanently revise or rescind it through notice-and-comment rulemaking. This final delay rule adds a new paragraph (e) making it clear that operators must comply with § 3179.102 beginning January 17, 2019. 43 CFR 3179.201—Equipment Requirements for Pneumatic Controllers Section 3179.201 addresses pneumatic controllers that use natural gas produced from a Federal or Indian lease, or from a unit or communitized area that includes a Federal or Indian lease. Section 3179.201 applies to such controllers if the controllers: (1) Have a continuous bleed rate greater than 6 standard cubic feet per hour (scf/hour) (‘‘high-bleed’’ controllers); and (2) Are not covered by EPA regulations that prohibit the new use of high-bleed pneumatic controllers (40 CFR part 60, subparts OOOO or OOOOa), but would be subject to those regulations if the controllers were new, modified, or reconstructed sources. Section 3179.201(b) requires the applicable pneumatic controllers to be replaced with controllers (including, but not limited to, continuous or intermittent pneumatic controllers) having a bleed rate of no more than 6 scf/hour, subject to certain exceptions. Section 3179.201(d) requires that this replacement occur no later than January 17, 2018, or within 3 years from the effective date of the rule if the well or facility served by the controller has an estimated remaining productive life of 3 years or less. In the 2016 RIA, the BLM estimated that this requirement would impose costs of about $2 million per year and generate cost savings from product recovery of $3 million to $4 million per year (2016 RIA at 56). The BLM is concerned that § 3179.201 imposes an immediate cost on operators and is currently reviewing it to determine whether it should be revised or rescinded. The BLM is considering whether § 3179.201 is necessary in light of the analogous EPA regulations (40 CFR part 60, subparts OOOO or PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 OOOOa) and the fact that operators are likely to adopt more efficient equipment in cases where it makes economic sense for them to do so. The BLM does not believe that operators should be required to make expensive equipment upgrades to comply with § 3179.201 until the BLM has had an opportunity to review its requirements and, if appropriate, revise them through noticeand-comment rulemaking. The BLM is therefore delaying the compliance date stated in § 3179.201 until January 17, 2019. This final delay rule revises the first sentence of paragraph (d) by replacing ‘‘no later than 1 year after the effective date of this section’’ with ‘‘by January 17, 2019.’’ This final delay rule also replaces ‘‘the effective date of this section’’ with ‘‘January 17, 2017’’ the two times that it appears in the second sentence of paragraph (d). This final delay rule does not otherwise revise paragraph (d), but the rest of the paragraph remains the same as in the 2016 final rule and is repeated in the final delay rule text only for context. 43 CFR 3179.202—Requirements for Pneumatic Diaphragm Pumps Section 3179.202 establishes requirements for operators with pneumatic diaphragm pumps that use natural gas produced from a Federal or Indian lease, or from a unit or communitized area that includes a Federal or Indian lease. It applies to such pumps if they are not covered under EPA regulations at 40 CFR part 60, subpart OOOOa, but would be subject to that subpart if they were a new, modified, or reconstructed source. For covered pneumatic pumps, § 3179.202 requires that the operator either replace the pump with a zeroemissions pump or route the pump exhaust to processing equipment for capture and sale. Alternatively, an operator may route the exhaust to a flare or low-pressure combustion device if the operator makes a determination (and notifies the BLM through a Sundry Notice) that replacing the pneumatic diaphragm pump with a zero-emissions pump or capturing the pump exhaust is not viable because: (1) A pneumatic pump is necessary to perform the function required; and (2) Capturing the exhaust is technically infeasible or unduly costly. If an operator makes this determination and has no flare or lowpressure combustor on-site, or routing to such a device would be technically infeasible, the operator is not required to route the exhaust to a flare or lowpressure combustion device. Under § 3179.202(h), an operator must replace its covered pneumatic diaphragm pump E:\FR\FM\08DER2.SGM 08DER2 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES2 or route the exhaust gas to capture or flare beginning no later than January 17, 2018. In the 2016 RIA, the BLM estimated that this requirement would impose costs of about $4 million per year and generate cost savings from product recovery of $2 million to $3 million per year (2016 RIA at 61). The BLM is concerned that § 3179.202 imposes an immediate cost on operators and is currently reviewing it to determine whether it should be rescinded or revised. Analogous EPA regulations apply to new, modified, and reconstructed sources, therefore limiting the applicability of § 3179.202. See 40 CFR part 60, subpart OOOOa. In addition, the BLM is concerned that requiring zero-emissions pumps may not conserve gas in some cases. The volume of royalty-free gas used to generate electricity to provide the power necessary to operate a zero-emission pump could exceed the volume of gas necessary to operate the pneumatic pump that the zero-emission pump would replace. The BLM does not believe that operators should be required to make expensive equipment upgrades to comply with § 3179.202 until the BLM has had an opportunity to review its requirements and, if appropriate, revise them through noticeand-comment rulemaking. The BLM is therefore delaying the compliance date stated in § 3179.202 until January 17, 2019. This final delay rule revises paragraph (h) by replacing ‘‘no later than 1 year after the effective date of this section’’ in the first sentence with ‘‘by January 17, 2019’’ and also replaces ‘‘the effective date of this section’’ with ‘‘January 17, 2017’’ the two times that it appears later in the same sentence. This final delay rule does not otherwise revise paragraph (h); the rest of the paragraph remains the same as in the 2016 final rule and is repeated in the final delay rule text only for context. 43 CFR 3179.203—Storage Vessels Section 3179.203 applies to crude oil, condensate, intermediate hydrocarbon liquid, or produced-water storage vessels that contain production from a Federal or Indian lease, or from a unit or communitized area that includes a Federal or Indian lease, and that are not subject to 40 CFR part 60, subparts OOOO or OOOOa, but would be if they were new, modified, or reconstructed sources. If such storage vessels have the potential for volatile organic compound (VOC) emissions equal to or greater than 6 tons per year (tpy), § 3179.203 requires operators to route all gas vapor from the vessels to a sales line. Alternatively, the VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 operator may route the vapor to a combustion device if it determines that routing the vapor to a sales line is technically infeasible or unduly costly. The operator also may submit a Sundry Notice to the BLM that demonstrates that compliance with the above options would cause the operator to cease production and abandon significant recoverable oil reserves under the lease due to the cost of compliance. Pursuant to § 3179.203(c), operators must meet these requirements for covered storage vessels by January 17, 2018 (unless the operator will replace the storage vessel in order to comply, in which case it has a longer time to comply). In the 2016 RIA, the BLM estimated that this requirement would impose costs of about $7 million to $8 million per year and generate cost savings from product recovery of up to $200,000 per year (2016 RIA at 74). The BLM is concerned that § 3179.203 imposes an immediate cost on operators and is currently reviewing it to determine whether it should be rescinded or revised. The BLM is considering whether § 3179.203 is necessary in light of analogous EPA regulations (40 CFR part 60, subparts OOOO or OOOOa) and whether the costs associated with compliance are justified. The BLM does not believe that operators should be required to make expensive upgrades to their storage vessels in order to comply with § 3179.203 until the BLM has had an opportunity to review its requirements and, if appropriate, revise them through notice-and-comment rulemaking. The BLM is therefore delaying the January 17, 2018, compliance date in § 3179.203 until January 17, 2019. This final delay rule revises the first sentence of paragraph (b) by replacing ‘‘Within 60 days after the effective date of this section’’ with ‘‘Beginning January 17, 2019’’ and by adding ‘‘after January 17, 2019’’ between the words ‘‘vessel’’ and ‘‘the operator.’’ This final delay rule also revises the introductory text of paragraph (c) by replacing ‘‘no later than one year after the effective date of this section’’ with ‘‘by January 17, 2019’’ and by changing ‘‘or three years if’’ to ‘‘or by January 17, 2020, if ’’ to account for removing the reference to ‘‘the effective date of this section.’’ This final delay rule does not otherwise revise paragraphs (b) and (c), and the rest of these paragraphs remain the same as in the 2016 final rule and are repeated in this final delay rule text only for context. PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 58055 43 CFR 3179.204—Downhole Well Maintenance and Liquids Unloading Section 3179.204 establishes requirements for venting and flaring during downhole well maintenance and liquids unloading. It requires the operator to use practices for such operations that minimize vented gas and the need for well venting, unless the practices are necessary for safety. Section 3179.204 also requires that for wells equipped with a plunger lift system or an automated well-control system, the operator must optimize the operation of the system to minimize gas losses. Under § 3179.204, before an operator manually purges a well for the first time, the operator must document in a Sundry Notice that other methods for liquids unloading are technically infeasible or unduly costly. In addition, during any liquids unloading by manual well purging, the person conducting the well purging is required to be present on-site to minimize, to the maximum extent practicable, any venting to the atmosphere. This section also requires the operator to maintain records of the cause, date, time, duration and estimated volume of each venting event associated with manual well purging, and to make those records available to the BLM upon request. Additionally, operators are required to notify the BLM by Sundry Notice within 30 days after the following conditions are met: (1) The cumulative duration of manual well-purging events for a well exceeds 24 hours during any production month; or (2) The estimated volume of gas vented in the process of conducting liquids unloading by manual well purging for a well exceeds 75 Mcf during any production month. In the 2016 RIA, the BLM estimated that these requirements would impose costs of about $6 million per year and generate cost savings from product recovery of about $5 million to $9 million per year (2016 RIA at 66). In addition, there would be estimated administrative burdens associated with these requirements of $323,000 per year for the industry and $37,000 per year for the BLM (2016 RIA at 98 and 101). The BLM is concerned that § 3179.204 imposes immediate costs on operators and is currently reviewing it to determine whether it should be rescinded or revised. The BLM does not believe that operators should be burdened with the operational and reporting requirements imposed by § 3179.204 until the BLM has had an opportunity to review them and, if appropriate, revise them through noticeand-comment rulemaking. In addition, as part of this review, the BLM would E:\FR\FM\08DER2.SGM 08DER2 58056 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES2 want to review how these data could be reported in a consistent manner among operators. The BLM is therefore suspending the effectiveness of § 3179.204 until January 17, 2019. This final delay rule adds a new paragraph (i), making it clear that operators must comply with § 3179.204 beginning January 17, 2019. 43 CFR 3179.301—Operator Responsibility Sections 3179.301 through 3179.305 establish leak detection, repair, and reporting requirements for: (1) Sites and equipment used to produce, process, treat, store, or measure natural gas from or allocable to a Federal or Indian lease, unit, or communitization agreement; and (2) Sites and equipment used to store, measure, or dispose of produced water on a Federal or Indian lease. Section 3179.302 prescribes the instruments and methods that may be used for leak detection. Section 3179.303 prescribes the frequency for inspections and § 3179.304 prescribes the time frames for repairing leaks found during inspections. Finally, § 3179.305 requires operators to maintain records of their LDAR activities and submit an annual report to the BLM. Pursuant to § 3179.301(f), operators must begin to comply with the LDAR requirements of §§ 3179.301 through 3179.305 before: (1) January 17, 2018, for sites in production prior to January 17, 2017; (2) 60 days after beginning production for sites that began production after January 17, 2017; and (3) 60 days after a site that was out of service is brought back into service and re-pressurized. In the 2016 RIA, the BLM estimated that these requirements would impose costs of about $83 million to $84 million per year and generate cost savings from product recovery of about $12 million to $21 million per year (2016 RIA at 91). In addition, there would be estimated administrative burdens associated with these requirements of $3.9 million per year for the industry and over $1 million per year for the BLM (2016 RIA at 98 and 102). The BLM is concerned that §§ 3179.301 through 3179.305 impose an immediate cost on operators and is currently reviewing them to determine whether they should be revised or rescinded. The analysis of the 2016 rule may have significantly overestimated the benefits of captured gas and therefore not justified the estimated costs. The BLM is also considering whether these requirements are necessary in light of comparable EPA (40 CFR part 60, subpart OOOOa.) and State LDAR regulations. The 2017 RIA VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 includes a discussion of State regulations (2017 RIA at 17). The BLM is considering whether the reporting burdens imposed by these sections are justified and whether the substantial compliance costs could be mitigated by allowing for less frequent and/or noninstrument-based inspections or by exempting wells that have low potential to leak natural gas. The BLM does not believe that operators should be burdened with the significant compliance costs imposed by these sections until the BLM has had an opportunity to review them and, if appropriate, revise them through noticeand-comment rulemaking. The BLM is therefore delaying the effective dates for these sections until January 17, 2019, by revising § 3179.301(f). This final delay rule revises paragraph (f)(1) by replacing ‘‘Within one year of January 17, 2017 for sites that have begun production prior to January 17, 2017;’’ with ‘‘By January 17, 2019, for all existing sites.’’ This final delay rule also revises paragraph (f)(2) by adding ‘‘new’’ between the words ‘‘for’’ and ‘‘sites’’ and by replacing the existing date with ‘‘January 17, 2019.’’ Finally, this final delay rule revises paragraph (f)(3) by adding ‘‘an existing’’ between the words ‘‘when’’ and ‘‘site’’ and by adding ‘‘after January 17, 2019’’ to the end of the sentence. This final delay rule does not otherwise revise paragraph (f), and the rest of the paragraph remains the same as in the 2016 final rule and is repeated in this final delay rule text only for context. B. Summary of Estimated Economic Impacts The BLM reviewed the final delay rule and conducted an RIA and Environmental Assessment (EA) that examine the impacts of the final delay rule’s requirements. The following discussion is a summary of the final delay rule’s economic impacts. The RIA and EA that we prepared have been posted in the docket for the final delay rule on the Federal eRulemaking Portal: https://www.regulations.gov. In the Searchbox, enter ‘‘RIN 1004–AE54’’ and click the ‘‘Search’’ button. Follow the instructions at this Web site. The suspension or delay in the implementation of certain requirements in the 2016 final rule postpones the economic impacts estimated previously to the near-term future. That is to say, impacts that we previously estimated would occur in 2017 will now occur in 2018, impacts that we previously estimated would occur in 2018 will now occur in 2019, and so on. In the RIA for this final delay rule, we track this shift in impacts over the 10-year period PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 following the delay. A 10-year period of analysis was also used in the 2016 RIA. Except for some notable changes, the 2017 RIA uses the impacts estimated and underlying assumptions used by the BLM for the 2016 RIA, published in November 2016. The BLM’s final delay rule temporarily suspends or delays almost all of the requirements in the 2016 final rule that we estimated would pose a compliance burden to operators and generate benefits of gas savings or reductions in methane emissions. Estimated Reductions in Compliance Costs (Excluding Cost Savings) First, we examine the reductions in compliance costs excluding the savings that would have been realized from product recovery. This final delay rule temporarily suspends or delays almost all of the requirements in the 2016 final rule that we estimated would pose a compliance burden to operators. We estimate that suspending or delaying the targeted requirements of the 2016 final rule until January 17, 2019, will substantially reduce compliance costs during the period of the suspension or delay (2017 RIA at 29). Impacts in Year 1: • A delay in compliance costs of $114 million (using a 7 percent discount rate to annualize capital costs) or $110 million (using a 3 percent discount rate to annualize capital costs). Impacts from 2017–2027: • Total reduction in compliance costs ranging from $73 million to $91 million (net present value (NPV) using a 7 percent discount rate) or $40 million to $50 million (NPV using a 3 percent discount rate). Estimated Reduction in Benefits This final delay rule temporarily suspends or delays almost all of the requirements in the 2016 final rule that were estimated to generate benefits of gas savings or reductions in methane emissions. We estimate that this final delay rule will result in forgone benefits, since estimated cost savings that would have come from product recovery will be deferred and the emissions reductions will also be deferred (2017 RIA at 32). Impacts in Year 1: • A reduction in cost savings of $19 million. Impacts from 2017–2027: • Total reduction in cost savings of $36 million (NPV using a 7 percent discount rate) or $21 million (NPV using a 3 percent discount rate). We estimate that this final delay rule will also result in additional methane and VOC emissions of 175,000 and E:\FR\FM\08DER2.SGM 08DER2 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations 250,000 tons, respectively, in Year 1 (2017 RIA at 32). These estimated emissions are measured as the change from the baseline environment, which is the 2016 final rule’s requirements being implemented per the 2016 final rule schedule. Since the final delay rule delays the implementation of those requirements, the estimated benefits of the 2016 final rule will be forgone during the temporary suspension or delay. The BLM used interim domestic values of the carbon dioxide and methane to value the forgone emissions reductions resulting from the delay (see the discussion of social cost of greenhouse gases in the 2017 RIA at Section 3.2 and Appendix). Impact in Year 1: • Forgone methane emissions reductions valued at $8 million (using interim domestic SC–CH4 2 based on a 7 percent discount rate) or $26 million (using interim domestic SC–CH4 based on a 3 percent discount rate). Impacts from 2017–2027: • Forgone methane emissions reductions valued at $1.9 million (NPV 3 and interim domestic SC–CH4 using a 7 percent discount rate); or • Forgone methane emissions reductions valued at $300,000 (NPV and interim domestic SC–CH4 using a 3 percent discount rate). Estimated Net Benefits This final delay rule is estimated to result in positive net benefits, meaning that the reduction of compliance costs would exceed the reduction in cost savings and the cost of emissions additions (2017 RIA at 36). Impact in Year 1: • Net benefits of $83—86 million (using interim domestic SC–CH4 based on a 7 percent discount rate) or $64— 68 million (using interim domestic SC– CH4 based on a 3 percent discount rate). Impacts from 2017–2027: • Total net benefits ranging from $35—52 million (NPV and interim domestic SC–CH4 using a 7 percent discount rate); or • Total net benefits ranging from $19—29 million (NPV and interim domestic SC–CH4 using a 3 percent discount rate). sradovich on DSK3GMQ082PROD with RULES2 Energy Systems This final delay rule is expected to influence the production of natural gas, natural gas liquids, and crude oil from onshore Federal and Indian oil and gas leases, particularly in the short-term and 2 Social 3 Net cost of methane. present value. VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 on a regional basis. However, since the relative changes in production compared to global levels are expected to be small, we do not expect that this final delay rule will significantly impact the price, supply, or distribution of energy. Noting that the assumptions in the 2016 RIA are under review and subject to change, we estimate the following incremental changes in production. Also note the representative share of the total U.S. production in 2015 for context (2017 RIA at 41). Annual Impacts: • A decrease in natural gas production of 9.0 billion cubic feet (Bcf) in Year 1 (0.03 percent of the total U.S. production). • An increase in crude oil production of 91,000 barrels in Year 2 (0.003 percent of the total U.S. production). There is no estimated change in crude oil production in Year 1. Royalty Impacts Based on the assumptions in the 2016 RIA, which are currently under review, in the short-term the final 2017 delay rule is expected to decrease natural gas production from Federal and Indian leases, and likewise, is expected to reduce annual royalties to the Federal Government, tribal governments, States, and private landowners. From 2017– 2027, however, we expect a small increase in total royalties, likely due to production slightly shifting into the future where commodity prices are expected to be higher. Royalty payments are recurring income to Federal or tribal governments and costs to the operator or lessee. As such, they are transfer payments that do not affect the total resources available to society. An important but sometimes difficult problem in cost estimation is to distinguish between real costs and transfer payments. While transfers should not be included in the economic analysis estimates of the benefits and costs of a regulation, they may be important for describing the distributional effects of a regulation. We estimate a reduction in royalties of $2.6 million in Year 1 (2017 RIA at 43). This amount represents about 0.2 percent of the total royalties received from oil and gas production on Federal lands in FY 2016. However, from 2017– 2027, we estimate an increase in total royalties of $1.26 million (NPV using a 7 percent discount rate) or $380,000 (NPV using a 3 percent discount rate). Consideration of Alternative Approaches In developing this final delay rule, the BLM considered alternative timeframes PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 58057 for which it could suspend or delay the requirements (e.g., 6 months and 2 years). Ultimately, the BLM decided on a suspension or delay for 1 year, which it believes to be the minimum length of time practicable within which to review the 2016 final rule and complete a notice-and-comment rulemaking to revise that regulation. Employment Impacts This final delay rule temporarily suspends or delays certain requirements of the BLM’s 2016 final rule on waste prevention and is a temporary deregulatory action. As such, we estimate that it will result in a reduction of compliance costs for operators of oil and gas leases on Federal and Indian lands. Therefore, it is likely that the impact, if any, on the employment will be positive. In the 2016 RIA, the BLM concluded that the requirements were not expected to impact the employment within the oil and gas extraction, drilling oil and gas wells, and support activities industries, in any material way. This determination was based on several reasons. First, the estimated incremental gas production represented only a small fraction of the U.S. natural gas production volumes. Second, the estimated compliance costs represented only a small fraction of the annual net incomes of companies likely to be impacted. Third, for those operations that would have been impacted to the extent that the compliance costs would force the operator to shut in production, the 2016 final rule had provisions that would exempt these operations from compliance. Based on these factors, the BLM determined that the 2016 final rule would not alter the investment or employment decisions of firms or significantly adversely impact employment. The RIA also noted that the 2016 final rule would require the one-time installation or replacement of equipment and the ongoing implementation of an LDAR program, both of which would require labor to comply. As discussed more thoroughly above, the assumptions upon which the determination of the 2016 rule was based upon are under review. Based on the 2016 RIA, this final delay rule will not substantially alter the investment or employment decisions of firms for two reasons. First, the 2016 RIA determined that that rule would not substantially alter the investment or employment decisions of firms, and so therefore delaying the 2016 final rule would likewise not be expected to impact those decisions. We also recognize that while there might be a small positive impact E:\FR\FM\08DER2.SGM 08DER2 58058 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES2 on investment and employment due to the reduction in compliance burdens, the magnitude of the reductions are relatively small. Small Business Impacts The BLM reviewed the Small Business Administration (SBA) size standards for small businesses and the number of entities fitting those size standards as reported by the U.S. Census Bureau. We conclude that small entities represent the overwhelming majority of entities operating in the onshore crude oil and natural gas extraction industry and, therefore, this final delay rule will impact a significant number of small entities. To examine the economic impact of the rule on small entities, the BLM performed a screening analysis on a sample of potentially affected small entities, comparing the reduction of compliance costs to entity profit margins. The BLM identified up to 1,828 entities that operate on Federal and Indian leases and recognizes that the overwhelming majority of these entities are small business, as defined by the SBA. We estimated the potential reduction in compliance costs to be about $60,000 per entity during the initial year when the requirements would be suspended or delayed. This represents the average maximum amount by which the operators would be positively impacted by this final delay rule. We used existing BLM information and research concerning firms that have recently completed Federal and Indian wells and the financial and employment information on a sample of these firms, as available in company annual report filings with the Securities and Exchange Commission (SEC). From the original list of companies, we identified 55 company filings. Of those companies, 33 were small businesses. From data in the companies’ 10–K filings to the SEC, the BLM was able to calculate the companies’ profit margins for the years 2012, 2013, and 2014. We then calculated a profit margin figure for each company when subject to the average annual reduction in compliance costs associated with this final delay rule. For these 26 small companies, the estimated per-entity reduction in compliance costs will result in an average increase in profit margin of 0.17 percentage points (based on the 2014 company data) (2017 RIA at 46). Impacts Associated With Oil and Gas Operations on Tribal Lands This final delay rule applies to oil and gas operations on both Federal and VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 Indian leases. In the 2017 RIA, the BLM estimates the impacts associated with operations on Indian leases, as well as royalty implications for tribal governments. We estimate these impacts by scaling down the total impacts by the share of oil wells on Indian lands and the share of gas wells on Indian lands. The BLM expects the impacts on Tribal Lands to be between 11 percent and 15 percent of those levels described in sections 4.1 to 4.4.4 of the 2017 RIA. Please reference the 2017 RIA at sections 4.1 to 4.4.5 for a full explanation of the estimated impacts. C. Comments and Responses The BLM has engaged in stakeholder outreach in the course of developing this 2017 final delay rule to the degree it believes is appropriate given that the final delay rule extends the compliance dates of the 2016 final rule, but does not change the policies of that rule. The BLM published a proposed rule on October 5, 2017 (82 FR 46458), and accepted public comments through November 6, 2017. The BLM sent correspondence to tribal governments to solicit their views to inform the development of this 2017 final delay rule on October 16 and 17, 2017, and requested feedback and comment through the respective BLM State Office Directors. In addition, BLM State and Field Offices informed the tribes of the BLM delay rule notification letters via phone, and offered to conduct tribal consultation if the tribes chose to do so. More detailed information is found below in the subsection titled ‘‘Consultation and Coordination with Indian Tribal Governments (Executive Order 13175 and Departmental Policy).’’ The BLM received over 158,000 comments on the proposed rule, including approximately 750 unique comments, which are available for viewing on the Federal eRulemaking Portal (http://www.regulations.gov) In the Searchbox, enter ‘‘RIN 1004–AE54’’ and click the ‘‘Search’’ button. Follow the instructions at this Web site. The BLM has reviewed all public comments, and has made changes, as appropriate, to the final delay rule and supporting documents based on those comments and internal review. Those changes are described in detail below in this final delay rule. In addition, the ‘‘comments and responses’’ discussion in this final delay rule provides a summary of issues raised most frequently in public comments and the BLM’s response. A more comprehensive account of public comments and detailed responses to these comments are available to the public in a supporting document in the docket for this rulemaking at the Federal PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 eRulemaking Portal referenced above. The final delay rule reflects the very extensive input that the BLM gathered from the public comment process. The comments revolved around several main issues, which are categorized as the following: (1) Industry impacts; (2) Royalty Provisions, (3) Legal authority; (4) Lost gas volumes; (5) Rule net benefits; (6) National impacts, including energy security; (7) Climate change; (8) Air quality and public health; (9) Rule process; and (10) Technical issues, including parts of the rule that were not delayed. Industry Impacts The BLM received numerous comments on the BLM’s analysis of costs and benefits. Many comments addressed the cost to the operators of complying with the 2017 final delay rule. Some commenters stated that the long-term prevention of energy waste outweighs the additional burden that smaller companies may face from the cost of complying with the 2016 final rule, and others asserted that there is continued stability in the oil and gas industry and jobs despite promulgation of the 2016 final rule so that a delay was unnecessary. Another commenter saw compliance as a cost of doing business and another as a cost to access public lands, while another said they would take a reduction in royalties to pay for reductions in methane emissions. One commenter noted the broad negative impacts of the rule on public welfare through ‘‘wasted gas, diminished royalties, and harmful impacts for public health and the environment.’’ One commenter asserted a disparity between the alleged broad negative impacts of the proposed 2017 delay rule on public welfare through ‘‘wasted gas, diminished royalties, and harmful impacts for public health and the environment’’ with the BLM’s own conclusion that the 2017 delay rule would not ‘‘substantially alter the investment or employment decisions of firms.’’ The BLM did not revise the proposed rule in response to these comments. Most of the comments on these cost/ benefit issues asserted a policy preference for immediately implementing the rule but did not assert that the BLM had relied on improper data analysis. Operators have raised concerns regarding the cost, complexity, and other implications of the 2016 rule. Moreover, the 2016 final rule analysis is under review and the BLM is concerned that certain assumptions that justified the rule’s costs may be unsupported. The BLM does not believe that operators E:\FR\FM\08DER2.SGM 08DER2 sradovich on DSK3GMQ082PROD with RULES2 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations should be required to make expensive equipment upgrades to comply with the 2016 rule until it has had an opportunity to review the requirements and, if appropriate, revise them through notice-and-comment rulemaking. Many commenters supported issuing the delay rule and stated that a final delay rule would avoid imposing immediate compliance costs for requirements that might be rescinded or significantly revised in the near future. The BLM agrees. This final rule will also allow the BLM to avoid expending agency resources on implementation of activities for potentially transitory requirements. The BLM acknowledges that some operators have upgraded their equipment in the interim, and delaying the 2016 rule does not preclude operators from upgrading their equipment voluntarily, but the BLM does not see the delay as penalizing operators who have adopted the 2016 final rule requirements early, as mentioned in one comment. The intent of the delay rule is to prevent the incurrence of compliance costs and potential unnecessary shutting in of wells while the aforementioned provisions are being reviewed due to the concerns raised in this rulemaking. As mentioned above, the BLM shows in the 2017 RIA that the avoided costs of delaying the rule exceed the forgone benefits. Over the 11-year evaluation period (2017–2027), the BLM estimates total net benefits ranging from $35–52 million (NPV and interim social cost of methane using a 7 percent discount rate) or $19–29 million (NPV and interim domestic social cost of methane using a 3 percent discount rate) (2017 RIA at 1). Thus, the RIA for the 2017 final delay rule concludes that the benefits of the 2017 final delay rule (avoided compliance costs) exceed the costs (forgone savings and environmental improvements). In accordance with E.O. 13783, the BLM is committed to furthering the national interest by promoting ‘‘clean and safe development of our Nation’s vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation.’’ Thus, the policy set forth in E.O. 13783 is aimed at ensuring the ‘‘clean’’ and ‘‘prudent’’ (i.e., not wasteful) development of energy resources. As the BLM reconsiders the 2016 final rule in accordance with E.O. 13783, it will continue to analyze the rule’s costs and benefits. Royalty Provisions Several commenters stated that the 2016 final rule’s gas capture provisions VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 would be commercially valuable and economically beneficial to the government through additional royalties. The commenters argued that delaying the 2016 final rule would result in wasted gas and a reduction in the royalties flowing to the States, tribes, and Federal Government. The BLM did not change its proposal in response to these comments. The BLM’s analysis of the delay rule, which is based on potentially tenuous assumptions made in the 2016 final analysis, shows that it might forgo royalties in the short-term, but that there would be a negligible change from the baseline over the entire period of analysis. See Section 4.4 of the 2017 final delay rule RIA. As the BLM reconsiders the final 2016 rule in accordance with E.O. 13783, it will continue to assess impacts on royalty revenues. Some commenters were concerned that the 2016 rule would impact oil and gas development on tribal reservations and royalties to tribes. Some tribes are located in known shale play areas and contain large amounts of undeveloped or underdeveloped areas. In particular, the commenters suggested that the 2016 final rule could delay drilling on or drive industry away from tribal lands, reducing income flowing to Indian mineral owners and tribal economies. The BLM agrees that this is an important issue and is assessing it in developing a proposal to revise or rescind the 2016 final rule. The BLM evaluated the royalty impacts of the delay rule on Indian lands and determined that these impacts were minimal (2017 RIA at 40). Following its initial review, the BLM is reviewing the 2016 final rule to develop an appropriate proposed revision of the 2016 final rule that is intended to align the 2016 final rule with section 1 of E.O. 13783. The BLM invites the commenters to provide comment on its proposal to revise the 2016 final rule, when that proposal is available. The BLM received comments on other royalty-related issues. One commenter believes royalties should not be treated as transfer payments in the 2017 RIA. The BLM disagrees with the commenter. Based on widely-accepted economic principles and OMB Circular A–4, royalties are, by definition, transfer payments. Legal Authority Multiple commenters stated that the BLM lacks either implicit or explicit legal authority to suspend certain requirements of the 2016 final rule for the purpose of reconsidering them. They stated that the 2017 final delay rule is PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 58059 arbitrary and capricious under the Administrative Procedure Act (APA) section 706(2)(A), and the reasoning behind the rule is outside the scope of the Federal Land Policy and Management Act. Commenters stated that promulgation of the 2017 delay rule would put the BLM in violation of both the MLA and FLPMA. Commenters also asserted that, since the 2017 delay rule was proposed shortly after the U.S. District Court for the District of Wyoming denied industry petitioners a preliminary injunction to stay the 2016 final rule until the case was decided on the merits, the BLM is using rulemaking to mirror a judicial function. The BLM has not modified the rule in light of these comments. The BLM has ample legal authority to modify or otherwise revise the existing regulation in response to substantive concerns regarding cost and feasibility under the authority granted by the MLA, the MLAAL, FOGRMA, FLPMA, the IMLA, the IMDA, and the Act of March 3, 1909. These statutes authorize the Secretary of the Interior to promulgate such rules and regulations as may be necessary to carry out the statutes’ various purposes. (See, e.g., 30 U.S.C. 189 (MLA); 30 U.S.C. 359 (MLAAL); 30 U.S.C. 1751(a) (FOGRMA); 43 U.S.C. 1740 (FLPMA); 25 U.S.C. 396d (IMLA); 25 U.S.C. 2107 (IMDA); 25 U.S.C. 396). Moreover, neither the MLA nor FLPMA provide statutory ‘‘mandates’’ that the BLM maintain the regulatory provisions that are being suspended for a year in this final rule. Furthermore, the BLM is not acting arbitrarily and capriciously in promulgating today’s final rule; the preamble, RIA, responses to comments, and other associated documents collectively and adequately explain the rationales and factual bases for each provision in the rule, the relevant factors that the BLM considered, and the reasons why the BLM did not consider certain other factors. Commenters addressed the importance of government-togovernment consultation and stated that, in contrast to the 2016 rule, the BLM only provided a few opportunities for tribes and individual mineral owners to consult about the 2017 delay rule. The BLM engaged in stakeholder outreach in the course of developing this 2017 final delay rule, and believes its degree of outreach was appropriate given that the final delay rule extends the compliance dates of the 2016 final rule, but does not change the policies of that rule. The BLM sent correspondence to all tribal governments with major oil and gas interests, as well as individual Indian mineral owners that have E:\FR\FM\08DER2.SGM 08DER2 sradovich on DSK3GMQ082PROD with RULES2 58060 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations expressed to the BLM in the past that they want to be notified of such actions. Such correspondence solicited their views to inform the development of this 2017 final delay rule and requested feedback and comment through the respective BLM State Office Directors. Several tribal governments have provided feedback on today’s action. Commenters were also concerned about delaying the 2016 final rule, which they viewed as helping the Secretary meet his statutory trust responsibilities with respect to development of Indian oil and gas interests, because it ensured extraction that increased royalties rather than waste of resources. The BLM believes that the 2017 final rule helps the Secretary fulfill his trust responsibility with respect to the development of Indian oil and gas interests. As detailed in the RIA accompanying today’s action, although there is expected a short-term reduction in annual royalties to tribes (and other lessors) from the 1-year delay, overall the economic impact of this final delay rule is positive. The delay also provides the BLM an opportunity to reconsider and ensure appropriate compliance requirements are imposed on tribal lands, which may help to avoid having operators forego development of tribal lands due to burdensome and unnecessary compliance requirements. Commenters stated that the 2017 delay rule would leave the oil and gas operations on Federal and Indian leases unregulated with respect to the activities governed by the provisions being suspended or delayed. The BLM believes this is not the case. The development and production of oil and gas are regulated under a framework of Federal and State laws and regulations. Several Federal agencies implement Federal laws and requirements, while each State in which oil and gas is produced has one or more regulatory agencies that administer State laws and regulations. As discussed more thoroughly above, the requirements of the 2016 final rule that are not being suspended or delayed, various State laws and regulations, and EPA regulations will operate together to limit venting and flaring during the period of the 1-year suspension. See the 2017 final delay rule RIA for a summary of selected Federal and State regulations and policies that have the effect of limiting the waste of gas from production operations in the States where the production of oil and gas from Federal and Indian leases is most prevalent (2017 RIA at 17). VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 Lost Gas Volumes Many commenters stated that the 2017 final delay rule will result in waste of natural gas through venting, flaring, and leaking of natural gas from oil and gas operators. The commenters stated that the valuable energy resources being wasted could otherwise be productively used, which would subsequently increase revenues for taxpayers in the form of royalty and tax collection. Some commenters also expressed concern that the rule impedes U.S. progress towards energy independence. The BLM acknowledges that delaying implementation of compliance requirements for certain provisions of the 2016 final rule could result in incremental flaring of gas during the 1year interim period when compared to the baseline. However, over 11 years of implementation (2017–2027), the BLM expects an overall small increase in production (and subsequent royalties) when commodity prices are projected to be higher. In addition, the BLM found positive net benefits of the 2017 delay rule due to the reduction in compliance costs exceeding the foregone benefits of the 2016 rule. The BLM also notes that the assumptions of the final analysis of the 2016 rule are under review and may be revised. Some commenters expressed concern about the uncertainty underlying the estimates of lost gas volumes in the final RIA. The BLM acknowledges that there is uncertainty regarding the quantity and value of gas that is vented or flared on Federal or tribal lands. The BLM reviewed data from the Office of Natural Resources Revenue (ONRR) and 2016 greenhouse gas (GHG) Inventory to develop estimates of the average volume of gas vented and flared. See the 2016 RIA for a complete discussion of the methodology and data used to estimate lost gas volumes (2016 RIA at 15). Rule Net Benefits Multiple commenters took issue with the approach the BLM used to calculate the forgone benefits of methane emissions reductions in terms of the social cost of methane in the 2017 delay rule analysis. In particular, commenters suggested that the RIA for the delay rule: (a) Should rely on estimates of the global value of the social cost of methane and not the ‘‘domestic-only’’ value and; (b) That a 7 percent discount rate is not justifiable for use in discounting these benefits and a 3 percent discount rate would be appropriate and consistent with OMB Circular A–4. Multiple commenters also suggested that the BLM continue to use the analysis conducted by the IWG in PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 regard to these issues. Since publication of the 2016 RIA, several documents upon which the 2016 final rule RIA relied upon have been rescinded. In particular, Section 5 of E.O. 13783, issued by the President on March 28, 2017, disbanded the earlier IWG and withdrew the Technical Support Documents upon which the 2016 RIA relied for the valuation of changes in methane emissions. It further directed agencies to ensure that estimates of the social cost of greenhouse gases used in regulatory analyses ‘‘are based on the best available science and economics’’ and are consistent with the guidance contained in OMB Circular A–4, ‘‘including with respect to the consideration of domestic versus international impacts and the consideration of appropriate discount rates’’ (E.O. 13783, Section 5(c)). The social cost of methane (SC–CH4) estimates used for the 2017 final delay rule analysis are interim values for use in regulatory analyses while estimates of the impacts of climate change to the U.S. are being developed. Multiple commenters cited specific issues regarding the use of 7 percent discount rate, stating that by applying a 7 percent discount rate, the BLM is ignoring the welfare of future generations of Americans. Commenters further suggested that the use of the 3 percent discount rate is consistent with OMB Circular A–4. The BLM disagrees. The analysis presented in the RIA for the 2017 final delay rule uses both a 3 percent and a 7 percent discount rate in the above analysis. The 7 percent rate is intended to represent the average before-tax rate of return to private capital in the U.S. economy. The 3 percent rate is intended to reflect the rate at which society discounts future consumption. The use of both discount rates is consistent with the guidance contained in OMB Circular A–4. One commenter opposed the use of the social cost of methane to analyze this rulemaking given the uncertainty and the lack of accuracy surrounding these estimates, noting that its use goes against the need to produce an analysis that is ‘‘based on the best available science and economics.’’ The commenter requested that the BLM omit benefits related to the social cost of methane. Pursuant to E.O. 12866, and in an effort to provide full transparency to the public regarding the impacts of its actions, the BLM has estimated all of the significant costs and benefits of this 2017 final delay rule to the extent that data and available methodologies permit, consistent with the best science currently available. The SC–CH4 estimates presented here are interim E:\FR\FM\08DER2.SGM 08DER2 sradovich on DSK3GMQ082PROD with RULES2 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations values for use in regulatory analyses until an improved estimate of the impacts of climate change to the U.S. can be developed. Several commenters stated the BLM neglected to analyze the loss of public health and safety benefits generated by the implementation of the 2016 final rule, citing OMB Circular A–4 guidance as evidence. Commenters also stated that the BLM neglected to analyze the impacts of the proposed suspension on worker safety, which was one of the purposes of the 2016 final rule. Pursuant to E.O. 12866, and in an effort to provide full transparency to the public regarding the impacts of its actions, the BLM has estimated all of the significant costs and benefits of this 2017 final delay rule to the extent that data and available methodologies permit, consistent with the best science currently available. Commenters incorrectly stated that the BLM failed to analyze non-monetized impacts. The EA, which accompanies today’s action, analyzes the No-Action and Proposed Action effects on climate change, air quality, noise and light impacts, wildlife resources (threatened and endangered species and critical habitat), and socioeconomics. The EA, where appropriate, incorporates by reference the 2016 final rule EA analysis. Circular A–4 recommends approaches the agencies may take in its NEPA documents, but it does not require them. One commenter stated that the BLM’s description of impacts for the 11-year period (2017–2027) of analysis in the RIA for the 2017 final delay rule is misleading, as the reduction in the estimated compliance costs is solely due to the delay in compliance. Another commenter stated that some operators have begun compliance before the 2017 proposed delay rule will be finalized, and therefore the net cost savings of deferral will be lower than those outlined in the 2017 proposed delay rule RIA. The BLM adjusted the language in the RIA to reflect the first comment. The BLM disagrees with the second comment. For this 2017 final delay rule, the BLM tracks the shift in impacts over the first 10 years of implementation (after the delay) and compares it against the baseline. The original period of analysis in the RIA prepared for the 2016 final rule was 10 years. We note that certain impacts, such as cost savings and royalty, are different when shifted to the future. The BLM also notes that the estimated impacts attributed to a suspension or delay may be imprecise for several reasons (See RIA section 3.4). Also, while compliance with the requirements suspended or delayed by this 2017 final VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 delay rule will not be required until January 17, 2019, BLM anticipates that operators will start undertaking compliance activities in advance of the compliance date. Although the BLM is currently considering revisions to the 2016 final rule, it cannot definitively determine what form those revisions will take until it completes the noticeand-comment rulemaking process. Therefore, for the purposes of this analysis, the BLM assumes that the 2016 final rule will be fully implemented starting in January 2019 after the suspension period ends. Some commenters called the decision to limit the analysis timespan to 10 years arbitrary and too short and expressed concerns that other aspects of the net benefit analysis, such as the definition of the baseline and the benefits of the delay rule, result in undercounting of forgone benefits. The comment specifically stated that the BLM counted beneficial effects in year 2027 as benefits of its proposed delay even though these benefits would have occurred under the 2016 rule as methane reductions would continue. The BLM disagrees. The 10-year timeframe was not arbitrarily chosen. The BLM originally used a 10-year period of analysis in the 2016 final rule to reflect the limited life of the equipment that the rule was requiring and that the additional installations would be covered by the overlapping EPA regulations (see 40 CFR part 60, subparts OOOO or OOOOa). When comparing the 2017 final delay rule impacts to the 2016 rule, it is necessary to look at the equivalent 10 year estimated lifespan of the equipment in addition to the 1-year delay. If, instead, the impacts of the delay rule were constrained to the 10-year span used in the 2016 rule, the rule would be undervalued. If companies are still incurring costs for the delay rule in year 2027, then it is appropriate to count the social benefits that result from those costs. The omission of baseline impacts in the final year of the delay rule analysis is a result of the EPA rule taking effect (see 40 CFR part 60, subparts OOOO or OOOOa). Ascribing emission reduction benefits from the EPA rule to the BLM’s 2016 final rule would be inappropriate. Multiple commenters stated in a joint comment letter that the BLM did not consider information indicating that the costs of the 2016 final rule are actually lower than estimated in the 2016 RIA or that the benefits are actually higher than estimated in the 2016 RIA. The BLM recognizes that, despite the status of the 2016 final rule, operators are taking and will continue to take voluntary action to PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 58061 reduce the waste of natural gas, especially when taking action is in their best financial interest. Relying solely on a voluntary approach may not achieve the same results in a primarily oilproducing area, for oil wells, for marginal oil wells, or for marginal gas wells. The BLM also recognizes that the experiences of ‘‘major’’ operators may not be the same as small operators. Multiple commenters disagreed with an alternative net-benefit analysis presented in the 2017 proposed-delayrule RIA that omits monetized estimates of forgone climate benefits. In response to this and other related comments, the BLM removed the referenced alternative in the Appendix to the RIA that omitted monetized benefits. National Impacts, Including Energy Security Commenters stated that while the BLM acknowledges that the delay rule is expected to reduce annual royalties to the Federal Government, tribal governments, States, and private landowners, it fails to address the impacts of reduced royalty revenues to State, local and tribal governments. Another commenter noted that suspension of the 2016 final rule could indirectly impact other industries like those in the outdoor recreation and tourism sectors. Pursuant to Executive Order 12866 and NEPA, and in an effort to provide full transparency to the public regarding the impacts of its actions, the BLM has presented all of the foreseeable impacts that this 2017 final delay rule would have, based on the final analysis of the 2016 rule and to the extent that data and available methodologies permit and consistent with the best science currently available. See Section 4.4.2 of the 2017 RIA for a discussion on royalty impacts. The BLM’s EA (at section 4.2.3) discusses the impacts that the 2017 final delay rule would have on recreation. One commenter stated that the 2016 final rule promotes domestic natural gas production, which in turn supports energy security, national security, and economic productivity. Additionally, commenters stated that the 2016 final rule allows for the creation of cuttingedge technologies and field jobs that would reduce waste and increase income. The 2017 final delay rule does not substantively change the 2016 final rule, it merely postpones implementation of the compliance requirements for certain provisions of the 2016 final rule for 1 year. These comments are therefore outside the scope of this rule. E:\FR\FM\08DER2.SGM 08DER2 58062 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations Climate Change Several commenters cited concerns over climate change in their opposition to the BLM’s proposal to delay implementation of the 2016 final rule. The commenters stated that methane is a potent GHG that contributes to global warming and that oil and gas operators should not allow methane to escape into the atmosphere. The commenters stated that climate change has been linked to negative consequences, like more severe droughts and wildfires. The commenters argued that this rule is an example of the U.S. Government taking actions that cause climate change, and that methane pollution has increased from onshore Federal leases in recent years. The commenters argued that the need to reduce methane emissions is an urgent matter and cannot be delayed. The BLM did not change its proposal in response to these comments. The BLM estimates that the 2017 final rule will result in additional methane emissions of 175,000 tons in Year 1, but no change from the baseline for the 11year period following the delay. We also estimate additional VOC emissions of 250,000 tons in Year 1, but no change from the baseline for the 11-year period following the delay. See section 4.2 of the 2017 RIA for a full description of the estimated reduction in benefits. As the BLM develops a proposed revision of the 2016 final rule, it will continue to evaluate and address potential environmental impacts. The BLM notes that the 2017 final delay rule will only temporarily delay the 2016 final rule’s requirements. In response to concerns that methane emissions may be higher than those disclosed, the BLM notes that, while there is uncertainty in estimating the volumes of gas vented or flared, it has estimated the impacts of this 2017 final delay rule in a manner that is consistent with statute and executive orders and based on the best available information. sradovich on DSK3GMQ082PROD with RULES2 Air Quality and Public Health Many commenters stated that the 2016 final rule will reduce air pollution from oil and gas production, and that subsequently delaying the implementation of the 2016 final rule poses a public health challenge, particularly to the most vulnerable populations and communities, and impacts the environment. Commenters described that the implementation of the 2016 final rule not only results in the capture of methane, but also the capture of VOC emissions, such as benzene, a known carcinogen. The commenters stated that VOC releases degrade our ambient air quality, with VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 long-term health impacts related to the exposure of low levels of VOC emissions. The BLM acknowledges that there will be a short-term increase in the amount of methane and VOCs emitted during the 1-year delay, relative to the baseline, but there will be essentially no increase over the 11-year evaluation period (See EA Section 4.2.1 and 4.2.2 and 2017 RIA Section 4.2). While the BLM did not monetize the forgone benefits from VOC emissions reductions, it notes that the impact is transitory. The BLM will analyze the costs and benefits, which may result from any changes it proposes, in an upcoming rulemaking, to the 2016 final rule in accordance with Executive Order 13783. One commenter stated that methane release can trigger life-threatening asthma attacks, worsen respiratory conditions, and cause cancer, which disproportionately affects Hispanic communities. The comment cited the EPA as reporting that Hispanics are among those facing the greatest risk of exposure to air pollutants and are three times more likely to die from asthma than any other racial or ethnic group. The BLM notes that the 2017 final delay rule delays or suspends implementation of the compliance requirements for certain provisions of the 2016 final rule by 1 year and is not expected to materially affect methane emissions as compared to the baseline data analyzed in the 2017 final delay rule RIA. The BLM concluded that the 2016 final rule did not lead to any significant or adverse differential environmental justice impacts (see 2016 final EA section 4.2.7). As the BLM reconsiders the 2016 final rule, in accordance with Executive Order 13783, it will continue to analyze the rule’s costs and benefits, including any potential environmental justice impacts. Rule Process Several commenters raised concerns about lack of sufficient public engagement throughout this rulemaking process. They asked the BLM to extend the 2017 delay rule comment period to 60 days and to hold one or more public hearings, stating that the 30-day comment period was inadequate given the fundamental, highly technical, and extremely controversial changes to the benefits estimates included in the 2017 proposed delay rule. The BLM did not change its proposal in response to these comments. The BLM believes it provided adequate public engagement throughout the process through outreach to stakeholders and a 30-day comment period. Given the narrow scope of the PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 proposal, short delay, and recent comments on the 2016 final rule, the BLM determined a 30-day comment period to be appropriate and public meetings to be unnecessary. The 2017 final delay rule merely suspends and delays regulatory provisions that were very recently the object of public comment procedures. The public was engaged throughout this rulemaking process. The BLM received over 158,000 comments, including approximately 750 unique comments. The BLM is not required to hold public meetings for this rulemaking process. Commenters stated that, given the lengthy 2016 final rule rulemaking process, a 2-year delay is needed to avoid unnecessary compliance costs and creating regulatory uncertainty for industry. The BLM did not change this rule in response to these comments. To reduce uncertainty, the BLM limited this 2017 final delay rule to the minimum necessary to achieve revision to the 2016 final rule, which it determined to be 1 year. The BLM has already made significant progress in developing a proposed revision of the 2016 rule and the BLM therefore fully expects that the revision will be completed and finalized before January 17, 2019. Commenters stated that the BLM and the Secretary predetermined the outcome of this rulemaking with statements made and documents filed in Federal court. The BLM disagrees. The BLM is conducting the rulemaking process for the delay rule in accordance with the APA, and the BLM will be revising, as appropriate, the 2016 rule in accordance with the APA. Public statements about the BLM’s plan to reconsider the 2016 rule and its intentions behind the proposed delay rule do not amount to final decisions made prior to conducting NEPA. Commenters stated that the 2017 delay rule is a significant action that warrants an environmental impact statement (EIS), instead of an EA. Commenters state that the EA erroneously includes the 2016 rule implementation in the baseline, failed to analyze the impacts of the proposed action in a meaningful way, and did not include a reasonable range of alternatives. The commenters also believe that the BLM should have published a draft Finding of No Significant Impact (FONSI) for public comment, and that the FONSI does not consider both the context and intensity of the 2017 delay rule, resulting in the failure to take a hard look at localized impacts. The BLM did not change its proposal in response to these comments. Based E:\FR\FM\08DER2.SGM 08DER2 sradovich on DSK3GMQ082PROD with RULES2 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations upon a review of the EA and the associated documents referenced in the EA, and considering the criteria for significance provided by the Council on Environmental Quality regulations implementing the NEPA and the comments submitted on the EA, the BLM determined and detailed in the FONSI that the Proposed Action (Alternative B in the EA) will not have a significant effect on the quality of the human environment, individually or cumulatively with other actions in the potentially affected areas. Therefore, an EIS is not required. For the detailed analysis of the criteria for significance, see the FONSI accompanying today’s action. NEPA and its implementing regulations do not require a public review period for the FONSI. The fact that the BLM chose to include the expected effects of the 2016 final rule in the ‘‘baseline’’ environment does not mean that the BLM’s analysis of the environmental impacts of the proposed action was inadequate. In fact, the incorporation of the 2016 final rule into the baseline environment has exactly the opposite effect. Were the BLM not to include the not-yet effective requirements of the 2016 final rule in the baseline, then the BLM’s analysis of the proposed suspension action relative to the baseline would necessarily find fewer (and possibly no) impacts, as the suspension action would essentially maintain the environmental status quo. The EA analyzed Alternative A (No Action) and Alternative B (BLM Proposed Action), which are the reasonable alternatives that would meet the purpose and need of today’s action. See Section 2 of the EA for a description of each alternative. Section 2.4 of the EA describes the alternatives considered, but eliminated from further analysis. The 2017 RIA analyzed the impacts for a 6-month and 2-year delay, but they were both found to be not technically or financially feasible, therefore they were not carried forward for analysis. Commenters stated that the 2017 delay rule is a dramatic substantive change from the 2016 final rule, and that the BLM did not follow proper procedures to make the substantive revision to the 2016 final rule prescribed in FCC v. Fox Television Stations, Inc. 556 U.S. 502, 514–16 (2009). The BLM disagrees with the commenters’ characterization of the legal standard for amending regulations. As stated above, the BLM has a reasoned explanation for reconsidering the 2016 final rule and delaying implementation of certain provisions of the 2016 rule. Commenters stated the BLM failed to meets it review/consultation requirements under the Endangered VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 Species Act (ESA) and the National Historic Preservation Act (NHPA). The BLM disagrees. The BLM has met its review and consultation requirements for both the ESA and NHPA. As stated in section 4.1 of the EA, the BLM informally consulted with the FWS and the FWS concurred with the BLM’s determination that the 2017 delay rule may affect, but is not likely to adversely affect, listed species or their associated designated critical habitat. This rulemaking is not a ‘‘Federal undertaking’’ for which the NHPA requires an analysis of effects on historic property. See 54 U.S.C. 306108 and 300320. Technical Issues Commenters supported the inclusion of the following provisions of the 2016 final rule in the 2017 delay rule: Section 3162.3, because the requirement is duplicative, conflicting, and/or unnecessary given existing state requirements; Section 3179.6, but the commenter provided no explanation; Section 3179.7, because it is unnecessarily complex and the gas capture percentage requirements could be obviated through other BLM efforts to facilitate pipeline development; Section 3179.9 because the requirement on operators to estimate (using estimation protocols) or measure (using a metering device) all flared and vented gas will impose significant costs; Section 3179.101, because the BLM has failed to consider the technical feasibility of the requirements; Section 3179.102, because it is technically infeasible and duplicative of EPA regulations; Section 3179.204, but the commenter provided no explanation; and Sections 3179.301– 305 because the BLM overestimated the benefits and underestimated costs. Other commenters asserted that the following provisions should not be included in the delay rule: Section 3179.102, because the provision would not require any action from most operators and therefore imposes no burden; section 3179.7, because the 2016 RIA found that the direct quantified benefits to operators that would result from capturing gas that would otherwise have been wasted outweighed the costs of the capture targets in the first 2 years that those targets apply; section 3179.10, because the delay rule provides no information on the effect of such an extension, and specifically, how much royalty revenue would be lost; sections 3179.101 and 3179.102, because the 2017 RIA does not estimate any capital costs to operators associated with these provisions; section 3179.201, because the BLM repeats the 2016 RIA findings PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 58063 that the cost savings to operators from compliance with the pneumatic controller requirements would substantially exceed the costs of compliance so its motives are unclear; section 3179.204, because the BLM’s proposal repeats the 2016 RIA findings that the burden on the operators would be small or nonexistent; and section 3179.202 because the BLM’s justification for suspension is inaccurate when describing analogous EPA regulations. The BLM did not revise its proposal in response to these comments. This final delay rule temporarily suspends or delays almost all of the requirements in the 2016 final rule that the BLM estimated would pose a compliance burden to operators and are being reconsidered due to the cost, complexity, and other implications. The BLM has tailored the final delay rule to target the requirements of the 2016 rule for which immediate regulatory relief is particularly justified. The 2017 final delay rule does not suspend or delay the requirements in subpart 3178 related to the royalty-free use of natural gas, but the only estimated compliance costs associated with those requirements are for minor and rarely occurring administrative burdens. In addition, for the most part, the 2017 final delay rule suspends or delays the administrative burdens associated with subpart 3179. Only four of the 24 information collection activities remain, and the burdens associated with these remaining items are not substantial. See the section-by-section analysis for the BLM’s specific justification for delay with regard to each provision. One commenter stated that the 2017 RIA incorrectly assumes that suspension of the 2016 final rule will result in a return to NTL–4A. The BLM disagrees. The 2017 final rule RIA does not state nor imply an assumption that the suspension of the 2016 final rule will result in a return to NTL–4A. Several States have published regulations and policies that have the effect of limiting the waste of gas from production operations in the States where the production of oil and gas from Federal and Indian leases is most prevalent. See the 2017 RIA at 17 for a summary of these State regulations. One commenter disagrees with the BLM’s description of the requirements at 43 CFR 3179.9 as ‘‘imposing a blanket requirement on all operators.’’ The commenter notes that the 2016 final rule differentiates between flares of different volumes by establishing the threshold. The commenter’s criticism of terminology does not alter the BLM’s underlying point that the requirement E:\FR\FM\08DER2.SGM 08DER2 58064 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations applies to all operators, each of whom has the duty to estimate volumes and measure the volumes if the threshold is met. Thus, the BLM disagrees with the commenter’s assertion that the measurement requirements of 43 CFR 3179.9 cannot be characterized as a ‘‘blanket’’ requirement. The BLM believes that a 1-year suspension of 43 CFR 3179.9 is justified as the requirements impose immediate costs and the BLM is considering revising or rescinding the requirements of 43 CFR 3179.9. Also, the commenter refers to meters being inexpensive to install, but does not take into account all the other equipment that would be required under the 2016 final rule. See the 2016 RIA at 2 for an estimate of total costs for the 2016 final rule. Commenters state that the reference to analogous EPA regulations as the reason for reconsidering requirements at 43 CFR 3179.201 and 43 CFR 3179.203 is inaccurate because the EPA and 2016 final rules regulate different operations. The BLM disagrees. Although 43 CFR 3179.201 and 3179.203 were designed to avoid imposing requirements that conflict with EPA’s requirements, this does not mean that overlap with EPA regulations is not important to the BLM’s reconsideration of the regulatory necessity of §§ 3179.201 and 3179.203. Because EPA’s regulations apply to new, modified, and reconstructed pneumatic controllers and storage vessels, EPA’s existing regulations will address the losses of gas from these sources as pneumatic controllers and storage vessels are installed, modified, or replaced over time and become subject to EPA’s regulations. In addition, the BLM will reconsider, in an upcoming rulemaking, whether the volumes of gas that would be captured for sale under §§ 3179.201 and 3179.203 actually justify the compliance costs associated with those provisions. sradovich on DSK3GMQ082PROD with RULES2 III. Procedural Matters Regulatory Planning and Review (Executive Orders 12866 and 13563) Executive Order 12866 provides that the Office of Information and Regulatory Affairs within the Office of Management and Budget (OMB) will review all significant rules. Executive Order 13563 reaffirms the principles of Executive Order 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. The Executive Order directs agencies to consider regulatory approaches that VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. Executive Order 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. This final delay rule temporarily suspends or delays portions of the BLM’s 2016 final rule while the BLM reviews those requirements. We have developed this final delay rule in a manner consistent with the requirements in Executive Order 12866 and Executive Order 13563. After reviewing the requirements of the final delay rule, the OMB has determined that the final delay rule is not an economically significant action according to the criteria of Executive Order 12866. The BLM reviewed the requirements of this final delay rule and determined that it will not 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. For more detailed information, see the RIA prepared for this final delay rule. The RIA has been posted in the docket for the final rule on the Federal eRulemaking Portal: https:// www.regulations.gov. In the Searchbox, enter ‘‘RIN 1004–AE54’’ and click the ‘‘Search’’ button. Follow the instructions at this Web site. Regulatory Flexibility Act This final delay rule will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.). The RFA generally requires that Federal agencies prepare a regulatory flexibility analysis for rules subject to the notice-andcomment rulemaking requirements under the APA (5 U.S.C. 500 et seq.), if the rule would have a significant economic impact, either detrimental or beneficial, on a substantial number of small entities. See 5 U.S.C. 601–612. Congress enacted the RFA to ensure that government regulations do not unnecessarily or disproportionately burden small entities. Small entities include small businesses, small governmental jurisdictions, and small not-for-profit enterprises. The BLM reviewed the Small Business Administration (SBA) size standards for small businesses and the number of entities fitting those size standards as reported by the U.S. Census Bureau in the Economic Census. PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 The BLM concludes that the vast majority of entities operating in the relevant sectors are small businesses as defined by the SBA. As such, this final delay rule will likely affect a substantial number of small entities. However, the BLM believes that this final delay rule will not have a significant economic impact on a substantial number of small entities. Although the rule will affect a substantial number of small entities, the BLM does not believe that these effects will be economically significant. This final delay rule temporarily suspends or delays certain requirements placed on operators by the 2016 final rule. Operators will not have to undertake the associated compliance activities, either operational or administrative, that are outlined in the 2016 final rule until January 17, 2019, except to the extent the activities are required by State or tribal law, or by other pre-existing BLM regulations. The screening analysis conducted by the BLM estimates that the average reduction in compliance costs associated with this final delay rule will be a small fraction of a percent of the profit margin for small companies, which is not a large enough impact to be considered significant. Small Business Regulatory Enforcement Fairness Act This final delay rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This final delay rule: (a) Will not have an annual effect on the economy of $100 million or more. (b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. (c) Will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. Unfunded Mandates Reform Act (UMRA) This final delay rule will not impose an unfunded mandate on State, local, or tribal governments, or the private sector of $100 million or more per year. The final delay rule will not have a significant or unique effect on State, local, or tribal governments or the private sector. This final delay rule contains no requirements that apply to State, local, or tribal governments. It temporarily suspends or delays requirements that otherwise apply to the private sector. A statement containing the information required by the Unfunded Mandates Reform Act E:\FR\FM\08DER2.SGM 08DER2 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations (UMRA) (2 U.S.C. 1531 et seq.) is not required for this final delay rule. This final delay rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments, because it contains no requirements that apply to such governments, nor does it impose obligations upon them. Governmental Actions and Interference With Constitutionally Protected Property Right—Takings (Executive Order 12630) This final delay rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630. A takings implication assessment is not required. This final delay rule temporarily suspends or delays many of the requirements placed on operators by the 2016 final rule. Operators will not have to undertake the associated compliance activities, either operational or administrative, that are outlined in the 2016 final rule until January 17, 2019. All such operations are subject to lease terms, which expressly require that subsequent lease activities must be conducted in compliance with subsequently adopted Federal laws and regulations. This final delay rule conforms to the terms of those leases and applicable statutes and, as such, the rule is not a government action capable of interfering with constitutionally protected property rights. Therefore, the BLM has determined that this final delay rule will not cause a taking of private property or require further discussion of takings implications under Executive Order 12630. sradovich on DSK3GMQ082PROD with RULES2 Federalism (Executive Order 13132) Under the criteria in section 1 of Executive Order 13132, this final delay rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. A federalism impact statement is not required. This final delay rule will not have a substantial direct effect on the States, on the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the levels of government. It will not apply to States or local governments or State or local governmental entities. The rule will affect the relationship between operators, lessees, and the BLM, but it does not directly impact the States. Therefore, in accordance with Executive Order 13132, the BLM has determined that this final delay rule does not have sufficient federalism implications to VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 warrant preparation of a Federalism Assessment. Civil Justice Reform (Executive Order 12988) This final delay rule complies with the requirements of Executive Order 12988. More specifically, this final delay rule meets the criteria of section 3(a), which requires agencies to review all regulations to eliminate errors and ambiguity and to write all regulations to minimize litigation. This final delay rule also meets the criteria of section 3(b)(2), which requires agencies to write all regulations in clear language with clear legal standards. Consultation and Coordination With Indian Tribal Governments (Executive Order 13175 and Departmental Policy) The Department 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 final delay rule under the Department’s consultation policy and under the criteria in Executive Order 13175 and have identified direct effects on federally recognized Indian tribes that will result from this final delay rule. Under this final delay rule, oil and gas operations on tribal and allotted lands will not be subject to many of the requirements placed on operators by the 2016 final rule until January 17, 2019. The BLM has conducted an appropriate degree of tribal outreach in the course of developing this final delay rule given that the rule extends the compliance dates of the 2016 final rule, but does not change the policies of that rule. On October 16 and 17, 2017, the BLM sent out 264 rule notification letters with an enclosure to tribes and tribal organizations with oil and gas interests in Alaska (27), Arizona (38), California (5), Colorado (3), District of Columbia (1), Eastern States (2), Idaho (2), Montana/Dakotas (36), New Mexico/ Oklahoma/Texas (139), Nevada (1), Utah (7), and Wyoming (3). The BLM then sent 16 follow-up letters to tribes that the letters were returned with the mark ‘‘Return to Sender’’ or, during consultation, BLM was informed that the tribes had not received letters. The BLM State Directors, as delegated, personally contacted some of the tribes by phone with significant oil and gas interests, including six tribes in Colorado, two tribes in Wyoming, five tribes in the Montanas/Dakotas and two tribes in Arizona. Through regulations.gov, the BLM heard from the Ojo Encino Chapter of PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 58065 the Navajo Nation, the Mandan, Hidatsa, and Arakara Nation of the Fort Berthold Reservation, the Muscogee (Creek) Nation, the Navajo Nation, Counselor Chapter House, the Fort Berthold Protectors of Water and Earth, the Turtle Mountain Band of Chippewa Indians, Southwest Native Cultures, and the Thloppthlocco Tribal Town Tribal Historic Preservation Office. The tribes raised several issues, including: Insufficient consultation; loss of royalties from not implementing the 2016 rule; the DOI Secretary, but not the BLM, has a right to regulate Indian land; and, the environmental effects to the Native populations. The tribal comments were summarized and responded to in the supplemental comments and response document and are also referenced above in the ‘‘Comments and Responses’’ section of this 2017 final delay rule. Paperwork Reduction Act 1. Overview The Paperwork Reduction Act (PRA) (44 U.S.C. 3501–3521) provides that an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless it displays a currently valid control number. 44 U.S.C. 3512. Collections of information include requests and requirements that an individual, partnership, or corporation obtain information, and report it to a Federal agency. See 44 U.S.C. 3502(3); 5 CFR 1320.3(c) and (k). OMB has approved the 24 information collection activities in the 2016 final rule and has assigned control number 1004–0211 to those activities. In the Notice of Action approving the 24 information collection activities in the 2016 final rule, OMB announced that the control number will expire on January 31, 2018. The Notice of Action also included terms of clearance. The BLM requests the extension of control number 1004–0021 until January 31, 2019. The BLM also requests revisions to the burden estimates as described below. The information collection activities in this final delay rule are described below along with estimates of the annual burdens. Included in the burden estimates are the time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each component of the proposed information collection. 2. Summary of Information Collection Activities Title: Waste Prevention, Production Subject to Royalties, and Resource E:\FR\FM\08DER2.SGM 08DER2 58066 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations Conservation (43 CFR parts 3160 and 3170). Form 3160–5, Sundry Notices and Reports on Wells. OMB Control Number: 1004–0211. Forms: Form 3160–3, Application for Permit to Drill or Re-enter; and Form 3160–5, Sundry Notices and Reports on Wells. Description of Respondents: Holders of Federal and Indian (except Osage Tribe) oil and gas leases, those who belong to Federally approved units or communitized areas, and those who are parties to oil and gas agreements under the Indian Mineral Development Act, 25 U.S.C. 2101–2108. Respondents’ Obligation: Required to obtain or retain a benefit. Frequency of Collection: On occasion. Abstract: The BLM requests the extension of control number 1004–0021 until January 31, 2019. The BLM requests no changes to the control number except this extension. Estimated Number of Responses: 64,200. Estimated Total Annual Burden Hours: 90,170. Estimated Total Non-Hour Cost: None. sradovich on DSK3GMQ082PROD with RULES2 3. Information Collection Request The BLM requests extension of OMB control number 1004–0211 until January 31, 2019. This extension would continue OMB’s approval of the following information collection activities, with the revised burden estimates described below. Plan To Minimize Waste of Natural Gas (43 CFR 3162.3–1) The 2016 final rule added a new provision to 43 CFR 3162.3–1 that requires a plan to minimize waste of natural gas when submitting an Application for Permit to Drill or Reenter (APD) for a development oil well. This information is in addition to the APD information that the BLM already collects under OMB Control Number 1004–0137. The required elements of the waste minimization plan are listed at paragraphs (j)(1) through (j)(7). The BLM is revising the estimated burdens to operators. The BLM recently included the following annual burden estimates for APDs in a notice announcing its intention to seek renewal of control number 1004–0137, Onshore Oil and gas Operations and Production (expires January 31, 2018): 3,000 responses, 8 hours per response, and 24,000 total hours. 82 FR 42832, R 42833 (Sept. 12, 2017). The BLM will increase the estimated annual number of responses for waste minimization plans from 2,000 to 3,000, to match the estimates for APDs in control number VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 1004–0137, and will increase the total burden hours for APDs from 16,000 to 24,000. Request for Approval for Royalty-Free Uses On-Lease or Off-Lease (43 CFR 3178.5, 3178.7, 3178.8, and 3178.9) Section 3178.5 requires submission of a Sundry Notice (Form 3160–5) to request prior written BLM approval for use of gas royalty-free for the following operations and production purposes on the lease, unit or communitized area: • Using oil or gas that an operator removes from the pipeline at a location downstream of the facility measurement point (FMP); • Removal of gas initially from a lease, unit PA, or communitized area for treatment or processing because of particular physical characteristics of the gas, prior to use on the lease, unit PA or communitized area; and • Any other type of use of produced oil or gas for operations and production purposes pursuant to § 3178.3 that is not identified in § 3178.4. Section 3178.7 requires submission of a Sundry Notice (Form 3160–5) to request prior written BLM approval for off-lease royalty-free uses in the following circumstances: • The equipment or facility in which the operation is conducted is located off the lease, unit, or communitized area for engineering, economic, resourceprotection, or physical-accessibility reasons; and • The operations are conducted upstream of the FMP. Section 3178.8 requires that an operator measure or estimate the volume of royalty-free gas used in operations upstream of the FMP. In general, the operator is free to choose whether to measure or estimate, with the exception that the operator must in all cases measure the following volumes: • Royalty-free gas removed downstream of the FMP and used pursuant to §§ 3178.4 through 3178.7; and • Royalty-free oil used pursuant to §§ 3178.4 through 3178.7. If oil is used on the lease, unit or communitized area, it is most likely to be removed from a storage tank on the lease, unit or communitized area. Thus, this regulation also requires the operator to document the removal of the oil from the tank or pipeline. Section 3178.8(e) requires that operators use best available information to estimate gas volumes, where estimation is allowed. For both oil and gas, the operator must report the volumes measured or estimated, as applicable, under ONRR reporting requirements. As revisions to Onshore Oil and Gas Orders No. 4 and 5 have PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 now been finalized as 43 CFR subparts 3174 and 3175, respectively, the final delay rule text now references § 3173.12, as well as §§ 3178.4 through 3178.7 to clarify that royalty-free use must adhere to the provisions in those sections. Section 3178.9 requires the following additional information in a request for prior approval of royalty-free use under § 3178.5, or for prior approval of offlease royalty-free use under § 3178.7: • A complete description of the operation to be conducted, including the location of all facilities and equipment involved in the operation and the location of the FMP; • The volume of oil or gas that the operator expects will be used in the operation and the method of measuring or estimating that volume; • If the volume expected to be used will be estimated, the basis for the estimate (e.g., equipment manufacturer’s published consumption or usage rates); and • The proposed disposition of the oil or gas used (e.g., whether gas used would be consumed as fuel, vented through use of a gas-activated pneumatic controller, returned to the reservoir, or disposed by some other method). Request for Approval of Alternative Capture Requirement (43 CFR 3179.8) Section 3179.8 applies only to leases issued before the effective date of the 2016 final rule and to operators choosing to comply with the capture requirement in § 3179.7 on a lease-bylease, unit-by-unit, or communitized area-by-communitized area basis. The regulation provides that operators who meet those parameters may seek BLM approval of a capture percentage other than that which is applicable under 43 CFR 3179.7. The operator must submit a Sundry Notice (Form 3160–5) that includes the following information: • The name, number, and location of each of the operator’s wells, and the number of the lease, unit, or communitized area with which it is associated; and • The oil and gas production levels of each of the operator’s wells on the lease, unit, or communitized area for the most recent production month for which information is available and the volumes being vented and flared from each well. In addition, the request must include map(s) showing: • The entire lease, unit, or communitized area, and the surrounding lands to a distance and on a scale that shows the field in which the well is or will be located (if applicable), E:\FR\FM\08DER2.SGM 08DER2 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES2 and all pipelines that could transport the gas from the well; • All of the operator’s producing oil and gas wells, which are producing from Federal or Indian leases, (both on Federal or Indian leases and on other properties) within the map area; • Identification of all of the operator’s wells within the lease from which gas is flared or vented, and the location and distance of the nearest gas pipeline(s) to each such well, with an identification of those pipelines that are or could be available for connection and use; and • Identification of all of the operator’s wells within the lease from which gas is captured; The following information is also required: • Data that show pipeline capacity and the operator’s projections of the cost associated with installation and operation of gas capture infrastructure, to the extent that the operator is able to obtain this information, as well as cost projections for alternative methods of transportation that do not require pipelines; and • Projected costs of and the combined stream of revenues from both gas and oil production, including: (1) The operator’s projections of gas prices, gas production volumes, gas quality (i.e., heating value and H2S content), revenues derived from gas production, and royalty payments on gas production over the next 15 years or the life of the operator’s lease, unit, or communitized area, whichever is less; and (2) The operator’s projections of oil prices, oil production volumes, costs, revenues, and royalty payments from the operator’s oil and gas operations within the lease over the next 15 years or the life of the operator’s lease, unit, or communitized area, whichever is less. Notification of Choice To Comply on County- or State-Wide Basis (43 CFR 3179.7(c)(3)(ii)) Section 3179.7 requires operators flaring gas from development oil wells to capture a specified percentage of the operator’s adjusted volume of gas produced over the relevant area. The ‘‘relevant area’’ is each of the operator’s leases, units, or communitized areas, unless the operator chooses to comply on a county- or State-wide basis and the operator notifies the BLM of its choice by Sundry Notice (Form 3160–5) by January 1 of the relevant year. Request for Exemption From Well Completion Requirements (43 CFR 3179.102(c) and (d)) Section 3179.102 lists several requirements pertaining to gas that reaches the surface during well VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 completion and related operations. An operator may seek an exemption from these requirements by submitting a Sundry Notice (Form 3160–5) that includes the following information: (1) The name, number, and location of each of the operator’s wells, and the number of the lease, unit, or communitized area with which it is associated; (2) The oil and gas production levels of each of the operator’s wells on the lease, unit or communitized area for the most recent production month for which information is available; (3) Data that show the costs of compliance; and (4) Projected costs of and the combined stream of revenues from both gas and oil production, including: the operator’s projections of oil and gas prices, production volumes, quality (i.e., heating value and H2S content), revenues derived from production, and royalty payments on production over the next 15 years or the life of the operator’s lease, unit, or communitized area, whichever is less. The rule also provides that an operator that is in compliance with the EPA regulations for well completions under 40 CFR part 60, subpart OOOO or subpart OOOOa is deemed in compliance with the requirements of this section. As a practical matter, all hydraulically fractured or refractured wells are now subject to the EPA requirements, so the BLM does not believe that the requirements of this section would have any independent effect, or that any operator would request an exemption from the requirements of this section, as long as the EPA requirements remain in effect. For this reason, the BLM is not estimating any PRA burdens for § 3179.102. Request for Extension of Royalty-Free Flaring During Initial Production Testing (43 CFR 3179.103) Section 3179.103 allows gas to be flared royalty-free during initial production testing. The regulation lists specific volume and time limits for such testing. An operator may seek an extension of those limits on royalty-free flaring by submitting a Sundry Notice (Form 3160–5) to the BLM. Request for Extension of Royalty-Free Flaring During Subsequent Well Testing (43 CFR 3179.104) Section 3179.104 allows gas to be flared royalty-free for no more than 24 hours during well tests subsequent to the initial production test. The operator may seek authorization to flare royaltyfree for a longer period by submitting a PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 58067 Sundry Notice (Form 3160–5) to the BLM. Reporting of Venting or Flaring (43 CFR 3179.105) Section 3179.105 allows an operator to flare gas royalty-free during a temporary, short-term, infrequent, and unavoidable emergency. Venting gas is permissible if flaring is not feasible during an emergency. The regulation defines limited circumstances that constitute an emergency, and other circumstances that do not constitute an emergency. The operator must estimate and report to the BLM on a Sundry Notice (Form 3160–5) volumes flared or vented in circumstances that, as provided by 43 CFR 3179.105, do not constitute emergencies for the purposes of royalty assessment: (1) More than 3 failures of the same component within a single piece of equipment within any 365-day period; (2) The operator’s failure to install appropriate equipment of a sufficient capacity to accommodate the production conditions; (3) Failure to limit production when the production rate exceeds the capacity of the related equipment, pipeline, or gas plant, or exceeds sales contract volumes of oil or gas; (4) Scheduled maintenance; (5) A situation caused by operator negligence; or (6) A situation on a lease, unit, or communitized area that has already experienced three or more emergencies within the past 30 days, unless the BLM determines that the occurrence of more than three emergencies within the 30 day period could not have been anticipated and was beyond the operator’s control. Pneumatic Controllers—Introduction Section 3179.201 pertains to any pneumatic controller that: (1) Is not subject to EPA regulations at 40 CFR 60.5360 through 60.5390, but would be subject to those regulations if it were a new or modified source; and (2) Has a continuous bleed rate greater than 6 scf per hour. Section 3179.201(b) requires operators to replace each high-bleed pneumatic controller with a controller with a bleed rate lower than 6 scf per hour, with the following exceptions: (1) The pneumatic controller exhaust is routed to processing equipment; (2) The pneumatic controller exhaust was and continues to be routed to a flare device or low pressure combustor; (3) The pneumatic controller exhaust is routed to processing equipment; or (4) The operator notifies the BLM through a Sundry Notice and demonstrates, and the BLM agrees, that such would impose E:\FR\FM\08DER2.SGM 08DER2 58068 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations Showing in Support of Replacement of Pneumatic Controller Within 3 Years (43 CFR 3179.201(d)) such costs as to cause the operator to cease production and abandon significant recoverable oil reserves under the lease. Notification of Functional Needs for a Pneumatic Controller (43 CFR 3179.201(b)(1)–(3)) An operator may invoke one of the first three exceptions described above by notifying the BLM through a Sundry Notice (Form 3160–5) that use of the pneumatic controller is required based on functional needs that may include, but are not limited to, response time, safety, and positive actuation, and the Sundry Notice (Form 3160–5) describes those functional needs. sradovich on DSK3GMQ082PROD with RULES2 Showing That Cost of Compliance Would Cause Cessation of Production and Abandonment of Oil Reserves (Pneumatic Controller) (43 CFR 3179.201(b)(4) and 3179.201(c)) An operator may invoke the fourth exception described above by demonstrating to the BLM through a Sundry Notice (Form 3160–5), and by obtaining the BLM’s agreement, that replacement of a pneumatic controller would impose such costs as to cause the operator to cease production and abandon significant recoverable oil reserves under the lease. The Sundry Notice (Form 3160–5) must include the following information: (1) The name, number, and location of each of the operator’s wells, and the number of the lease, unit, or communitized area with which it is associated; (2) The oil and gas production levels of each of the operator’s wells on the lease, unit or communitized area for the most recent production month for which information is available; (3) Data that show the costs of compliance; (4) Projected costs of and the combined stream of revenues from both gas and oil production, including: The operator’s projections of gas prices, gas production volumes, gas quality (i.e., heating value and H2S content), revenues derived from gas production, and royalty payments on gas production over the next 15 years or the life of the operator’s lease, unit, or communitized area, whichever is less; and the operator’s projections of oil prices, oil production volumes, costs, revenues, and royalty payments from the operator’s oil and gas operations within the lease over the next 15 years or the life of the operator’s lease, unit, or communitized area, whichever is less. VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 The operator may replace a high-bleed pneumatic controller if the operator notifies the BLM through a Sundry Notice (Form 3160–5) that the well or facility that the pneumatic controller serves has an estimated remaining productive life of 3 years or less. Pneumatic Diaphragm Pumps— Introduction With some exceptions, § 3179.202 pertains to any pneumatic diaphragm pump that: (1) Uses natural gas produced from a Federal or Indian lease, or from a unit or communitized area that includes a Federal or Indian lease; and (2) Is not subject to EPA regulations at 40 CFR 60.5360 through 60.5390, but would be subject to those regulations if it were a new or modified source. This regulation generally requires replacement of such a pump with a zero-emissions pump or routing of the pump’s exhaust gas to processing equipment for capture and sale. This requirement does not apply to pneumatic diaphragm pumps that do not vent exhaust gas to the atmosphere. In addition, this requirement does not apply if the operator submits a Sundry Notice to the BLM documenting that the pump(s) operated on less than 90 individual days in the prior calendar year. Showing That a Pneumatic Diaphragm Pump Was Operated on Fewer Than 90 Individual Days in the Prior Calendar Year (43 CFR 3179.202(b)(2)) A pneumatic diaphragm pump is not subject to section 3179.202 if the operator documents in a Sundry Notice (Form 3160–5) that the pump was operated fewer than 90 days in the prior calendar year. Notification of Functional Needs for a Pneumatic Diaphragm Pump (43 CFR 3179.202(d)) In lieu of replacing a pneumatic diaphragm pump or routing the pump exhaust gas to processing equipment, an operator may submit a Sundry Notice (Form 3160–5) to the BLM showing that replacing the pump with a zero emissions pump is not viable because a pneumatic pump is necessary to perform the function required, and that routing the pump exhaust gas to processing equipment for capture and sale is technically infeasible or unduly costly. PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 Showing That Cost of Compliance Would Cause Cessation of Production and Abandonment of Oil Reserves (Pneumatic Diaphragm Pump) (43 CFR 3179.202(f) and (g)) An operator may seek an exemption from the replacement requirement by submitting a Sundry Notice (Form 3160–5) to the BLM that provides an economic analysis that demonstrates that compliance with these requirements would impose such costs as to cause the operator to cease production and abandon significant recoverable oil reserves under the lease. The Sundry Notice (Form 3160–5) must include the following information: (1) Well information that must include: (i) The name, number, and location of each well, and the number of the lease, unit, or communitized area with which it is associated; and (ii) The oil and gas production levels of each of the operator’s wells on the lease, unit or communitized area for the most recent production month for which information is available; (2) Data that show the costs of compliance with paragraphs (c) through (e) of § 3179.202; and (3) The operator’s estimate of the costs and revenues of the combined stream of revenues from both the gas and oil components, including: (i) The operator’s projections of gas prices, gas production volumes, gas quality (i.e., heating value and H2S content), revenues derived from gas production, and royalty payments on gas production over the next 15 years or the life of the operator’s lease, unit, or communitized area, whichever is less; and (ii) the operator’s projections of oil prices, oil production volumes, costs, revenues, and royalty payments from the operator’s oil and gas operations within the lease over the next 15 years or the life of the operator’s lease, unit, or communitized area, whichever is less. Showing in Support of Replacement of Pneumatic Diaphragm Pump Within 3 Years (43 CFR 3179.202(h)) The operator may replace a pneumatic diaphragm pump if the operator notifies the BLM through a Sundry Notice (Form 3160–5) that the well or facility that the pneumatic controller serves has an estimated remaining productive life of 3 years or less. Storage Vessels (43 CFR 3179.203(c) and (d)) A storage vessel is subject to 43 CFR 3179.203(c) if the vessel: (1) Contains production from a Federal or Indian lease, or from a unit or communitized area that includes a Federal or Indian E:\FR\FM\08DER2.SGM 08DER2 sradovich on DSK3GMQ082PROD with RULES2 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations lease; and (2) Is not subject to any of the requirements of EPA regulations at 40 CFR part 60, subpart OOOO, but would be subject to that subpart if it were a new or modified source. The operator must determine, record, and make available to the BLM upon request, whether the storage vessel has the potential for VOC emissions equal to or greater than 6 tpy based on the maximum average daily throughput for a 30-day period of production. The determination may take into account requirements under a legally and practically enforceable limit in an operating permit or other requirement established under a Federal, State, local or tribal authority that limit the VOC emissions to less than 6 tpy. If a storage vessel has the potential for VOC emissions equal to or greater than 6 tpy, the operator must replace the storage vessel at issue in order to comply with the requirements of this section, and the operator must (1) Route all tank vapor gas from the storage vessel to a sales line; (2) If the operator determines that compliance with paragraph (c)(1) of this section is technically infeasible or unduly costly, route all tank vapor gas from the storage vessel to a device or method that ensures continuous combustion of the tank vapor gas; or (3) Submit an economic analysis to the BLM through a Sundry Notice (Form 3160–5) that demonstrates, and the BLM agrees, based on the information identified in paragraph (d) of this section, that compliance with paragraph (c)(2) of this section would impose such costs as to cause the operator to cease production and abandon significant recoverable oil reserves under the lease. To support the demonstration described above, the operator must submit a Sundry Notice (Form 3160–5) that includes the following information: (1) The name, number, and location of each well, and the number of the lease, unit, or communitized area with which it is associated; (2) The oil and gas production levels of each of the operator’s wells on the lease, unit or communitized area for the most recent production month for which information is available; (3) Data that show the costs of compliance with paragraph (c)(1) or (c)(2) of this section on the lease; and (4) The operator must consider the costs and revenues of the combined stream of revenues from both the gas and oil components, including: The operator’s projections of oil and gas prices, production volumes, quality (i.e., heating value and H2S content), revenues derived from production, and royalty payments on production over VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 the next 15 years or the life of the operator’s lease, unit, or communitized area, whichever is less. Downhole Well Maintenance and Liquids Unloading—Documentation and Reporting (43 CFR 3179.204(c) and (e)) The operator must minimize vented gas and the need for well venting associated with downhole well maintenance and liquids unloading, consistent with safe operations. Before the operator manually purges a well for liquids unloading for the first time after the effective date of this section, the operator must consider other methods for liquids unloading and determine that they are technically infeasible or unduly costly. The operator must provide information supporting that determination as part of a Sundry Notice (Form 3160–5). This requirement applies to each well the operator operates. For any liquids unloading by manual well purging, the operator must: (1) Ensure that the person conducting the well purging remains present on-site throughout the event to minimize to the maximum extent practicable any venting to the atmosphere; (2) Record the cause, date, time, duration, and estimated volume of each venting event; and (3) Maintain the records for the period required under § 3162.4–1 and make them available to the BLM, upon request. Downhole Well Maintenance and Liquids Unloading—Notification of Excessive Duration or Volume (43 CFR 3179.204(f)) The operator must notify the BLM by Sundry Notice (Form 3160–5), within 30 calendar days, if: (1) The cumulative duration of manual well purging events for a well exceeds 24 hours during any production month; or (2) The estimated volume of gas vented in liquids unloading by manual well purging operations for a well exceeds 75 Mcf during any production month. Leak Detection—Compliance With EPA Regulations (43 CFR 3179.301(j)) Sections 3179.301 through 3179.305 include information collection activities pertaining to the detection and repair of gas leaks during production operations. These regulations require operators to inspect all equipment covered under § 3179.301(a) for gas leaks. Section 3179.301(j) allows an operator to satisfy the requirements of §§ 3179.301 through 3179.305 for some PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 58069 or all of the equipment or facilities on a given lease by notifying the BLM in a Sundry Notice (Form 3160–5) that the operator is complying with EPA requirements established pursuant to 40 CFR part 60 with respect to such equipment or facilities. Leak Detection—Request To Use an Alternative Monitoring Device and Protocol (43 CFR 3179.302(c)) Section 3179.302 specifies the instruments and methods that an operator may use to detect leaks. Section 3179.302(d) allows the BLM to approve an alternative monitoring device and associated inspection protocol if the BLM finds that the alternative would achieve equal or greater reduction of gas lost through leaks compared with the approach specified in § 3179.302(a)(1) when used according to § 3179.303(a). Any person may request approval of an alternative monitoring device and protocol by submitting a Sundry Notice (Form 3160–5) to the BLM that includes the following information: (1) Specifications of the proposed monitoring device, including a detection limit capable of supporting the desired function; (2) The proposed monitoring protocol using the proposed monitoring device, including how results will be recorded; (3) Records and data from laboratory and field testing, including but not limited to performance testing; (4) A demonstration that the proposed monitoring device and protocol will achieve equal or greater reduction of gas lost through leaks compared with the approach specified in the regulations; (5) Tracking and documentation procedures; and (6) Proposed limitations on the types of sites or other conditions on deploying the device and the protocol to achieve the demonstrated results. Leak Detection—Operator Request To Use an Alternative Leak Detection Program (43 CFR 3179.303(b)) Section 3179.303(b) allows an operator to submit a Sundry Notice (Form 3160–5) requesting authorization to detect gas leaks using an alternative instrument-based leak detection program, different from the specified requirement to inspect each site semiannually using an approved monitoring device. To obtain approval for an alternative leak detection program, the operator must submit a Sundry Notice (Form 3160–5) that includes the following information: (1) A detailed description of the alternative leak detection program, E:\FR\FM\08DER2.SGM 08DER2 58070 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations including how it will use one or more of the instruments specified in or approved under § 3179.302(a) and an identification of the specific instruments, methods and/or practices that would substitute for specific elements of the approach specified in §§ 3179.302(a) and 3179.303(a); (2) The proposed monitoring protocol; (3) Records and data from laboratory and field testing, including, but not limited to, performance testing, to the extent relevant; (4) A demonstration that the proposed alternative leak detection program will achieve equal or greater reduction of gas lost through leaks compared to compliance with the requirements specified in §§ 3179.302(a) and 3179.303(a); (5) A detailed description of how the operator will track and document its procedures, leaks found, and leaks repaired; and (6) Proposed limitations on types of sites or other conditions on deployment of the alternative leak detection program. Leak Detection—Operator Request for Exemption Allowing Use of an Alternative Leak-Detection Program That Does Not Meet Specified Criteria (43 CFR 3179.303(d)) An operator may seek authorization for an alternative leak detection program that does not achieve equal or greater reduction of gas lost through leaks compared to the required approach, if the operator demonstrates that compliance with the leak-detection regulations (including the option for an alternative program under 43 CFR 3179.303(b)) would impose such costs as to cause the operator to cease production and abandon significant recoverable oil or gas reserves under the lease. The BLM may approve an alternative leak detection program that does not achieve equal or greater reduction of gas lost through leaks, but is as effective as possible consistent with not causing the operator to cease production and abandon significant recoverable oil or gas reserves under the lease. To obtain approval for an alternative program under this provision, the operator must submit a Sundry Notice (Form 3160–5) that includes the following information: (1) The name, number, and location of each well, and the number of the lease, unit, or communitized area with which it is associated; (2) The oil and gas production levels of each of the operator’s wells on the lease, unit or communitized area for the most recent production month for which information is available; (3) Data that show the costs of compliance on the lease with the requirements of §§ 3179.301 through 305 and with an alternative leak detection program that meets the requirements of § 3179.303(b); (4) The operator must consider the costs and revenues of the combined stream of revenues from both the gas and oil components and provide the operator’s projections of oil and gas prices, production volumes, quality (i.e., heating value and H2S content), revenues derived from production, and royalty payments on production over the next 15 years or the life of the operator’s lease, unit, or communitized area, whichever is less; (5) The information required to obtain approval of an alternative program under § 3179.303(b), except that the estimated volume of gas that will be lost through leaks under the alternative program must be compared to the volume of gas lost under the required program, but does not have to be shown to be at least equivalent. Leak Detection—Notification of Delay in Repairing Leaks (43 CFR 3179.304(b)) Section 3179.304(a) requires an operator to repair any leak no later than 30 calendar days after discovery of the leak, unless there is good cause for delay in repair. If there is good cause for a delay beyond 30 calendar days, § 3179.304(b) requires the operator to submit a Sundry Notice (Form 3160–5) notifying the BLM of the cause. Leak Detection—Inspection Recordkeeping and Reporting (43 CFR 3179.305) Section 3179.305 requires operators to maintain the following records and make them available to the BLM upon request: (1) For each inspection required under § 3179.303, documentation of the date of the inspection and the site where the inspection was conducted; (2) The monitoring method(s) used to determine the presence of leaks; (3) A list of leak components on which leaks were found; (4) The date each leak was repaired; and (5) The date and result of the follow-up inspection(s) required under § 3179.304. By March 31 of each calendar year, the operator must provide to the BLM an annual summary report on the previous year’s inspection activities that includes: (1) The number of sites inspected; (2) The total number of leaks identified, categorized by the type of component; (3) The total number of leaks repaired; (4) The total number of leaks that were not repaired as of December 31 of the previous calendar year due to good cause and an estimated date of repair for each leak; and (5) A certification by a responsible officer that the information in the report is true and accurate. Leak Detection—Annual Reporting of Inspections (43 CFR 3179.305(b)) By March 31 of each calendar year, the operator must provide to the BLM an annual summary report on the previous year’s inspection activities that includes: (1) The number of sites inspected; (2) The total number of leaks identified, categorized by the type of component; (3) The total number of leaks repaired; (4) The total number leaks that were not repaired as of December 31 of the previous calendar year due to good cause and an estimated date of repair for each leak; and (5) A certification by a responsible officer that the information in the report is true and accurate to the best of the officer’s knowledge. 4. Burden Estimates The following table details the annual estimated hour burdens on operators for the information activities described above. The table thus estimates the hour burdens which will not be incurred in the 1-year period from January 17, 2018, to January 17, 2019. sradovich on DSK3GMQ082PROD with RULES2 Type of response Number of responses Hours per response Total hours (column B × column C) A. B. C. D. Plan to Minimize Waste of Natural Gas, 43 CFR 3162.3–1, Form 3160–3 ............................... Request for Approval for Royalty-Free Uses On-Lease or Off-Lease, 43 CFR 3178.5, 3178.7, 3178.8, and 3178.9, Form 3160–5 .......................................................................................... Notification of Choice to Comply on County- or State-wide Basis, 43 CFR 3179.7(c)(3)(iii) ..... Request for Approval of Alternative Capture Requirement, 43 CFR 3179.8(b), Form 3160–5 .. VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 E:\FR\FM\08DER2.SGM 3,000 8 24,000 50 200 50 4 1 16 200 200 800 08DER2 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations 58071 Type of response Number of responses Hours per response Total hours (column B × column C) A. B. C. D. Request for Exemption from Well Completion Requirements, 43 CFR 3179.102(c) and (d), Form 3160–5 ............................................................................................................................ Request for Extension of Royalty-Free Flaring During Initial Production Testing, 43 CFR 3179.103, Form 3160–5 ........................................................................................................... Request for Extension of Royalty-Free Flaring During Subsequent Well Testing, 43 CFR 3179.104, Form 3160–5 ........................................................................................................... Reporting of Venting or Flaring, 43 CFR 3179.105, Form 3160–5 ............................................ Notification of Functional Needs for a Pneumatic Controller, 43 CFR 3179.201(b)(1)–(3), Form 3160–5 ............................................................................................................................ Showing that Cost of Compliance Would Cause Cessation of Production and Abandonment of Oil Reserves, 43 CFR 3179.201(b)(4) and 3179.201(c) (Pneumatic Controller), Form 3160–5 ..................................................................................................................................... Showing in Support of Replacement of Pneumatic Controller within 3 Years, 43 CFR 3179.201(d), Form 3160–5 ...................................................................................................... Showing that a Pneumatic Diaphragm Pump was Operated on Fewer than 90 Individual Days in the Prior Calendar Year, 43 CFR 3179.202(b)(2), Form 3160–5 .............................. Notification of Functional Needs for a Pneumatic Diaphragm Pump, 43 CFR 3179.202(d), Form 3160–5 ............................................................................................................................ Showing that Cost of Compliance Would Cause Cessation of Production and Abandonment of Oil Reserves (Pneumatic Diaphragm Pump), 43 CFR 3179.202(f) and (g), Form 3160–5 Showing in Support of Replacement of Pneumatic Diaphragm Pump within 3 Years, 43 CFR 3179.202(h), Form 3160–5 ...................................................................................................... Storage Vessels, 43 CFR 3179.203(c), Form 3160–5 ................................................................ Downhole Well Maintenance and Liquids Unloading Documentation and Reporting, 43 CFR 3179.204(c) and (e), Form 3160–5 .......................................................................................... Downhole Well Maintenance and Liquids Unloading—Notification of Excessive Duration or Volume, 43 CFR 3179.204(f), Form 3160–5 ........................................................................... Leak Detection Compliance with EPA Regulations, 43 CFR 3179.301(j), Form 3160–5 .......... Leak Detection Request to Use an Alternative Monitoring Device and Protocol, 43 CFR 3179.302(c), Form 3160–5 ...................................................................................................... Leak Detection Operator Request to Use an Alternative Leak Detection Program, 43 CFR 3179.303(b), Form 3160–5 ...................................................................................................... Leak Detection Operator Request for Exemption Allowing Use of an Alternative Leak-Detection Program that Does Not Meet Specified 43 CFR 3179.303(d), Form 3160–5 .................. Leak Detection Notification of Delay in Repairing Leaks, 43 CFR 3179.304(a), Form 3160–5 Leak Detection Inspection Recordkeeping and Reporting, 43 CFR 3179.305 ........................... Leak Detection Annual Reporting of Inspections, 43 CFR 3179.305(b), Form 3160–5 ............. Totals .................................................................................................................................... sradovich on DSK3GMQ082PROD with RULES2 National Environmental Policy Act The BLM prepared an environmental assessment (EA) to determine whether this final delay rule will have a significant impact on the quality of the human environment under the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.). The BLM has determined that this final delay rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under NEPA is not required because the BLM reached a FONSI. The EA and FONSI have been placed in the file for the BLM’s Administrative Record for the rule. The EA and FONSI have also been posted in the docket for the rule on the Federal eRulemaking Portal: https://www.regulations.gov. In the Searchbox, enter ‘‘RIN 1004–AE54’’ and click the ‘‘Search’’ button. Follow the instructions at this Web site. VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (Executive Order 13211) This final delay rule is not a significant energy action under the definition in Executive Order 13211. A statement of Energy Effects is not required. Section 4(b) of Executive Order 13211 defines a ‘‘significant energy action’’ as ‘‘any action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of rulemaking, and notices of rulemaking: (1)(i) That is a significant regulatory action under Executive Order 12866 or any successor order, and (ii) Is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) That is designated by the Administrator of (OIRA) as a significant energy action.’’ PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 0 0 0 500 2 1,000 5 250 2 2 10 500 10 2 20 50 4 200 100 1 100 100 1 100 150 1 150 10 4 40 100 50 1 4 100 200 5,000 1 5,000 250 50 1 4 250 200 5 40 200 20 40 800 150 100 52,000 2,000 20 1 .25 20 3,000 100 13,000 40,000 64,200 ........................ 90,170 This final delay rule temporarily suspends or delays certain requirements in the 2016 final rule and reduces compliance costs in the short-term. The BLM determined that the 2016 final rule will not impact the supply, distribution, or use of energy and so the suspension or delay of many of the 2016 final rule’s requirements until January 17, 2019, will likewise not have an impact on the supply, distribution, or use of energy. As such, we do not consider this final delay rule to be a ‘‘significant energy action’’ as defined in Executive Order 13211. Authors The principal authors of this final delay rule are: James Tichenor and Erica Pionke of the BLM Washington Office; Adam Stern of the DOI’s Office of Policy and Analysis; assisted by Faith Bremner, Jean Sonneman, and Charles Yudson of the BLM’s Division of Regulatory Affairs and by the E:\FR\FM\08DER2.SGM 08DER2 58072 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations Department of the Interior’s Office of the Solicitor. List of Subjects 43 CFR Part 3160 Administrative practice and procedure; Government contracts; Indians—lands; Mineral royalties; Oil and gas exploration; Penalties; Public lands—mineral resources; Reporting and recordkeeping requirements. PART 3170—ONSHORE OIL AND GAS PRODUCTION 3. The authority citation for part 3170 continues to read as follows: ■ 43 CFR Part 3170 Administrative practice and procedure; Flaring; Government contracts; Incorporation by reference; Indians—lands; Mineral royalties; Immediate assessments; Oil and gas exploration; Oil and gas measurement; Public lands—mineral resources; Reporting and recordkeeping requirements; Royalty-free use; Venting. Dated: December 4, 2017. Katharine S. MacGregor, Deputy Assistant Secretary—Land and Minerals Management, Exercising the Authority of the Assistant Secretary—Land and Minerals Management. 43 CFR Chapter II For the reasons set out in the preamble, the Bureau of Land Management amends 43 CFR parts 3160 and 3170 as follows: PART 3160—ONSHORE OIL AND GAS OPERATIONS 1. The authority citation for part 3160 continues to read as follows: ■ Authority: 25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and 1751; and 43 U.S.C. 1732(b), 1733, and 1740. 2. Amend § 3162.3–1 by revising paragraph (j) introductory text to read as follows: ■ § 3162.3–1 Drilling applications and plans. sradovich on DSK3GMQ082PROD with RULES2 * * * * * (j) Beginning January 17, 2019, when submitting an Application for Permit to Drill an oil well, the operator must also submit a plan to minimize waste of natural gas from that well. The waste minimization plan must accompany, but would not be part of, the Application for Permit to Drill. The waste minimization plan must set forth a strategy for how the operator will comply with the requirements of 43 CFR subpart 3179 regarding control of waste from venting and flaring, and must explain how the operator plans to capture associated gas upon the start of oil production, or as soon thereafter as reasonably possible, including an explanation of why any delay in capture of the associated gas would be required. Failure to submit a VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 complete and adequate waste minimization plan is grounds for denying or disapproving an Application for Permit to Drill. The waste minimization plan must include the following information: * * * * * Authority: 25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and 1751; and 43 U.S.C. 1732(b), 1733, and 1740. 4. Amend § 3179.7 by revising paragraphs (b) and (c) to read as follows: ■ § 3179.7 Gas capture requirement. * * * * * (b) Beginning January 17, 2019, the operator’s capture percentage must equal: (1) For each month during the period from January 17, 2019, to December 31, 2020: 85 percent; (2) For each month during the period from January 1, 2021, to December 31, 2023: 90 percent; (3) For each month during the period from January 1, 2024, to December 31, 2026: 95 percent; and (4) For each month beginning January 1, 2027: 98 percent. (c) The term ‘‘capture percentage’’ in this section means the ‘‘total volume of gas captured’’ over the ‘‘relevant area’’ divided by the ‘‘adjusted total volume of gas produced’’ over the ‘‘relevant area.’’ (1) The term ‘‘total volume of gas captured’’ in this section means: For each month, the volume of gas sold from all of the operator’s development oil wells in the relevant area plus the volume of gas from such wells used on lease, unit, or communitized area in the relevant area. (2) The term ‘‘adjusted total volume of gas produced’’ in this section means: The total volume of gas captured over the month plus the total volume of gas flared over the month from high pressure flares from all of the operator’s development oil wells that are in production in the relevant area, minus: (i) For each month from January 17, 2019, to December 31, 2019: 5,400 Mcf times the total number of development oil wells ‘‘in production’’ in the relevant area; (ii) For each month from January 1, 2020, to December 31, 2020: 3,600 Mcf times the total number of development oil wells in production in the relevant area; (iii) For each month from January 1, 2021, to December 31, 2021: 1,800 Mcf times the total number of development PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 oil wells in production in the relevant area; and (iv) For each month from January 1, 2022, to December 31, 2022: 1,500 Mcf times the total number of development oil wells in production in the relevant area; (v) For each month from January 1, 2023, to December 31, 2024: 1,200 Mcf times the total number of development oil wells in production in the relevant area; (vi) For each month from January 1, 2025, to December 31, 2025: 900 Mcf times the total number of development oil wells in production in the relevant area; and (vii) For each month after January 1, 2026: 750 Mcf times the total number of development. * * * * * ■ 5. Amend § 3179.9 by revising paragraph (b)(1) introductory text to read as follows: § 3179.9 Measuring and reporting volumes of gas vented and flared. * * * * * (b) * * * (1) If the operator estimates that the volume of gas flared from a high pressure flare stack or manifold equals or exceeds an average of 50 Mcf per day for the life of the flare, or the previous 12 months, whichever is shorter, then, beginning January 17, 2019, the operator must either: * * * * * ■ 6. Amend § 3179.10 by revising paragraph (a) to read as follows: § 3179.10 Determinations regarding royalty-free flaring. (a) Approvals to flare royalty free, which are in effect as of January 17, 2017, will continue in effect until January 17, 2019. * * * * * ■ 7. Amend § 3179.101 by adding paragraph (c) to read as follows: § 3179.101 Well drilling. * * * * * (c) The operator must comply with this section beginning January 17, 2019. ■ 8. Amend § 3179.102 by adding paragraph (e) to read as follows: § 3179.102 Well completion and related operations. * * * * * (e) The operator must comply with this section beginning January 17, 2019. ■ 9. Amend § 3179.201 by revising paragraph (d) to read as follows: § 3179.201 Equipment requirements for pneumatic controllers. * E:\FR\FM\08DER2.SGM * * 08DER2 * * Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Rules and Regulations (d) The operator must replace the pneumatic controller(s) by January 17, 2019, as required under paragraph (b) of this section. If, however, the well or facility that the pneumatic controller serves has an estimated remaining productive life of 3 years or less from January 17, 2017, then the operator may notify the BLM through a Sundry Notice and replace the pneumatic controller no later than 3 years from January 17, 2017. * * * * * ■ 10. Amend § 3179.202 by revising paragraph (h) to read as follows: § 3179.202 Requirements for pneumatic diaphragm pumps. * * * * (h) The operator must replace the pneumatic diaphragm pump(s) or route the exhaust gas to capture or to a flare or combustion device by January 17, 2019, except that if the operator will comply with paragraph (c) of this section by replacing the pneumatic diaphragm pump with a zero-emission pump and the well or facility that the pneumatic diaphragm pump serves has an estimated remaining productive life of 3 years or less from January 17, 2017, the operator must notify the BLM through a Sundry Notice and replace the sradovich on DSK3GMQ082PROD with RULES2 * VerDate Sep<11>2014 20:50 Dec 07, 2017 Jkt 244001 pneumatic diaphragm pump no later than 3 years from January 17, 2017. * * * * * ■ 11. Amend § 3179.203 by revising paragraph (b) and paragraph (c) introductory text to read as follows: § 3179.203 Storage vessels. * * * * * (b) Beginning January 17, 2019, and within 30 days after any new source of production is added to the storage vessel after January 17, 2019, the operator must determine, record, and make available to the BLM upon request, whether the storage vessel has the potential for VOC emissions equal to or greater than 6 tpy based on the maximum average daily throughput for a 30-day period of production. The determination may take into account requirements under a legally and practically enforceable limit in an operating permit or other requirement established under a Federal, State, local or tribal authority that limit the VOC emissions to less than 6 tpy. (c) If a storage vessel has the potential for VOC emissions equal to or greater than 6 tpy under paragraph (b) of this section, by January 17, 2019, or by January 17, 2020, if the operator must PO 00000 Frm 00025 Fmt 4701 Sfmt 9990 58073 and will replace the storage vessel at issue in order to comply with the requirements of this section, the operator must: * * * * * ■ 12. Amend § 3179.204 by adding paragraph (i) to read as follows: § 3179.204 Downhole well maintenance and liquids unloading. * * * * * (i) The operator must comply with this section beginning January 17, 2019. ■ 13. Amend § 3179.301 by revising paragraph (f) to read as follows: § 3179.301 Operator responsibility. * * * * * (f) The operator must make the first inspection of each site: (1) By January 17, 2019, for all existing sites; (2) Within 60 days of beginning production for new sites that begin production after January 17, 2019; and (3) Within 60 days of the date when an existing site that was out of service is brought back into service and repressurized after January 17, 2019. * * * * * [FR Doc. 2017–26389 Filed 12–7–17; 8:45 a.m.] BILLING CODE 4310–84–P E:\FR\FM\08DER2.SGM 08DER2

Agencies

[Federal Register Volume 82, Number 235 (Friday, December 8, 2017)]
[Rules and Regulations]
[Pages 58050-58073]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26389]



[[Page 58049]]

Vol. 82

Friday,

No. 235

December 8, 2017

Part II





Department of the Interior





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Bureau of Land Management





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43 CFR Parts 3160 and 3170





Waste Prevention, Production Subject to Royalties, and Resource 
Conservation; Delay and Suspension of Certain Requirements; Final Rule

Federal Register / Vol. 82 , No. 235 / Friday, December 8, 2017 / 
Rules and Regulations

[[Page 58050]]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 3160 and 3170

[18X.LLWO310000.L13100000.PP0000]
RIN 1004-AE54


Waste Prevention, Production Subject to Royalties, and Resource 
Conservation; Delay and Suspension of Certain Requirements

AGENCY: Bureau of Land Management, Interior.

ACTION: Final rule.

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SUMMARY: The Bureau of Land Management (BLM) is promulgating a final 
rule (2017 final delay rule) to temporarily suspend or delay certain 
requirements contained in the rule published in the Federal Register on 
November 18, 2016, entitled, ``Waste Prevention, Production Subject to 
Royalties, and Resource Conservation'' (2016 final rule) until January 
17, 2019. The BLM has concerns regarding the statutory authority, cost, 
complexity, feasibility, and other implications of the 2016 final rule, 
and therefore intends to avoid imposing likely considerable and 
immediate compliance costs on operators for requirements that may be 
rescinded or significantly revised in the near future. The 2017 final 
delay rule does not substantively change the 2016 final rule, but 
simply postpones implementation of the compliance requirements for 
certain provisions of the 2016 final rule for 1 year.

DATES: This rule is effective on January 8, 2018.

FOR FURTHER INFORMATION CONTACT: Catherine Cook, Acting Division Chief, 
Fluid Minerals Division, 202-912-7145, or [email protected], for 
information regarding the substance of today's final delay rule or 
information about the BLM's Fluid Minerals program. For questions 
relating to regulatory process issues, contact Faith Bremner, 
Regulatory Analyst, at 202-912-7441, or [email protected]. Persons who 
use a telecommunications device for the deaf (TDD) may call the Federal 
Relay Service (FRS) at 1-800-877-8339, 24 hours a day, 7 days a week, 
to leave a message or question with the above individuals. You will 
receive a reply during normal business hours.

SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion of the Final Delay Rule
III. Procedural Matters

I. Background

    The BLM's onshore oil and gas management program is a major 
contributor to our nation's oil and gas production. The BLM manages 
more than 245 million acres of Federal land and 700 million acres of 
subsurface estate, making up nearly a third of the nation's mineral 
estate. In fiscal year (FY) 2016, sales volumes from Federal onshore 
production lands accounted for 9 percent of domestic natural gas 
production, and 5 percent of total U.S. oil production. Over $1.9 
billion in royalties were collected from all oil, natural gas, and 
natural gas liquids transactions in FY 2016 on Federal and Indian 
lands. Royalties from Federal lands are shared with States. Royalties 
from Indian lands are collected for the benefit of the Indian owners.
    In response to oversight reviews and a recognition of increased 
flaring from Federal and Indian leases, the BLM developed the 2016 
final rule entitled, ``Waste Prevention, Production Subject to 
Royalties, and Resource Conservation,'' which was published in the 
Federal Register on November 18, 2016. See 81 FR 83008 (Nov. 18, 2016). 
The rule replaced the BLM's existing policy at that time, Notice to 
Lessees and Operators of Onshore Federal and Indian Oil and Gas Leases, 
Royalty or Compensation for Oil and Gas Lost (NTL-4A). The 2016 final 
rule was intended to: Reduce waste of natural gas from venting, 
flaring, and leaks during oil and natural gas production activities on 
onshore Federal and Indian leases; clarify when produced gas lost 
through venting, flaring, or leaks is subject to royalties; and clarify 
when oil and gas production may be used royalty free on-site. The 2016 
final rule became effective on January 17, 2017. Many of the 2016 final 
rule's provisions are to be phased in over time, and are to become 
operative on January 17, 2018.
    Since late January 2017, the President has issued several Executive 
Orders that necessitate a review of the 2016 final rule by the 
Department. On January 30, 2017, the President issued Executive Order 
13771, entitled, ``Reducing Regulation and Controlling Regulatory 
Costs,'' which requires Federal agencies to take proactive measures to 
reduce the costs associated with complying with Federal regulations. In 
addition, on March 28, 2017, the President issued Executive Order 
13783, entitled, ``Promoting Energy Independence and Economic Growth.'' 
Section 7(b) of Executive Order 13783 directs the Secretary of the 
Interior to review four specific rules, including the 2016 final rule, 
for consistency with the policy articulated in section 1 of the Order 
and, ``if appropriate,'' to publish proposed rules suspending, 
revising, or rescinding those rules. Among other things, section 1 of 
Executive Order 13783 states that ``[i]t is in the national interest to 
promote clean and safe development of our Nation's vast energy 
resources, while at the same time avoiding regulatory burdens that 
unnecessarily encumber energy production, constrain economic growth, 
and prevent job creation.''
    To implement Executive Order 13783, on March 29, 2017, Secretary of 
the Interior Ryan Zinke issued Secretarial Order No. 3349, entitled, 
``American Energy Independence,'' which, among other things, directs 
the BLM to review the 2016 final rule to determine whether it is fully 
consistent with the policy set forth in section 1 of Executive Order 
13783. The BLM conducted an initial review of the 2016 final rule and 
found that it is inconsistent with the policy in section 1 of Executive 
Order 13783. The BLM found that some provisions of the 2016 final rule 
add considerable regulatory burdens that unnecessarily encumber energy 
production, constrain economic growth, and prevent job creation. For 
example, despite the rule's assertions, many of the 2016 final rule's 
requirements would pose a particular compliance burden to operators of 
marginal or low-producing wells. There is newfound concern that this 
additional burden would jeopardize the ability of operators to maintain 
or economically operate these wells.
    Reexamination of the 2016 final rule is also needed because the BLM 
is not confident that all provisions of the 2016 final rule would 
survive judicial review. Immediately after the 2016 final rule was 
issued, petitions for judicial review of the rule were filed by 
industry groups and certain States with significant BLM-managed Federal 
and Indian minerals. See Wyoming v. U.S. Dep't of the Interior, Case 
No. 2:16-cv-00285-SWS (D. Wyo.). Although the court denied motions for 
a preliminary injunction, it did express concerns that the BLM may have 
usurped the authority of the Environmental Protection Agency (EPA) and 
the States under the Clean Air Act, and questioned whether it was 
appropriate for the 2016 final rule to be justified based on its 
environmental and societal benefits, rather than on its resource 
conservation benefits alone. Moreover, questions have been raised over 
to what extend Federal regulations should apply to leases in 
communitization agreements when Federal mineral ownership is very 
small. The BLM is evaluating these issues as part of its reexamination 
of the rule.
    Reexamination of the 2016 final rule is warranted to reassess the 
rule's estimated costs and benefits. In the

[[Page 58051]]

Regulatory Impact Analysis (RIA) for the 2016 final rule (2016 RIA), 
the BLM estimated that the requirements of the 2016 final rule would 
impose compliance costs, not including potential cost savings for 
product recovery, of approximately $114 million to $279 million per 
year (2016 RIA at 4). Certain States, tribes, and many oil and gas 
companies and trade associations have argued, in comments and in the 
litigation following the issuance of the 2016 final rule, that the BLM 
underestimated the compliance costs of the 2016 final rule and that the 
costs would inhibit oil and gas development on Federal and Indian 
lands, thereby reducing royalties and harming State and tribal 
economies. The BLM is reexamining these issues to determine whether the 
2016 RIA may have underestimated costs.
    Apart from this concern over costs, the 2016 RIA also may have 
overestimated benefits by the use of a social cost of methane that 
attempts to account for global rather than domestic climate change 
impacts. Section 5 of Executive Order 13783, issued by the President on 
March 28, 2017, disbanded the earlier Interagency Working Group on 
Social Cost of Greenhouse Gases (IWG) and withdrew the Technical 
Support Documents upon which the RIA for the 2016 final rule relied for 
the valuation of changes in methane emissions. The Executive Order 
further directed agencies to ensure that estimates of the social cost 
of greenhouse gases used in regulatory analyses ``are based on the best 
available science and economics'' and are consistent with the guidance 
contained in Office of Management and Budget (OMB) Circular A-4, 
``including with respect to the consideration of domestic versus 
international impacts and the consideration of appropriate discount 
rates'' (E.O. 13783, Section 5(c)). The BLM is reassessing its 
estimates of the rule's benefits taking into account the Executive 
Order's directives.
    The BLM also believes that a number of specific assumptions 
underlying the analysis supporting the 2016 final rule warrant 
reconsideration. For example, the BLM is reconsidering whether it was 
appropriate to assume that all marginal wells would receive exemptions 
from the rule's requirements and whether this assumption might have 
masked adverse impacts of the 2016 final rule on production from 
marginal wells. The BLM is also reconsidering whether it was 
appropriate to assume that there would be no delay in the BLM's review 
of Applications for Permits to Drill (APDs) as a result of reviewing 
Sundry Notices requesting exemptions from the rule's requirements, and 
that there would be no impact on production due to operators waiting on 
the BLM to review and approve such requests for exemptions. The BLM is 
reconsidering whether it was appropriate to assume that there would be 
no reservoir damage if an operator uses temporary well shut-ins to 
comply with the 2016 final rule's capture percentage requirements, and 
whether it was correct to assume that the capture percentage 
requirements would not have a disproportionate impact on small 
operators, who might have fewer wells with which to average volumes of 
allowable flaring. Finally, the BLM has concerns that its cost-benefit 
analysis for the leak detection and repair (LDAR) requirements in the 
2016 final rule--which used data from the EPA's OOOOa rule (40 CFR part 
60, subpart OOOOa)--was not based on the best available information and 
science. The BLM is reviewing the effectiveness of LDAR requirements to 
determine whether more accurate data is available.
    Following up on its initial review, the BLM is currently reviewing 
the 2016 final rule to develop an appropriate proposed revision--to be 
promulgated through notice-and-comment rulemaking--that would propose 
to align the 2016 final rule with the policies set forth in section 1 
of Executive Order 13783. Today's final delay rule temporarily suspends 
or delays certain requirements contained in the 2016 final rule until 
January 17, 2019. As noted above, the BLM has concerns regarding the 
statutory authority, cost, complexity, feasibility, and other 
implications of the 2016 final rule, and therefore wants to avoid 
imposing temporary or permanent compliance costs on operators for 
requirements that might be rescinded or significantly revised in the 
near future. The BLM also wishes to avoid expending scarce agency 
resources on implementation activities (internal training, operator 
outreach/education, developing clarifying guidance, etc.) for such 
potentially transitory requirements.
    For certain requirements in the 2016 final rule that have yet to be 
implemented, this final delay rule will temporarily postpone the 
implementation dates until January 17, 2019, or for 1 year. For certain 
requirements in the 2016 final rule that are currently in effect, this 
final delay rule will temporarily suspend their effectiveness until 
January 17, 2019. A detailed discussion of the suspensions and delays 
is provided below. The BLM has attempted to tailor this final delay 
rule to target the requirements of the 2016 final rule for which 
immediate regulatory relief is particularly justified. Although the 
requirements of the 2016 final rule that are not suspended under this 
final delay rule may ultimately be revised in the near future, the BLM 
is not suspending them because it does not, at this time, believe that 
suspension is necessary, because the cost and other implications do not 
pose immediate concerns for operators. This final delay rule 
temporarily suspends or delays all of the requirements in the 2016 
final rule that the BLM estimated would pose an immediate compliance 
burden to operators and generate benefits of gas savings or reductions 
in methane emissions. The 2017 final delay rule does not suspend or 
delay the requirements in subpart 3178 related to the royalty-free use 
of natural gas, but the only estimated compliance costs associated with 
those requirements are for minor and rarely occurring administrative 
burdens. In addition, for the most part, the 2017 final delay rule 
suspends or delays the administrative burdens associated with subpart 
3179. Only four of the 24 information collection activities remain, and 
the burdens associated with these remaining items are not substantial.
    The BLM promulgated the 2016 final rule, and now will suspend and 
delay certain provisions of that rule, pursuant to its authority under 
the following statutes: The Mineral Leasing Act of 1920 (30 U.S.C. 181-
287), the Mineral Leasing Act for Acquired Lands of 1947 (30 U.S.C. 
351-360), the Federal Oil and Gas Royalty Management Act of 1982 (30 
U.S.C. 1701-1758), the Federal Land Policy and Management Act of 1976 
(43 U.S.C. 1701-1785), the Indian Mineral Leasing Act of 1938 (25 
U.S.C. 396a-g), the Indian Mineral Development Act of 1982 (25 U.S.C. 
2101-2108), and the Act of March 3, 1909 (25 U.S.C. 396). These 
statutes authorize the Secretary of the Interior to promulgate such 
rules and regulations as may be necessary to carry out the statutes' 
various purposes.\1\
---------------------------------------------------------------------------

    \1\ See, e.g., 30 U.S.C. 189 (MLA); 30 U.S.C. 359 (MLAAL); 30 
U.S.C. 1751(a) (FOGRMA); 43 U.S.C. 1740 (FLPMA); 25 U.S.C. 396d 
(IMLA); 25 U.S.C. 2107 (IMDA); 25 U.S.C. 396. See also Clean Air 
Council v. Pruitt, 862 F.3d 1, 13 (D.C. Cir. 2017) (recognizing that 
``[a]gencies obviously have broad discretion to reconsider a 
regulation at any time'' through notice and comment rulemaking).
---------------------------------------------------------------------------

    Today's action temporarily suspending certain requirements of the 
2016 final rule does not leave unregulated the venting and flaring of 
gas from Federal and Indian oil and gas leases. Indeed, regulations 
from the BLM, the EPA, and the States will operate to address venting 
and flaring during the period of the suspension. The BLM's venting and 
flaring

[[Page 58052]]

regulations that will remain in effect during the 1-year suspension 
period include: Definitions clarifying when lost gas is ``avoidably 
lost,'' and therefore subject to royalties (Sec.  3179.4); restrictions 
on the practice of venting (Sec.  3179.6); limitations on royalty-free 
venting and flaring during initial production testing (Sec.  3179.103); 
limitations on royalty-free flaring during subsequent well tests (Sec.  
3179.104); and restrictions on royalty-free venting and flaring during 
``emergencies'' (Sec.  3179.105). The BLM also notes that States with 
significant Federal oil and gas production have regulations that 
restrict flaring and these regulations apply to Federal oil and gas 
operations in those States. See, e.g., 20 Alaska Admin. Code Sec.  
25.235; Mont. Admin. R. 36.22.1220-.1221; New Mexico Administrative 
Code section 19.15.18.12; North Dakota Century Code section 38-08-06.4; 
North Dakota Industrial Commission Order 24665; 055-3 Wyo. Code R. 
Sec.  39; Utah Administrative Code R649-3-20. Finally, as discussed 
elsewhere in this document, EPA regulations in 40 CFR 60 subparts OOOO 
and OOOOa address natural gas emissions from new, modified, and 
reconstructed equipment on oil and gas leases.
    On October 5, 2017, the BLM published its proposed rule and sought 
comment on whether to suspend the implementation of certain 
requirements in the 2016 final rule until January 17, 2019 (82 FR 
46458). Issues of particular interest to the BLM included the necessity 
of the proposed suspensions and delays, the costs and benefits 
associated with the proposed suspensions and delays, and whether 
suspension of other requirements of the 2016 final rule were warranted. 
The BLM was also interested in the appropriate length of the proposed 
suspension and delays and wanted to know whether the period should be 
longer or shorter (e.g., 6 months, 18 months, or 2 years). The BLM 
allowed a 30-day comment period for the proposed delay rule to afford 
the public a meaningful opportunity to comment on its narrow proposal, 
involving a straightforward temporary suspension and delay of certain 
provisions of the 2016 final rule.
    The BLM has engaged in stakeholder outreach in the course of 
developing this final delay rule. On October 16 and 17, 2017, the BLM 
sent correspondence to tribal governments to solicit their views to 
inform the development of this final delay rule. The BLM issued a 
proposed delay rule on September 28, 2017, which was published on 
October 5, 2017, and accepted public comments through November 6, 2017. 
The BLM received over 158,000 public comments on the proposed rule, 
including approximately 750 unique comments.

II. Discussion of the Final Rule

A. Section-by-Section Discussion

43 CFR 3162.3-1(j)--Drilling Applications and Plans
    In the 2016 final rule, the BLM added a paragraph (j) to 43 CFR 
3162.3-1, which presently requires that when submitting an APD for an 
oil well, an operator must also submit a waste-minimization plan. 
Submission of the plan is required for approval of the APD, but the 
plan is not itself part of the APD, and the terms of the plan are not 
enforceable against the operator. The purpose of the waste-minimization 
plan is for the operator to set forth a strategy for how the operator 
will comply with the requirements of 43 CFR subpart 3179 regarding the 
control of waste from venting and flaring from oil wells.
    The waste-minimization plan must include information regarding: The 
anticipated completion date(s) of the proposed oil well(s); a 
description of anticipated production from the well(s); certification 
that the operator has provided one or more midstream processing 
companies with information about the operator's production plans, 
including the anticipated completion dates and gas production rates of 
the proposed well or wells; and identification of a gas pipeline to 
which the operator plans to connect. Additional information is required 
when an operator cannot identify a gas pipeline with sufficient 
capacity to accommodate the anticipated production from the proposed 
well, including: A gas pipeline system location map showing the 
proposed well(s); the name and location of the gas processing plant(s) 
closest to the proposed well(s); all existing gas trunklines within 20 
miles of the well, and proposed routes for connection to a trunkline; 
the total volume of produced gas, and percentage of total produced gas, 
that the operator is currently venting or flaring from wells in the 
same field and any wells within a 20-mile radius of that field; and a 
detailed evaluation, including estimates of costs and returns, of 
potential on-site capture approaches.
    In the 2016 RIA, the BLM estimated that the administrative burden 
of the waste-minimization plan requirements would be roughly $1 million 
per year for the industry and $180,000 per year for the BLM (2016 RIA 
at 96 and 100). The BLM is currently reviewing concerns raised by 
operators that the requirements of Sec.  3162.3-1(j) may impose an 
unnecessary burden and can be reduced. The BLM is also evaluating 
concerns raised by the operators that Sec.  3162.3-1(j) is infeasible 
because some of the required information is in the possession of a 
midstream company that is not in a position to share it with the 
operator prior to the operator's submission of an APD. The BLM is 
considering narrowing the required information and is considering 
whether submission of a State waste-minimization plan, such as those 
required by New Mexico and North Dakota, would serve the purpose of 
Sec.  3162.3-1(j). The BLM is therefore suspending the waste 
minimization plan requirement of Sec.  3162.3-1(j) until January 17, 
2019.
    This final delay rule revises Sec.  3162.3-1 by adding ``Beginning 
January 17, 2019'' to the beginning of paragraph (j). The rest of this 
paragraph remains the same as in the 2016 final rule and the 
introductory paragraph is repeated in this final delay rule text only 
for context.
43 CFR 3179.7--Gas Capture Requirement
    In the 2016 final rule, the BLM sought to constrain routine flaring 
through the imposition of a ``capture percentage'' requirement, 
requiring operators to capture a certain percentage of the gas they 
produce, after allowing for a certain volume of flaring per well. The 
capture-percentage requirement would become more stringent over a 
period of years, beginning with an 85 percent capture requirement 
(5,400 Mcf per well flaring allowable) in January 2018, and eventually 
reaching a 98 percent capture requirement (750 Mcf per well flaring 
allowable) in January 2026. An operator would choose whether to comply 
with the capture targets on each of the operator's leases, units or 
communitized areas, or on a county-wide or state-wide basis.
    In the 2016 RIA, the BLM estimated that this requirement would 
impose costs of up to $162 million per year and generate cost savings 
from product recovery of up to $124 million per year, with both costs 
and cost savings increasing as the requirements increased in stringency 
(2016 RIA at 49).
    The BLM is currently considering concerns raised by operators that 
the capture-percentage requirement of Sec.  3179.7 is unnecessarily 
complex and infeasible in some regions because it may cause wells to be 
shut-in repeatedly (or otherwise cease production if the lease(s) does 
not allow for a shut in) until sufficient gas infrastructure is in 
place. The BLM is considering whether

[[Page 58053]]

the NTL-4A framework can be applied in a manner that addresses any 
inappropriate levels of flaring, and whether market-based incentives 
(i.e., royalty obligations) could improve capture in a more 
straightforward and efficient manner. Finally, the BLM is considering 
whether the need for a complex capture-percentage requirement could be 
obviated through other BLM efforts to facilitate pipeline development.
    Since meeting this requirement requires operators to incur 
significant costs rather than require operators to institute new 
processes and adjust their plans for development to meet a capture-
percentage requirement that may be rescinded or revised as a result of 
the BLM's review, the BLM is delaying for 1 year the compliance dates 
for Sec.  3179.7's capture requirements. This final delay rule will 
allow the BLM sufficient time to more thoroughly explore through 
notice-and-comment rulemaking whether the capture percentage 
requirements should be rescinded or revised and would prevent operators 
from being unnecessarily burdened by regulatory requirements that are 
subject to change. This final delay rule revises the compliance dates 
in paragraphs (b), (b)(1) through (b)(4), and (c)(2)(i) through (vii) 
of Sec.  3179.7 to begin January 17, 2019. Paragraphs (c), (c)(1), and 
the introductory text of (c)(2) remain the same as in the 2016 final 
rule and are repeated in this final delay rule text only for context.
43 CFR 3179.9--Measuring and Reporting Volumes of Gas Vented and Flared 
From Wells
    Section 3179.9 requires operators to estimate (using estimation 
protocols) or measure (using a metering device) all flared and vented 
gas, whether royalty-bearing or royalty-free. This section further 
provides that specific requirements apply when the operator is flaring 
50 Mcf or more of gas per day from a high-pressure flare stack or 
manifold, based on estimated volumes from the previous 12 months, or 
based on estimated volumes over the life of the flare, whichever is 
shorter. Under the 2016 final rule, Sec.  3179.9(b) would have required 
the operator, as of January 17, 2018, if the volume threshold is met, 
to measure the volume of the flared gas, or calculate the volume of the 
flared gas based on the results of a regularly performed gas-to-oil 
ratio test, so as to allow the BLM to independently verify the volume, 
rate, and heating value of the flared gas.
    In the 2016 RIA, the BLM estimated that this requirement would 
impose costs of about $4 million to $7 million per year (2016 RIA at 
52).
    The BLM is presently reviewing concerns raised by operators that 
the additional accuracy associated with the measurement and estimation 
required by Sec.  3179.9(b) does not justify the burden it would place 
on operators and that the requirement is infeasible because current 
technology does not reliably measure low pressure, low volume, 
fluctuating gas flow. The BLM is considering whether it would make more 
sense to allow the BLM to require measurement or estimation on a case-
by-case basis, rather than imposing a blanket requirement on all 
operators. In order to avoid immediate and potentially unnecessary 
compliance costs on the part of operators, this final delay rule delays 
the compliance date in Sec.  3179.9 until January 17, 2019.
    This final delay rule revises the compliance date in Sec.  
3179.9(b)(1). The rest of paragraph (b)(1) remains the same as in the 
2016 final rule and is repeated in this final delay rule text only for 
context.
43 CFR 3179.10--Determinations Regarding Royalty-Free Flaring
    Section 3179.10(a) provides that approvals to flare royalty free 
that were in effect as of January 17, 2017, will continue in effect 
until January 17, 2018. The purpose of this provision was to provide a 
transition period for operators who were operating under existing 
approvals for royalty-free flaring. Because the BLM's review of the 
2016 final rule could result in rescission or substantial revision of 
the rule, the BLM believes that terminating pre-existing flaring 
approvals in January 2018 would impose an immediate cost, be premature 
and disruptive, and would introduce needless regulatory uncertainty for 
operators with existing flaring approvals. The BLM therefore extends 
the end of the transition period provided for in Sec.  3179.10(a) to 
January 17, 2019.
    This final delay rule also revises the date in paragraph (a) and 
replaces ``as of the effective date of this rule'' with ``as of January 
17, 2017,'' which is the effective date of the 2016 final rule, for 
clarity. Aside from these two changes, this final delay rule does not 
otherwise revise paragraph (a), but the rest of the paragraph remains 
the same as in the 2016 final rule and is repeated in this final delay 
rule text only for context.
43 CFR 3179.101--Well Drilling
    Section 3179.101(a) requires that gas reaching the surface as a 
normal part of drilling operations be used or disposed of in one of 
four ways: (1) Captured and sold; (2) Directed to a flare pit or flare 
stack; (3) Used in the operations on the lease, unit, or communitized 
area; or (4) Injected. Section 3179.101(a) also specifies that gas may 
not be vented, except under the circumstances specified in Sec.  
3179.6(b) or when it is technically infeasible to use or dispose of the 
gas in one of the ways specified above. Section 3179.101(b) states that 
gas lost as a result of a loss of well control will be classified as 
avoidably lost if the BLM determines that the loss of well control was 
due to operator negligence.
    The BLM is currently reviewing concerns raised by operators that 
Sec.  3179.101 is unnecessary in light of existing BLM requirements, 
infeasible in the situations where flares may be used on drilling wells 
because of insufficient gas to burn, and creates a risk to safety. The 
BLM has existing regulations that require the operator to flare gas 
during drilling operations, see Onshore Oil and Gas Order No. 2--
Drilling Operations, Section III.C.7. The requirements state that ``All 
flare systems shall be designed to gather and burn all gas. . . . The 
flare system shall have an effective method for ignition. Where 
noncombustible gas is likely or expected to be vented, the system shall 
be provided supplemental fuel for ignition and to maintain a continuous 
flare.''
    Because Sec.  3179.101 includes the primary method of gas 
disposition, which is also required by Onshore Oil and Gas Order No. 
2--Drilling Operations, Section III.C.7, the primary effect of Sec.  
3179.101, therefore, may be to impose a regulatory constraint on 
operators in exceptional circumstances where the operator must make a 
case-specific judgment about how to safely and effectively dispose of 
the gas.
    Further, in addition to the existing requirements regulating well 
drilling operations, the available data suggest that potential gas 
losses during a well-drilling operation is very small. According to 
EPA's Greenhouse Gas Inventory, drilling a well generates only small 
amounts of uncontrolled gas (2016 RIA at 149 and 151). These data 
indicate either that operators are already operating in a manner 
consistent with Sec.  3179.101 or that the amount of potential gas 
losses from these operations is very small.
    The BLM is therefore suspending the effectiveness of Sec.  3179.101 
until January 17, 2019, while the BLM completes its review of Sec.  
3179.101 and decides whether to propose permanently revising or 
rescinding it through notice-and-comment rulemaking.
    This final delay rule adds a new paragraph (c) making it clear that 
the

[[Page 58054]]

operator must comply with Sec.  3179.101 beginning January 17, 2019. 
This action does not impact the operator's compliance with Onshore Oil 
and Gas Order No. 2--Drilling Operations, Section III.C.7.
43 CFR 3179.102--Well Completion and Related Operations
    Section 3179.102 addresses gas that reaches the surface during 
well-completion, post-completion, and fluid-recovery operations after a 
well has been hydraulically fractured or refractured. It requires the 
gas to be used or disposed of in one of four ways: (1) Captured and 
sold; (2) Directed to a flare pit or stack, subject to a volumetric 
limitation in Sec.  3179.103; (3) Used in the lease operations; or (4) 
Injected. Section 3179.102 specifies that gas may not be vented, except 
under the narrow circumstances specified in Sec.  3179.6(b) or when it 
is technically infeasible to use or dispose of the gas in one of the 
four ways specified above. Section 3179.102(b) provides that an 
operator will be deemed to be in compliance with its gas capture and 
disposition requirements if the operator is in compliance with the 
requirements for control of gas from well completions established under 
Environmental Protection Agency (EPA) regulations 40 CFR part 60, 
subparts OOOO or OOOOa regulations, or if the well is not a ``well 
affected facility'' under those regulations.
    The BLM is concerned that Sec.  3179.102 imposes an immediate cost 
on operators and is currently reviewing it to determine whether it is 
necessary, in light of current operator practices and the analogous EPA 
regulations. Operators dispose of gas during well completions and 
related operations consistent with Sec.  3179.102(a) either to comply 
with EPA or State regulations.
    EPA regulations at 40 CFR part 60, subparts OOOO and OOOOa, address 
the disposition of gas from oil and gas well completions using 
hydraulic fracturing, which are the vast majority of well completions 
occurring on Federal and Indian lands. The BLM believes that over 90 
percent of wells on Federal and Indian lands are completed using 
hydraulic fracturing. Therefore, most of the well completions and 
related operations that would otherwise be covered by Sec.  3179.102 
would actually be exempted under Sec.  3179.102(b).
    The EPA regulations also exempt from its coverage a small portion 
of well completions that, according to EPA's Greenhouse Gas Inventory, 
generate only small amounts of uncontrolled gas (2016 RIA at 149 and 
151). These data indicate either that operators are already operating 
in a manner consistent with Sec.  3179.102(a) or that the amount of 
potential gas losses from these operations is very small.
    Considering the overlap with EPA regulations (40 CFR part 60, 
subparts OOOO and OOOOa), the primary effect of Sec.  3179.102 may be 
to generate confusion about regulatory compliance during well-drilling 
and related operations. The BLM is therefore suspending the 
effectiveness of Sec.  3179.102 until January 17, 2019, while the BLM 
completes its review of Sec.  3179.102 and decides whether to 
permanently revise or rescind it through notice-and-comment rulemaking.
    This final delay rule adds a new paragraph (e) making it clear that 
operators must comply with Sec.  3179.102 beginning January 17, 2019.
43 CFR 3179.201--Equipment Requirements for Pneumatic Controllers
    Section 3179.201 addresses pneumatic controllers that use natural 
gas produced from a Federal or Indian lease, or from a unit or 
communitized area that includes a Federal or Indian lease. Section 
3179.201 applies to such controllers if the controllers: (1) Have a 
continuous bleed rate greater than 6 standard cubic feet per hour (scf/
hour) (``high-bleed'' controllers); and (2) Are not covered by EPA 
regulations that prohibit the new use of high-bleed pneumatic 
controllers (40 CFR part 60, subparts OOOO or OOOOa), but would be 
subject to those regulations if the controllers were new, modified, or 
reconstructed sources. Section 3179.201(b) requires the applicable 
pneumatic controllers to be replaced with controllers (including, but 
not limited to, continuous or intermittent pneumatic controllers) 
having a bleed rate of no more than 6 scf/hour, subject to certain 
exceptions. Section 3179.201(d) requires that this replacement occur no 
later than January 17, 2018, or within 3 years from the effective date 
of the rule if the well or facility served by the controller has an 
estimated remaining productive life of 3 years or less.
    In the 2016 RIA, the BLM estimated that this requirement would 
impose costs of about $2 million per year and generate cost savings 
from product recovery of $3 million to $4 million per year (2016 RIA at 
56).
    The BLM is concerned that Sec.  3179.201 imposes an immediate cost 
on operators and is currently reviewing it to determine whether it 
should be revised or rescinded. The BLM is considering whether Sec.  
3179.201 is necessary in light of the analogous EPA regulations (40 CFR 
part 60, subparts OOOO or OOOOa) and the fact that operators are likely 
to adopt more efficient equipment in cases where it makes economic 
sense for them to do so. The BLM does not believe that operators should 
be required to make expensive equipment upgrades to comply with Sec.  
3179.201 until the BLM has had an opportunity to review its 
requirements and, if appropriate, revise them through notice-and-
comment rulemaking. The BLM is therefore delaying the compliance date 
stated in Sec.  3179.201 until January 17, 2019.
    This final delay rule revises the first sentence of paragraph (d) 
by replacing ``no later than 1 year after the effective date of this 
section'' with ``by January 17, 2019.'' This final delay rule also 
replaces ``the effective date of this section'' with ``January 17, 
2017'' the two times that it appears in the second sentence of 
paragraph (d). This final delay rule does not otherwise revise 
paragraph (d), but the rest of the paragraph remains the same as in the 
2016 final rule and is repeated in the final delay rule text only for 
context.
43 CFR 3179.202--Requirements for Pneumatic Diaphragm Pumps
    Section 3179.202 establishes requirements for operators with 
pneumatic diaphragm pumps that use natural gas produced from a Federal 
or Indian lease, or from a unit or communitized area that includes a 
Federal or Indian lease. It applies to such pumps if they are not 
covered under EPA regulations at 40 CFR part 60, subpart OOOOa, but 
would be subject to that subpart if they were a new, modified, or 
reconstructed source. For covered pneumatic pumps, Sec.  3179.202 
requires that the operator either replace the pump with a zero-
emissions pump or route the pump exhaust to processing equipment for 
capture and sale. Alternatively, an operator may route the exhaust to a 
flare or low-pressure combustion device if the operator makes a 
determination (and notifies the BLM through a Sundry Notice) that 
replacing the pneumatic diaphragm pump with a zero-emissions pump or 
capturing the pump exhaust is not viable because: (1) A pneumatic pump 
is necessary to perform the function required; and (2) Capturing the 
exhaust is technically infeasible or unduly costly. If an operator 
makes this determination and has no flare or low-pressure combustor on-
site, or routing to such a device would be technically infeasible, the 
operator is not required to route the exhaust to a flare or low-
pressure combustion device. Under Sec.  3179.202(h), an operator must 
replace its covered pneumatic diaphragm pump

[[Page 58055]]

or route the exhaust gas to capture or flare beginning no later than 
January 17, 2018.
    In the 2016 RIA, the BLM estimated that this requirement would 
impose costs of about $4 million per year and generate cost savings 
from product recovery of $2 million to $3 million per year (2016 RIA at 
61).
    The BLM is concerned that Sec.  3179.202 imposes an immediate cost 
on operators and is currently reviewing it to determine whether it 
should be rescinded or revised. Analogous EPA regulations apply to new, 
modified, and reconstructed sources, therefore limiting the 
applicability of Sec.  3179.202. See 40 CFR part 60, subpart OOOOa. In 
addition, the BLM is concerned that requiring zero-emissions pumps may 
not conserve gas in some cases. The volume of royalty-free gas used to 
generate electricity to provide the power necessary to operate a zero-
emission pump could exceed the volume of gas necessary to operate the 
pneumatic pump that the zero-emission pump would replace. The BLM does 
not believe that operators should be required to make expensive 
equipment upgrades to comply with Sec.  3179.202 until the BLM has had 
an opportunity to review its requirements and, if appropriate, revise 
them through notice-and-comment rulemaking. The BLM is therefore 
delaying the compliance date stated in Sec.  3179.202 until January 17, 
2019.
    This final delay rule revises paragraph (h) by replacing ``no later 
than 1 year after the effective date of this section'' in the first 
sentence with ``by January 17, 2019'' and also replaces ``the effective 
date of this section'' with ``January 17, 2017'' the two times that it 
appears later in the same sentence. This final delay rule does not 
otherwise revise paragraph (h); the rest of the paragraph remains the 
same as in the 2016 final rule and is repeated in the final delay rule 
text only for context.
43 CFR 3179.203--Storage Vessels
    Section 3179.203 applies to crude oil, condensate, intermediate 
hydrocarbon liquid, or produced-water storage vessels that contain 
production from a Federal or Indian lease, or from a unit or 
communitized area that includes a Federal or Indian lease, and that are 
not subject to 40 CFR part 60, subparts OOOO or OOOOa, but would be if 
they were new, modified, or reconstructed sources. If such storage 
vessels have the potential for volatile organic compound (VOC) 
emissions equal to or greater than 6 tons per year (tpy), Sec.  
3179.203 requires operators to route all gas vapor from the vessels to 
a sales line. Alternatively, the operator may route the vapor to a 
combustion device if it determines that routing the vapor to a sales 
line is technically infeasible or unduly costly. The operator also may 
submit a Sundry Notice to the BLM that demonstrates that compliance 
with the above options would cause the operator to cease production and 
abandon significant recoverable oil reserves under the lease due to the 
cost of compliance. Pursuant to Sec.  3179.203(c), operators must meet 
these requirements for covered storage vessels by January 17, 2018 
(unless the operator will replace the storage vessel in order to 
comply, in which case it has a longer time to comply).
    In the 2016 RIA, the BLM estimated that this requirement would 
impose costs of about $7 million to $8 million per year and generate 
cost savings from product recovery of up to $200,000 per year (2016 RIA 
at 74).
    The BLM is concerned that Sec.  3179.203 imposes an immediate cost 
on operators and is currently reviewing it to determine whether it 
should be rescinded or revised. The BLM is considering whether Sec.  
3179.203 is necessary in light of analogous EPA regulations (40 CFR 
part 60, subparts OOOO or OOOOa) and whether the costs associated with 
compliance are justified. The BLM does not believe that operators 
should be required to make expensive upgrades to their storage vessels 
in order to comply with Sec.  3179.203 until the BLM has had an 
opportunity to review its requirements and, if appropriate, revise them 
through notice-and-comment rulemaking. The BLM is therefore delaying 
the January 17, 2018, compliance date in Sec.  3179.203 until January 
17, 2019.
    This final delay rule revises the first sentence of paragraph (b) 
by replacing ``Within 60 days after the effective date of this 
section'' with ``Beginning January 17, 2019'' and by adding ``after 
January 17, 2019'' between the words ``vessel'' and ``the operator.'' 
This final delay rule also revises the introductory text of paragraph 
(c) by replacing ``no later than one year after the effective date of 
this section'' with ``by January 17, 2019'' and by changing ``or three 
years if'' to ``or by January 17, 2020, if '' to account for removing 
the reference to ``the effective date of this section.'' This final 
delay rule does not otherwise revise paragraphs (b) and (c), and the 
rest of these paragraphs remain the same as in the 2016 final rule and 
are repeated in this final delay rule text only for context.
43 CFR 3179.204--Downhole Well Maintenance and Liquids Unloading
    Section 3179.204 establishes requirements for venting and flaring 
during downhole well maintenance and liquids unloading. It requires the 
operator to use practices for such operations that minimize vented gas 
and the need for well venting, unless the practices are necessary for 
safety. Section 3179.204 also requires that for wells equipped with a 
plunger lift system or an automated well-control system, the operator 
must optimize the operation of the system to minimize gas losses. Under 
Sec.  3179.204, before an operator manually purges a well for the first 
time, the operator must document in a Sundry Notice that other methods 
for liquids unloading are technically infeasible or unduly costly. In 
addition, during any liquids unloading by manual well purging, the 
person conducting the well purging is required to be present on-site to 
minimize, to the maximum extent practicable, any venting to the 
atmosphere. This section also requires the operator to maintain records 
of the cause, date, time, duration and estimated volume of each venting 
event associated with manual well purging, and to make those records 
available to the BLM upon request. Additionally, operators are required 
to notify the BLM by Sundry Notice within 30 days after the following 
conditions are met: (1) The cumulative duration of manual well-purging 
events for a well exceeds 24 hours during any production month; or (2) 
The estimated volume of gas vented in the process of conducting liquids 
unloading by manual well purging for a well exceeds 75 Mcf during any 
production month.
    In the 2016 RIA, the BLM estimated that these requirements would 
impose costs of about $6 million per year and generate cost savings 
from product recovery of about $5 million to $9 million per year (2016 
RIA at 66). In addition, there would be estimated administrative 
burdens associated with these requirements of $323,000 per year for the 
industry and $37,000 per year for the BLM (2016 RIA at 98 and 101).
    The BLM is concerned that Sec.  3179.204 imposes immediate costs on 
operators and is currently reviewing it to determine whether it should 
be rescinded or revised. The BLM does not believe that operators should 
be burdened with the operational and reporting requirements imposed by 
Sec.  3179.204 until the BLM has had an opportunity to review them and, 
if appropriate, revise them through notice-and-comment rulemaking. In 
addition, as part of this review, the BLM would

[[Page 58056]]

want to review how these data could be reported in a consistent manner 
among operators. The BLM is therefore suspending the effectiveness of 
Sec.  3179.204 until January 17, 2019.
    This final delay rule adds a new paragraph (i), making it clear 
that operators must comply with Sec.  3179.204 beginning January 17, 
2019.
43 CFR 3179.301--Operator Responsibility
    Sections 3179.301 through 3179.305 establish leak detection, 
repair, and reporting requirements for: (1) Sites and equipment used to 
produce, process, treat, store, or measure natural gas from or 
allocable to a Federal or Indian lease, unit, or communitization 
agreement; and (2) Sites and equipment used to store, measure, or 
dispose of produced water on a Federal or Indian lease. Section 
3179.302 prescribes the instruments and methods that may be used for 
leak detection. Section 3179.303 prescribes the frequency for 
inspections and Sec.  3179.304 prescribes the time frames for repairing 
leaks found during inspections. Finally, Sec.  3179.305 requires 
operators to maintain records of their LDAR activities and submit an 
annual report to the BLM. Pursuant to Sec.  3179.301(f), operators must 
begin to comply with the LDAR requirements of Sec. Sec.  3179.301 
through 3179.305 before: (1) January 17, 2018, for sites in production 
prior to January 17, 2017; (2) 60 days after beginning production for 
sites that began production after January 17, 2017; and (3) 60 days 
after a site that was out of service is brought back into service and 
re-pressurized.
    In the 2016 RIA, the BLM estimated that these requirements would 
impose costs of about $83 million to $84 million per year and generate 
cost savings from product recovery of about $12 million to $21 million 
per year (2016 RIA at 91). In addition, there would be estimated 
administrative burdens associated with these requirements of $3.9 
million per year for the industry and over $1 million per year for the 
BLM (2016 RIA at 98 and 102).
    The BLM is concerned that Sec. Sec.  3179.301 through 3179.305 
impose an immediate cost on operators and is currently reviewing them 
to determine whether they should be revised or rescinded. The analysis 
of the 2016 rule may have significantly overestimated the benefits of 
captured gas and therefore not justified the estimated costs. The BLM 
is also considering whether these requirements are necessary in light 
of comparable EPA (40 CFR part 60, subpart OOOOa.) and State LDAR 
regulations. The 2017 RIA includes a discussion of State regulations 
(2017 RIA at 17). The BLM is considering whether the reporting burdens 
imposed by these sections are justified and whether the substantial 
compliance costs could be mitigated by allowing for less frequent and/
or non-instrument-based inspections or by exempting wells that have low 
potential to leak natural gas. The BLM does not believe that operators 
should be burdened with the significant compliance costs imposed by 
these sections until the BLM has had an opportunity to review them and, 
if appropriate, revise them through notice-and-comment rulemaking. The 
BLM is therefore delaying the effective dates for these sections until 
January 17, 2019, by revising Sec.  3179.301(f).
    This final delay rule revises paragraph (f)(1) by replacing 
``Within one year of January 17, 2017 for sites that have begun 
production prior to January 17, 2017;'' with ``By January 17, 2019, for 
all existing sites.'' This final delay rule also revises paragraph 
(f)(2) by adding ``new'' between the words ``for'' and ``sites'' and by 
replacing the existing date with ``January 17, 2019.'' Finally, this 
final delay rule revises paragraph (f)(3) by adding ``an existing'' 
between the words ``when'' and ``site'' and by adding ``after January 
17, 2019'' to the end of the sentence. This final delay rule does not 
otherwise revise paragraph (f), and the rest of the paragraph remains 
the same as in the 2016 final rule and is repeated in this final delay 
rule text only for context.

B. Summary of Estimated Economic Impacts

    The BLM reviewed the final delay rule and conducted an RIA and 
Environmental Assessment (EA) that examine the impacts of the final 
delay rule's requirements. The following discussion is a summary of the 
final delay rule's economic impacts. The RIA and EA that we prepared 
have been posted in the docket for the final delay rule on the Federal 
eRulemaking Portal: https://www.regulations.gov. In the Searchbox, 
enter ``RIN 1004-AE54'' and click the ``Search'' button. Follow the 
instructions at this Web site.
    The suspension or delay in the implementation of certain 
requirements in the 2016 final rule postpones the economic impacts 
estimated previously to the near-term future. That is to say, impacts 
that we previously estimated would occur in 2017 will now occur in 
2018, impacts that we previously estimated would occur in 2018 will now 
occur in 2019, and so on. In the RIA for this final delay rule, we 
track this shift in impacts over the 10-year period following the 
delay. A 10-year period of analysis was also used in the 2016 RIA. 
Except for some notable changes, the 2017 RIA uses the impacts 
estimated and underlying assumptions used by the BLM for the 2016 RIA, 
published in November 2016. The BLM's final delay rule temporarily 
suspends or delays almost all of the requirements in the 2016 final 
rule that we estimated would pose a compliance burden to operators and 
generate benefits of gas savings or reductions in methane emissions.
Estimated Reductions in Compliance Costs (Excluding Cost Savings)
    First, we examine the reductions in compliance costs excluding the 
savings that would have been realized from product recovery. This final 
delay rule temporarily suspends or delays almost all of the 
requirements in the 2016 final rule that we estimated would pose a 
compliance burden to operators. We estimate that suspending or delaying 
the targeted requirements of the 2016 final rule until January 17, 
2019, will substantially reduce compliance costs during the period of 
the suspension or delay (2017 RIA at 29).
    Impacts in Year 1:
     A delay in compliance costs of $114 million (using a 7 
percent discount rate to annualize capital costs) or $110 million 
(using a 3 percent discount rate to annualize capital costs).
    Impacts from 2017-2027:
     Total reduction in compliance costs ranging from $73 
million to $91 million (net present value (NPV) using a 7 percent 
discount rate) or $40 million to $50 million (NPV using a 3 percent 
discount rate).
Estimated Reduction in Benefits
    This final delay rule temporarily suspends or delays almost all of 
the requirements in the 2016 final rule that were estimated to generate 
benefits of gas savings or reductions in methane emissions. We estimate 
that this final delay rule will result in forgone benefits, since 
estimated cost savings that would have come from product recovery will 
be deferred and the emissions reductions will also be deferred (2017 
RIA at 32).
    Impacts in Year 1:
     A reduction in cost savings of $19 million.
    Impacts from 2017-2027:
     Total reduction in cost savings of $36 million (NPV using 
a 7 percent discount rate) or $21 million (NPV using a 3 percent 
discount rate).
    We estimate that this final delay rule will also result in 
additional methane and VOC emissions of 175,000 and

[[Page 58057]]

250,000 tons, respectively, in Year 1 (2017 RIA at 32).
    These estimated emissions are measured as the change from the 
baseline environment, which is the 2016 final rule's requirements being 
implemented per the 2016 final rule schedule. Since the final delay 
rule delays the implementation of those requirements, the estimated 
benefits of the 2016 final rule will be forgone during the temporary 
suspension or delay.
    The BLM used interim domestic values of the carbon dioxide and 
methane to value the forgone emissions reductions resulting from the 
delay (see the discussion of social cost of greenhouse gases in the 
2017 RIA at Section 3.2 and Appendix).
    Impact in Year 1:
     Forgone methane emissions reductions valued at $8 million 
(using interim domestic SC-CH4 \2\ based on a 7 percent 
discount rate) or $26 million (using interim domestic SC-CH4 
based on a 3 percent discount rate).
---------------------------------------------------------------------------

    \2\ Social cost of methane.
---------------------------------------------------------------------------

    Impacts from 2017-2027:
     Forgone methane emissions reductions valued at $1.9 
million (NPV \3\ and interim domestic SC-CH4 using a 7 
percent discount rate); or
---------------------------------------------------------------------------

    \3\ Net present value.
---------------------------------------------------------------------------

     Forgone methane emissions reductions valued at $300,000 
(NPV and interim domestic SC-CH4 using a 3 percent discount 
rate).
Estimated Net Benefits
    This final delay rule is estimated to result in positive net 
benefits, meaning that the reduction of compliance costs would exceed 
the reduction in cost savings and the cost of emissions additions (2017 
RIA at 36).
    Impact in Year 1:
     Net benefits of $83--86 million (using interim domestic 
SC-CH4 based on a 7 percent discount rate) or $64--68 
million (using interim domestic SC-CH4 based on a 3 percent 
discount rate).
    Impacts from 2017-2027:
     Total net benefits ranging from $35--52 million (NPV and 
interim domestic SC-CH4 using a 7 percent discount rate); or
     Total net benefits ranging from $19--29 million (NPV and 
interim domestic SC-CH4 using a 3 percent discount rate).
Energy Systems
    This final delay rule is expected to influence the production of 
natural gas, natural gas liquids, and crude oil from onshore Federal 
and Indian oil and gas leases, particularly in the short-term and on a 
regional basis. However, since the relative changes in production 
compared to global levels are expected to be small, we do not expect 
that this final delay rule will significantly impact the price, supply, 
or distribution of energy.
    Noting that the assumptions in the 2016 RIA are under review and 
subject to change, we estimate the following incremental changes in 
production. Also note the representative share of the total U.S. 
production in 2015 for context (2017 RIA at 41).
    Annual Impacts:
     A decrease in natural gas production of 9.0 billion cubic 
feet (Bcf) in Year 1 (0.03 percent of the total U.S. production).
     An increase in crude oil production of 91,000 barrels in 
Year 2 (0.003 percent of the total U.S. production). There is no 
estimated change in crude oil production in Year 1.
Royalty Impacts
    Based on the assumptions in the 2016 RIA, which are currently under 
review, in the short-term the final 2017 delay rule is expected to 
decrease natural gas production from Federal and Indian leases, and 
likewise, is expected to reduce annual royalties to the Federal 
Government, tribal governments, States, and private landowners. From 
2017-2027, however, we expect a small increase in total royalties, 
likely due to production slightly shifting into the future where 
commodity prices are expected to be higher.
    Royalty payments are recurring income to Federal or tribal 
governments and costs to the operator or lessee. As such, they are 
transfer payments that do not affect the total resources available to 
society. An important but sometimes difficult problem in cost 
estimation is to distinguish between real costs and transfer payments. 
While transfers should not be included in the economic analysis 
estimates of the benefits and costs of a regulation, they may be 
important for describing the distributional effects of a regulation.
    We estimate a reduction in royalties of $2.6 million in Year 1 
(2017 RIA at 43). This amount represents about 0.2 percent of the total 
royalties received from oil and gas production on Federal lands in FY 
2016. However, from 2017-2027, we estimate an increase in total 
royalties of $1.26 million (NPV using a 7 percent discount rate) or 
$380,000 (NPV using a 3 percent discount rate).
Consideration of Alternative Approaches
    In developing this final delay rule, the BLM considered alternative 
timeframes for which it could suspend or delay the requirements (e.g., 
6 months and 2 years). Ultimately, the BLM decided on a suspension or 
delay for 1 year, which it believes to be the minimum length of time 
practicable within which to review the 2016 final rule and complete a 
notice-and-comment rulemaking to revise that regulation.
Employment Impacts
    This final delay rule temporarily suspends or delays certain 
requirements of the BLM's 2016 final rule on waste prevention and is a 
temporary deregulatory action. As such, we estimate that it will result 
in a reduction of compliance costs for operators of oil and gas leases 
on Federal and Indian lands. Therefore, it is likely that the impact, 
if any, on the employment will be positive.
    In the 2016 RIA, the BLM concluded that the requirements were not 
expected to impact the employment within the oil and gas extraction, 
drilling oil and gas wells, and support activities industries, in any 
material way. This determination was based on several reasons. First, 
the estimated incremental gas production represented only a small 
fraction of the U.S. natural gas production volumes. Second, the 
estimated compliance costs represented only a small fraction of the 
annual net incomes of companies likely to be impacted. Third, for those 
operations that would have been impacted to the extent that the 
compliance costs would force the operator to shut in production, the 
2016 final rule had provisions that would exempt these operations from 
compliance. Based on these factors, the BLM determined that the 2016 
final rule would not alter the investment or employment decisions of 
firms or significantly adversely impact employment. The RIA also noted 
that the 2016 final rule would require the one-time installation or 
replacement of equipment and the ongoing implementation of an LDAR 
program, both of which would require labor to comply.
    As discussed more thoroughly above, the assumptions upon which the 
determination of the 2016 rule was based upon are under review. Based 
on the 2016 RIA, this final delay rule will not substantially alter the 
investment or employment decisions of firms for two reasons. First, the 
2016 RIA determined that that rule would not substantially alter the 
investment or employment decisions of firms, and so therefore delaying 
the 2016 final rule would likewise not be expected to impact those 
decisions. We also recognize that while there might be a small positive 
impact

[[Page 58058]]

on investment and employment due to the reduction in compliance 
burdens, the magnitude of the reductions are relatively small.
Small Business Impacts
    The BLM reviewed the Small Business Administration (SBA) size 
standards for small businesses and the number of entities fitting those 
size standards as reported by the U.S. Census Bureau. We conclude that 
small entities represent the overwhelming majority of entities 
operating in the onshore crude oil and natural gas extraction industry 
and, therefore, this final delay rule will impact a significant number 
of small entities.
    To examine the economic impact of the rule on small entities, the 
BLM performed a screening analysis on a sample of potentially affected 
small entities, comparing the reduction of compliance costs to entity 
profit margins.
    The BLM identified up to 1,828 entities that operate on Federal and 
Indian leases and recognizes that the overwhelming majority of these 
entities are small business, as defined by the SBA. We estimated the 
potential reduction in compliance costs to be about $60,000 per entity 
during the initial year when the requirements would be suspended or 
delayed. This represents the average maximum amount by which the 
operators would be positively impacted by this final delay rule.
    We used existing BLM information and research concerning firms that 
have recently completed Federal and Indian wells and the financial and 
employment information on a sample of these firms, as available in 
company annual report filings with the Securities and Exchange 
Commission (SEC). From the original list of companies, we identified 55 
company filings. Of those companies, 33 were small businesses.
    From data in the companies' 10-K filings to the SEC, the BLM was 
able to calculate the companies' profit margins for the years 2012, 
2013, and 2014. We then calculated a profit margin figure for each 
company when subject to the average annual reduction in compliance 
costs associated with this final delay rule. For these 26 small 
companies, the estimated per-entity reduction in compliance costs will 
result in an average increase in profit margin of 0.17 percentage 
points (based on the 2014 company data) (2017 RIA at 46).
Impacts Associated With Oil and Gas Operations on Tribal Lands
    This final delay rule applies to oil and gas operations on both 
Federal and Indian leases. In the 2017 RIA, the BLM estimates the 
impacts associated with operations on Indian leases, as well as royalty 
implications for tribal governments. We estimate these impacts by 
scaling down the total impacts by the share of oil wells on Indian 
lands and the share of gas wells on Indian lands. The BLM expects the 
impacts on Tribal Lands to be between 11 percent and 15 percent of 
those levels described in sections 4.1 to 4.4.4 of the 2017 RIA. Please 
reference the 2017 RIA at sections 4.1 to 4.4.5 for a full explanation 
of the estimated impacts.

C. Comments and Responses

    The BLM has engaged in stakeholder outreach in the course of 
developing this 2017 final delay rule to the degree it believes is 
appropriate given that the final delay rule extends the compliance 
dates of the 2016 final rule, but does not change the policies of that 
rule. The BLM published a proposed rule on October 5, 2017 (82 FR 
46458), and accepted public comments through November 6, 2017.
    The BLM sent correspondence to tribal governments to solicit their 
views to inform the development of this 2017 final delay rule on 
October 16 and 17, 2017, and requested feedback and comment through the 
respective BLM State Office Directors. In addition, BLM State and Field 
Offices informed the tribes of the BLM delay rule notification letters 
via phone, and offered to conduct tribal consultation if the tribes 
chose to do so. More detailed information is found below in the 
subsection titled ``Consultation and Coordination with Indian Tribal 
Governments (Executive Order 13175 and Departmental Policy).''
    The BLM received over 158,000 comments on the proposed rule, 
including approximately 750 unique comments, which are available for 
viewing on the Federal eRulemaking Portal (http://www.regulations.gov) 
In the Searchbox, enter ``RIN 1004-AE54'' and click the ``Search'' 
button. Follow the instructions at this Web site. The BLM has reviewed 
all public comments, and has made changes, as appropriate, to the final 
delay rule and supporting documents based on those comments and 
internal review. Those changes are described in detail below in this 
final delay rule. In addition, the ``comments and responses'' 
discussion in this final delay rule provides a summary of issues raised 
most frequently in public comments and the BLM's response. A more 
comprehensive account of public comments and detailed responses to 
these comments are available to the public in a supporting document in 
the docket for this rulemaking at the Federal eRulemaking Portal 
referenced above. The final delay rule reflects the very extensive 
input that the BLM gathered from the public comment process.
    The comments revolved around several main issues, which are 
categorized as the following: (1) Industry impacts; (2) Royalty 
Provisions, (3) Legal authority; (4) Lost gas volumes; (5) Rule net 
benefits; (6) National impacts, including energy security; (7) Climate 
change; (8) Air quality and public health; (9) Rule process; and (10) 
Technical issues, including parts of the rule that were not delayed.
Industry Impacts
    The BLM received numerous comments on the BLM's analysis of costs 
and benefits. Many comments addressed the cost to the operators of 
complying with the 2017 final delay rule. Some commenters stated that 
the long-term prevention of energy waste outweighs the additional 
burden that smaller companies may face from the cost of complying with 
the 2016 final rule, and others asserted that there is continued 
stability in the oil and gas industry and jobs despite promulgation of 
the 2016 final rule so that a delay was unnecessary. Another commenter 
saw compliance as a cost of doing business and another as a cost to 
access public lands, while another said they would take a reduction in 
royalties to pay for reductions in methane emissions. One commenter 
noted the broad negative impacts of the rule on public welfare through 
``wasted gas, diminished royalties, and harmful impacts for public 
health and the environment.'' One commenter asserted a disparity 
between the alleged broad negative impacts of the proposed 2017 delay 
rule on public welfare through ``wasted gas, diminished royalties, and 
harmful impacts for public health and the environment'' with the BLM's 
own conclusion that the 2017 delay rule would not ``substantially alter 
the investment or employment decisions of firms.''
    The BLM did not revise the proposed rule in response to these 
comments. Most of the comments on these cost/benefit issues asserted a 
policy preference for immediately implementing the rule but did not 
assert that the BLM had relied on improper data analysis. Operators 
have raised concerns regarding the cost, complexity, and other 
implications of the 2016 rule. Moreover, the 2016 final rule analysis 
is under review and the BLM is concerned that certain assumptions that 
justified the rule's costs may be unsupported. The BLM does not believe 
that operators

[[Page 58059]]

should be required to make expensive equipment upgrades to comply with 
the 2016 rule until it has had an opportunity to review the 
requirements and, if appropriate, revise them through notice-and-
comment rulemaking.
    Many commenters supported issuing the delay rule and stated that a 
final delay rule would avoid imposing immediate compliance costs for 
requirements that might be rescinded or significantly revised in the 
near future. The BLM agrees. This final rule will also allow the BLM to 
avoid expending agency resources on implementation of activities for 
potentially transitory requirements. The BLM acknowledges that some 
operators have upgraded their equipment in the interim, and delaying 
the 2016 rule does not preclude operators from upgrading their 
equipment voluntarily, but the BLM does not see the delay as penalizing 
operators who have adopted the 2016 final rule requirements early, as 
mentioned in one comment. The intent of the delay rule is to prevent 
the incurrence of compliance costs and potential unnecessary shutting 
in of wells while the aforementioned provisions are being reviewed due 
to the concerns raised in this rulemaking.
    As mentioned above, the BLM shows in the 2017 RIA that the avoided 
costs of delaying the rule exceed the forgone benefits. Over the 11-
year evaluation period (2017-2027), the BLM estimates total net 
benefits ranging from $35-52 million (NPV and interim social cost of 
methane using a 7 percent discount rate) or $19-29 million (NPV and 
interim domestic social cost of methane using a 3 percent discount 
rate) (2017 RIA at 1). Thus, the RIA for the 2017 final delay rule 
concludes that the benefits of the 2017 final delay rule (avoided 
compliance costs) exceed the costs (forgone savings and environmental 
improvements). In accordance with E.O. 13783, the BLM is committed to 
furthering the national interest by promoting ``clean and safe 
development of our Nation's vast energy resources, while at the same 
time avoiding regulatory burdens that unnecessarily encumber energy 
production, constrain economic growth, and prevent job creation.'' 
Thus, the policy set forth in E.O. 13783 is aimed at ensuring the 
``clean'' and ``prudent'' (i.e., not wasteful) development of energy 
resources. As the BLM reconsiders the 2016 final rule in accordance 
with E.O. 13783, it will continue to analyze the rule's costs and 
benefits.
Royalty Provisions
    Several commenters stated that the 2016 final rule's gas capture 
provisions would be commercially valuable and economically beneficial 
to the government through additional royalties. The commenters argued 
that delaying the 2016 final rule would result in wasted gas and a 
reduction in the royalties flowing to the States, tribes, and Federal 
Government.
    The BLM did not change its proposal in response to these comments. 
The BLM's analysis of the delay rule, which is based on potentially 
tenuous assumptions made in the 2016 final analysis, shows that it 
might forgo royalties in the short-term, but that there would be a 
negligible change from the baseline over the entire period of analysis. 
See Section 4.4 of the 2017 final delay rule RIA. As the BLM 
reconsiders the final 2016 rule in accordance with E.O. 13783, it will 
continue to assess impacts on royalty revenues.
    Some commenters were concerned that the 2016 rule would impact oil 
and gas development on tribal reservations and royalties to tribes. 
Some tribes are located in known shale play areas and contain large 
amounts of undeveloped or underdeveloped areas. In particular, the 
commenters suggested that the 2016 final rule could delay drilling on 
or drive industry away from tribal lands, reducing income flowing to 
Indian mineral owners and tribal economies. The BLM agrees that this is 
an important issue and is assessing it in developing a proposal to 
revise or rescind the 2016 final rule. The BLM evaluated the royalty 
impacts of the delay rule on Indian lands and determined that these 
impacts were minimal (2017 RIA at 40). Following its initial review, 
the BLM is reviewing the 2016 final rule to develop an appropriate 
proposed revision of the 2016 final rule that is intended to align the 
2016 final rule with section 1 of E.O. 13783. The BLM invites the 
commenters to provide comment on its proposal to revise the 2016 final 
rule, when that proposal is available.
    The BLM received comments on other royalty-related issues. One 
commenter believes royalties should not be treated as transfer payments 
in the 2017 RIA. The BLM disagrees with the commenter. Based on widely-
accepted economic principles and OMB Circular A-4, royalties are, by 
definition, transfer payments.
Legal Authority
    Multiple commenters stated that the BLM lacks either implicit or 
explicit legal authority to suspend certain requirements of the 2016 
final rule for the purpose of reconsidering them. They stated that the 
2017 final delay rule is arbitrary and capricious under the 
Administrative Procedure Act (APA) section 706(2)(A), and the reasoning 
behind the rule is outside the scope of the Federal Land Policy and 
Management Act. Commenters stated that promulgation of the 2017 delay 
rule would put the BLM in violation of both the MLA and FLPMA. 
Commenters also asserted that, since the 2017 delay rule was proposed 
shortly after the U.S. District Court for the District of Wyoming 
denied industry petitioners a preliminary injunction to stay the 2016 
final rule until the case was decided on the merits, the BLM is using 
rulemaking to mirror a judicial function.
    The BLM has not modified the rule in light of these comments. The 
BLM has ample legal authority to modify or otherwise revise the 
existing regulation in response to substantive concerns regarding cost 
and feasibility under the authority granted by the MLA, the MLAAL, 
FOGRMA, FLPMA, the IMLA, the IMDA, and the Act of March 3, 1909. These 
statutes authorize the Secretary of the Interior to promulgate such 
rules and regulations as may be necessary to carry out the statutes' 
various purposes. (See, e.g., 30 U.S.C. 189 (MLA); 30 U.S.C. 359 
(MLAAL); 30 U.S.C. 1751(a) (FOGRMA); 43 U.S.C. 1740 (FLPMA); 25 U.S.C. 
396d (IMLA); 25 U.S.C. 2107 (IMDA); 25 U.S.C. 396).
    Moreover, neither the MLA nor FLPMA provide statutory ``mandates'' 
that the BLM maintain the regulatory provisions that are being 
suspended for a year in this final rule. Furthermore, the BLM is not 
acting arbitrarily and capriciously in promulgating today's final rule; 
the preamble, RIA, responses to comments, and other associated 
documents collectively and adequately explain the rationales and 
factual bases for each provision in the rule, the relevant factors that 
the BLM considered, and the reasons why the BLM did not consider 
certain other factors.
    Commenters addressed the importance of government-to-government 
consultation and stated that, in contrast to the 2016 rule, the BLM 
only provided a few opportunities for tribes and individual mineral 
owners to consult about the 2017 delay rule.
    The BLM engaged in stakeholder outreach in the course of developing 
this 2017 final delay rule, and believes its degree of outreach was 
appropriate given that the final delay rule extends the compliance 
dates of the 2016 final rule, but does not change the policies of that 
rule. The BLM sent correspondence to all tribal governments with major 
oil and gas interests, as well as individual Indian mineral owners that 
have

[[Page 58060]]

expressed to the BLM in the past that they want to be notified of such 
actions. Such correspondence solicited their views to inform the 
development of this 2017 final delay rule and requested feedback and 
comment through the respective BLM State Office Directors. Several 
tribal governments have provided feedback on today's action.
    Commenters were also concerned about delaying the 2016 final rule, 
which they viewed as helping the Secretary meet his statutory trust 
responsibilities with respect to development of Indian oil and gas 
interests, because it ensured extraction that increased royalties 
rather than waste of resources.
    The BLM believes that the 2017 final rule helps the Secretary 
fulfill his trust responsibility with respect to the development of 
Indian oil and gas interests. As detailed in the RIA accompanying 
today's action, although there is expected a short-term reduction in 
annual royalties to tribes (and other lessors) from the 1-year delay, 
overall the economic impact of this final delay rule is positive. The 
delay also provides the BLM an opportunity to reconsider and ensure 
appropriate compliance requirements are imposed on tribal lands, which 
may help to avoid having operators forego development of tribal lands 
due to burdensome and unnecessary compliance requirements.
    Commenters stated that the 2017 delay rule would leave the oil and 
gas operations on Federal and Indian leases unregulated with respect to 
the activities governed by the provisions being suspended or delayed.
    The BLM believes this is not the case. The development and 
production of oil and gas are regulated under a framework of Federal 
and State laws and regulations. Several Federal agencies implement 
Federal laws and requirements, while each State in which oil and gas is 
produced has one or more regulatory agencies that administer State laws 
and regulations. As discussed more thoroughly above, the requirements 
of the 2016 final rule that are not being suspended or delayed, various 
State laws and regulations, and EPA regulations will operate together 
to limit venting and flaring during the period of the 1-year 
suspension. See the 2017 final delay rule RIA for a summary of selected 
Federal and State regulations and policies that have the effect of 
limiting the waste of gas from production operations in the States 
where the production of oil and gas from Federal and Indian leases is 
most prevalent (2017 RIA at 17).
Lost Gas Volumes
    Many commenters stated that the 2017 final delay rule will result 
in waste of natural gas through venting, flaring, and leaking of 
natural gas from oil and gas operators. The commenters stated that the 
valuable energy resources being wasted could otherwise be productively 
used, which would subsequently increase revenues for taxpayers in the 
form of royalty and tax collection. Some commenters also expressed 
concern that the rule impedes U.S. progress towards energy 
independence. The BLM acknowledges that delaying implementation of 
compliance requirements for certain provisions of the 2016 final rule 
could result in incremental flaring of gas during the 1-year interim 
period when compared to the baseline. However, over 11 years of 
implementation (2017-2027), the BLM expects an overall small increase 
in production (and subsequent royalties) when commodity prices are 
projected to be higher. In addition, the BLM found positive net 
benefits of the 2017 delay rule due to the reduction in compliance 
costs exceeding the foregone benefits of the 2016 rule. The BLM also 
notes that the assumptions of the final analysis of the 2016 rule are 
under review and may be revised.
    Some commenters expressed concern about the uncertainty underlying 
the estimates of lost gas volumes in the final RIA. The BLM 
acknowledges that there is uncertainty regarding the quantity and value 
of gas that is vented or flared on Federal or tribal lands. The BLM 
reviewed data from the Office of Natural Resources Revenue (ONRR) and 
2016 greenhouse gas (GHG) Inventory to develop estimates of the average 
volume of gas vented and flared. See the 2016 RIA for a complete 
discussion of the methodology and data used to estimate lost gas 
volumes (2016 RIA at 15).
Rule Net Benefits
    Multiple commenters took issue with the approach the BLM used to 
calculate the forgone benefits of methane emissions reductions in terms 
of the social cost of methane in the 2017 delay rule analysis. In 
particular, commenters suggested that the RIA for the delay rule: (a) 
Should rely on estimates of the global value of the social cost of 
methane and not the ``domestic-only'' value and; (b) That a 7 percent 
discount rate is not justifiable for use in discounting these benefits 
and a 3 percent discount rate would be appropriate and consistent with 
OMB Circular A-4. Multiple commenters also suggested that the BLM 
continue to use the analysis conducted by the IWG in regard to these 
issues. Since publication of the 2016 RIA, several documents upon which 
the 2016 final rule RIA relied upon have been rescinded. In particular, 
Section 5 of E.O. 13783, issued by the President on March 28, 2017, 
disbanded the earlier IWG and withdrew the Technical Support Documents 
upon which the 2016 RIA relied for the valuation of changes in methane 
emissions. It further directed agencies to ensure that estimates of the 
social cost of greenhouse gases used in regulatory analyses ``are based 
on the best available science and economics'' and are consistent with 
the guidance contained in OMB Circular A-4, ``including with respect to 
the consideration of domestic versus international impacts and the 
consideration of appropriate discount rates'' (E.O. 13783, Section 
5(c)). The social cost of methane (SC-CH4) estimates used for the 2017 
final delay rule analysis are interim values for use in regulatory 
analyses while estimates of the impacts of climate change to the U.S. 
are being developed.
    Multiple commenters cited specific issues regarding the use of 7 
percent discount rate, stating that by applying a 7 percent discount 
rate, the BLM is ignoring the welfare of future generations of 
Americans. Commenters further suggested that the use of the 3 percent 
discount rate is consistent with OMB Circular A-4. The BLM disagrees. 
The analysis presented in the RIA for the 2017 final delay rule uses 
both a 3 percent and a 7 percent discount rate in the above analysis. 
The 7 percent rate is intended to represent the average before-tax rate 
of return to private capital in the U.S. economy. The 3 percent rate is 
intended to reflect the rate at which society discounts future 
consumption. The use of both discount rates is consistent with the 
guidance contained in OMB Circular A-4.
    One commenter opposed the use of the social cost of methane to 
analyze this rulemaking given the uncertainty and the lack of accuracy 
surrounding these estimates, noting that its use goes against the need 
to produce an analysis that is ``based on the best available science 
and economics.'' The commenter requested that the BLM omit benefits 
related to the social cost of methane. Pursuant to E.O. 12866, and in 
an effort to provide full transparency to the public regarding the 
impacts of its actions, the BLM has estimated all of the significant 
costs and benefits of this 2017 final delay rule to the extent that 
data and available methodologies permit, consistent with the best 
science currently available. The SC-CH4 estimates presented here are 
interim

[[Page 58061]]

values for use in regulatory analyses until an improved estimate of the 
impacts of climate change to the U.S. can be developed.
    Several commenters stated the BLM neglected to analyze the loss of 
public health and safety benefits generated by the implementation of 
the 2016 final rule, citing OMB Circular A-4 guidance as evidence. 
Commenters also stated that the BLM neglected to analyze the impacts of 
the proposed suspension on worker safety, which was one of the purposes 
of the 2016 final rule. Pursuant to E.O. 12866, and in an effort to 
provide full transparency to the public regarding the impacts of its 
actions, the BLM has estimated all of the significant costs and 
benefits of this 2017 final delay rule to the extent that data and 
available methodologies permit, consistent with the best science 
currently available. Commenters incorrectly stated that the BLM failed 
to analyze non-monetized impacts. The EA, which accompanies today's 
action, analyzes the No-Action and Proposed Action effects on climate 
change, air quality, noise and light impacts, wildlife resources 
(threatened and endangered species and critical habitat), and 
socioeconomics. The EA, where appropriate, incorporates by reference 
the 2016 final rule EA analysis. Circular A-4 recommends approaches the 
agencies may take in its NEPA documents, but it does not require them.
    One commenter stated that the BLM's description of impacts for the 
11-year period (2017-2027) of analysis in the RIA for the 2017 final 
delay rule is misleading, as the reduction in the estimated compliance 
costs is solely due to the delay in compliance. Another commenter 
stated that some operators have begun compliance before the 2017 
proposed delay rule will be finalized, and therefore the net cost 
savings of deferral will be lower than those outlined in the 2017 
proposed delay rule RIA. The BLM adjusted the language in the RIA to 
reflect the first comment. The BLM disagrees with the second comment. 
For this 2017 final delay rule, the BLM tracks the shift in impacts 
over the first 10 years of implementation (after the delay) and 
compares it against the baseline. The original period of analysis in 
the RIA prepared for the 2016 final rule was 10 years. We note that 
certain impacts, such as cost savings and royalty, are different when 
shifted to the future. The BLM also notes that the estimated impacts 
attributed to a suspension or delay may be imprecise for several 
reasons (See RIA section 3.4). Also, while compliance with the 
requirements suspended or delayed by this 2017 final delay rule will 
not be required until January 17, 2019, BLM anticipates that operators 
will start undertaking compliance activities in advance of the 
compliance date. Although the BLM is currently considering revisions to 
the 2016 final rule, it cannot definitively determine what form those 
revisions will take until it completes the notice-and-comment 
rulemaking process. Therefore, for the purposes of this analysis, the 
BLM assumes that the 2016 final rule will be fully implemented starting 
in January 2019 after the suspension period ends.
    Some commenters called the decision to limit the analysis timespan 
to 10 years arbitrary and too short and expressed concerns that other 
aspects of the net benefit analysis, such as the definition of the 
baseline and the benefits of the delay rule, result in undercounting of 
forgone benefits. The comment specifically stated that the BLM counted 
beneficial effects in year 2027 as benefits of its proposed delay even 
though these benefits would have occurred under the 2016 rule as 
methane reductions would continue. The BLM disagrees. The 10-year 
timeframe was not arbitrarily chosen. The BLM originally used a 10-year 
period of analysis in the 2016 final rule to reflect the limited life 
of the equipment that the rule was requiring and that the additional 
installations would be covered by the overlapping EPA regulations (see 
40 CFR part 60, subparts OOOO or OOOOa). When comparing the 2017 final 
delay rule impacts to the 2016 rule, it is necessary to look at the 
equivalent 10 year estimated lifespan of the equipment in addition to 
the 1-year delay. If, instead, the impacts of the delay rule were 
constrained to the 10-year span used in the 2016 rule, the rule would 
be undervalued. If companies are still incurring costs for the delay 
rule in year 2027, then it is appropriate to count the social benefits 
that result from those costs. The omission of baseline impacts in the 
final year of the delay rule analysis is a result of the EPA rule 
taking effect (see 40 CFR part 60, subparts OOOO or OOOOa). Ascribing 
emission reduction benefits from the EPA rule to the BLM's 2016 final 
rule would be inappropriate.
    Multiple commenters stated in a joint comment letter that the BLM 
did not consider information indicating that the costs of the 2016 
final rule are actually lower than estimated in the 2016 RIA or that 
the benefits are actually higher than estimated in the 2016 RIA. The 
BLM recognizes that, despite the status of the 2016 final rule, 
operators are taking and will continue to take voluntary action to 
reduce the waste of natural gas, especially when taking action is in 
their best financial interest. Relying solely on a voluntary approach 
may not achieve the same results in a primarily oil-producing area, for 
oil wells, for marginal oil wells, or for marginal gas wells. The BLM 
also recognizes that the experiences of ``major'' operators may not be 
the same as small operators.
    Multiple commenters disagreed with an alternative net-benefit 
analysis presented in the 2017 proposed-delay-rule RIA that omits 
monetized estimates of forgone climate benefits. In response to this 
and other related comments, the BLM removed the referenced alternative 
in the Appendix to the RIA that omitted monetized benefits.
National Impacts, Including Energy Security
    Commenters stated that while the BLM acknowledges that the delay 
rule is expected to reduce annual royalties to the Federal Government, 
tribal governments, States, and private landowners, it fails to address 
the impacts of reduced royalty revenues to State, local and tribal 
governments. Another commenter noted that suspension of the 2016 final 
rule could indirectly impact other industries like those in the outdoor 
recreation and tourism sectors. Pursuant to Executive Order 12866 and 
NEPA, and in an effort to provide full transparency to the public 
regarding the impacts of its actions, the BLM has presented all of the 
foreseeable impacts that this 2017 final delay rule would have, based 
on the final analysis of the 2016 rule and to the extent that data and 
available methodologies permit and consistent with the best science 
currently available. See Section 4.4.2 of the 2017 RIA for a discussion 
on royalty impacts. The BLM's EA (at section 4.2.3) discusses the 
impacts that the 2017 final delay rule would have on recreation.
    One commenter stated that the 2016 final rule promotes domestic 
natural gas production, which in turn supports energy security, 
national security, and economic productivity. Additionally, commenters 
stated that the 2016 final rule allows for the creation of cutting-edge 
technologies and field jobs that would reduce waste and increase 
income. The 2017 final delay rule does not substantively change the 
2016 final rule, it merely postpones implementation of the compliance 
requirements for certain provisions of the 2016 final rule for 1 year. 
These comments are therefore outside the scope of this rule.

[[Page 58062]]

Climate Change
    Several commenters cited concerns over climate change in their 
opposition to the BLM's proposal to delay implementation of the 2016 
final rule. The commenters stated that methane is a potent GHG that 
contributes to global warming and that oil and gas operators should not 
allow methane to escape into the atmosphere. The commenters stated that 
climate change has been linked to negative consequences, like more 
severe droughts and wildfires. The commenters argued that this rule is 
an example of the U.S. Government taking actions that cause climate 
change, and that methane pollution has increased from onshore Federal 
leases in recent years. The commenters argued that the need to reduce 
methane emissions is an urgent matter and cannot be delayed.
    The BLM did not change its proposal in response to these comments. 
The BLM estimates that the 2017 final rule will result in additional 
methane emissions of 175,000 tons in Year 1, but no change from the 
baseline for the 11-year period following the delay. We also estimate 
additional VOC emissions of 250,000 tons in Year 1, but no change from 
the baseline for the 11-year period following the delay. See section 
4.2 of the 2017 RIA for a full description of the estimated reduction 
in benefits. As the BLM develops a proposed revision of the 2016 final 
rule, it will continue to evaluate and address potential environmental 
impacts. The BLM notes that the 2017 final delay rule will only 
temporarily delay the 2016 final rule's requirements. In response to 
concerns that methane emissions may be higher than those disclosed, the 
BLM notes that, while there is uncertainty in estimating the volumes of 
gas vented or flared, it has estimated the impacts of this 2017 final 
delay rule in a manner that is consistent with statute and executive 
orders and based on the best available information.
Air Quality and Public Health
    Many commenters stated that the 2016 final rule will reduce air 
pollution from oil and gas production, and that subsequently delaying 
the implementation of the 2016 final rule poses a public health 
challenge, particularly to the most vulnerable populations and 
communities, and impacts the environment. Commenters described that the 
implementation of the 2016 final rule not only results in the capture 
of methane, but also the capture of VOC emissions, such as benzene, a 
known carcinogen. The commenters stated that VOC releases degrade our 
ambient air quality, with long-term health impacts related to the 
exposure of low levels of VOC emissions. The BLM acknowledges that 
there will be a short-term increase in the amount of methane and VOCs 
emitted during the 1-year delay, relative to the baseline, but there 
will be essentially no increase over the 11-year evaluation period (See 
EA Section 4.2.1 and 4.2.2 and 2017 RIA Section 4.2). While the BLM did 
not monetize the forgone benefits from VOC emissions reductions, it 
notes that the impact is transitory. The BLM will analyze the costs and 
benefits, which may result from any changes it proposes, in an upcoming 
rulemaking, to the 2016 final rule in accordance with Executive Order 
13783.
    One commenter stated that methane release can trigger life-
threatening asthma attacks, worsen respiratory conditions, and cause 
cancer, which disproportionately affects Hispanic communities. The 
comment cited the EPA as reporting that Hispanics are among those 
facing the greatest risk of exposure to air pollutants and are three 
times more likely to die from asthma than any other racial or ethnic 
group. The BLM notes that the 2017 final delay rule delays or suspends 
implementation of the compliance requirements for certain provisions of 
the 2016 final rule by 1 year and is not expected to materially affect 
methane emissions as compared to the baseline data analyzed in the 2017 
final delay rule RIA. The BLM concluded that the 2016 final rule did 
not lead to any significant or adverse differential environmental 
justice impacts (see 2016 final EA section 4.2.7). As the BLM 
reconsiders the 2016 final rule, in accordance with Executive Order 
13783, it will continue to analyze the rule's costs and benefits, 
including any potential environmental justice impacts.
Rule Process
    Several commenters raised concerns about lack of sufficient public 
engagement throughout this rulemaking process. They asked the BLM to 
extend the 2017 delay rule comment period to 60 days and to hold one or 
more public hearings, stating that the 30-day comment period was 
inadequate given the fundamental, highly technical, and extremely 
controversial changes to the benefits estimates included in the 2017 
proposed delay rule.
    The BLM did not change its proposal in response to these comments. 
The BLM believes it provided adequate public engagement throughout the 
process through outreach to stakeholders and a 30-day comment period. 
Given the narrow scope of the proposal, short delay, and recent 
comments on the 2016 final rule, the BLM determined a 30-day comment 
period to be appropriate and public meetings to be unnecessary. The 
2017 final delay rule merely suspends and delays regulatory provisions 
that were very recently the object of public comment procedures. The 
public was engaged throughout this rulemaking process. The BLM received 
over 158,000 comments, including approximately 750 unique comments. The 
BLM is not required to hold public meetings for this rulemaking 
process.
    Commenters stated that, given the lengthy 2016 final rule 
rulemaking process, a 2-year delay is needed to avoid unnecessary 
compliance costs and creating regulatory uncertainty for industry. The 
BLM did not change this rule in response to these comments. To reduce 
uncertainty, the BLM limited this 2017 final delay rule to the minimum 
necessary to achieve revision to the 2016 final rule, which it 
determined to be 1 year. The BLM has already made significant progress 
in developing a proposed revision of the 2016 rule and the BLM 
therefore fully expects that the revision will be completed and 
finalized before January 17, 2019.
    Commenters stated that the BLM and the Secretary predetermined the 
outcome of this rulemaking with statements made and documents filed in 
Federal court. The BLM disagrees. The BLM is conducting the rulemaking 
process for the delay rule in accordance with the APA, and the BLM will 
be revising, as appropriate, the 2016 rule in accordance with the APA. 
Public statements about the BLM's plan to reconsider the 2016 rule and 
its intentions behind the proposed delay rule do not amount to final 
decisions made prior to conducting NEPA.
    Commenters stated that the 2017 delay rule is a significant action 
that warrants an environmental impact statement (EIS), instead of an 
EA. Commenters state that the EA erroneously includes the 2016 rule 
implementation in the baseline, failed to analyze the impacts of the 
proposed action in a meaningful way, and did not include a reasonable 
range of alternatives. The commenters also believe that the BLM should 
have published a draft Finding of No Significant Impact (FONSI) for 
public comment, and that the FONSI does not consider both the context 
and intensity of the 2017 delay rule, resulting in the failure to take 
a hard look at localized impacts.
    The BLM did not change its proposal in response to these comments. 
Based

[[Page 58063]]

upon a review of the EA and the associated documents referenced in the 
EA, and considering the criteria for significance provided by the 
Council on Environmental Quality regulations implementing the NEPA and 
the comments submitted on the EA, the BLM determined and detailed in 
the FONSI that the Proposed Action (Alternative B in the EA) will not 
have a significant effect on the quality of the human environment, 
individually or cumulatively with other actions in the potentially 
affected areas. Therefore, an EIS is not required. For the detailed 
analysis of the criteria for significance, see the FONSI accompanying 
today's action. NEPA and its implementing regulations do not require a 
public review period for the FONSI.
    The fact that the BLM chose to include the expected effects of the 
2016 final rule in the ``baseline'' environment does not mean that the 
BLM's analysis of the environmental impacts of the proposed action was 
inadequate. In fact, the incorporation of the 2016 final rule into the 
baseline environment has exactly the opposite effect. Were the BLM not 
to include the not-yet effective requirements of the 2016 final rule in 
the baseline, then the BLM's analysis of the proposed suspension action 
relative to the baseline would necessarily find fewer (and possibly no) 
impacts, as the suspension action would essentially maintain the 
environmental status quo.
    The EA analyzed Alternative A (No Action) and Alternative B (BLM 
Proposed Action), which are the reasonable alternatives that would meet 
the purpose and need of today's action. See Section 2 of the EA for a 
description of each alternative. Section 2.4 of the EA describes the 
alternatives considered, but eliminated from further analysis. The 2017 
RIA analyzed the impacts for a 6-month and 2-year delay, but they were 
both found to be not technically or financially feasible, therefore 
they were not carried forward for analysis.
    Commenters stated that the 2017 delay rule is a dramatic 
substantive change from the 2016 final rule, and that the BLM did not 
follow proper procedures to make the substantive revision to the 2016 
final rule prescribed in FCC v. Fox Television Stations, Inc. 556 U.S. 
502, 514-16 (2009). The BLM disagrees with the commenters' 
characterization of the legal standard for amending regulations. As 
stated above, the BLM has a reasoned explanation for reconsidering the 
2016 final rule and delaying implementation of certain provisions of 
the 2016 rule.
    Commenters stated the BLM failed to meets it review/consultation 
requirements under the Endangered Species Act (ESA) and the National 
Historic Preservation Act (NHPA). The BLM disagrees. The BLM has met 
its review and consultation requirements for both the ESA and NHPA. As 
stated in section 4.1 of the EA, the BLM informally consulted with the 
FWS and the FWS concurred with the BLM's determination that the 2017 
delay rule may affect, but is not likely to adversely affect, listed 
species or their associated designated critical habitat. This 
rulemaking is not a ``Federal undertaking'' for which the NHPA requires 
an analysis of effects on historic property. See 54 U.S.C. 306108 and 
300320.
Technical Issues
    Commenters supported the inclusion of the following provisions of 
the 2016 final rule in the 2017 delay rule: Section 3162.3, because the 
requirement is duplicative, conflicting, and/or unnecessary given 
existing state requirements; Section 3179.6, but the commenter provided 
no explanation; Section 3179.7, because it is unnecessarily complex and 
the gas capture percentage requirements could be obviated through other 
BLM efforts to facilitate pipeline development; Section 3179.9 because 
the requirement on operators to estimate (using estimation protocols) 
or measure (using a metering device) all flared and vented gas will 
impose significant costs; Section 3179.101, because the BLM has failed 
to consider the technical feasibility of the requirements; Section 
3179.102, because it is technically infeasible and duplicative of EPA 
regulations; Section 3179.204, but the commenter provided no 
explanation; and Sections 3179.301-305 because the BLM overestimated 
the benefits and underestimated costs.
    Other commenters asserted that the following provisions should not 
be included in the delay rule: Section 3179.102, because the provision 
would not require any action from most operators and therefore imposes 
no burden; section 3179.7, because the 2016 RIA found that the direct 
quantified benefits to operators that would result from capturing gas 
that would otherwise have been wasted outweighed the costs of the 
capture targets in the first 2 years that those targets apply; section 
3179.10, because the delay rule provides no information on the effect 
of such an extension, and specifically, how much royalty revenue would 
be lost; sections 3179.101 and 3179.102, because the 2017 RIA does not 
estimate any capital costs to operators associated with these 
provisions; section 3179.201, because the BLM repeats the 2016 RIA 
findings that the cost savings to operators from compliance with the 
pneumatic controller requirements would substantially exceed the costs 
of compliance so its motives are unclear; section 3179.204, because the 
BLM's proposal repeats the 2016 RIA findings that the burden on the 
operators would be small or nonexistent; and section 3179.202 because 
the BLM's justification for suspension is inaccurate when describing 
analogous EPA regulations.
    The BLM did not revise its proposal in response to these comments. 
This final delay rule temporarily suspends or delays almost all of the 
requirements in the 2016 final rule that the BLM estimated would pose a 
compliance burden to operators and are being reconsidered due to the 
cost, complexity, and other implications. The BLM has tailored the 
final delay rule to target the requirements of the 2016 rule for which 
immediate regulatory relief is particularly justified. The 2017 final 
delay rule does not suspend or delay the requirements in subpart 3178 
related to the royalty-free use of natural gas, but the only estimated 
compliance costs associated with those requirements are for minor and 
rarely occurring administrative burdens. In addition, for the most 
part, the 2017 final delay rule suspends or delays the administrative 
burdens associated with subpart 3179. Only four of the 24 information 
collection activities remain, and the burdens associated with these 
remaining items are not substantial. See the section-by-section 
analysis for the BLM's specific justification for delay with regard to 
each provision.
    One commenter stated that the 2017 RIA incorrectly assumes that 
suspension of the 2016 final rule will result in a return to NTL-4A. 
The BLM disagrees. The 2017 final rule RIA does not state nor imply an 
assumption that the suspension of the 2016 final rule will result in a 
return to NTL-4A. Several States have published regulations and 
policies that have the effect of limiting the waste of gas from 
production operations in the States where the production of oil and gas 
from Federal and Indian leases is most prevalent. See the 2017 RIA at 
17 for a summary of these State regulations.
    One commenter disagrees with the BLM's description of the 
requirements at 43 CFR 3179.9 as ``imposing a blanket requirement on 
all operators.'' The commenter notes that the 2016 final rule 
differentiates between flares of different volumes by establishing the 
threshold. The commenter's criticism of terminology does not alter the 
BLM's underlying point that the requirement

[[Page 58064]]

applies to all operators, each of whom has the duty to estimate volumes 
and measure the volumes if the threshold is met. Thus, the BLM 
disagrees with the commenter's assertion that the measurement 
requirements of 43 CFR 3179.9 cannot be characterized as a ``blanket'' 
requirement. The BLM believes that a 1-year suspension of 43 CFR 3179.9 
is justified as the requirements impose immediate costs and the BLM is 
considering revising or rescinding the requirements of 43 CFR 3179.9. 
Also, the commenter refers to meters being inexpensive to install, but 
does not take into account all the other equipment that would be 
required under the 2016 final rule. See the 2016 RIA at 2 for an 
estimate of total costs for the 2016 final rule.
    Commenters state that the reference to analogous EPA regulations as 
the reason for reconsidering requirements at 43 CFR 3179.201 and 43 CFR 
3179.203 is inaccurate because the EPA and 2016 final rules regulate 
different operations. The BLM disagrees. Although 43 CFR 3179.201 and 
3179.203 were designed to avoid imposing requirements that conflict 
with EPA's requirements, this does not mean that overlap with EPA 
regulations is not important to the BLM's reconsideration of the 
regulatory necessity of Sec. Sec.  3179.201 and 3179.203. Because EPA's 
regulations apply to new, modified, and reconstructed pneumatic 
controllers and storage vessels, EPA's existing regulations will 
address the losses of gas from these sources as pneumatic controllers 
and storage vessels are installed, modified, or replaced over time and 
become subject to EPA's regulations. In addition, the BLM will 
reconsider, in an upcoming rulemaking, whether the volumes of gas that 
would be captured for sale under Sec. Sec.  3179.201 and 3179.203 
actually justify the compliance costs associated with those provisions.

III. Procedural Matters

Regulatory Planning and Review (Executive Orders 12866 and 13563)

    Executive Order 12866 provides that the Office of Information and 
Regulatory Affairs within the Office of Management and Budget (OMB) 
will review all significant rules.
    Executive Order 13563 reaffirms the principles of Executive Order 
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. The Executive Order 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. Executive Order 13563 
emphasizes further that regulations must be based on the best available 
science and that the rulemaking process must allow for public 
participation and an open exchange of ideas.
    This final delay rule temporarily suspends or delays portions of 
the BLM's 2016 final rule while the BLM reviews those requirements. We 
have developed this final delay rule in a manner consistent with the 
requirements in Executive Order 12866 and Executive Order 13563.
    After reviewing the requirements of the final delay rule, the OMB 
has determined that the final delay rule is not an economically 
significant action according to the criteria of Executive Order 12866. 
The BLM reviewed the requirements of this final delay rule and 
determined that it will not 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. For more detailed information, see the RIA 
prepared for this final delay rule. The RIA has been posted in the 
docket for the final rule on the Federal eRulemaking Portal: https://www.regulations.gov. In the Searchbox, enter ``RIN 1004-AE54'' and 
click the ``Search'' button. Follow the instructions at this Web site.

Regulatory Flexibility Act

    This final delay rule will not have a significant economic effect 
on a substantial number of small entities under the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601 et seq.). The RFA generally 
requires that Federal agencies prepare a regulatory flexibility 
analysis for rules subject to the notice-and-comment rulemaking 
requirements under the APA (5 U.S.C. 500 et seq.), if the rule would 
have a significant economic impact, either detrimental or beneficial, 
on a substantial number of small entities. See 5 U.S.C. 601-612. 
Congress enacted the RFA to ensure that government regulations do not 
unnecessarily or disproportionately burden small entities. Small 
entities include small businesses, small governmental jurisdictions, 
and small not-for-profit enterprises.
    The BLM reviewed the Small Business Administration (SBA) size 
standards for small businesses and the number of entities fitting those 
size standards as reported by the U.S. Census Bureau in the Economic 
Census. The BLM concludes that the vast majority of entities operating 
in the relevant sectors are small businesses as defined by the SBA. As 
such, this final delay rule will likely affect a substantial number of 
small entities.
    However, the BLM believes that this final delay rule will not have 
a significant economic impact on a substantial number of small 
entities. Although the rule will affect a substantial number of small 
entities, the BLM does not believe that these effects will be 
economically significant. This final delay rule temporarily suspends or 
delays certain requirements placed on operators by the 2016 final rule. 
Operators will not have to undertake the associated compliance 
activities, either operational or administrative, that are outlined in 
the 2016 final rule until January 17, 2019, except to the extent the 
activities are required by State or tribal law, or by other pre-
existing BLM regulations. The screening analysis conducted by the BLM 
estimates that the average reduction in compliance costs associated 
with this final delay rule will be a small fraction of a percent of the 
profit margin for small companies, which is not a large enough impact 
to be considered significant.

Small Business Regulatory Enforcement Fairness Act

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

Unfunded Mandates Reform Act (UMRA)

    This final delay rule will not impose an unfunded mandate on State, 
local, or tribal governments, or the private sector of $100 million or 
more per year. The final delay rule will not have a significant or 
unique effect on State, local, or tribal governments or the private 
sector. This final delay rule contains no requirements that apply to 
State, local, or tribal governments. It temporarily suspends or delays 
requirements that otherwise apply to the private sector. A statement 
containing the information required by the Unfunded Mandates Reform Act

[[Page 58065]]

(UMRA) (2 U.S.C. 1531 et seq.) is not required for this final delay 
rule. This final delay rule is also not subject to the requirements of 
section 203 of UMRA because it contains no regulatory requirements that 
might significantly or uniquely affect small governments, because it 
contains no requirements that apply to such governments, nor does it 
impose obligations upon them.

Governmental Actions and Interference With Constitutionally Protected 
Property Right--Takings (Executive Order 12630)

    This final delay rule will not effect a taking of private property 
or otherwise have taking implications under Executive Order 12630. A 
takings implication assessment is not required. This final delay rule 
temporarily suspends or delays many of the requirements placed on 
operators by the 2016 final rule. Operators will not have to undertake 
the associated compliance activities, either operational or 
administrative, that are outlined in the 2016 final rule until January 
17, 2019. All such operations are subject to lease terms, which 
expressly require that subsequent lease activities must be conducted in 
compliance with subsequently adopted Federal laws and regulations. This 
final delay rule conforms to the terms of those leases and applicable 
statutes and, as such, the rule is not a government action capable of 
interfering with constitutionally protected property rights. Therefore, 
the BLM has determined that this final delay rule will not cause a 
taking of private property or require further discussion of takings 
implications under Executive Order 12630.

Federalism (Executive Order 13132)

    Under the criteria in section 1 of Executive Order 13132, this 
final delay rule does not have sufficient federalism implications to 
warrant the preparation of a federalism summary impact statement. A 
federalism impact statement is not required.
    This final delay rule will not have a substantial direct effect on 
the States, on the relationship between the Federal Government and the 
States, or on the distribution of power and responsibilities among the 
levels of government. It will not apply to States or local governments 
or State or local governmental entities. The rule will affect the 
relationship between operators, lessees, and the BLM, but it does not 
directly impact the States. Therefore, in accordance with Executive 
Order 13132, the BLM has determined that this final delay rule does not 
have sufficient federalism implications to warrant preparation of a 
Federalism Assessment.

Civil Justice Reform (Executive Order 12988)

    This final delay rule complies with the requirements of Executive 
Order 12988. More specifically, this final delay rule meets the 
criteria of section 3(a), which requires agencies to review all 
regulations to eliminate errors and ambiguity and to write all 
regulations to minimize litigation. This final delay rule also meets 
the criteria of section 3(b)(2), which requires agencies to write all 
regulations in clear language with clear legal standards.

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

    The Department 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 final delay rule under 
the Department's consultation policy and under the criteria in 
Executive Order 13175 and have identified direct effects on federally 
recognized Indian tribes that will result from this final delay rule. 
Under this final delay rule, oil and gas operations on tribal and 
allotted lands will not be subject to many of the requirements placed 
on operators by the 2016 final rule until January 17, 2019.
    The BLM has conducted an appropriate degree of tribal outreach in 
the course of developing this final delay rule given that the rule 
extends the compliance dates of the 2016 final rule, but does not 
change the policies of that rule. On October 16 and 17, 2017, the BLM 
sent out 264 rule notification letters with an enclosure to tribes and 
tribal organizations with oil and gas interests in Alaska (27), Arizona 
(38), California (5), Colorado (3), District of Columbia (1), Eastern 
States (2), Idaho (2), Montana/Dakotas (36), New Mexico/Oklahoma/Texas 
(139), Nevada (1), Utah (7), and Wyoming (3). The BLM then sent 16 
follow-up letters to tribes that the letters were returned with the 
mark ``Return to Sender'' or, during consultation, BLM was informed 
that the tribes had not received letters.
    The BLM State Directors, as delegated, personally contacted some of 
the tribes by phone with significant oil and gas interests, including 
six tribes in Colorado, two tribes in Wyoming, five tribes in the 
Montanas/Dakotas and two tribes in Arizona.
    Through regulations.gov, the BLM heard from the Ojo Encino Chapter 
of the Navajo Nation, the Mandan, Hidatsa, and Arakara Nation of the 
Fort Berthold Reservation, the Muscogee (Creek) Nation, the Navajo 
Nation, Counselor Chapter House, the Fort Berthold Protectors of Water 
and Earth, the Turtle Mountain Band of Chippewa Indians, Southwest 
Native Cultures, and the Thloppthlocco Tribal Town Tribal Historic 
Preservation Office.
    The tribes raised several issues, including: Insufficient 
consultation; loss of royalties from not implementing the 2016 rule; 
the DOI Secretary, but not the BLM, has a right to regulate Indian 
land; and, the environmental effects to the Native populations. The 
tribal comments were summarized and responded to in the supplemental 
comments and response document and are also referenced above in the 
``Comments and Responses'' section of this 2017 final delay rule.

Paperwork Reduction Act

1. Overview
    The Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3521) provides 
that an agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information, unless it displays a 
currently valid control number. 44 U.S.C. 3512. Collections of 
information include requests and requirements that an individual, 
partnership, or corporation obtain information, and report it to a 
Federal agency. See 44 U.S.C. 3502(3); 5 CFR 1320.3(c) and (k).
    OMB has approved the 24 information collection activities in the 
2016 final rule and has assigned control number 1004-0211 to those 
activities. In the Notice of Action approving the 24 information 
collection activities in the 2016 final rule, OMB announced that the 
control number will expire on January 31, 2018. The Notice of Action 
also included terms of clearance.
    The BLM requests the extension of control number 1004-0021 until 
January 31, 2019. The BLM also requests revisions to the burden 
estimates as described below.
    The information collection activities in this final delay rule are 
described below along with estimates of the annual burdens. Included in 
the burden estimates are the time for reviewing instruction, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing each component of the proposed information 
collection.
2. Summary of Information Collection Activities
    Title: Waste Prevention, Production Subject to Royalties, and 
Resource

[[Page 58066]]

Conservation (43 CFR parts 3160 and 3170). Form 3160-5, Sundry Notices 
and Reports on Wells. OMB Control Number: 1004-0211.
    Forms: Form 3160-3, Application for Permit to Drill or Re-enter; 
and Form 3160-5, Sundry Notices and Reports on Wells.
    Description of Respondents: Holders of Federal and Indian (except 
Osage Tribe) oil and gas leases, those who belong to Federally approved 
units or communitized areas, and those who are parties to oil and gas 
agreements under the Indian Mineral Development Act, 25 U.S.C. 2101-
2108.
    Respondents' Obligation: Required to obtain or retain a benefit.
    Frequency of Collection: On occasion.
    Abstract: The BLM requests the extension of control number 1004-
0021 until January 31, 2019. The BLM requests no changes to the control 
number except this extension.
    Estimated Number of Responses: 64,200.
    Estimated Total Annual Burden Hours: 90,170.
    Estimated Total Non-Hour Cost: None.
3. Information Collection Request
    The BLM requests extension of OMB control number 1004-0211 until 
January 31, 2019. This extension would continue OMB's approval of the 
following information collection activities, with the revised burden 
estimates described below.

Plan To Minimize Waste of Natural Gas (43 CFR 3162.3-1)

    The 2016 final rule added a new provision to 43 CFR 3162.3-1 that 
requires a plan to minimize waste of natural gas when submitting an 
Application for Permit to Drill or Re-enter (APD) for a development oil 
well. This information is in addition to the APD information that the 
BLM already collects under OMB Control Number 1004-0137. The required 
elements of the waste minimization plan are listed at paragraphs (j)(1) 
through (j)(7).
    The BLM is revising the estimated burdens to operators. The BLM 
recently included the following annual burden estimates for APDs in a 
notice announcing its intention to seek renewal of control number 1004-
0137, Onshore Oil and gas Operations and Production (expires January 
31, 2018): 3,000 responses, 8 hours per response, and 24,000 total 
hours. 82 FR 42832, R 42833 (Sept. 12, 2017). The BLM will increase the 
estimated annual number of responses for waste minimization plans from 
2,000 to 3,000, to match the estimates for APDs in control number 1004-
0137, and will increase the total burden hours for APDs from 16,000 to 
24,000.

Request for Approval for Royalty-Free Uses On-Lease or Off-Lease (43 
CFR 3178.5, 3178.7, 3178.8, and 3178.9)

    Section 3178.5 requires submission of a Sundry Notice (Form 3160-5) 
to request prior written BLM approval for use of gas royalty-free for 
the following operations and production purposes on the lease, unit or 
communitized area:
     Using oil or gas that an operator removes from the 
pipeline at a location downstream of the facility measurement point 
(FMP);
     Removal of gas initially from a lease, unit PA, or 
communitized area for treatment or processing because of particular 
physical characteristics of the gas, prior to use on the lease, unit PA 
or communitized area; and
     Any other type of use of produced oil or gas for 
operations and production purposes pursuant to Sec.  3178.3 that is not 
identified in Sec.  3178.4. Section 3178.7 requires submission of a 
Sundry Notice (Form 3160-5) to request prior written BLM approval for 
off-lease royalty-free uses in the following circumstances:
     The equipment or facility in which the operation is 
conducted is located off the lease, unit, or communitized area for 
engineering, economic, resource-protection, or physical-accessibility 
reasons; and
     The operations are conducted upstream of the FMP. Section 
3178.8 requires that an operator measure or estimate the volume of 
royalty-free gas used in operations upstream of the FMP. In general, 
the operator is free to choose whether to measure or estimate, with the 
exception that the operator must in all cases measure the following 
volumes:
     Royalty-free gas removed downstream of the FMP and used 
pursuant to Sec. Sec.  3178.4 through 3178.7; and
     Royalty-free oil used pursuant to Sec. Sec.  3178.4 
through 3178.7.
    If oil is used on the lease, unit or communitized area, it is most 
likely to be removed from a storage tank on the lease, unit or 
communitized area. Thus, this regulation also requires the operator to 
document the removal of the oil from the tank or pipeline.
    Section 3178.8(e) requires that operators use best available 
information to estimate gas volumes, where estimation is allowed. For 
both oil and gas, the operator must report the volumes measured or 
estimated, as applicable, under ONRR reporting requirements. As 
revisions to Onshore Oil and Gas Orders No. 4 and 5 have now been 
finalized as 43 CFR subparts 3174 and 3175, respectively, the final 
delay rule text now references Sec.  3173.12, as well as Sec. Sec.  
3178.4 through 3178.7 to clarify that royalty-free use must adhere to 
the provisions in those sections.
    Section 3178.9 requires the following additional information in a 
request for prior approval of royalty-free use under Sec.  3178.5, or 
for prior approval of off-lease royalty-free use under Sec.  3178.7:
     A complete description of the operation to be conducted, 
including the location of all facilities and equipment involved in the 
operation and the location of the FMP;
     The volume of oil or gas that the operator expects will be 
used in the operation and the method of measuring or estimating that 
volume;
     If the volume expected to be used will be estimated, the 
basis for the estimate (e.g., equipment manufacturer's published 
consumption or usage rates); and
     The proposed disposition of the oil or gas used (e.g., 
whether gas used would be consumed as fuel, vented through use of a 
gas-activated pneumatic controller, returned to the reservoir, or 
disposed by some other method).

Request for Approval of Alternative Capture Requirement (43 CFR 3179.8)

    Section 3179.8 applies only to leases issued before the effective 
date of the 2016 final rule and to operators choosing to comply with 
the capture requirement in Sec.  3179.7 on a lease-by-lease, unit-by-
unit, or communitized area-by-communitized area basis. The regulation 
provides that operators who meet those parameters may seek BLM approval 
of a capture percentage other than that which is applicable under 43 
CFR 3179.7. The operator must submit a Sundry Notice (Form 3160-5) that 
includes the following information:
     The name, number, and location of each of the operator's 
wells, and the number of the lease, unit, or communitized area with 
which it is associated; and
     The oil and gas production levels of each of the 
operator's wells on the lease, unit, or communitized area for the most 
recent production month for which information is available and the 
volumes being vented and flared from each well. In addition, the 
request must include map(s) showing:
     The entire lease, unit, or communitized area, and the 
surrounding lands to a distance and on a scale that shows the field in 
which the well is or will be located (if applicable),

[[Page 58067]]

and all pipelines that could transport the gas from the well;
     All of the operator's producing oil and gas wells, which 
are producing from Federal or Indian leases, (both on Federal or Indian 
leases and on other properties) within the map area;
     Identification of all of the operator's wells within the 
lease from which gas is flared or vented, and the location and distance 
of the nearest gas pipeline(s) to each such well, with an 
identification of those pipelines that are or could be available for 
connection and use; and
     Identification of all of the operator's wells within the 
lease from which gas is captured;
    The following information is also required:
     Data that show pipeline capacity and the operator's 
projections of the cost associated with installation and operation of 
gas capture infrastructure, to the extent that the operator is able to 
obtain this information, as well as cost projections for alternative 
methods of transportation that do not require pipelines; and
     Projected costs of and the combined stream of revenues 
from both gas and oil production, including: (1) The operator's 
projections of gas prices, gas production volumes, gas quality (i.e., 
heating value and H2S content), revenues derived from gas 
production, and royalty payments on gas production over the next 15 
years or the life of the operator's lease, unit, or communitized area, 
whichever is less; and (2) The operator's projections of oil prices, 
oil production volumes, costs, revenues, and royalty payments from the 
operator's oil and gas operations within the lease over the next 15 
years or the life of the operator's lease, unit, or communitized area, 
whichever is less.

Notification of Choice To Comply on County- or State-Wide Basis (43 CFR 
3179.7(c)(3)(ii))

    Section 3179.7 requires operators flaring gas from development oil 
wells to capture a specified percentage of the operator's adjusted 
volume of gas produced over the relevant area. The ``relevant area'' is 
each of the operator's leases, units, or communitized areas, unless the 
operator chooses to comply on a county- or State-wide basis and the 
operator notifies the BLM of its choice by Sundry Notice (Form 3160-5) 
by January 1 of the relevant year.

Request for Exemption From Well Completion Requirements (43 CFR 
3179.102(c) and (d))

    Section 3179.102 lists several requirements pertaining to gas that 
reaches the surface during well completion and related operations. An 
operator may seek an exemption from these requirements by submitting a 
Sundry Notice (Form 3160-5) that includes the following information:
    (1) The name, number, and location of each of the operator's wells, 
and the number of the lease, unit, or communitized area with which it 
is associated;
    (2) The oil and gas production levels of each of the operator's 
wells on the lease, unit or communitized area for the most recent 
production month for which information is available;
    (3) Data that show the costs of compliance; and
    (4) Projected costs of and the combined stream of revenues from 
both gas and oil production, including: the operator's projections of 
oil and gas prices, production volumes, quality (i.e., heating value 
and H2S content), revenues derived from production, and 
royalty payments on production over the next 15 years or the life of 
the operator's lease, unit, or communitized area, whichever is less.
    The rule also provides that an operator that is in compliance with 
the EPA regulations for well completions under 40 CFR part 60, subpart 
OOOO or subpart OOOOa is deemed in compliance with the requirements of 
this section. As a practical matter, all hydraulically fractured or 
refractured wells are now subject to the EPA requirements, so the BLM 
does not believe that the requirements of this section would have any 
independent effect, or that any operator would request an exemption 
from the requirements of this section, as long as the EPA requirements 
remain in effect. For this reason, the BLM is not estimating any PRA 
burdens for Sec.  3179.102.

Request for Extension of Royalty-Free Flaring During Initial Production 
Testing (43 CFR 3179.103)

    Section 3179.103 allows gas to be flared royalty-free during 
initial production testing. The regulation lists specific volume and 
time limits for such testing. An operator may seek an extension of 
those limits on royalty-free flaring by submitting a Sundry Notice 
(Form 3160-5) to the BLM.

Request for Extension of Royalty-Free Flaring During Subsequent Well 
Testing (43 CFR 3179.104)

    Section 3179.104 allows gas to be flared royalty-free for no more 
than 24 hours during well tests subsequent to the initial production 
test. The operator may seek authorization to flare royalty-free for a 
longer period by submitting a Sundry Notice (Form 3160-5) to the BLM.

Reporting of Venting or Flaring (43 CFR 3179.105)

    Section 3179.105 allows an operator to flare gas royalty-free 
during a temporary, short-term, infrequent, and unavoidable emergency. 
Venting gas is permissible if flaring is not feasible during an 
emergency. The regulation defines limited circumstances that constitute 
an emergency, and other circumstances that do not constitute an 
emergency. The operator must estimate and report to the BLM on a Sundry 
Notice (Form 3160-5) volumes flared or vented in circumstances that, as 
provided by 43 CFR 3179.105, do not constitute emergencies for the 
purposes of royalty assessment:
    (1) More than 3 failures of the same component within a single 
piece of equipment within any 365-day period;
    (2) The operator's failure to install appropriate equipment of a 
sufficient capacity to accommodate the production conditions;
    (3) Failure to limit production when the production rate exceeds 
the capacity of the related equipment, pipeline, or gas plant, or 
exceeds sales contract volumes of oil or gas;
    (4) Scheduled maintenance;
    (5) A situation caused by operator negligence; or
    (6) A situation on a lease, unit, or communitized area that has 
already experienced three or more emergencies within the past 30 days, 
unless the BLM determines that the occurrence of more than three 
emergencies within the 30 day period could not have been anticipated 
and was beyond the operator's control.

Pneumatic Controllers--Introduction

    Section 3179.201 pertains to any pneumatic controller that: (1) Is 
not subject to EPA regulations at 40 CFR 60.5360 through 60.5390, but 
would be subject to those regulations if it were a new or modified 
source; and (2) Has a continuous bleed rate greater than 6 scf per 
hour. Section 3179.201(b) requires operators to replace each high-bleed 
pneumatic controller with a controller with a bleed rate lower than 6 
scf per hour, with the following exceptions: (1) The pneumatic 
controller exhaust is routed to processing equipment; (2) The pneumatic 
controller exhaust was and continues to be routed to a flare device or 
low pressure combustor; (3) The pneumatic controller exhaust is routed 
to processing equipment; or (4) The operator notifies the BLM through a 
Sundry Notice and demonstrates, and the BLM agrees, that such would 
impose

[[Page 58068]]

such costs as to cause the operator to cease production and abandon 
significant recoverable oil reserves under the lease.

Notification of Functional Needs for a Pneumatic Controller (43 CFR 
3179.201(b)(1)-(3))

    An operator may invoke one of the first three exceptions described 
above by notifying the BLM through a Sundry Notice (Form 3160-5) that 
use of the pneumatic controller is required based on functional needs 
that may include, but are not limited to, response time, safety, and 
positive actuation, and the Sundry Notice (Form 3160-5) describes those 
functional needs.

Showing That Cost of Compliance Would Cause Cessation of Production and 
Abandonment of Oil Reserves (Pneumatic Controller) (43 CFR 
3179.201(b)(4) and 3179.201(c))

    An operator may invoke the fourth exception described above by 
demonstrating to the BLM through a Sundry Notice (Form 3160-5), and by 
obtaining the BLM's agreement, that replacement of a pneumatic 
controller would impose such costs as to cause the operator to cease 
production and abandon significant recoverable oil reserves under the 
lease. The Sundry Notice (Form 3160-5) must include the following 
information:
    (1) The name, number, and location of each of the operator's wells, 
and the number of the lease, unit, or communitized area with which it 
is associated;
    (2) The oil and gas production levels of each of the operator's 
wells on the lease, unit or communitized area for the most recent 
production month for which information is available;
    (3) Data that show the costs of compliance;
    (4) Projected costs of and the combined stream of revenues from 
both gas and oil production, including: The operator's projections of 
gas prices, gas production volumes, gas quality (i.e., heating value 
and H2S content), revenues derived from gas production, and 
royalty payments on gas production over the next 15 years or the life 
of the operator's lease, unit, or communitized area, whichever is less; 
and the operator's projections of oil prices, oil production volumes, 
costs, revenues, and royalty payments from the operator's oil and gas 
operations within the lease over the next 15 years or the life of the 
operator's lease, unit, or communitized area, whichever is less.

Showing in Support of Replacement of Pneumatic Controller Within 3 
Years (43 CFR 3179.201(d))

    The operator may replace a high-bleed pneumatic controller if the 
operator notifies the BLM through a Sundry Notice (Form 3160-5) that 
the well or facility that the pneumatic controller serves has an 
estimated remaining productive life of 3 years or less.

Pneumatic Diaphragm Pumps--Introduction

    With some exceptions, Sec.  3179.202 pertains to any pneumatic 
diaphragm pump that: (1) Uses natural gas produced from a Federal or 
Indian lease, or from a unit or communitized area that includes a 
Federal or Indian lease; and (2) Is not subject to EPA regulations at 
40 CFR 60.5360 through 60.5390, but would be subject to those 
regulations if it were a new or modified source. This regulation 
generally requires replacement of such a pump with a zero-emissions 
pump or routing of the pump's exhaust gas to processing equipment for 
capture and sale.
    This requirement does not apply to pneumatic diaphragm pumps that 
do not vent exhaust gas to the atmosphere. In addition, this 
requirement does not apply if the operator submits a Sundry Notice to 
the BLM documenting that the pump(s) operated on less than 90 
individual days in the prior calendar year.

Showing That a Pneumatic Diaphragm Pump Was Operated on Fewer Than 90 
Individual Days in the Prior Calendar Year (43 CFR 3179.202(b)(2))

    A pneumatic diaphragm pump is not subject to section 3179.202 if 
the operator documents in a Sundry Notice (Form 3160-5) that the pump 
was operated fewer than 90 days in the prior calendar year.

Notification of Functional Needs for a Pneumatic Diaphragm Pump (43 CFR 
3179.202(d))

    In lieu of replacing a pneumatic diaphragm pump or routing the pump 
exhaust gas to processing equipment, an operator may submit a Sundry 
Notice (Form 3160-5) to the BLM showing that replacing the pump with a 
zero emissions pump is not viable because a pneumatic pump is necessary 
to perform the function required, and that routing the pump exhaust gas 
to processing equipment for capture and sale is technically infeasible 
or unduly costly.

Showing That Cost of Compliance Would Cause Cessation of Production and 
Abandonment of Oil Reserves (Pneumatic Diaphragm Pump) (43 CFR 
3179.202(f) and (g))

    An operator may seek an exemption from the replacement requirement 
by submitting a Sundry Notice (Form 3160-5) to the BLM that provides an 
economic analysis that demonstrates that compliance with these 
requirements would impose such costs as to cause the operator to cease 
production and abandon significant recoverable oil reserves under the 
lease. The Sundry Notice (Form 3160-5) must include the following 
information:
    (1) Well information that must include: (i) The name, number, and 
location of each well, and the number of the lease, unit, or 
communitized area with which it is associated; and (ii) The oil and gas 
production levels of each of the operator's wells on the lease, unit or 
communitized area for the most recent production month for which 
information is available;
    (2) Data that show the costs of compliance with paragraphs (c) 
through (e) of Sec.  3179.202; and
    (3) The operator's estimate of the costs and revenues of the 
combined stream of revenues from both the gas and oil components, 
including: (i) The operator's projections of gas prices, gas production 
volumes, gas quality (i.e., heating value and H2S content), 
revenues derived from gas production, and royalty payments on gas 
production over the next 15 years or the life of the operator's lease, 
unit, or communitized area, whichever is less; and (ii) the operator's 
projections of oil prices, oil production volumes, costs, revenues, and 
royalty payments from the operator's oil and gas operations within the 
lease over the next 15 years or the life of the operator's lease, unit, 
or communitized area, whichever is less.

Showing in Support of Replacement of Pneumatic Diaphragm Pump Within 3 
Years (43 CFR 3179.202(h))

    The operator may replace a pneumatic diaphragm pump if the operator 
notifies the BLM through a Sundry Notice (Form 3160-5) that the well or 
facility that the pneumatic controller serves has an estimated 
remaining productive life of 3 years or less.

Storage Vessels (43 CFR 3179.203(c) and (d))

    A storage vessel is subject to 43 CFR 3179.203(c) if the vessel: 
(1) Contains production from a Federal or Indian lease, or from a unit 
or communitized area that includes a Federal or Indian

[[Page 58069]]

lease; and (2) Is not subject to any of the requirements of EPA 
regulations at 40 CFR part 60, subpart OOOO, but would be subject to 
that subpart if it were a new or modified source.
    The operator must determine, record, and make available to the BLM 
upon request, whether the storage vessel has the potential for VOC 
emissions equal to or greater than 6 tpy based on the maximum average 
daily throughput for a 30-day period of production. The determination 
may take into account requirements under a legally and practically 
enforceable limit in an operating permit or other requirement 
established under a Federal, State, local or tribal authority that 
limit the VOC emissions to less than 6 tpy.
    If a storage vessel has the potential for VOC emissions equal to or 
greater than 6 tpy, the operator must replace the storage vessel at 
issue in order to comply with the requirements of this section, and the 
operator must
    (1) Route all tank vapor gas from the storage vessel to a sales 
line;
    (2) If the operator determines that compliance with paragraph 
(c)(1) of this section is technically infeasible or unduly costly, 
route all tank vapor gas from the storage vessel to a device or method 
that ensures continuous combustion of the tank vapor gas; or
    (3) Submit an economic analysis to the BLM through a Sundry Notice 
(Form 3160-5) that demonstrates, and the BLM agrees, based on the 
information identified in paragraph (d) of this section, that 
compliance with paragraph (c)(2) of this section would impose such 
costs as to cause the operator to cease production and abandon 
significant recoverable oil reserves under the lease.
    To support the demonstration described above, the operator must 
submit a Sundry Notice (Form 3160-5) that includes the following 
information:
    (1) The name, number, and location of each well, and the number of 
the lease, unit, or communitized area with which it is associated;
    (2) The oil and gas production levels of each of the operator's 
wells on the lease, unit or communitized area for the most recent 
production month for which information is available;
    (3) Data that show the costs of compliance with paragraph (c)(1) or 
(c)(2) of this section on the lease; and
    (4) The operator must consider the costs and revenues of the 
combined stream of revenues from both the gas and oil components, 
including: The operator's projections of oil and gas prices, production 
volumes, quality (i.e., heating value and H2S content), 
revenues derived from production, and royalty payments on production 
over the next 15 years or the life of the operator's lease, unit, or 
communitized area, whichever is less.

Downhole Well Maintenance and Liquids Unloading--Documentation and 
Reporting (43 CFR 3179.204(c) and (e))

    The operator must minimize vented gas and the need for well venting 
associated with downhole well maintenance and liquids unloading, 
consistent with safe operations. Before the operator manually purges a 
well for liquids unloading for the first time after the effective date 
of this section, the operator must consider other methods for liquids 
unloading and determine that they are technically infeasible or unduly 
costly. The operator must provide information supporting that 
determination as part of a Sundry Notice (Form 3160-5). This 
requirement applies to each well the operator operates.
    For any liquids unloading by manual well purging, the operator 
must:
    (1) Ensure that the person conducting the well purging remains 
present on-site throughout the event to minimize to the maximum extent 
practicable any venting to the atmosphere;
    (2) Record the cause, date, time, duration, and estimated volume of 
each venting event; and
    (3) Maintain the records for the period required under Sec.  
3162.4-1 and make them available to the BLM, upon request.

Downhole Well Maintenance and Liquids Unloading--Notification of 
Excessive Duration or Volume (43 CFR 3179.204(f))

    The operator must notify the BLM by Sundry Notice (Form 3160-5), 
within 30 calendar days, if:
    (1) The cumulative duration of manual well purging events for a 
well exceeds 24 hours during any production month; or
    (2) The estimated volume of gas vented in liquids unloading by 
manual well purging operations for a well exceeds 75 Mcf during any 
production month.

Leak Detection--Compliance With EPA Regulations (43 CFR 3179.301(j))

    Sections 3179.301 through 3179.305 include information collection 
activities pertaining to the detection and repair of gas leaks during 
production operations. These regulations require operators to inspect 
all equipment covered under Sec.  3179.301(a) for gas leaks.
    Section 3179.301(j) allows an operator to satisfy the requirements 
of Sec. Sec.  3179.301 through 3179.305 for some or all of the 
equipment or facilities on a given lease by notifying the BLM in a 
Sundry Notice (Form 3160-5) that the operator is complying with EPA 
requirements established pursuant to 40 CFR part 60 with respect to 
such equipment or facilities.

Leak Detection--Request To Use an Alternative Monitoring Device and 
Protocol (43 CFR 3179.302(c))

    Section 3179.302 specifies the instruments and methods that an 
operator may use to detect leaks. Section 3179.302(d) allows the BLM to 
approve an alternative monitoring device and associated inspection 
protocol if the BLM finds that the alternative would achieve equal or 
greater reduction of gas lost through leaks compared with the approach 
specified in Sec.  3179.302(a)(1) when used according to Sec.  
3179.303(a).
    Any person may request approval of an alternative monitoring device 
and protocol by submitting a Sundry Notice (Form 3160-5) to the BLM 
that includes the following information: (1) Specifications of the 
proposed monitoring device, including a detection limit capable of 
supporting the desired function; (2) The proposed monitoring protocol 
using the proposed monitoring device, including how results will be 
recorded; (3) Records and data from laboratory and field testing, 
including but not limited to performance testing; (4) A demonstration 
that the proposed monitoring device and protocol will achieve equal or 
greater reduction of gas lost through leaks compared with the approach 
specified in the regulations; (5) Tracking and documentation 
procedures; and (6) Proposed limitations on the types of sites or other 
conditions on deploying the device and the protocol to achieve the 
demonstrated results.

Leak Detection--Operator Request To Use an Alternative Leak Detection 
Program (43 CFR 3179.303(b))

    Section 3179.303(b) allows an operator to submit a Sundry Notice 
(Form 3160-5) requesting authorization to detect gas leaks using an 
alternative instrument-based leak detection program, different from the 
specified requirement to inspect each site semi-annually using an 
approved monitoring device.
    To obtain approval for an alternative leak detection program, the 
operator must submit a Sundry Notice (Form 3160-5) that includes the 
following information:
    (1) A detailed description of the alternative leak detection 
program,

[[Page 58070]]

including how it will use one or more of the instruments specified in 
or approved under Sec.  3179.302(a) and an identification of the 
specific instruments, methods and/or practices that would substitute 
for specific elements of the approach specified in Sec. Sec.  
3179.302(a) and 3179.303(a);
    (2) The proposed monitoring protocol;
    (3) Records and data from laboratory and field testing, including, 
but not limited to, performance testing, to the extent relevant;
    (4) A demonstration that the proposed alternative leak detection 
program will achieve equal or greater reduction of gas lost through 
leaks compared to compliance with the requirements specified in 
Sec. Sec.  3179.302(a) and 3179.303(a);
    (5) A detailed description of how the operator will track and 
document its procedures, leaks found, and leaks repaired; and
    (6) Proposed limitations on types of sites or other conditions on 
deployment of the alternative leak detection program.

Leak Detection--Operator Request for Exemption Allowing Use of an 
Alternative Leak-Detection Program That Does Not Meet Specified 
Criteria (43 CFR 3179.303(d))

    An operator may seek authorization for an alternative leak 
detection program that does not achieve equal or greater reduction of 
gas lost through leaks compared to the required approach, if the 
operator demonstrates that compliance with the leak-detection 
regulations (including the option for an alternative program under 43 
CFR 3179.303(b)) would impose such costs as to cause the operator to 
cease production and abandon significant recoverable oil or gas 
reserves under the lease. The BLM may approve an alternative leak 
detection program that does not achieve equal or greater reduction of 
gas lost through leaks, but is as effective as possible consistent with 
not causing the operator to cease production and abandon significant 
recoverable oil or gas reserves under the lease.
    To obtain approval for an alternative program under this provision, 
the operator must submit a Sundry Notice (Form 3160-5) that includes 
the following information:
    (1) The name, number, and location of each well, and the number of 
the lease, unit, or communitized area with which it is associated;
    (2) The oil and gas production levels of each of the operator's 
wells on the lease, unit or communitized area for the most recent 
production month for which information is available;
    (3) Data that show the costs of compliance on the lease with the 
requirements of Sec. Sec.  3179.301 through 305 and with an alternative 
leak detection program that meets the requirements of Sec.  
3179.303(b);
    (4) The operator must consider the costs and revenues of the 
combined stream of revenues from both the gas and oil components and 
provide the operator's projections of oil and gas prices, production 
volumes, quality (i.e., heating value and H2S content), 
revenues derived from production, and royalty payments on production 
over the next 15 years or the life of the operator's lease, unit, or 
communitized area, whichever is less;
    (5) The information required to obtain approval of an alternative 
program under Sec.  3179.303(b), except that the estimated volume of 
gas that will be lost through leaks under the alternative program must 
be compared to the volume of gas lost under the required program, but 
does not have to be shown to be at least equivalent.

Leak Detection--Notification of Delay in Repairing Leaks (43 CFR 
3179.304(b))

    Section 3179.304(a) requires an operator to repair any leak no 
later than 30 calendar days after discovery of the leak, unless there 
is good cause for delay in repair. If there is good cause for a delay 
beyond 30 calendar days, Sec.  3179.304(b) requires the operator to 
submit a Sundry Notice (Form 3160-5) notifying the BLM of the cause.

Leak Detection--Inspection Recordkeeping and Reporting (43 CFR 
3179.305)

    Section 3179.305 requires operators to maintain the following 
records and make them available to the BLM upon request: (1) For each 
inspection required under Sec.  3179.303, documentation of the date of 
the inspection and the site where the inspection was conducted; (2) The 
monitoring method(s) used to determine the presence of leaks; (3) A 
list of leak components on which leaks were found; (4) The date each 
leak was repaired; and (5) The date and result of the follow-up 
inspection(s) required under Sec.  3179.304. By March 31 of each 
calendar year, the operator must provide to the BLM an annual summary 
report on the previous year's inspection activities that includes: (1) 
The number of sites inspected; (2) The total number of leaks 
identified, categorized by the type of component; (3) The total number 
of leaks repaired; (4) The total number of leaks that were not repaired 
as of December 31 of the previous calendar year due to good cause and 
an estimated date of repair for each leak; and (5) A certification by a 
responsible officer that the information in the report is true and 
accurate.

Leak Detection--Annual Reporting of Inspections (43 CFR 3179.305(b))

    By March 31 of each calendar year, the operator must provide to the 
BLM an annual summary report on the previous year's inspection 
activities that includes:
    (1) The number of sites inspected;
    (2) The total number of leaks identified, categorized by the type 
of component;
    (3) The total number of leaks repaired;
    (4) The total number leaks that were not repaired as of December 31 
of the previous calendar year due to good cause and an estimated date 
of repair for each leak; and
    (5) A certification by a responsible officer that the information 
in the report is true and accurate to the best of the officer's 
knowledge.
4. Burden Estimates
    The following table details the annual estimated hour burdens on 
operators for the information activities described above. The table 
thus estimates the hour burdens which will not be incurred in the 1-
year period from January 17, 2018, to January 17, 2019.

----------------------------------------------------------------------------------------------------------------
                                                                                                    Total hours
                        Type of response                             Number of       Hours per      (column B x
                                                                     responses       response        column C)
A.                                                                            B.              C.              D.
----------------------------------------------------------------------------------------------------------------
Plan to Minimize Waste of Natural Gas, 43 CFR 3162.3-1, Form               3,000               8          24,000
 3160-3.........................................................
Request for Approval for Royalty-Free Uses On-Lease or Off-                   50               4             200
 Lease, 43 CFR 3178.5, 3178.7, 3178.8, and 3178.9, Form 3160-5..
Notification of Choice to Comply on County- or State-wide Basis,             200               1             200
 43 CFR 3179.7(c)(3)(iii).......................................
Request for Approval of Alternative Capture Requirement, 43 CFR               50              16             800
 3179.8(b), Form 3160-5.........................................

[[Page 58071]]

 
Request for Exemption from Well Completion Requirements, 43 CFR                0               0               0
 3179.102(c) and (d), Form 3160-5...............................
Request for Extension of Royalty-Free Flaring During Initial                 500               2           1,000
 Production Testing, 43 CFR 3179.103, Form 3160-5...............
Request for Extension of Royalty-Free Flaring During Subsequent                5               2              10
 Well Testing, 43 CFR 3179.104, Form 3160-5.....................
Reporting of Venting or Flaring, 43 CFR 3179.105, Form 3160-5...             250               2             500
Notification of Functional Needs for a Pneumatic Controller, 43               10               2              20
 CFR 3179.201(b)(1)-(3), Form 3160-5............................
Showing that Cost of Compliance Would Cause Cessation of                      50               4             200
 Production and Abandonment of Oil Reserves, 43 CFR
 3179.201(b)(4) and 3179.201(c) (Pneumatic Controller), Form
 3160-5.........................................................
Showing in Support of Replacement of Pneumatic Controller within             100               1             100
 3 Years, 43 CFR 3179.201(d), Form 3160-5.......................
Showing that a Pneumatic Diaphragm Pump was Operated on Fewer                100               1             100
 than 90 Individual Days in the Prior Calendar Year, 43 CFR
 3179.202(b)(2), Form 3160-5....................................
Notification of Functional Needs for a Pneumatic Diaphragm Pump,             150               1             150
 43 CFR 3179.202(d), Form 3160-5................................
Showing that Cost of Compliance Would Cause Cessation of                      10               4              40
 Production and Abandonment of Oil Reserves (Pneumatic Diaphragm
 Pump), 43 CFR 3179.202(f) and (g), Form 3160-5.................
Showing in Support of Replacement of Pneumatic Diaphragm Pump                100               1             100
 within 3 Years, 43 CFR 3179.202(h), Form 3160-5................
Storage Vessels, 43 CFR 3179.203(c), Form 3160-5................              50               4             200
Downhole Well Maintenance and Liquids Unloading Documentation              5,000               1           5,000
 and Reporting, 43 CFR 3179.204(c) and (e), Form 3160-5.........
Downhole Well Maintenance and Liquids Unloading--Notification of             250               1             250
 Excessive Duration or Volume, 43 CFR 3179.204(f), Form 3160-5..
Leak Detection Compliance with EPA Regulations, 43 CFR                        50               4             200
 3179.301(j), Form 3160-5.......................................
Leak Detection Request to Use an Alternative Monitoring Device                 5              40             200
 and Protocol, 43 CFR 3179.302(c), Form 3160-5..................
Leak Detection Operator Request to Use an Alternative Leak                    20              40             800
 Detection Program, 43 CFR 3179.303(b), Form 3160-5.............
Leak Detection Operator Request for Exemption Allowing Use of an             150              20           3,000
 Alternative Leak-Detection Program that Does Not Meet Specified
 43 CFR 3179.303(d), Form 3160-5................................
Leak Detection Notification of Delay in Repairing Leaks, 43 CFR              100               1             100
 3179.304(a), Form 3160-5.......................................
Leak Detection Inspection Recordkeeping and Reporting, 43 CFR             52,000             .25          13,000
 3179.305.......................................................
Leak Detection Annual Reporting of Inspections, 43 CFR                     2,000              20          40,000
 3179.305(b), Form 3160-5.......................................
                                                                 -----------------------------------------------
    Totals......................................................          64,200  ..............          90,170
----------------------------------------------------------------------------------------------------------------

National Environmental Policy Act

    The BLM prepared an environmental assessment (EA) to determine 
whether this final delay rule will have a significant impact on the 
quality of the human environment under the National Environmental 
Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.). The BLM has 
determined that this final delay rule does not constitute a major 
Federal action significantly affecting the quality of the human 
environment. A detailed statement under NEPA is not required because 
the BLM reached a FONSI.
    The EA and FONSI have been placed in the file for the BLM's 
Administrative Record for the rule. The EA and FONSI have also been 
posted in the docket for the rule on the Federal eRulemaking Portal: 
https://www.regulations.gov. In the Searchbox, enter ``RIN 1004-AE54'' 
and click the ``Search'' button. Follow the instructions at this Web 
site.

Actions Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use (Executive Order 13211)

    This final delay rule is not a significant energy action under the 
definition in Executive Order 13211. A statement of Energy Effects is 
not required.
    Section 4(b) of Executive Order 13211 defines a ``significant 
energy action'' as ``any action by an agency (normally published in the 
Federal Register) that promulgates or is expected to lead to the 
promulgation of a final rule or regulation, including notices of 
inquiry, advance notices of rulemaking, and notices of rulemaking: 
(1)(i) That is a significant regulatory action under Executive Order 
12866 or any successor order, and (ii) Is likely to have a significant 
adverse effect on the supply, distribution, or use of energy; or (2) 
That is designated by the Administrator of (OIRA) as a significant 
energy action.''
    This final delay rule temporarily suspends or delays certain 
requirements in the 2016 final rule and reduces compliance costs in the 
short-term. The BLM determined that the 2016 final rule will not impact 
the supply, distribution, or use of energy and so the suspension or 
delay of many of the 2016 final rule's requirements until January 17, 
2019, will likewise not have an impact on the supply, distribution, or 
use of energy. As such, we do not consider this final delay rule to be 
a ``significant energy action'' as defined in Executive Order 13211.

Authors

    The principal authors of this final delay rule are: James Tichenor 
and Erica Pionke of the BLM Washington Office; Adam Stern of the DOI's 
Office of Policy and Analysis; assisted by Faith Bremner, Jean 
Sonneman, and Charles Yudson of the BLM's Division of Regulatory 
Affairs and by the

[[Page 58072]]

Department of the Interior's Office of the Solicitor.

List of Subjects

43 CFR Part 3160

    Administrative practice and procedure; Government contracts; 
Indians--lands; Mineral royalties; Oil and gas exploration; Penalties; 
Public lands--mineral resources; Reporting and recordkeeping 
requirements.

43 CFR Part 3170

    Administrative practice and procedure; Flaring; Government 
contracts; Incorporation by reference; Indians--lands; Mineral 
royalties; Immediate assessments; Oil and gas exploration; Oil and gas 
measurement; Public lands--mineral resources; Reporting and 
recordkeeping requirements; Royalty-free use; Venting.

    Dated: December 4, 2017.
Katharine S. MacGregor,
Deputy Assistant Secretary--Land and Minerals Management, Exercising 
the Authority of the Assistant Secretary--Land and Minerals Management.

43 CFR Chapter II

    For the reasons set out in the preamble, the Bureau of Land 
Management amends 43 CFR parts 3160 and 3170 as follows:

PART 3160--ONSHORE OIL AND GAS OPERATIONS

0
1. The authority citation for part 3160 continues to read as follows:

    Authority: 25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and 
1751; and 43 U.S.C. 1732(b), 1733, and 1740.


0
2. Amend Sec.  3162.3-1 by revising paragraph (j) introductory text to 
read as follows:


Sec.  3162.3-1  Drilling applications and plans.

* * * * *
    (j) Beginning January 17, 2019, when submitting an Application for 
Permit to Drill an oil well, the operator must also submit a plan to 
minimize waste of natural gas from that well. The waste minimization 
plan must accompany, but would not be part of, the Application for 
Permit to Drill. The waste minimization plan must set forth a strategy 
for how the operator will comply with the requirements of 43 CFR 
subpart 3179 regarding control of waste from venting and flaring, and 
must explain how the operator plans to capture associated gas upon the 
start of oil production, or as soon thereafter as reasonably possible, 
including an explanation of why any delay in capture of the associated 
gas would be required. Failure to submit a complete and adequate waste 
minimization plan is grounds for denying or disapproving an Application 
for Permit to Drill. The waste minimization plan must include the 
following information:
* * * * *

PART 3170--ONSHORE OIL AND GAS PRODUCTION

0
3. The authority citation for part 3170 continues to read as follows:

    Authority: 25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and 
1751; and 43 U.S.C. 1732(b), 1733, and 1740.


0
4. Amend Sec.  3179.7 by revising paragraphs (b) and (c) to read as 
follows:


Sec.  3179.7  Gas capture requirement.

* * * * *
    (b) Beginning January 17, 2019, the operator's capture percentage 
must equal:
    (1) For each month during the period from January 17, 2019, to 
December 31, 2020: 85 percent;
    (2) For each month during the period from January 1, 2021, to 
December 31, 2023: 90 percent;
    (3) For each month during the period from January 1, 2024, to 
December 31, 2026: 95 percent; and
    (4) For each month beginning January 1, 2027: 98 percent.
    (c) The term ``capture percentage'' in this section means the 
``total volume of gas captured'' over the ``relevant area'' divided by 
the ``adjusted total volume of gas produced'' over the ``relevant 
area.''
    (1) The term ``total volume of gas captured'' in this section 
means: For each month, the volume of gas sold from all of the 
operator's development oil wells in the relevant area plus the volume 
of gas from such wells used on lease, unit, or communitized area in the 
relevant area.
    (2) The term ``adjusted total volume of gas produced'' in this 
section means: The total volume of gas captured over the month plus the 
total volume of gas flared over the month from high pressure flares 
from all of the operator's development oil wells that are in production 
in the relevant area, minus:
    (i) For each month from January 17, 2019, to December 31, 2019: 
5,400 Mcf times the total number of development oil wells ``in 
production'' in the relevant area;
    (ii) For each month from January 1, 2020, to December 31, 2020: 
3,600 Mcf times the total number of development oil wells in production 
in the relevant area;
    (iii) For each month from January 1, 2021, to December 31, 2021: 
1,800 Mcf times the total number of development oil wells in production 
in the relevant area; and
    (iv) For each month from January 1, 2022, to December 31, 2022: 
1,500 Mcf times the total number of development oil wells in production 
in the relevant area;
    (v) For each month from January 1, 2023, to December 31, 2024: 
1,200 Mcf times the total number of development oil wells in production 
in the relevant area;
    (vi) For each month from January 1, 2025, to December 31, 2025: 900 
Mcf times the total number of development oil wells in production in 
the relevant area; and
    (vii) For each month after January 1, 2026: 750 Mcf times the total 
number of development.
* * * * *

0
5. Amend Sec.  3179.9 by revising paragraph (b)(1) introductory text to 
read as follows:


Sec.  3179.9  Measuring and reporting volumes of gas vented and flared.

* * * * *
    (b) * * *
    (1) If the operator estimates that the volume of gas flared from a 
high pressure flare stack or manifold equals or exceeds an average of 
50 Mcf per day for the life of the flare, or the previous 12 months, 
whichever is shorter, then, beginning January 17, 2019, the operator 
must either:
* * * * *

0
6. Amend Sec.  3179.10 by revising paragraph (a) to read as follows:


Sec.  3179.10  Determinations regarding royalty-free flaring.

    (a) Approvals to flare royalty free, which are in effect as of 
January 17, 2017, will continue in effect until January 17, 2019.
* * * * *

0
7. Amend Sec.  3179.101 by adding paragraph (c) to read as follows:


Sec.  3179.101  Well drilling.

* * * * *
    (c) The operator must comply with this section beginning January 
17, 2019.

0
8. Amend Sec.  3179.102 by adding paragraph (e) to read as follows:


Sec.  3179.102  Well completion and related operations.

* * * * *
    (e) The operator must comply with this section beginning January 
17, 2019.

0
9. Amend Sec.  3179.201 by revising paragraph (d) to read as follows:


Sec.  3179.201  Equipment requirements for pneumatic controllers.

* * * * *

[[Page 58073]]

    (d) The operator must replace the pneumatic controller(s) by 
January 17, 2019, as required under paragraph (b) of this section. If, 
however, the well or facility that the pneumatic controller serves has 
an estimated remaining productive life of 3 years or less from January 
17, 2017, then the operator may notify the BLM through a Sundry Notice 
and replace the pneumatic controller no later than 3 years from January 
17, 2017.
* * * * *

0
10. Amend Sec.  3179.202 by revising paragraph (h) to read as follows:


Sec.  3179.202  Requirements for pneumatic diaphragm pumps.

* * * * *
    (h) The operator must replace the pneumatic diaphragm pump(s) or 
route the exhaust gas to capture or to a flare or combustion device by 
January 17, 2019, except that if the operator will comply with 
paragraph (c) of this section by replacing the pneumatic diaphragm pump 
with a zero-emission pump and the well or facility that the pneumatic 
diaphragm pump serves has an estimated remaining productive life of 3 
years or less from January 17, 2017, the operator must notify the BLM 
through a Sundry Notice and replace the pneumatic diaphragm pump no 
later than 3 years from January 17, 2017.
* * * * *

0
11. Amend Sec.  3179.203 by revising paragraph (b) and paragraph (c) 
introductory text to read as follows:


Sec.  3179.203  Storage vessels.

* * * * *
    (b) Beginning January 17, 2019, and within 30 days after any new 
source of production is added to the storage vessel after January 17, 
2019, the operator must determine, record, and make available to the 
BLM upon request, whether the storage vessel has the potential for VOC 
emissions equal to or greater than 6 tpy based on the maximum average 
daily throughput for a 30-day period of production. The determination 
may take into account requirements under a legally and practically 
enforceable limit in an operating permit or other requirement 
established under a Federal, State, local or tribal authority that 
limit the VOC emissions to less than 6 tpy.
    (c) If a storage vessel has the potential for VOC emissions equal 
to or greater than 6 tpy under paragraph (b) of this section, by 
January 17, 2019, or by January 17, 2020, if the operator must and will 
replace the storage vessel at issue in order to comply with the 
requirements of this section, the operator must:
* * * * *

0
12. Amend Sec.  3179.204 by adding paragraph (i) to read as follows:


Sec.  3179.204  Downhole well maintenance and liquids unloading.

* * * * *
    (i) The operator must comply with this section beginning January 
17, 2019.

0
13. Amend Sec.  3179.301 by revising paragraph (f) to read as follows:


Sec.  3179.301  Operator responsibility.

* * * * *
    (f) The operator must make the first inspection of each site:
    (1) By January 17, 2019, for all existing sites;
    (2) Within 60 days of beginning production for new sites that begin 
production after January 17, 2019; and
    (3) Within 60 days of the date when an existing site that was out 
of service is brought back into service and re-pressurized after 
January 17, 2019.
* * * * *
[FR Doc. 2017-26389 Filed 12-7-17; 8:45 a.m.]
 BILLING CODE 4310-84-P