Oil and Gas and Sulphur Operations on the Outer Continental Shelf-Oil and Gas Production Safety Systems, 49216-49263 [2018-21197]

Download as PDF 49216 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations DEPARTMENT OF THE INTERIOR Bureau of Safety and Environmental Enforcement 30 CFR Part 250 [Docket ID: BSEE–2017–0008; 189E1700D2 ET1SF0000.PSB000 EEEE500000] RIN 1014–AA37 Oil and Gas and Sulphur Operations on the Outer Continental Shelf—Oil and Gas Production Safety Systems Bureau of Safety and Environmental Enforcement, Interior. ACTION: Final rule. AGENCY: The Bureau of Safety and Environmental Enforcement (BSEE) is amending the regulations regarding oil and natural gas production safety systems. After a thorough reexamination of the current regulations, and consideration of recent experiences from implementation of those regulations and of public comments on the proposed rule to amend those regulations, BSEE is revising or removing certain regulatory provisions that create unnecessary burdens on stakeholders, and clarifying other provisions, while ensuring safety and environmental protection. DATES: This rule becomes effective on December 27, 2018. The incorporation by reference of certain publications listed in the rule is approved by the Director of the Federal Register as of December 27, 2018. ADDRESSES: Rulemaking documents and public comments on the proposed rule: You may review the rulemaking documents, including National Environmental Policy Act (NEPA) documents and public comments submitted on the proposed rule, by accessing the Federal eRulemaking Portal: https:// www.regulations.gov. In the entry entitled, ‘‘Enter Keyword or ID,’’ enter ‘‘BSEE–2017–0008,’’ then click search. Follow the instructions to search public comments and view supporting and related materials available for this rulemaking. Documents incorporated by reference: BSEE provides members of the public with website addresses where they may access standards incorporated by reference in BSEE’s regulations for viewing, sometimes for free and sometimes for a fee. In particular, the American Petroleum Institute (API) voluntarily makes available all API standards that are safety-related and that are incorporated into Federal regulations for free viewing by the amozie on DSK3GDR082PROD with RULES4 SUMMARY: VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 public online in the Incorporation by Reference Reading Room on API’s website at: https://publications.api.org.1 In addition to the free online availability of these standards for viewing on API’s website, hardcopies and printable versions are available for purchase from API. The API website address to purchase standards is: https:// www.api.org/publications-standardsand-statistics/publications/governmentcited-safety-documents. BSEE can make copies of incorporated standards available for review at BSEE’s office(s) upon advance request. One location where incorporated standards can be available for review is BSEE’s headquarters at 45600 Woodland Road, Sterling, Virginia, 20166. Please email: regs@bsee.gov to make arrangements to review incorporated standards, so BSEE can ensure hard copies of the requested standards are available. BSEE may also make the standards available at its other offices located in: Washington, DC; New Orleans, Louisiana; Houston, Texas; Camarillo, California; and Anchorage, Alaska. FOR FURTHER INFORMATION CONTACT: Amy White, Regulations and Standards Branch, 703–787–1665 or by email: regs@bsee.gov. SUPPLEMENTARY INFORMATION: Table of Contents A. BSEE Statutory and Regulatory Authority and Responsibilities B. Summary of the Rulemaking C. Recent Executive and Secretary’s Orders D. Incorporation by Reference of Industry Standards E. Overview of Comments on the Proposed Rule F. Discussion of General Issues Raised by Commenters G. Section-by-Section Summaries, Responses to Comments, and Changes From the Proposed Rule H. Additional Comments Solicited Procedural Matters Regulatory Planning and Review (E.O. 12866, E.O. 13563, E.O. 13771) Small Business Regulatory Enforcement Fairness Act and Regulatory Flexibility Act Regulatory Flexibility Act Unfunded Mandates Reform Act of 1995 Takings (E.O. 12630) Federalism (E.O. 13132) Civil Justice Reform (E.O. 12988) Consultation with Indian Tribes (E.O. 13175) Paperwork Reduction Act (PRA) of 1995 National Environmental Policy Act of 1969 Data Quality Act 1 To view these standards online, go to the API publications website at: https://publications.api.org. You must then log-in or create a new account, accept API’s ‘‘Terms and Conditions,’’ click on the ‘‘Browse Documents’’ button, and then select the applicable category (e.g., ‘‘Exploration and Production’’) for the standard(s) you wish to review. PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 Effects on the Nation’s Energy Supply (E.O. 13211) A. BSEE Statutory and Regulatory Authority and Responsibilities BSEE derives its authority primarily from the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1331–1356a. Congress enacted OCSLA in 1953, significantly amended it in 1978, and subsequently amended specific provisions. As amended, OCSLA authorizes the Secretary of the Interior (Secretary) to lease the Outer Continental Shelf (OCS) for resource development in a way that makes it available for expeditious and orderly development, consistent with national needs and subject to environmental safeguards. Among other things, Congress established a policy to provide for orderly and expeditious development of oil and natural gas resources of the OCS to meet national economic and energy policy and which may serve to assure national security and reduce dependence on foreign sources. OCSLA also states that, among other purposes, OCS oil and gas resources should be managed in a way that balances orderly development with protection of the environment. The Secretary has delegated authority to perform certain of these functions to BSEE. To carry out its responsibilities, BSEE regulates offshore oil and gas operations to ensure that operations are safe and environmentally responsible. See 30 CFR 250.101(b)(2). BSEE’s regulatory program covers a wide range of operations, including drilling, completion, workover, production, pipeline, and decommissioning operations; and associated facilities, such as mobile offshore drilling units (MODUs) and production platforms. See 30 CFR part 250. BSEE also conducts onsite inspections to assure compliance with regulations, lease terms, and approved plans and permits. Detailed information concerning BSEE’s regulations and guidance to the offshore oil and gas industry is on BSEE’s website at: https://www.bsee.gov/ Regulations-and-Guidance/index. B. Summary of the Rulemaking This final rule amends and updates the regulations in 30 CFR part 250, subpart H, Oil and Gas Production Safety Systems (subpart H). This rule supports the Administration’s objective of facilitating energy dominance by encouraging increased domestic oil and gas production and reducing unnecessary burdens on stakeholders, while ensuring safety and environmental protection. E:\FR\FM\28SER4.SGM 28SER4 amozie on DSK3GDR082PROD with RULES4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations Since 2010, the Department of the Interior (Department) has promulgated several rulemakings (e.g., Safety and Environmental Management Systems (SEMS) I and II final rules (75 FR 63610, October 15, 2010; 78 FR 20423, April 5, 2013), the final Safety Measures rule (77 FR 50856, August 22, 2012), and the Blowout Preventer Systems and Well Control final rule (the ‘‘2016 Well Control Rule’’ or the ‘‘2016 WCR’’) 2 to improve worker safety and environmental protection. On September 7, 2016, the Department published a Production Safety Systems final rule substantially revising subpart H (81 FR 61834) (2016 PSSR). That final rule addressed issues such as production safety systems, subsurface safety devices, and safety device testing. These systems play a critical role in protecting workers and the environment. Most of the provisions of that rulemaking took effect on November 7, 2016. Since that time, BSEE has become aware that certain provisions in that rulemaking created potentially unduly burdensome requirements for oil and natural gas production operators on the OCS, without meaningfully increasing safety of the workers or protection of the environment. During implementation of the 2016 PSSR, BSEE reassessed a number of the provisions in subpart H and determined that it could revise some provisions to reduce or eliminate some of the concerns expressed by the operators, thereby reducing the regulatory burden, while ensuring safety and protection of the environment. On December 29, 2017, BSEE published in the Federal Register a proposed rule to revise certain provisions in the subpart H regulations (82 FR 61703) (the ‘‘proposed rule’’) and to solicit comments on several additional issues. After consideration of the public comments on the proposed rule, BSEE is publishing this final rule, which revises or otherwise addresses the current requirements as follows: • Updates the incorporation of certain standards referenced in subpart H; • Adds gas lift shut down valves (GLSDVs) to the list of safety and pollution prevention equipment (SPPE); • Revises requirements for SPPE by replacing the requirement for independent third parties to certify that each device will function in the most extreme conditions to which it will be exposed with requirements for device design testing, documentation of the process the operator used to ensure the device is designed to function as required, and independent third party 2 See 81 FR 25887 (April 29, 2016). VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 review and certification of a device if the device is moved to a different location 3; • Clarifies equipment failure reporting requirements; • Clarifies and revises some of the production safety system design requirements, including revising the requirements for professional engineer (PE) stamping, revising the requirements for piping schematics, simplifying the requirements for electrical system information, revising the requirement for operators to provide certain documents to BSEE, and clarifying when operators must update existing documents; • Clarifies requirements for atmospheric vessels containing Class I liquids; • Clarifies requirements for inspection of the fire tube for tube-type heaters; • Clarifies the requirement for notifying the BSEE District Manager before commencing production; and • Makes other conforming changes to ensure consistency within the regulations and makes other minor edits. C. Recent Executive and Secretary’s Orders Since the start of 2017, the President issued several Executive Orders (E.O.) that necessitated the review of BSEE’s rules. On January 30, 2017, the President issued E.O. 13771, entitled, ‘‘Reducing Regulation and Controlling Regulatory Costs’’ (82 FR 9339), which requires Federal agencies to take proactive measures to reduce the costs associated with complying with Federal regulations. On March 28, 2017, the President issued E.O. 13783, entitled, ‘‘Promoting Energy Independence and Economic Growth’’ (82 FR 16093). This E.O. directed Federal agencies to review all existing regulations and other agency actions and, ultimately, to suspend, revise, or rescind any regulations or actions that unnecessarily burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law. On April 28, 2017, the President issued E.O. 13795, entitled, ‘‘Implementing an America-First Offshore Energy Strategy’’ (82 FR 20815). This E.O. directed the Secretary of the Interior to reconsider the 2016 Well Control Rule adopted in April 2016 and to take appropriate action to 3 Incorporated standards address the design of SPPE, based on the specific type of device and the conditions where the device will be located. PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 49217 ‘‘revise any related rules’’ for consistency with E.O. 13795’s stated policy ‘‘to encourage energy exploration and production, including on the Outer Continental Shelf, in order to maintain the Nation’s position as a global energy leader and foster energy security and resilience for the benefit of the American people, while ensuring that any such activity is safe and environmentally responsible.’’ To further implement E.O. 13783, the Secretary issued Secretary’s Order (S.O.) 3349, entitled, ‘‘American Energy Independence,’’ on March 29, 2017. The S.O. directed DOI to review all existing regulations ‘‘that potentially burden the development or utilization of domestically produced energy resources.’’ Similarly, to implement E.O. 13795, the Secretary issued S.O. 3350, entitled, ‘‘America-First Offshore Energy Strategy,’’ on May 1, 2017, which directed BSEE to review the 2016 Well Control Rule and related rulemakings. BSEE interpreted each of these orders to apply to the 2016 PSSR. As part of its response to E.O.s 13783 and 13795 and to S.O.s 3349 and 3350, BSEE reviewed the regulations in subpart H, as revised by the 2016 PSSR, with a view toward the policy of encouraging energy exploration and production on the OCS, and reducing unnecessary regulatory burdens, while ensuring that any such activity is safe and environmentally responsible. Like the 2016 PSSR, BSEE also focused on offshore oil and gas production technology and operations, including subsea production systems used for production in increasingly deeper waters. This focus is unrelated to well control during well operations. Nevertheless, BSEE carefully analyzed all the provisions in the proposed rule and this final rule and compared them to the 424 recommendations arising from 26 separate reports from 14 different organizations developed in the wake of and in response to the Deepwater Horizon (DWH) disaster, and determined that these changes to subpart H will not contradict any of those recommendations, nor will they alter any provision of the 2016 PSSR in a way that would make the result inconsistent with those recommendations. Further, nothing in this final rule will alter any elements of other rules promulgated since DWH, including the Drilling Safety Rule (Oct. 2010), SEMS I (Oct. 2010), SEMS II (April 2013), and 2016 WCR (April 2016). BSEE’s review has been thorough and tailored to the task of reducing unnecessary regulatory burdens while ensuring that OCS activity is safe and environmentally responsible. E:\FR\FM\28SER4.SGM 28SER4 49218 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations amozie on DSK3GDR082PROD with RULES4 D. Incorporation by Reference of Industry Standards In accordance with the National Technology Transfer and Advancement Act, Public Law 104–113 (NTTAA), 15 U.S.C. 3701 et seq. (Pub. L. 104–113), and with Office of Management and Budget (OMB) Circular A–119, ‘‘Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities,’’ (rev. Jan. 2016) implementing the NTTAA, BSEE frequently uses standards (e.g., codes, specifications, and recommended practices) that standards development organizations (SDOs) have developed through a consensus process, with input from the oil and gas industry, as a means of establishing requirements for activities on the OCS. The NTTAA charged, with few exceptions, that ‘‘all Federal agencies and departments shall use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities determined by the agencies and departments.’’ BSEE may incorporate these standards into its regulations by reference without republishing the standards in their entirety in regulations. The legal effect of incorporation by reference is that the incorporated standards become regulatory requirements. This incorporated material, like any other regulation, has the force and effect of law. Operators, lessees, and other regulated parties must comply with the documents incorporated by reference in the regulations. BSEE currently incorporates by reference over 100 consensus standards in its regulations. (See 30 CFR 250.198.) The Office of the Federal Register’s (OFR) regulations, at 1 CFR part 51, govern how BSEE and other Federal agencies incorporate documents by reference. Agencies may incorporate a document by reference by publishing in the Federal Register the document title, edition, date, author, publisher, identification number, and other specified information. The preamble of the rule must contain a summary of each document incorporated by reference, as well as discuss the ways that the incorporated materials are reasonably available to interested parties and how interested parties can obtain those materials. The Director of the Federal Register will approve publication in a final rule of each incorporation by reference that meets the criteria of 1 CFR part 51. The VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 documents are summarized in section G of this preamble. When a copyrighted publication is incorporated by reference into BSEE regulations, BSEE is obligated to observe and protect that copyright. BSEE provides website addresses where members of the public may access these standards for viewing, sometimes for free and sometimes for a fee. SDOs decide whether to charge a fee. One such organization, API, provides free online public access to view read only copies of its key industry standards, including a broad range of technical standards. In particular, API voluntarily makes available all API standards that are safety-related and that are incorporated into Federal regulations for free viewing by the public online in the Incorporation by Reference Reading Room on API’s website at: https:// publications.api.org.4 In addition to the free online availability of these standards for viewing on API’s website, hardcopies and printable versions are available for purchase from API. The API website address to purchase standards is: https://www.api.org/ publications-standards-and-statistics/ publications/government-cited-safetydocuments. BSEE also makes copies of incorporated standards available for review at BSEE’s office(s) upon request. Individuals wishing to view standards at a BSEE office may make arrangements by sending an email to: regs@bsee.gov. BSEE may make standards available at their offices in Washington, DC; Sterling, Virginia; New Orleans, Louisiana; Houston, Texas; Camarillo, California; and Anchorage, Alaska. BSEE recognizes that there may be additional opportunities to make standards more accessible and agrees to work with OMB and the OFR to explore potential approaches to improve public access to standards and to information about the standards. In addition to the legal requirement under the NTTAA for Federal agencies to use standards, there are a number of benefits to incorporating these documents into the regulations. Standards increase consistency for employee training, equipment compatibility, processes, and testing during operations. Standards help ensure that operators and their contractors take proper precautions during operations; resulting in safety performance improvements through the 4 To view these standards online, go to the API publications website at: https://publications.api.org. You must then log-in or create a new account, accept API’s ‘‘Terms and Conditions,’’ click on the ‘‘Browse Documents’’ button, and then select the applicable category (e.g., ‘‘Exploration and Production’’) for the standard(s) you wish to review. PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 reduction of lost time from injuries and incidents, work environment safety standards, proper training, product failure reporting, quality control and assurance requirements, addressing safety issues, and improved communications between user and supplier. Global adoption of standards is a compelling reason for the most updated editions to be part of regulatory frameworks since they drive consistency, promote competition, and reduce the burden of compliance. E. Overview of Comments on the Proposed Rule In response to the proposed rule, BSEE received 733 separate sets of comments, including some comments that had a total of over 60,000 signatures attached to the comments. BSEE received comments from a wide range of stakeholders, including industry trade groups and individual companies, State and local governments, Tribal authorities, members of the U.S. Congress, environmental groups, SDOs, and private citizens. All comments are posted at the Federal Rulemaking Portal: https://www.regulations.gov. To access the comments, enter ‘‘BSEE–2017– 0008’’ in the search box. BSEE reviewed all comments submitted. Commenters raised issues on a number of topics, including general issues, section-by- section comments, and comments on certain additional issues on which BSEE solicited comments, including: • Potential Revisions to § 250.107(c) Best Available and Safest Technology (BAST); • Potential Revisions to § 250.198 Documents incorporated by reference; • Extension of Compliance Deadline for Pressure Safety Valve (PSV) Testing Under § 250.880 Production safety system testing; • Potential Revisions Based on the Investigation of the Explosion and Fatality on West Delta Block 105 Platform E; and • Implementation of This Rulemaking. Some commenters opposed any changes to the existing production safety regulations, while other commenters supported most of the proposed revisions. Many commenters seemed to confuse the 2016 PSSR and BSEE’s December 2017 proposed rule with the 2016 WCR. The comments indicate that those commenters apparently assumed that the proposed rule involved revisions to the 2016 WCR, which was not the case. E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations F. Discussion of General Issues Raised by Commenters Requests To Extend the Comment Period Rulemaking ‘‘Technically Complex’’ Comment: Prior to the proposed rule’s public comment deadline (January 29, 2018), BSEE received several written requests to extend that comment period, most of which requested a 60-day extension. One such request provided no explanation for the requested extension, except to state that the proposed rule was ‘‘technically complex.’’ Similarly, another request asserted that the proposed rule was so ‘‘important in nature’’ that a 90-day comment period would be more reasonable. Response: After considering all the extension requests, BSEE determined that no extension was necessary. Although one requester stated that the proposed rule was ‘‘technically complex,’’ that entity provided no examples and identified no aspects of the proposed rule that it considered so complex that it could not submit meaningful comments by the close of the comment period. Similarly, the entity that suggested that a 90-day comment period would be more reasonable due to the importance of the proposed rule provided no examples of any specific proposed provisions that required more time to analyze, even though that request was submitted almost one month after publication of the proposed rule. Under the circumstances, BSEE does not believe that these entities’ requests provided justification for extending the comment period.5 Volume of Standards To Review Comment: Two entities—offshore oil and gas industry organizations— asserted that the comment period was not long enough for the commenters to analyze and prepare thorough comments on the proposed rule. In particular, those commenters asserted that the number and ‘‘volume’’ of the standards that BSEE proposed to update and incorporate was too large for the requesters to review and comment on in 30 days. amozie on DSK3GDR082PROD with RULES4 5A different entity submitted a request for an extension on January 29, 2018—the deadline set by the proposed rule for public comment—but did not suggest a specific extension period. In addition, although that request asserted that the proposed rule was ‘‘unclear, and in some places contradictory,’’ it provided no examples to support that assertion. For the reasons previously explained, BSEE does not believe this last-minute request provided a sufficient basis for extending the comment period. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Response: BSEE does not agree with the industry organizations’ suggestion that the updated standards and the one new standard that BSEE proposed to incorporate were ‘‘too numerous and too voluminous’’ to be thoroughly analyzed and understood within the time allowed by the comment period. In fact, one of those industry organizations is the SDO that developed and published 15 out of the 19 standards that BSEE proposed to incorporate. BSEE also notes that the other industry organization is a committee of virtually all of the offshore producing companies and service providers in the Gulf of Mexico, many of whom participated, or had the opportunity to participate, in the development of the relevant standards. In addition, both industry organizations represent companies that have had the opportunity to voluntarily implement those standards, in some cases over the course of many years. Under the circumstances, BSEE does not agree that those extension requests warranted an extension.6 Comment Period Inadequate Comment: One commenter submitted comments on the proposed rule, including an assertion that the comment period was inadequate (although the commenter did not request an extension). Response: BSEE disagrees. Although this commenter broadly asserted that the proposed rule proposed a ‘‘significant number of changes to the regulations that incorporate . . . thousands of pages of technical documents,’’ it failed to provide any specific examples or other support for its assertion that the comment period was inadequate. After considering this comment, as well as the prior requests for extension of the comment period, BSEE determined that the comment period set by the proposed rule was reasonably adequate for any interested party to submit meaningful comments. BSEE notes that the Administrative Procedure Act (APA), which governs the Federal rulemaking process, does not specify any minimum period for comments on proposed rules. In practice, comment periods of 30 to 60 days are commonplace and 30-day 6 Both of the industry organizations and one other entity also suggested that the publication of the proposed rule on December 29, 2017, during the ‘‘holiday season,’’ provided more justification for their requests for more time. BSEE believes that the important reductions in unnecessary burdens on energy production, and the other improvements intended by the proposed rule, warranted BSEE moving forward with the proposed and final rules as expeditiously as practicable, whether or not that entails BSEE or other entities devoting some effort during a holiday season. PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 49219 comment periods are not uncommon. Moreover, given that the number of substantive changes actually proposed was relatively small, that the provisions to be revised were previously subject to a lengthy rulemaking process that culminated in the 2016 PSSR, and that the need to remove unnecessary burdens on offshore energy production is a high-priority national goal, BSEE believes that the comment period for this proposed rule was reasonable and provided a meaningful opportunity for public participation. This determination is supported by the fact that commenters submitted well over 700 comments, raising a wide variety of issues, by the January 29, 2018, deadline. Comments Related to Deepwater Horizon Recommendations Comment: A number of commenters asserted that the proposed rule was inconsistent with recommendations in various reports, including ‘‘The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling’’ (the Commission or the Commission Report), that were published in the aftermath of the DWH incident. Some commenters asserted that the 2016 PSSR was the agency’s response to the DWH reports’ recommendations and that any changes to this rule would reduce the protections intended by those recommendations. Several commenters also asserted that any changes to the regulations would be arbitrary and capricious. Response: BSEE disagrees with these comments. The recommendations that the commenters cite come from various reports concerning the DWH incident. Those recommendations primarily addressed problems with well operations (including drilling, completion, workover, and decommissioning operations)—some of which led up to the DWH incident—and suggested ways to reduce risks of other incidents related to well operations. Those commenters apparently assumed, incorrectly, that BSEE developed the 2016 PSSR as a result of the DWH incident and that it was largely based on the Commission’s report. These commenters evidently confused the 2016 PSSR, which updated production safety systems regulations, with the 2016 WCR, which discussed the recommendations in the DWH reports and implemented, or responded to, many of those recommendations in order to reduce the risk of future well operation-related incidents. The well control requirements established by the 2016 WCR are primarily in 30 CFR part E:\FR\FM\28SER4.SGM 28SER4 amozie on DSK3GDR082PROD with RULES4 49220 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations 250, subparts D and G, and include requirements for well operations. By contrast, the production safety systems requirements at issue here apply to production operations and are in subpart H. Well control requirements and production safety requirements apply to different operations and types of equipment and processes. Well control equipment, such as blowout preventers, is used on multiple wells and is often moved from site to site; therefore, it must function properly in any conditions that may be encountered. By contrast, production safety equipment must function properly in the specific conditions applicable within the production system on a particular facility, as informed by data that were gathered during the drilling and completion operations. While the 2016 WCR was responsive to the Commission’s and other DWH reports on well operations, BSEE did not intend the 2016 final PSSR and the 2017 proposed PSSR revisions to directly respond to the Commission’s report or other DWH reports; nor did the 2016 PSSR and 2017 proposed rule refer to the DWH reports. In fact, the impetus for the 2016 PSSR was unrelated to well control during well operations; rather, that rule was focused on the need to address changes in offshore oil and gas production technology and operations, including subsea production systems used for production in increasingly deeper waters. Prior production safety systems regulations did not address subsea developments in deepwater production. See 81 FR 61834. Accordingly, the commenters’ concerns that the proposed revisions to the 2016 PSSR would be inconsistent with, and significantly diminish the protections intended by, the DWH reports’ recommendations are not justified. In any case, as previously discussed, BSEE has nevertheless carefully analyzed all the provisions in this rule, and determined that the changes made will not contradict any of the recommendations from the DWH reports, nor will they alter the regulations in a way that would make them inconsistent with those recommendations. Further, the commenters’ suggestions that any changes to the 2016 PSSR would be ‘‘arbitrary and capricious’’ are conclusory in nature, and the commenters have not provided support for that conclusion. The record of this rulemaking shows that the proposed and now final revisions to the PSSR are not arbitrary or capricious. First, as already explained, the commenters’ underlying assumption that BSEE intended for the 2016 PSSR to VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 implement the DWH recommendations is not accurate. Second, as discussed in the 2017 proposed rule, many of the proposed changes were based on experience from implementation of the 2016 PSSR. See, e.g., 82 FR 61704, 61709. Also, operators raised questions about the 2016 PSSR that BSEE has addressed in Regulatory Interpretations on its website, and BSEE is using this rulemaking to address issues raised in some of those questions.7 In addition, for all the reasons described elsewhere in this notice, BSEE has determined that the changes to the 2016 PSSR reflected in this final rule will reduce unnecessary burdens or provide needed clarifications, while still ensuring safety and environmental protection. Similarly, BSEE disagrees with one commenter’s suggestion that BSEE should not make changes to the 2016 PSSR simply because the ‘‘SUMMARY’’ statement in that final rule said that it was ‘‘necessary to improve . . . safety, environmental protection, and regulatory oversight of critical equipment involving productions safety systems’’ (emphasis added). While that statement was accurate as to the 2016 PSSR as a whole, it did not indicate that every specific provision in that extensive rule was essential in its existing form to ensuring safety and environmental protection, or would never be reviewed or revised in light of subsequent events or new information. Neither BSEE nor any other agency can predict, at the time it promulgates a rule, whether or not future circumstances will warrant any revisions. In fact, BSEE periodically reviews all of its regulations and makes revisions when necessary and appropriate. And, for the reasons explained elsewhere in this notice, BSEE has determined that some specific revisions to the 2016 PSSR are appropriate and that those revisions will achieve the goals of energy production and safety and environmental protection. Timing of Revisions to Subpart H Comment: One commenter suggested that BSEE cannot justify making any revisions to the 2016 PSSR ‘‘barely a year’’ after that rule took effect. Response: BSEE does not agree that it is too soon to make any changes to the 7 See https://www.bsee.gov/guidance-andregulations/regulations/regulatoryinterpretations#ssr. Examples of such issues include requirements in the 2016 PSSR for boarding shut-down valves (BSDVs), deferred compliance dates, production notification, effective date and annual inspection/testing requirements, and alternate compliance requests and/or departures (extensions) for PSV testing. PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 2016 PSSR. The final 2016 PSSR was published in September 2016 and took effect on November 7, 2016, more than 17 months ago. As stated in the proposed rule (see 82 FR 61704–61705) and elsewhere in this final rule, soon after the 2016 PSSR was issued, BSEE began receiving requests from the regulated industry to clarify various provisions and which raised other concerns with the rule, and several of the proposed (and now final) revisions to the 2016 PSSR are intended to clarify those provisions or address those concerns. It is common practice, especially in complex rulemakings, for an agency to become aware of unforeseen confusion or other problems with a final rule after it has been published and to revise the final rule as soon as practicable to clarify the requirements or otherwise resolve unanticipated concerns. In this case, over 17 months have passed since the 2016 PSSR was promulgated, and BSEE’s experiences during that time period demonstrate that it is not too soon to make appropriate corrections to that rule. Similarly, as explained in the proposed rule, by E.O.s 13783 and 13795, as well as S.O.s 3349 and 3350, issued in early 2017, obligated BSEE to review existing regulations (which include the 2016 PSSR) to determine whether it unnecessarily burdened exploration, development, or production of energy resources, and whether it would be appropriate to revise the rules to reduce those burdens while still ensuring that such activities are safe and environmentally responsible. See id. The time that has already passed since the 2016 PSSR was published and took effect is more than adequate for BSEE to have completed that review. Review and Certification by Independent Third-Parties and Professional Engineers (PEs) Comment: A number of commenters expressed concern that the proposed (i.e., proposed §§ 250.802 and 250.842) elimination of third-party certification of SPPE and reduction in the number of safety system design documents (e.g., drawings and diagrams) required to be certified and stamped by a registered PE would significantly reduce safety and environmental protection. Response: BSEE disagrees. Subpart H continues to impose numerous requirements, including provisions in the standards incorporated by reference, that effectively provide multiple layers of review to ensure safety and environmental protection in the design, installation, and testing of certain E:\FR\FM\28SER4.SGM 28SER4 amozie on DSK3GDR082PROD with RULES4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations aspects of production safety systems, including the SPPE. As explained earlier in this notice, although this final rule reduces the number of provisions that require third-party or PE review and certification, BSEE expects those procedural changes will continue to ensure safety and environmental protection, especially because of the other, more substantive, regulatory requirements applicable to safety equipment design, function, maintenance, and testing that are being retained or enhanced. BSEE carefully considered which documents are most critical to these operations and which documents provide information to support those critical documents. In addition, the regulations currently contain extensive testing provisions for SPPE and other production system components (see § 250.880), to ensure the devices will function when needed. These provisions clearly state actions that the operator must take if a device fails a test, including repairing or replacing devices. These requirements remain unchanged in this final rule. Specifically, several of the standards incorporated into subpart H (e.g., ANSI/ API Spec. 6A and ANSI/API Spec. 14A) set design criteria for SPPE, based on the type of SPPE, and require most types of SPPE to be design-tested by an independent third-party testing facility. In addition, the following provisions of the regulations effectively provide supplemental layers of review: (1) Existing § 250.801(a) through (c) requires use of SPPE that is manufactured and marked pursuant to a quality assurance program that satisfies ANSI/API Spec. Q1 or another equivalent quality assurance program approved by BSEE; (2) existing § 250.880 sets detailed production safety system testing criteria, and mandates that SPPE failing to meet the testing criteria must be repaired or replaced; and (3) § 250.842(a), as amended, will still require PE approval of modifications to production safety systems (required by § 250.842(c)(2)), while new § 250.842(b) will require additional design documents to be developed, maintained, and provided to BSEE upon request. For all of these reasons, BSEE determined that the final revisions to §§ 250.802 and 250.842, which reduce unnecessary burdens on operators, will ensure safety and environmental protection. Comments on Risk-Based Approaches Comment: Several commenters stated that BSEE should implement more ‘‘risk-based’’ approaches to regulation of industry. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Response: BSEE agrees that risk-based approaches are often an appropriate way to develop effective regulatory programs. However, no changes to the existing regulations are needed for BSEE to implement certain risk-based programs. For example, BSEE is currently developing ways to deploy inspection resources to focus on operations with higher rates of safety events, equipment failure, or incidents of non-compliance (INCs). Risk-based inspections complement BSEE’s existing National Safety Inspection Program under OCSLA, which requires BSEE to conduct annual scheduled inspections and periodic unannounced inspections on all OCS oil and gas facilities. Risk-based inspection approaches evaluate operational and performance information, such as data from prior inspections and failure reporting, to identify those facilities and operations that may pose a higher likelihood of an unsafe event or of more severe consequences from such an event. BSEE uses this data to manage its inspector force and to target their work to address production facilities with higher risks of safety incidents, equipment failure, or INCs. Accordingly, BSEE implemented a formal risk-based inspection program in 2018 following pilot testing. The program is comprised of two categories of risk-based inspections—a ‘‘facility-based’’ category targeting specific production facilities identified as higher-risk, and a ‘‘performancebased’’ category targeting specific operations or equipment across multiple facilities. Facility-based risk inspections employ a quantitative model and additional qualitative evaluation of operational and performance information to identify higher-risk facilities, and inspection protocols are tailored to facility-specific hazards, barriers, and risks. Performance-based risk inspections employ trend analysis of performance indicators, such as incident and INC data, to identify safety issues (e.g., potential gas releases, lifting incidents, and compressor fires) that may pose a risk at multiple facilities; thus, those inspection protocols narrowly focus on the identified safety issue. BSEE expects to continue to develop and refine the risk-based inspection program over time. Comments on Failure Reporting Comment: One commenter suggested that BSEE should modify § 250.803 to require any failed equipment to be immediately shut-in pending replacement with fully functioning, certified SPPE. Where the failed SPPE involves equipment that may be PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 49221 common to several production facilities, the commenter suggested that BSEE clarify its authority to order the immediate shut-down of all processes or equipment that rely on the failed SPPE until replaced by certified, functioning SPPE. Response: BSEE disagrees with this comment. The proposed revisions to § 250.803 were not intended to relax requirements for reporting SPPE or safety component failures or the potential for improved safety under those requirements. To the contrary, the final revisions to that section simply clarify the existing provision for reporting of failures to a BSEE designee instead of to BSEE directly. As explained in the preamble of the proposed rule (see 82 FR 61710), on October 26, 2016, BSEE designated the Bureau of Transportation Statistics (BTS) to receive SPPE failure reports. As discussed later in this notice (see n.17, infra), the reporting of SPPE and equipment component failure information to BTS should increase the potential for improving safety by allowing BTS to examine this information in the aggregate and to prepare reports on the aggregate analysis to share with the public, including the regulated industry. In addition, the final rule retains the existing requirement that operators report equipment failures to original equipment manufacturers (OEMs), as well as to BSEE (or BSEE’s designee). By requiring submissions of reports to the OEMs, § 250.803 ensures an opportunity for the industry bestsuited to make changes to failed SPPE (i.e., the OEM sources) to address equipment design and performance issues. BSEE does not believe that the additional measures—for automatic shut-in of individual facilities with a failure or for wide-spread shut-in of production that uses similar SPPE— suggested by a commenter are appropriate or necessary at this time. The testing provisions in existing § 250.880 already require operators to repair and reinstall or replace many key components in production safety equipment (e.g., surface safety valves) if those components fail to function as designed. The final rule retains those requirements. By the nature of the design and function of the production system and the regulatory requirements for that system, multiple barriers must be used throughout the production system. Multiple barriers are used in the production system to prevent the release of hydrocarbons; these include the SPPE that are required under § 250.801 (e.g., the various valves that can be shut in, if needed, to discontinue production). E:\FR\FM\28SER4.SGM 28SER4 49222 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations Prioritizing Safety and Environmental Protection Comments: Several commenters stated that OCSLA requires BSEE to prioritize ‘‘environmental safeguards’’ among other goals identified in the statute and that section 3 of OCSLA (43 U.S.C. 1332(3)) requires BSEE to ensure that regulated activities are ‘‘safe and environmentally responsible.’’ Some commenters also stated that BSEE is required by 43 U.S.C 1802(2)(B) to ‘‘balance orderly energy resource development with [environmental] protection.’’ The commenters suggested that some or all of the proposed changes (e.g., revisions to independent thirdparty certification of SPPE; incorporation by reference of industry standards) to the existing rule would not comply with these congressional policy declarations. Response: BSEE agrees that Congress intended that development and production of offshore energy resources BOEM’s Proposed 2019–2024 National should be carried out in a safe and OCS Leasing Program environmentally protective manner. Comment: A number of comments However, BSEE disagrees with the addressed provisions of the Bureau of commenters’ assertion that the proposed Ocean Energy Management (BOEM) rule (or this final rule) is inconsistent draft proposed 2019–2024 National OCS with the policies embodied in OCSLA at Leasing Program (Leasing Program). 43 U.S.C. 1332(3) and 1802(2)(B). Some comments stated that the proposal Although some of the commenters in the Leasing Program to expand OCS suggested that environmental or safety leasing into additional geographic areas protection must be the overriding—or would magnify any reduction in safety even the exclusive—goal of all agency and environmental protection resulting actions under OCSLA, these from the proposed revisions to the commenters failed to acknowledge that PSSR. section 1332 also states the principle Response: The proposed Leasing that the OCS should be managed to Program is a separate action by BOEM, ensure ‘‘expeditious and orderly which is a separate agency from BSEE development [of OCS resources] . . . in within the Department, and was not a manner . . . consistent with addressed in the 2017 proposed PSSR. competition and other national needs’’ The Leasing Program specifies the size, (See 43 U.S.C. 1332(3) Similarly, the timing, and location of potential leasing commenters failed to acknowledge that activity that the Secretary determines 43 U.S.C. 1802 specifically states that will best meet national energy needs for the Department should manage OCS oil the five-year period under and gas resources ‘‘expedite[] consideration. The Draft Proposed exploration and development of the . . . Program, the first of three stages of [OCS] in order to achieve national developing the Leasing Program for economic and energy policy goals, 2019–2024, was released on January 4, assure national security, reduce 2018, with a 60-day comment period dependence on foreign sources, and that ended on March 9, 2018. See maintain a favorable balance of BOEM’s website, www.boem.gov/ payments.’’ (See 43 U.S.C. 1802(1).) 8 National-Program, for additional details. Moreover, despite the commenter’s There will be additional opportunities assertions, sections 1332 and 1802(2) for public review and comment on the 8 Likewise, 43 U.S.C. 1802(2) makes it Federal Leasing Program at later stages of its policy that to ‘‘(2) preserve, protect, and develop oil development. Thus, any concern the and natural gas resources in the . . . [OCS] in a commenters may have about the manner . . . consistent with the need (A) to make potential impact that an expansion of such resources available to meet the Nation’s energy needs as rapidly as possible, (B) to balance orderly the Leasing Program might have on the energy resource development with protection of the level of safety and environmental marine, and coastal environments, (C) to protection provided by the revised PSSR human, insure the public a fair and equitable return on is premature and speculative at this [OCS] resources . . . and (D) to preserve and maintain free enterprise competition.’’ time. amozie on DSK3GDR082PROD with RULES4 The existence of multiple barriers generally decreases the need for automatic shut-in every time a single piece of equipment fails. In addition, BSEE already requires that any noncertified valve that requires offsite repair, re-manufacturing, or any hot work (such as welding) must be replaced with a certified valve as required by § 250.801. In any event, BSEE has authority under existing § 250.107(d) to order equipment repairs or replacement in order to ensure compliance with the regulations, and to issue orders to shut-in operations of a component or facility when appropriate to prevent threats of serious or immediate harm. In light of these existing protections, BSEE does not believe that any additional requirements to automatically shut-in the failed equipment, or additional authority for BSEE to order more widespread shutins, are needed. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 primarily relate to the way that the Department manages oil and gas resources at the National Program and lease sale stages of OCS development and do not expressly mandate how BSEE exercises its authority to issue safety regulations. More directly relevant to this rulemaking, however, are the specific provisions of OCLSA that authorize the Secretary to regulate activities on the OCS, which contain broad grants of discretion to issue regulations and do not contain any specific limitation that would prevent BSEE from eliminating undue burdens while still ensuring the safety of operations overall. Although the commenters may disagree with how BSEE has balanced those statutory principles and goals, the difficult and complex task of balancing those policies is committed to BSEE’s discretion and expert judgment. And for all the reasons discussed in the proposed rule and in this notice, BSEE has determined that the proposed revisions to subpart H (including those singled out by these commenters), as finalized in this rule, will reduce unnecessary regulatory burdens while ensuring safe and environmentally responsible operations on the OCS. In addition, BSEE notes that subpart H, as a whole, ensures safety and environmental protection safeguards at every stage of the production process, including with regard to: Design and approval of safety equipment and safety systems; installation of such equipment and systems at production facilities; personnel safety device training; continuous maintenance, field testing, and reporting of failures and problems to BSEE and manufacturers; equipment repair/removal/replacement, when needed, to ensure ongoing functionality; and shut-in, shutdown, and emergency procedures to deal with potential and impending risks. See, e.g., §§ 250.837, 250.842, 250.855, 250.880(b) and (c), 250.891. Moreover, many of the specific requirements that apply at these stages of production, especially during production operations, are intended to prevent harm to safety or the environment. For example, if the required SPPE fails, the default setting for the valves is to fail in ‘‘safe mode’’; in most cases, that is the ‘‘closed’’ position, thus preventing the release of hydrocarbons within the production system and limiting the impact of equipment failures. In addition, the SPPE in production safety systems are typically part of a closed system. Thus, when components fail, releasing hydrocarbons, another barrier confines the oil or gas within the system. E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations Accordingly, BSEE is confident that the final rule changes, which should reasonably reduce burdens (e.g., by clarifying some provisions and revising or eliminating certain redundant, needlessly burdensome or marginally useful provisions), will continue to ensure safety and environmentally protective operations, especially when viewed in the context of the full suite of protective measures established by subpart H. General Comments on Incorporation by Reference of Industry Standards amozie on DSK3GDR082PROD with RULES4 Enforcement of Compliance With Documents Incorporated by Reference Comment: A number of commenters asserted that, by relying on incorporation by reference of industry standards, the proposed rule would allow the oil and gas industry to regulate itself without government oversight. Response: BSEE disagrees. As discussed elsewhere in this final rule, BSEE incorporates industry standards by reference in accordance with the requirements of the NTTAA and implementing OMB guidance, OFR regulations (1 CFR part 51), and BSEE’s own procedures for incorporation (§ 250.198). The effect of incorporation by reference of an industry standard into the regulations is that the incorporated document becomes a regulatory requirement, see § 250.198(a)(3), and, thus, becomes subject to BSEE oversight and enforcement in the same manner as other regulatory requirements. See 82 FR 61705. If an SDO later revises a standard that BSEE has previously incorporated in a final rule, the BSEE would need to evaluate the revised standard before incorporating it through rulemaking in the regulations; in other words, industry itself cannot change the regulatory requirements by revising a standard after it has been incorporated in the regulations. Comment: One commenter asserted that the regulations should state that, where the regulatory requirements are more specific or stringent than incorporated industry standards, the regulations should take precedence. Response: There is no need for further regulation in response to this comment. The 2016 PSSR already inserted a provision in subpart H—at § 250.800(d)—clarifying that if there is any conflict between the standards incorporated by reference and any other requirements in subpart H, the operator must follow the other subpart H requirements. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Comment: Another commenter suggested that the regulations should state that compliance with incorporated industry standards is mandatory. Response: BSEE does not agree that such a broad statement needs to be added to the regulations. Existing § 250.198(a)(3) already provides that incorporation of an industry standard into the regulations makes that standard a regulatory requirement. BSEE has repeatedly referred to this principle in the PSSR and other rulemakings. In addition, BSEE concluded in an earlier rulemaking that a blanket statement, such as the one commenter suggested, is not needed, based on the wording of § 250.198(a)(3) and the bureau’s reliance on the specific regulatory language of incorporation for each incorporated standard. See 77 FR 50855 (August 22, 2012). Availability of Standards for Public Review Comment: Some commenters expressed concern about the availability of the standards proposed to be incorporated by reference in the proposed rule. The commenters asserted that the industry standards were not easily accessible or generally available to the public as part of the rulemaking process. Several commenters advocated that BSEE make the full text of any existing or proposed technical standards that are, or will be, incorporated by reference into BSEE’s regulations freely available for public download in a searchable format to facilitate public review. Response: The OFR requires standards incorporated by reference in its regulations to be made ‘‘reasonably available’’ for review by the public. Moreover, BSEE is required by law to describe how those incorporated documents are reasonably available. However, BSEE is not required, and often is not even permitted, to make industry standards downloadable and searchable for the convenience of commenters. Nor does BSEE agree with the suggestion that the standards at issue in the proposed rule were not reasonably available for public review by commenters in preparing their comments. As discussed in the proposed rule (82 FR 61705), all standards incorporated in BSEE’s regulations are available to view for free at BSEE’s headquarters office in Sterling, Virginia and at BSEE’s other office locations, during normal working hours, upon request. BSEE received no requests to examine the standards proposed for incorporation in the proposed rule at BSEE’s office. PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 49223 In addition to making standards available at BSEE for in-office examination, API voluntarily allows the public to view documents cited in government regulations free of charge on its website. (See, e,g., https:// www.api.org/publications-standardsand-statistics/publications/governmentcited-safety-documents). Documents from API and other SDOs (such as the American Society of Mechanical Engineers (ASME)) may also be purchased directly from those organizations. In this case, the updated or reaffirmed editions of the API standards referred to in the proposed rule (as well as one new replacement standard) were made available for free viewing on API’s website beginning on January 19, 2018. BSEE recognizes that those editions of the API standards were not available for viewing on API’s website during the entire comment period. Nonetheless, those editions could be accessed for public viewing during a significant portion of the comment period. Moreover, at all times during the comment period, commenters could have requested to view the relevant editions of API’s standards at BSEE’s office or purchased copies of those editions from API for a fee.9 In any event, because API based the updated or reaffirmed editions of the API standards at issue in the proposed rule on prior editions already incorporated in BSEE’s existing regulations, which were previously available for free viewing on API’s website, stakeholders interested in those API standards should have already been familiar with the basic subject matter of the current editions even before the new editions were made available for viewing by API.10 9 One commenter stated that it emailed BSEE during the comment period to request that BSEE provide the commenter with copies of all of the API standards currently incorporated and proposed for incorporation in BSEE’s regulations, which BSEE did not provide. As explained in the proposed rule and elsewhere in this notice, BSEE must respect API’s and other SDO’s copyright protections and cannot provide free copies of a copyrighted document without the copyright-holder’s consent. That is why BSEE makes copies of all incorporated standards (proposed or final) available for viewing at BSEE’s office(s) and why BSEE provides instructions for how interested parties can either view such standards on the SDO’s website or purchase the standards from the SDO. 10 The new, updated editions of API standards that the proposed rule proposed for incorporation are API 510, API STD 2RD, API RP 2SM, ANSI/API RP 14B, API RP 14C, API RP 14FZ, API RP 14G, API RP 500, ANSI/API Spec. Q1, ANSI/API Spec. 6A, API Spec. 6AV1, ANSI/API Spec. 14A, ANSI/ API Spec. 17J, and API 570. The reaffirmed standard is API RP 2SK (Third ed.). The only standard that BSEE proposed to incorporate that was not an updated edition or a reaffirmation of a currently-incorporated standard was API STD E:\FR\FM\28SER4.SGM Continued 28SER4 49224 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations amozie on DSK3GDR082PROD with RULES4 In addition, although some commenters suggested or implied that BSEE should make incorporated industry standards freely downloadable and searchable, apparently without regard to whether the standards are protected by copyright under U.S. and international law. Federal law— including the NTTAA, which authorizes and requires BSEE to incorporate industry-developed consensus standards by reference under appropriate circumstances, and the OFR regulations (1 CFR part 51) that govern all incorporations by reference in Federal regulations—does not eliminate copyright protection for incorporated standards. In fact, OFR, which has authority to approve all incorporations by reference, has considered and expressly rejected the idea that either the NTTAA or OFR’s own regulations remove copyright protections. See 79 FR 66267, 66273 (Nov. 7, 2014).11 Accordingly, as explained in the proposed rule (82 FR 61705), BSEE must respect the publisher’s copyright, which means that BSEE could not make and provide copies of the copyrighted standards to other parties without the copyright-holder’s consent. Further, OFR’s rules for incorporation by reference require only that an agency discuss in the final rule the ways that the incorporated document(s) are ‘‘reasonably available’’ to interested parties and how interested parties can obtain the documents. See 1 CFR 51.5(b)(2).12 Elsewhere in the final rule, as well as in the proposed rule (82 FR 61705), BSEE discusses how the editions of the standards to be incorporated here are reasonably available by free viewing at BSEE’s office, or viewing on the SDO’s website(s), or by purchase from the SDO.13 Those procedures are consistent 6AV2, which API had substituted for the former API RP 14H (which was previously incorporated in § 250.198). See 82 FR 61706. 11 In OFR’s most recent revision of its regulations governing incorporation by reference, OFR stated that ‘‘t‘‘[he NTTAA [has] not eliminated the availability of copyright protection for privately developed codes and standards that are referenced in or incorporated into federal regulations. Therefore, we [OFR] cannot issue regulations that could be interpreted as removing copyright protection from [incorporated by reference] IBR’d standards.’’ 79 FR 66273. 12 Similarly, OFR’s regulations require that proposed rules discuss the ways that materials proposed for incorporation are ‘‘reasonably available’’ or how the agency worked to make those materials reasonably available. See 1 CFR 51.5(a)(1). 13 1 CFR 51.7 of OFR’s regulations indicates that, to be eligible for incorporation by reference, a document needs only to be reasonably available to (and usable by) ‘‘the class of persons affected.’’ BSEE is confident that members of the regulated industry that are affected by the incorporated standards are able to purchase copies of the standards from API or other SDOs for their use. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 with BSEE’s longstanding practice in many other rulemakings and OFR has reviewed and approved the incorporations by reference in this final rule in accordance with OFR’s own regulations. Other Concerns About Using Incorporation by Reference Comment: One commenter stated that incorporation by reference can be cumbersome and that, in many cases, it reduces clarity of the regulatory requirements. This commenter suggested that BSEE use caution in this process and recommended that BSEE develop a way to provide a short summary of the incorporated document that will aid the reviewer in determining the document’s applicability and whether the reviewer needs to review that document in order to clarify the Federal regulatory requirements. Response: BSEE understands that the incorporation by reference of standards may sometimes appear cumbersome and may result in some questions that need further clarification. When BSEE decides to incorporate a standard by reference, it uses its best efforts to anticipate potential problems and to make the incorporation as simple, clear, and straightforward as possible. And if some confusion nonetheless arises after a standard is incorporated, BSEE can and does use several means to provide more clarity (e.g., Regulatory Interpretations, guidance through Notices to Lessees and Operators (NTLs)). BSEE disagrees, however, with the commenter’s suggestion that the incorporation of documents by reference in general is overly cumbersome and often reduces clarity, and with the implication that BSEE therefore should not use incorporated standards. Standards typically address complex technical issues, often at great length and in great detail, and it would be difficult and impracticable to duplicate that effort by drafting and inserting such detailed standards in the regulations. In fact, the NTTAA requires Federal agencies to use technical standards developed by voluntary consensus organizations to carry out the agencies’ objectives, when consistent with Federal law, in lieu of creating new Federal standards. And it is frequently more practical and efficient for agencies to incorporate such standards—with which the regulated industry is typically already familiar through their development by industry experts—by reference in the regulatory text rather than for the agencies to develop separate Federal standards. Moreover, OMB PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 Circular A–119, which instructs agencies on compliance with the NTTAA, expressly recognizes incorporation by reference of such standards as an acceptable means of using such standards in regulations. Consistent with the NTTAA, BSEE frequently participates in the standards development process by attending relevant standards development committee meetings and commenting on the documents as they are developed. Furthermore, requiring operators to follow specific standards documents that are incorporated by reference in the regulations often helps operators by providing detailed instructions for meeting the standards that would be impracticable to include in regulatory text. These instructions can help ensure consistency in operators’ approaches to carrying out regulatory requirements. This consistency, in turn, helps BSEE in reviewing and approving plans, permits, and other applications and simplifies the inspection process. With regard to the commenter’s suggestion that BSEE provide summaries of the relevant standards, BSEE notes that it is already required, by OFR’s regulations governing incorporations by reference, to summarize the incorporated materials in preambles to proposed and final rules (see 1 CFR 51.5(a)(2), 51.5(b)(3)), which are provided to OFR for review before the proposed and final rules are published. In this case, BSEE provided such summaries in the proposed rule (82 FR 61706–61709) and elsewhere in this final rule that have been reviewed and approved by OFR. BSEE has also provided summaries of the standards incorporated with this final rule in a document titled, ‘‘AA37—Oil and Gas Production Safety Systems—Revisions (Subpart H), Summary of standards incorporated by reference that are being updated to newer editions in this final rule.’’ That document may be viewed by accessing the online docket for this rulemaking action located at the Federal eRulemaking Portal: https:// www.regulations.gov. Comment: A commenter noted that BSEE proposed to adopt certain industry standards although it had not yet completed its own technical and regulatory evaluations (at the time of the proposal) of each standard to ensure that it provides superior safety and environmental protection. The commenter also stated that ‘‘The Report to the President by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling . . . sounded a strong warning’’ about DOI relying too heavily on API standards and on incorporating those E:\FR\FM\28SER4.SGM 28SER4 amozie on DSK3GDR082PROD with RULES4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations standards into agency regulations. The commenter asserted that the Report raised concerns that API’s role in developing standards could compromise BSEE’s regulatory framework, since API also serves as the industry’s principal lobbyist and advocate. The commenter also asserted that the report noted that API standards increasingly fail to reflect ‘‘best industry practices’’ and that, because the Department had relied on API in developing its own regulatory safety standards, any shortfalls in API’s objectivity could also undermine the Department’s regulatory system. Response: BSEE acknowledges some of the commenter’s concerns regarding the use of industry standards in its regulations, but disagrees with much of this comment and with the commenter’s conclusions. First, BSEE notes that the Report’s concerns with incorporation of industry standards were based on agency practices and other circumstances pre-dating the 2010 DWH incident. Since that event, many of those practices and circumstances have changed significantly. With regard to the commenter’s concern that BSEE had not completed its own evaluation of the new editions of certain standards that BSEE proposed to update, BSEE agrees that was the case at the time the proposed rule was published. However, BSEE did not intend to incorporate into a final rule any standards for which it had not completed its evaluation and is not doing so. Rather, BSEE sought to use the proposed rulemaking to solicit public feedback on those documents for BSEE to take into consideration while BSEE continued its internal review of these documents. See 82 FR 61705. In fact, BSEE has benefited from consideration of the public comments on the proposed incorporations, and those comments have helped inform BSEE’s determinations as to whether the new (or reaffirmed) editions proposed for incorporation are appropriate for inclusion in this final rule. In addition, soliciting comments on the proposed incorporations during BSEE’s continued evaluation of those newer versions of the standards has enabled BSEE to proceed more expeditiously to the incorporation in this final rule of those standards that BSEE has now determined will provide the same or higher levels of safety and environmental protection. As discussed in part G of this notice, BSEE has completed its review of most of the updated editions or new standards proposed for incorporation in the proposed rule and has included those editions and the one new standard in this final rule. However, BSEE is still VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 evaluating several remaining editions proposed for incorporation and is not including those remaining editions in this final rule. BSEE needs more time to complete its evaluation of those standards and will make final decisions on whether to incorporate some or all of those editions in a final rule at a later date. Concerning the comments on BSEE’s use of API standards, and the assertion that API standards increasingly do not represent best industry practices, BSEE does not agree that incorporation and use of the standards referenced in this final rule is either inappropriate or detrimental to safety and environmental protection. BSEE has evaluated the API standards incorporated in this final rule, and determined that they are at least as protective as the previously incorporated versions of those standards and serve as a valuable complement to BSEE’s regulations in helping to achieve the statutory objectives. These standards provide a baseline. BSEE adds supplemental requirements where appropriate. Moreover, as previously discussed, the NTTAA mandates that Federal agencies use technical standards developed by voluntary consensus standards organizations, instead of government-developed standards, where practicable and consistent with applicable law. There are only a few SDOs, including API, that address issues related to offshore oil and gas operations. Also, API provides standards on technical topics that are not addressed by other SDOs. And, consistent with the NTTAA’s preference for agency use of consensus standards (see 15 U.S.C. 272(e)(1)(A)(v)), API develops its standards through a ‘‘general consensus’’ process, which provides for input from those who are potentially ‘‘materially impacted’’ by the standard. In addition, based on recommendations in other post-DWH reports (see, e.g., Final Report on the Investigation of the Macondo Well Blowout, Deepwater Horizon Study Group (March 1, 2011) at pp. 94–98), BSEE has expanded its standards program and increased its involvement in the standards development process, including development of many API standards, and is continuously improving and formalizing BSEE’s internal process for reviewing standards relevant to the regulatory program. These developments will help BSEE to identify issues that may not be adequately addressed in incorporated standards and to supplement those standards, as necessary, in its regulations. PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 49225 Comment: A commenter asserted that BSEE should provide a technical analysis of any new or updated industry standards proposed for incorporation. The commenter suggested that this analysis should be publicly available at the same time as the proposed rule and should verify that the new standard represents BAST. This commenter noted that BSEE had not completed its own technical review before proposing these changes. The commenter requested that BSEE complete this work, and then reissue proposed regulations with an appropriate technical justification that is made available to the public before the public is asked to submit comments on the proposed changes. The commenter also suggested that the Department should establish a process with the National Academy of Engineering to assess proposed changes in standards and to determine if the new editions of incorporated standards ‘‘enhance safety and environmental protection and represent the highest level of international regulatory practice.’’ Response: BSEE does not agree with the commenters’ suggestions. First, the incorporation of industry standards in BSEE’s regulations does not reflect a specific BAST determination by BSEE; those actions derive from separate authorities and are governed by different criteria. Thus, there is no support for the commenter’s suggestion that ‘‘technical analysis’’ of a standard should include verification that it represents BAST. In addition, the issue of whether BSEE should modify its procedures for incorporating industry standards in the future is beyond the scope of this rulemaking. As previously discussed, in this rulemaking BSEE made all of the documents incorporated by reference available for public review in connection with the comment period provided for the proposed rule and continues to make publicly available at its office all of the standards incorporated by reference in the final rule. Similarly, BSEE does not agree that a ‘‘technical analysis’’ of the kind suggested by the commenter prior to a proposed incorporation by reference is necessary in order for commenters to be able to comment on such a proposal. As discussed previously, BSEE complies with the NTTAA requirement that an agency use standards developed or adopted by ‘‘voluntary consensus standards bodies’’ rather than government-unique standards, except where inconsistent with applicable law or otherwise impractical. (See OMB Circular A–119). BSEE also complies E:\FR\FM\28SER4.SGM 28SER4 49226 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations with the OFR regulations governing incorporation by reference. Those regulations (see §§ 51.5(a)(2) and (b)(3) and 51.11(a)) specify the process for updating an incorporated standard, including the types of descriptions required in connection with proposed and final rule documents, and a requirement that the descriptions must be provided to OFR for its review. BSEE complied with those requirements by providing for public notice and comment through the proposed rule and by seeking OFR’s approval for changes to the standards incorporated by reference in the final rule.14 This process does not require an agency to complete its review of a document it proposes to incorporate by reference prior to the proposed rule stage, and BSEE does not here in the final rule incorporate any standard for which it has not completed its review. G. Section-by-Section Summaries, Responses to Comments, and Changes From the Proposed Rule amozie on DSK3GDR082PROD with RULES4 Documents Incorporated by Reference. (Section 250.198) Section summary: Section 250.198 of the existing regulations contains provisions regarding how BSEE incorporates documents by reference in BSEE’s regulations, lists all of the documents BSEE has incorporated by reference in 30 CFR part 250, and states BSEE’s general expectations for compliance with those documents. The requirements for complying with a specific incorporated document can be found where the document is referenced in the regulations, as specified in § 250.198. BSEE proposed to revise § 250.198 by replacing older editions of certain standards incorporated in the regulations with new or recently reaffirmed editions of those standards.15 In addition, BSEE proposed to replace API RP 14H (Installation, Maintenance and Repair of Surface Safety Valves and Underwater Safety Valves Offshore, Fifth Edition 2007), currently incorporated in the regulations but subsequently withdrawn by API, with a new standard, API STD 6AV2 (Installation, Maintenance and Repair of 14 Under certain circumstances, existing § 250.198(a)(2) authorizes BSEE to incorporate a newer edition of an industry standard through a direct final rule (i.e., without a prior proposal); however, that authority was not exercised in this rulemaking. 15 As described in more detail later, the provisions proposed to be updated in this way included: ASME Boiler and Pressure Codes, Sections I, IV and VIII; API 510; API RP 2SK; ANSI/ API RP 14B; API RP 14FZ; API RP 14G; API RP 500; ANSI/API Spec. Q1; ANSI/API Spec. 6A; API Spec. 6AV1; API STD 6AV2; and API 570. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Surface Safety Valves and Underwater Safety Valves Offshore, First Edition 2014). Finally, BSEE proposed to revise § 250.198(h)(58) and (62) in order to change cross-references (from to ‘‘§ 250.842(b)’’ to ‘‘§ 250.842(c)’’) to the regulations which mention the two standards incorporated at those locations.16 BSEE received numerous comments that raised several issues (e.g., public availability of standards) related to the proposed revisions to § 250.198. BSEE responded to those general comments elsewhere in this final rule. Several commenters also stated that they either supported or did not oppose the proposed incorporations, but provided no details regarding the merits of those documents. Several commenters, however, raised significant concerns with the merits of incorporating API RP 14C (Eighth Edition 2017) and API RP 500 (Third Edition 2012) at this time. For the reasons explained earlier in this notice, this final rule updates the incorporation by reference of 12 standards (including API RP 500, Third Edition) as proposed, but does not update the remaining five standards at this time. BSEE received no comments on the proposed revisions to the crossreferences in § 250.198(h)(58) and (62) and the final rule makes those revisions. Comment: One industry commenter asserted that, although it did not oppose the proposed incorporation of the Third Edition of API RP 500, it needed more time to fully evaluate the impacts of the Third Edition (including the potential costs of implementation, especially for facilities that are under construction at the time the final rule takes effect) before compliance with that edition of the standard becomes mandatory. Therefore, the commenter recommended delaying the incorporation of the Third Edition of API RP 500 until a later date. Response: BSEE does not agree that such a delay is warranted. API RP 500 (Second Edition) was adopted in 1997 and has long been incorporated in BSEE’s regulations. The regulated industry has longstanding experience with how to implement that standard. Although the Third Edition made some significant revisions to the Second Edition, the commenter did not explain 16 The references in § 250.198 to be modified in this way are related to: API RP 14F, Design, Installation, and Maintenance of Electrical Systems for Fixed and Floating Offshore Petroleum Facilities for Unclassified and Class 1, Division 1 and Division 2 Locations, Upstream Segment, Fifth Edition (2008, reaff. 2013): and API RP 14J, Design and Hazards Analysis for Offshore Production Facilities, Second Edition (2001; reaff. 2013). PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 or offer any examples as to why those differences would require more time to evaluate potential implementation concerns or costs. Moreover, although API was one of the joint commenters requesting a delay, API itself adopted the Third Edition (with the consensus of the industry) in 2012, and it has already had over five years to consider what the impacts of its own revised standard would be on the industry it represents. Thus, no delay in finalizing the proposed incorporation of the Third Edition of API RP 500 is necessary. Comment: One commenter, although not opposed to the proposed incorporation of API RP 14C (Eighth Edition), raised strong concerns about the inclusion of that edition in the final rule at this time. The commenter asserted that, in light of the many substantive changes to the Eighth Edition, which was recently adopted (February 2017), more time is needed to assess the potential impacts and costs from implementation of those changes, especially with respect to facilities still under construction. Two commenters also pointed out that there are a number of significant organizational and other clerical errors, as well as several apparent inconsistencies, in the Eighth Edition that need correction and that would cause substantial confusion and implementation problems if incorporated at this time. Response: The standards being incorporated into the regulations are updated editions to what is already incorporated by reference, not adoptions of novel standards. At the time BSEE or its predecessor originally incorporated the standards in the regulations, BSEE determined that they would improve safety and environmental protection for their respective applications. Subsequently, BSEE reviewed updated editions of each standard and concluded in this final rule that the new editions increase the overall safety baseline from the previously incorporated editions. Since the nature of operations evolves and equipment changes over time, standards also change to keep up-todate. Updating the incorporation of standards to newer editions helps maintain and improve the safety and environmental integrity of operations. BSEE does not anticipate the change in burden to be significant, since updating to the new editions will not require retrofit of equipment. The revised maintenance and testing procedures contained in these standards are generally modifications of existing procedures, which are already required. BSEE is aware that there are a number of organizational problems and clerical and other non-substantive errors in the E:\FR\FM\28SER4.SGM 28SER4 amozie on DSK3GDR082PROD with RULES4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations Eighth Edition that could significantly affect other standards that refer to and rely on API RP 14C, and that could interfere with the industry’s and BSEE’s ability to implement the regulations. BSEE is also aware that API is currently considering how to resolve these concerns. BSEE has therefore decided not to update the reference to API RP 14C in § 250.198 in the final rule at this time. In addition, although BSEE has completed its evaluation of most of the standards proposed for incorporation (including the Third Edition of API RP 500), BSEE needs more time to complete its evaluation of the other five standards (including the Eighth Edition of API RP 14C). Accordingly, BSEE will not finalize the proposed incorporation of the following standards at this time and will make final decisions as to whether to incorporate some or all of these standards in a final rule at a later date: • API RP 14C, Analysis, Design, Installation, and Testing of Basic Surface Safety Systems for Offshore Production Platforms, Eighth Edition (February 2017). BSEE proposed to substitute the Eighth Edition for the currently incorporated Seventh Edition (2001, reaffirmed 2007). The Eighth Edition contains extensive substantive changes compared to the last substantive revision (the Sixth Edition) in 1998 and makes numerous organizational changes as compared to the Seventh Edition. • API STD 2RD, Dynamic Risers for Floating Production Systems, Second Edition, September 2013. BSEE proposed to substitute this standard for the currently incorporated First Edition of API RP 2RD (1998, Errata 2009) of the same standard. • ANSI/API Spec. 14A, Subsurface Safety Valve Equipment, Twelfth Edition (January 2015; Errata, July 2015; Addendum, June 2017). BSEE proposed to substitute the Twelfth Edition for the currently incorporated Eleventh Edition (2005) of the same standard. • ANSI/API Spec. 17J, Unbonded Flexible Pipe, Fourth Edition May 2014; Errata 1, September 2016; Errata 2, May 2017; Addendum 1, October 2017. BSEE proposed to substitute this edition for the currently incorporated Third Edition (2008) of the same standard. • API RP 2SM, Design, Manufacture, Installation, and Maintenance of Synthetic Fiber Ropes for Offshore Mooring, Second Edition (2014). BSEE proposed to substitute this edition for the currently incorporated First Edition (2001; 2007 Addendum) of the same standard. BSEE is carrying forward with certain proposed revisions to § 250.198 in the VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 final rule. First, as previously mentioned, and as proposed, the final rule revises § 250.198(h)(58) (which incorporates API RP 14F, Recommended Practice for Design, Installation, and Maintenance of Electrical Systems for Fixed and Floating Offshore Petroleum Facilities for Unclassified and Class 1, Division 1 and Division 2 Locations, Upstream Segment) and § 250.198(h)(62) (which incorporates API RP 14J, Recommended Practice for Design and Hazards Analysis for Offshore Production Facilities) to update the cross-references to § 250.842(b), which this final rule has redesignated as § 250.842(c). Second, BSEE has completed its evaluations of the following standards, as well as any comments received on their proposed incorporation, and determined that these standards are at least as protective of safety and the environment as the standards previously incorporated in the regulations. Accordingly, this final rule revises existing § 250.198 to incorporate the following updated standards: • ASME Boiler and Pressure Vessel Code (BPVC) Æ Section I, Rules for Construction of Power Boilers including Appendices (2017 Edition). This edition replaces the previously incorporated 2004 edition of that standard, including the July 2005 Addenda and all Section I Interpretations Volume 55. ASME BPVC Section 1 provides methods and requirements for: construction of power, electric, and miniature boilers; high temperature water boilers, heat recovery steam generators, and certain fired pressure vessels to be used in stationary service; and power boilers used in locomotive, portable, and traction service. Major changes in the 2017 edition include: (a) New guidance on visual examination in the fabrication process; (b) a non-mandatory option for ultrasonic examination acceptance criteria; (c) requirements for retaining radiographs as digital images; (d) clarification of material identification requirements for a ‘‘pressure part material;’’ (e) updated mandatory training requirements for qualified personnel for various non-destructive examination (NDE) techniques; (f) updated provisions on the types of auxiliary lift devices that operators can use for alternative testing of valves to align with current state of the art; (g) clarification that welded pressure parts must be hydrostatic-tested with the completed boiler; and (h) references to other updated standards. Æ Section IV, Rules for Construction of Heating Boilers; including Appendices 1, 2, 3, 5, 6, and Non- PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 49227 mandatory Appendices B, C, D, E, F, H, I, K, L, and M, and the Guide to Manufacturers Data Report Forms (2017 Edition). This edition replaces the previously incorporated 2004 Edition and 2005 Addenda of that standard. The updated standard provides requirements for design, fabrication, installation, and inspection of steam heating, hot water heating, hot water supply boilers, and potable water heaters intended for low pressure service that are directly fired by oil, gas, electricity, coal, or other solid or liquid fuels. The new edition also (a) provides equipment scope clarifications, (b) includes a new mandatory appendix for feedwater economizers, (c) deletes conformity assessments requirements and moves them to normative reference ASME CA– 1, (d) provides new corrosion resistant alloy requirements for internal tank surfaces of heat exchangers installed in storage tanks, and (e) clarifies requirements for modular boilers. Æ Section VIII, Rules for Construction of Pressure Vessels; Divisions 1, 2, and 3 (2017 Edition) and all Section VIII Interpretations Volumes 54 and 55. This edition replaces the previously incorporated 2004 Edition and 2005 Addenda, Divisions 1, 2, and 3 and all Section VIII Interpretations Volumes 54 and 55. Since the 2004 edition was issued, ASME has rewritten the BPVC code to incorporate the latest technologies and engineering knowledge. The 2017 Edition gives detailed requirements for the design, fabrication, testing, inspection, and certification of both fired and unfired pressure vessels. This updated edition specifically refers to those pressure vessels that operate at pressures, either internal or external, that exceed 15 pounds per square inch gauge (psig). Section VIII contains three divisions, each of which covers different vessel specifications. • API 510, Pressure Vessel Inspection Code: In-Service Inspection, Rating, Repair, and Alteration, Downstream Segment, Tenth Edition (May 2014), including Addendum 1 (May 2017). This edition replaces the previously incorporated Ninth Edition of the same standard. API 510 covers the in-service inspection, repair, alteration, and rerating activities for pressure vessels and the pressure-relieving devices protecting these vessels. API 510 is intended to specify the in-service inspection and condition-monitoring program that is needed to determine the integrity of pressure vessels and pressure-relieving devices. The Tenth Edition includes updated normative references, updated definitions, and new requirements for inspection programs, corrective actions, E:\FR\FM\28SER4.SGM 28SER4 amozie on DSK3GDR082PROD with RULES4 49228 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations management of change, integrity operating windows, pressure testing, corrosion considerations, and marking requirements. • API RP 2SK, Design and Analysis of Stationkeeping Systems for Floating Structures, Third Edition (October 2005), Addendum (May 2008), reaffirmed edition of June 2015. The reaffirmed document makes no changes to the previously incorporated 2008 Third Edition. It provides a method for analyzing, designing, or evaluating station-keeping systems (mooring, dynamic positioning, or thrusterassisted mooring) that operators use for floating units. The reaffirmed standard also addresses some operational aspects of such systems and provides different design requirements for mobile and permanent moorings. • ANSI/API RP 14B, Design, Installation, Operation, Test and Redress of Subsurface Safety Valve Systems, Sixth Edition (September 2015). This edition replaces the previously incorporated Fifth Edition (2005) of the same standard. This standard creates requirements and provides guidelines for subsurface safety valve (SSSV) system equipment. Manufacturers and operators design and install SSSVs to prevent an uncontrolled well flow, when actuated. The Sixth Edition addresses system design, installation, operation, testing, redress, support activities, documentation, and failure reporting. The Sixth Edition covers specific equipment including control systems, control lines, SSSVs, and secondary tools and provides criteria for proper redress for replacement or disassembly of an SSSV. In contrast to the Fifth Edition, the Sixth Edition also emphasizes supplier and manufacturer operating manuals, systems integration manuals, handling, system quality, documentation, and data control. • API RP 14FZ, Design, Installation, and Maintenance of Electrical Systems for Fixed and Floating Offshore Petroleum Facilities for Unclassified and Class I, Zone 0, Zone 1 and Zone 2 Locations, Second Edition (May 2013). This edition replaces the previously incorporated First Edition (2001, reaffirmed 2007) of the same standard. The Second Edition contains substantial changes from the First Edition. The Second Edition establishes minimum requirements and guidelines for design and installation of electrical systems on fixed and floating petroleum facilities located offshore in hazardous locations classified as Zone 0, Zone 1, or Zone 2. As revised, the Second Edition of API RP 14FZ applies to both permanent and temporary electrical installations and VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 describes basic desirable electrical practices for offshore electrical systems. • API RP 14G, Fire Prevention and Control on Fixed Open-type Offshore Production Platforms, Fourth Edition (April 2007), reaffirmed January 2013. The reaffirmed document makes no changes to the previously-incorporated standard. This reaffirmed standard includes provisions for minimizing the likelihood of an accidental fire, and for designing, inspecting, and maintaining fire control systems. The reaffirmed standard emphasizes the need to train personnel in firefighting, to conduct routine drills, and to establish methods and procedures for safe evacuation. API’s intent in this standard is for fire control systems to provide an early response to prevent incipient fires from spreading; however, the intent is not to preclude the application of more extensive practices to meet special situations or the substitution of other systems that will provide an equivalent or greater level of protection. This reaffirmed standard is applicable to fixed open-type offshore production platforms, which are generally installed in moderate climates and which have sufficient natural ventilation to minimize the accumulation of vapors; enclosed areas, such as quarters buildings and equipment enclosures, normally installed on this type platform are addressed. Totally enclosed platforms installed for extreme weather conditions or other reasons, however, are beyond the scope of this standard. • API STD 6AV2, Installation, Maintenance, and Repair of Surface Safety Valves and Underwater Safety Valves Offshore (First Edition March 2014) and Errata 1, August 2014. This standard replaces the previously incorporated API RP 14H, Installation, Maintenance and Repair of Surface Safety Valves and Underwater Safety Valves Offshore (Fifth Edition 2007), which API withdrew when it adopted API STD 6AV2. The new standard provides practices for installing and maintaining Surface Safety Valves (SSVs) and Underwater Safety Valves (USVs) used or intended to be used as part of a safety system (as defined by documents such as API RP 14C) and includes provisions for conducting inspections, installations, and maintenance, field and off-site repair as well as provisions addressing testing procedures, acceptance criteria, failure reporting, and documentation. API STD 6AV2 also includes updated definitions, new provisions for qualified personnel, new documentation and test procedures, acceptance criteria for postinstallation and post-field repair, and provisions for offsite repair and PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 remanufacture alignment to ANSI/API Spec. 6A. • API RP 500, Classification of Locations for Electrical Installations at Petroleum Facilities Classified as Class I, Division 1 and Division 2, Third Edition (December 2012; Errata January 2014). This edition replaces the previously incorporated Second Edition (1997, reaffirmed 2002) of the same standard. The purpose of this standard is to provide guidelines for classifying locations (Class I, Division 1 and Class I, Division 2) at petroleum facilities for the selection and installation of electrical equipment. This standard followed the basic definitions given in the 2011 edition of National Fire Protection Association (NFPA) 70, National Electrical Code (NEC). • ANSI/API Spec. Q1, Specification for Quality Management System Requirements for Manufacturing Organizations for the Petroleum and Natural Gas Industry, Ninth Edition (June 2013; Errata, February 2014; Errata 2, March 2014) and Addendum 1 (June 2016). This edition replaces the previously incorporated Eighth Edition (2007) of the same standard. This updated standard features over 85 new clauses and five new sections, creating a major shift in quality management as it applies to the oil and gas industry. A thematic change is the approach to quality through risk assessment and risk management. The five new sections include risk assessment and management, contingency planning, product quality planning, preventative maintenance, and management of change. The Ninth Edition is also intended to align with API Spec. Q2, Quality Management System Requirements for Service Supply Organizations for the Petroleum and Natural Gas Industries, First Edition (2011). Overall, the goal of ANSI/API Spec. Q1 Ninth Edition is to further enhance the minimum baseline requirements of quality management systems of oil and gas equipment manufacturers. • ANSI/API Spec. 6A, Wellhead and Christmas Tree Equipment, Twentieth Edition (October 2010; Addendum 1, November 2011; Errata 2, November 2011; Addendum 2, November 2012; Addendum 3, March 2013; Errata 3, June 2013; Errata 4, August 2013; Errata 5, November 2013; Errata 6, March 2014; Errata 7, December 2014; Errata 8, February 2016; Addendum 4, June 2016; Errata 9, June 2016; Errata 10, August 2016). This edition replaces the previously incorporated Nineteenth Edition (2004) of the same standard. The Twentieth Edition includes significant changes from the previous edition, such E:\FR\FM\28SER4.SGM 28SER4 amozie on DSK3GDR082PROD with RULES4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations as: (a) Updated definitions and terms; (b) updated normative references to other standards; (c) temperature ratings; (d) more stringent material performance requirements; (e) a revised repair and remanufacture annex; (f) updated requirements for equipment in hydrogen sulfide (H2S) service; and (g) SSV and USV performance requirements. The Twentieth Edition also aligns with other standards, such as NACE MR0175 (for use in H2S-containing environments), and contains options to use various American Society for Testing and Materials (ASTM) International documents for material testing. The authors removed references to obsolete standards and requirements for obsolete equipment from the Twentieth Edition. • API Spec. 6AV1, Specification for Verification Test of Wellhead Surface Safety Valves and Underwater Safety Valves for Offshore Service, Second Edition (February 2013). This edition replaces the previously incorporated First Edition (1996, reaffirmed 2008) of the same standard. The Second Edition establishes design validation requirements for ANSI/API Spec. 6A, Specification for Wellhead and Christmas Tree Equipment, for SSVs and USVs as well as associated valve bore sealing mechanisms for Class II and Class III SSVs and USVs. Major changes from the First Edition include: replacing ‘‘Performance Requirement’’ with the term ‘‘Class;’’ phasing out the use of Class 1/PR1 valves; establishment of API licensing of test agencies; updated facility requirements; more specificity on the validation testing procedures of Class II valves; and new validation tests for Class III SSVs and USVs. • API 570, Piping Inspection Code: In-service Inspection, Rating, Repair, and Alteration of Piping Systems, Fourth Edition (February 2016; Addendum 1, May 2017). This edition replaces the previously incorporated Third Edition (2009). API 570 covers inspection, rating, repair, and alteration procedures for metallic and fiberglassreinforced plastic piping systems and their associated pressure relieving devices that have been placed in service. This inspection code applies to all hydrocarbon and chemical process piping covered in section 1.2.1 that have been placed in service (unless specifically designated as optional per section 1.2.2). This publication does not cover inspection of specialty equipment, including instrumentation, exchanger tubes and control valves. The ‘‘in service inspection’’ Code in this standard no longer covers process piping systems that have been retired from service and abandoned in place. However, piping that is abandoned in VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 place may still need some amount of inspection and/or risk mitigation to ensure that it does not become a process safety hazard because of continuing deterioration. Process piping systems that are temporarily out of service, but have been preserved for potential future use, are still covered by the new edition of this Code. Timing of Compliance With New Editions of Standards Comment: Several commenters suggested that, if BSEE updated certain standards in the final rule, it should clarify that some of the updated standards would apply only to new equipment or to new offshore facilities; i.e., that those updated standards would not require replacement of existing facilities or equipment that do not meet the updated standards’ requirements. Response: BSEE does not believe that it is necessary to revise the regulatory text for the updated standards that are included in this final rule to specify which standards, or which provisions in those standards, apply prospectively. BSEE does not intend to require, and the standards themselves do not envision, replacement of existing facilities or equipment (that meet the applicable requirements that were in effect when the facilities or equipment were installed) simply because updated standards have been incorporated in this final rule. The updated standards will apply to all BSEE approvals of facilities and equipment prospectively (as of the effective date of the final rule). By the nature of the standards and the way in which they are incorporated in BSEE’s regulations, some of the updated standards’ provisions can apply only to new facilities or equipment (e.g., provisions for design, analysis, and/or installation of certain new systems or new equipment). The language of the regulations and the referenced standards will result in their application to new and existing facilities or equipment, and require certain future actions (e.g., equipment inspection, testing, removal/ repair/replacement). Operators must ensure that those future actions are taken and that all existing facilities/ equipment comply with those applicable requirements. Although BSEE believes that the nature, purpose, and scope of the updated standards— and of the regulations which reference those standards—in this final rule are clear as to which requirements apply only to new equipment/facilities and which requirements apply to both new and existing equipment/facilities, BSEE notes that: • API STD 6AV2 (First Edition), API 510 (Tenth Edition), and API 570 PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 49229 (Fourth Edition) apply to both new and existing facilities and equipment; • API RP 2SK (Third Edition, reaffirmed 2015), API RP 14FZ (Second Edition), and API RP 500 (Third Edition) apply only to new facilities installed after the final rule effective date; and • ANSI/API RP 14B (Sixth Edition), ANSI/API Spec. Q1 (Ninth Edition), and API Spec. 6AV1 (Second Edition) apply only to new equipment installed after the effective date. What must the DWOP contain? (Section 250.292) BSEE did not receive any comments on this section of the proposed rule. Since BSEE decided not to incorporate by reference the second edition of API STD 2RD, as proposed, the final rule implements no changes to this section of the regulations. General (Section 250.800) BSEE proposed updating API RP 2RD to API STD 2RD in this rule. BSEE did not receive any comments on this section of the proposed rule. BSEE decided not to incorporate by reference the second edition of API STD 2RD, as proposed. However, BSEE is revising paragraph (a) of this section to clarify expectations for preproduction inspections of new facilities, adding two new subordinate paragraphs to paragraph (a). In the current regulations, paragraph (a) of this section already requires operators to receive BSEE approval of their production safety system application and request a preproduction inspection from BSEE before commencing production. BSEE added a new paragraph (a)(1) to clarify the requirement to obtain approval of the production safety system application by referencing § 250.842, which contains the requirements for that application. BSEE also added new paragraph (a)(2) to highlight and clarify the requirement to request a preproduction inspection, including language noting that the operator must notify the District Manager 72 hours before it plans to commence initial production and adding a cross reference to that existing requirement in § 250.880(a)(1). These revisions are purely organizational and clarifying and do not impose any new substantive requirements. Safety and Pollution Prevention Equipment (SPPE) Certification (Section 250.801) Section summary: This section of the existing regulations contains requirements for the installation of certified SPPE on OCS wells or as part E:\FR\FM\28SER4.SGM 28SER4 49230 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations amozie on DSK3GDR082PROD with RULES4 of the system associated with the wells. It also clarified that (as of September 2017) SPPE includes SSVs and actuators, such as those installed on injection wells capable of natural flow, as well as BSDVs. This section of the existing regulations also specifies that BSEE will not allow subsurfacecontrolled SSSVs on subsea wells and provides that SPPE manufactured and marked pursuant to ANSI/API Spec. Q1 will be considered certified SPPE under part 250. Section 250.801(c) of the existing regulations also provides that BSEE may exercise its discretion, under certain conditions, to accept SPPE manufactured under quality assurance programs other than ANSI/API Spec. Q1. In the proposed rule, BSEE proposed to clarify that GSLDVs are a type of SPPE, since, for reasons explained in the 2017 proposed rule (82 FR 61709), GLSDVs already must follow § 250.801. BSEE also proposed to revise the introductory sentence in paragraph (a) of this section to remove the phrase ‘‘[i]n wells located on the OCS,’’ since all of the equipment that is considered SPPE is either located in a well or a riser. After consideration of comments submitted on the proposed revisions to this section, as discussed below, the final rule revises § 250.801(a) to expressly include GLSDVs in the list of equipment that BSEE considers to be SPPE. In addition, as proposed, the final rule revises paragraph (a) to remove the phrase, ‘‘[i]n wells located on the OCS.’’ Addition of GLSDVs to SPPE List Comment: Commenters generally questioned the proposed addition of GLSDVs to the list of equipment that is considered SPPE. One comment asserted that GLSDVs are installed in a departing capacity (direction of flow into the well). The commenter stated that there is a check valve to prevent backflow and that there are no testing frequency or leakage rate requirements for GLSDVs and there is no mention of GLSDVs in the Eighth Edition of API RP 14C. Comments also stated that BSEE did not provide statistics or failure data to justify the proposed addition of GLSDVs as SPPE. Response: BSEE does not believe that the assertions made in these comments warrant a change to the proposed revision. As explained in the proposed rule, the addition of GLSDVs to the list of SPPE is merely a clarification of what is already required by the current regulations. Section 250.835 currently requires that BSDVs meet the requirements in § 250.801, and § 250.873 states that GLSDVs must meet the requirements for BSDVs in VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 § 250.835, so it follows that GLSDVs are already required to meet the requirements of § 250.801. The GLSDV acts as a robust, tested barrier to prevent backflow to the platform. The configuration of many subsea fields is such that it is important to prevent the continuous feeding of gas lift gas to the facility in the event of an emergency. Regarding the comment that GLSDVs are not addressed in API RP 14C, BSEE does not believe that the lack of direct mention of GLSDVs in that document is dispositive of whether the requirements for SPPE in subpart H should apply to those valves, which in fact they already did under the pre-existing regulations. BSEE notes that GLSDVs are mentioned in API RP 17V, Recommended Practice for Analysis, Design, Installation, and Testing of Safety Systems for Subsea Applications, First Edition, which was adopted by API in 2015 and includes the subsea requirements that were found in the Seventh Edition of API RP 14C. Although BSEE does not incorporate API RP 17V by reference in its regulations, that standard is considered a companion document for API RP 14C, and BSEE believes that the regulated industry is well aware of the connection between those standards. Regarding the assertion that there are no testing frequency or leakage rate requirements for GLSDVs, the current regulations include specific testing requirements for GLSDVs under § 250.873(d). Comment: A commenter asserted that GLSDV requirements should apply only to subsea systems. Response: BSEE agrees. In fact, GLSDVs are listed only under the subsea systems sections in the regulations. However, to clarify this point, BSEE added ‘‘associated with subsea systems’’ to § 250.801(a)(5) in the final rule. Requirements for SPPE (Section 250.802) Section summary: This section provides the requirements for SPPE. SPPE are key safety barriers that prevent catastrophic events from occurring on offshore platforms. This section requires compliance with a variety of industry standards and includes repair and documentation requirements. BSEE requested comments on the proposed elimination within § 250.802(c)(1) of a requirement that an independent third party certify that each device will function under the most extreme conditions to which it may be exposed. Based on the comments received, BSEE is revising existing paragraph (c)(1) and renumbering the remaining paragraphs of this section. In paragraph (c)(1) of the final rule, BSEE is removing the PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 requirement for an independent third party certification of the design of the SPPE. In the final rule BSEE is maintaining the requirement in the existing regulations that each device must be designed to function in the conditions to which it may be exposed, while deleting the phrase ‘‘most extreme.’’ BSEE is adding a provision in the final rule in paragraph (c)(1)(i) that was not in the proposed rule requiring the operator to have each device design tested by an independent test agency, according to the testing criteria in the appropriate standard as incorporated into the regulations. This change does not reflect any new substantive requirements or burdens, but rather merely reinforces existing requirements from documents that are already incorporated by reference in § 250.802. In addition, the final rule requires operators to maintain a description of the process used to ensure the device is designed to function as required in paragraph (a) and final paragraph (c)(1) of this section. The operator must provide this documentation to BSEE upon request. BSEE also included a provision in final paragraph (c)(1)(iii) that preserves the requirement for a qualified third party certification of a device, if that device is removed from service and installed at a different location. This ensures that the device will function as designed under the conditions to which it may be exposed in the new location. Consistent with the proposed revision to § 250.801, BSEE is revising this section to include GLSDVs in the equipment addressed in paragraphs (a) and (c) of this section, as well. BSEE also is revising paragraph (d)(2) of § 250.802 to remove the phrase ‘‘on that well,’’ as proposed. BSEE does not need to specify the location of the SPPE since all of the equipment that is considered SPPE is either located in a well or a riser. Third Party Certifications Comment: BSEE received many comments on the proposed deletion of the requirements for third party certifications. Industry groups supported elimination of this requirement and concurred with the rationale in the proposed rule that suggested that this requirement duplicated validation and functional tests required in other sections of the regulations. Other commenters highlighted the importance of this equipment in preventing major incidents, noted recommendations arising out of the DWH incident related to the need for the use of third party certification programs, described the E:\FR\FM\28SER4.SGM 28SER4 amozie on DSK3GDR082PROD with RULES4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations value of independent third party verification, and asserted that BSEE had not provided any evidence to support a revision of the 2016 requirement. Many commenters believe that deletion of this requirement will increase the risks arising out of offshore oil and gas development. Commenters asked how BSEE would ensure the operators followed the standards as required, and met the design requirements for the SPPE, if the independent third party certification requirement was removed. Response: BSEE agrees that the current industry standards and quality assurance certification programs related to SPPE have played an important role in improving the reliability of equipment that is manufactured for use on the OCS. Industry certification practices, such as the API Monogram Program, provide a level of assurance that these critical barriers are designed and manufactured according to good engineering practices. However, there are limits to the scope of these certification and verification programs. For example, these programs apply only to new equipment at the time of manufacture and the certifications are made by the OEMs rather than the operator (see industry comments: ‘‘it is the manufacturer’s responsibility to meet the design requirements of API standards, not the operator’’ and ‘‘it is the responsibility of the manufacturer to meet certification requirement of ANSI/ API Spec Q1’’). However, the responsibility for verifying that the SPPE is fit-for-service on a specific facility ultimately rests with the operator and BSEE, not the OEM. The existing requirement for independent third party certification helps to supplement BSEE’s review process. Based on the public comments, BSEE reviewed this process and the existing third party certification programs and is revising the current requirements regarding the independent third party certifications as previously described. BSEE determined that it is appropriate to retain the existing language requiring the device to be designed to function under the conditions to which it may be exposed, while deleting the phrase ‘‘most extreme.’’ The recommendations arising from the DHW incident included the use of the phrase ‘‘most extreme conditions’’ in the criteria for the blowout preventer (BOP), and BSEE then applied it to SPPE. However, unlike BOPs, operators do not generally move SPPE to other locations after it is installed. Manufacturers and operators design SPPE to be used in a specific well/ location for the life of the equipment. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 The potential for unanticipated extremes during production is less than during drilling or completion operations. Manufacturers and operators know the operating environment when they design the SPPE, and the basic design criteria includes temperature, pressure and flow rate for the well where the SPPE will be installed. The valves used are normally commercial, off the shelf products that are designed to function in a range of operating conditions. The most extreme production conditions generally occur at the beginning of production operations, since operating pressures decrease over time as the reservoir is produced. In addition, BSEE is retaining long standing requirements for design testing, as provided in the incorporated standards, as well as associated requirements for documentation of the design process. The final rule still provides that any SPPE that is removed from service, then installed in another location, must have independent third party certification. To the extent the final rule will no longer require independent third party certification in other contexts, the final rule will require the operator to maintain documentation of the process used to ensure the device is designed to function in the conditions to which it may be exposed and to provide that documentation to BSEE upon request. These elements of the final rule help address concerns raised by commenters regarding BSEE’s ability to verify compliance with the standards for design. As a result, we revised the language of the proposed rule in the final rule to state that the operator must have the device design tested by an independent test agency and must maintain documentation of the design process used to ensure that the device is designed to function under the conditions to which it may be exposed. The independent third party certification required by existing regulations is a one-time certification of each device. A one-time certification will not guarantee that a device will function as designed for the life of the device. Accordingly, an independent third party’s certification that the device will function is inherently of limited value. The existing regulations already include additional requirements to ensure that SPPE will function when needed. For example, § 250.880 establishes detailed testing requirements for SPPE, based on the specific type of device, ensuring that all SPPE are tested on a regular basis and repaired or replaced, as appropriate. This regular testing is designed to ensure the SPPE PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 49231 will function when needed, preventing failures during operations. Existing BSDV Inventory BSEE requested comments concerning a method of using BSDVs which were already in the operator’s inventory, but had not been certified pursuant to the SPPE requirements. BSEE also requested information on the size of this noncertified BSDV inventory. The comments from industry associations included a recommendation that would allow the use of non-certified equipment if a purchase order had been signed by the effective date of the 2016 rule. BSEE notes that operators were aware of the likely SPPE requirements long before the effective date of the 2016 rule. In addition, operators have options under the existing regulations for obtaining approval to use non-certified SPPE. We believe that this case-by case approval process is a better approach than attempting to address the issue through a modification of the SPPE requirements. Consequently, BSEE made no change to the regulations regarding existing BSDV inventory. Requirements for Non-Certified Equipment Comment: According to the commenter, the proposed regulations (presumably, the specific proposal to remove the phrase ‘‘on that well’’ from § 250.802(d)(2)) would allow pulling non-certified safety equipment from one well and moving it to another well. The commenter noted that current regulations allow non-certified equipment to remain in service on a specific well, until it is time to replace that equipment. The commenter went on to assert that the regulations allow this because there is a cost of pulling and replacing it, and BSEE provided operators the opportunity to use noncertified equipment for their useful remaining life in a specific well. The commenter noted that, therefore, the regulations would ‘‘grandfather’’ noncertified equipment for use in that specific well. The commenter concluded that, if the industry is allowed to pull non-certified equipment and move it to another well, new certified equipment will not be purchased and installed as planned. The commenter stated that continuing to use non-certified safety equipment is not in the public interest and could increase the risk of a spill. For those reasons, the commenter opposed this revision. Response: BSEE disagrees. Whenever SPPE is installed on a well, it must be certified according to §§ 250.801 and 250.802(d)(1), neither of which is being modified to allow the behavior the E:\FR\FM\28SER4.SGM 28SER4 49232 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations amozie on DSK3GDR082PROD with RULES4 commenter describes. The existing provisions that allow operators to continue to use non-certified SPPE that is currently installed on a well applies only to equipment that was installed before the certification requirement was in the regulations. Any new SPPE or SPPE that requires offsite repair, remanufacturing, or any hot work, must be replaced with certified SPPE. Operators are not allowed to remove non-certified SPPE from one well and install it on another well. The reason that BSEE is removing the phrase ‘‘on that well’’ is not to allow for the conduct described by the commenter, but to recognize that SPPE may also be installed on risers or locations in production systems other than a well itself. What SPPE failure reporting procedures must I follow? (Section 250.803) Section summary: Section 250.803(a) of the existing regulations: Requires operators to follow failure reporting requirements in ANSI/API Spec. 6A (Nineteenth Edition) for SSVs, BSDVs, and USVs, and to follow the requirements in ANSI/API Spec. 14A (Eleventh Edition) and Annex F of ANSI/API RP 14B (Fifth Edition) for SSSVs; defines a failure as ‘‘any condition that prevents the equipment from meeting the functional specification;’’ and requires operators to provide written notice of equipment failure to BSEE and the equipment manufacturer within 30 days after the discovery of the failure. Existing § 250.803(b) requires operators to ensure that an investigation and a failure analysis to determine the cause of the failure are performed within 120 days of the failure and that the conclusions and any corrective action are documented. If an entity other than the manufacturer performs the investigation and analysis, the regulation requires operators to ensure that the manufacturer and BSEE receive copies of the analysis report. Existing § 250.803(c) specifies that if an equipment manufacturer notifies an operator that it changed the design of the equipment that failed, or if the operator changes operating or repair procedures as a result of a failure, then the operator must, within 30 days of such changes, report the design change or modified procedures in writing to the Chief of BSEE’s Office of Offshore Regulatory Programs (OORP) (at the address specified in existing paragraph (d)) or to the Chief’s designee. BSEE proposed to revise § 250.803(a) to expressly include GLSDVs in the list of equipment that are subject to the failure reporting requirements and to VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 clarify that operators must submit their SPPE failure information to BSEE through the Chief, OORP, unless BSEE has designated a third-party under proposed paragraph (d), to whom operators would then be required to submit their failure information.17 Similarly, BSEE proposed to revise existing § 250.803(b) of this section to clarify that, when anyone other than the equipment manufacture performs an investigation and analysis, operators must submit the investigation and analysis results to the Chief of OORP in accordance with proposed paragraph (d). BSEE also proposed to revise existing paragraph (d) to further clarify the requirement to submit failure information to a BSEE-designated third party. The final rule implements these revisions as proposed. Finally, although BSEE proposed no changes to the existing definition of ‘‘failure’’ in this section, the proposed rule invited input on whether or how to revise the definition to ensure consistency. The final rule makes no change to that definition. Definition of ‘‘Failure’’ Comment: Industry commenters requested that BSEE clarify the definition of ‘‘failure’’ of SPPE, which was added in the 2016 PSSR, and recommended that BSEE provide a definition to align with industry standards. Commenters further 17 Currently, the designee of the Chief of OORP is the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS). Operators submit this information through www.SafeOCS.gov, where it is received and processed by BTS. BSEE identified BTS as the designee and recommended that SPPE failure information should be sent to BTS via www.SafeOCS.gov through a press release issued on October 26, 2016 (https://www.bsee.gov/ newsroom/latest-news/statements-and-releases/ press-releases/bsee-expands-safeocs-program). BSEE and BTS have a Memorandum of Understanding (MOU) that provides for BTS collection of BOP and SPPE failure reports. The MOU may be viewed on BSEE’s website at: https:// www.bsee.gov/sites/bsee.gov/files/bsee-bts-mou-0818-2016_0.pdf. Reporting instructions are on the SafeOCS website at: https://www.SafeOCS.gov. Reports submitted through www.SafeOCS.gov are collected and analyzed by BTS and protected from release under the Confidential Information Protection and Statistical Efficiency Act (CIPSEA) (44 U.S.C. 101). CIPSEA requires that BTS treat and store such reports confidentially, under strict criminal and civil penalties for noncompliance. Information submitted under CIPSEA also is protected from release to other government agencies (including BSEE), from Freedom of Information Act (FOIA) requests and subpoena. If the information were to be submitted to BSEE, BSEE could only protect its confidentiality to the extent allowed by Federal law other than CIPSEA. The SafeOCS program was designed to protect the confidentiality of information submitted and promote failure reporting without fear of reprisals. The ‘‘Oil and Gas Production Safety System Events 2017 Annual Report’’ is available at https://www.safeocs.gov/ sppe_home.htm. PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 recommended that, until they and BSEE could reach a ‘‘mutually agreeable’’ resolution, industry should document and maintain failure reports in accordance with applicable API standards, and provide failure reports to BSEE upon request. These commenters recommended that BSEE and industry hold workshops to determine the best repository or clearinghouse for collecting failure data. Commenters asserted that the ‘‘failure’’ definition proposed in § 250.803(a) could be interpreted so broadly as to include maintenance issues and routine repair items that would create an administrative burden with no safety or environmental protection improvement, while noting that some operators disagree with this position. Those operators recognize that parts wear over time, and due to the wear, the SPPE device would ‘‘fail to meet the functional specification.’’ Response: BSEE disagrees. Although BSEE sought input in the proposed rule about how to revise the current language specifying how ‘‘failure’’ is defined in this regulation, BSEE did not receive any specific proposals for modifying the existing definition of ‘‘failure.’’ Currently, according to BTS, the designated third party to receive SPPE failure information, submitters for each of the specific SPPE types appear to be following the definitions within the applicable API standard for individual equipment types. BSEE finds this to be a logical and reasonable approach that is consistent with the regulatory requirement; thus, no change to the ‘‘failure’’ definition has been made. With regard to the commenters’ suggestion that BSEE hold workshops with industry to determine the best repository or clearinghouse for collecting failure data, BSEE does not agree that this approach is necessary, at this time. BSEE already has identified BTS as an appropriate clearinghouse for this data. The commenters did not raise specific objections or concerns related to BSEE’s designation of BTS to collect the failure data. BSEE’s collaboration with BTS allows the collection and analysis of failure data under strict standards of confidentiality, which supports robust reporting. With regard to commenters’ assertion that the existing definition could be interpreted so broadly as to include maintenance issues and routine repair items, BSEE observes that the types of devices included as SPPE in the final rule represent primary and secondary barriers to prevent the loss of well control and subsequent potentially catastrophic events. In a study recently completed for BSEE by ExproSoft E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations (https://www.bsee.gov/sites/bsee.gov/ files/tap-technical-assessment-program/ 765aa.pdf), approximately 30 percent of well control events worldwide were found to be related to such barriers for production platforms, especially after large storms such as hurricanes. Thus, commenters and others should not view failure reporting as inconsequential or unimportant to concerns such as safety and environmental protection. amozie on DSK3GDR082PROD with RULES4 Reporting Requirements Comment: A commenter recommended that BSEE consider using the API Standard 689/ISO 14224 Collection and Exchange of Reliability and Maintenance Data for Equipment to clarify reporting requirements and standardize data collection processes. Response: As the SPPE failure reporting program is relatively new, it is premature to require adherence to the referenced standard. BTS has prepared the first public report of aggregated statistics covering SPPE reports submitted by industry from the effective date of the requirement, November 7, 2016 through December 2017. BSEE still needs to assess results from the first year and identify any issues with regard to reporting or collection processes. In conducting this evaluation, BSEE plans to consider the potential usefulness of industry standards such as API Standard 689/ISO 14224 to improve the failure reporting program. At this time, however, the focus for the requested data is described within each of the cited standards and is intended to increase both the volume and quality of the aggregated equipment component failure data for SPPE shared among the regulated community and the OEMs that serve that community. BSEE is not adopting a change at this time. Root Cause Analysis Comment: A commenter recommended that BSEE incorporate internationally recognized good practice standards, coupled with verification; employ incident reporting with root cause analysis (RCA); and seek prevention of major incidents through research and development on emerging threats and use of various risk tools. Regarding failure reporting, the commenter asserted that the issue of what is considered a failure is tied to its root cause, and that operators should use RCA to analyze what systemic causes allowed the failure to occur, in addition to the immediate cause. Response: BSEE agrees in general with the comment. In § 250.803, as revised by this final rule, BSEE establishes a system that is consistent with globally recognized good-practice VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 standards, complemented by verification. The equipment component failure notification, analysis, and reporting process implemented through this final rule applies the identified good practices to equipment component failures, use of RCA to aid in the prevention of catastrophic events, and proper consideration of emerging threats. The final rule also applies the concept of barrier management by requiring reporting on all failures of SPPE that represent sequential barriers to catastrophic events. BSEE agrees that a failure is ultimately a result of its root cause, and BSEE is implementing the failure reporting requirements to promote confidence that there will be no adverse impact on entities that report failures by designating BTS as the third party to receive and analyze information submitted under this section (see n.17). As discussed above, BTS is able to analyze and store reports confidentially. BSEE also has included consideration of root cause at two levels within the current collection methods. The fields within the form include initial root cause information. For failures that require equipment to be returned to a shore facility for repair, BSEE requires a formal RCA report. Such an analysis looks beyond the immediate cause and investigates systemic factors. The use of probabilistic risk methods for catastrophic risk assessment is outside the scope of this rule, but BSEE might consider them in the future. Strengthen Requirements Comment: One commenter recommended that any revisions to § 250.803 failure reporting requirements should only strengthen them and not weaken them in any way. The commenter asserted that the current regulation does not require the processes or equipment that rely on the failed SPPE to be immediately shut-in until the equipment can be replaced with a certified, functioning SPPE and the commenter recommended that § 250.803 be revised to require immediate reporting of failed SPPE to BSEE and immediate shut-down of all processes or equipment that rely on the failed SPPE until replaced with a certified functioning SPPE. The commenter also recommended that, after investigation and collaboration with the equipment manufacturer is complete, the regulations should require the operator to notify BSEE of the longterm, permanent solution developed to either change the equipment design or modify operating, testing, maintenance, or repair procedures. PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 49233 Response: BSEE did not propose to, and does not here, relax the standards of safety in relation to equipment component safety reporting. To the contrary, the final rule continues to recognize the importance of improving safety and reducing burdens on operators while continuing to ensure safety and environmental protection. The collection of equipment component failure information promotes continuous safety improvement by enabling examination of this information in the aggregate, and by requiring submissions of reports to the OEMs where the opportunity to address design issues is greatest. Accordingly, BSEE disagrees that the additional measures suggested by the commenter are needed at this time. BSEE regulations already require multiple barriers within each well under § 250.801. Those requirements minimize the possibility that a single SPPE failure would result in the release of hydrocarbons to the environment. Communication on Failure Reporting Comment: A commenter stated that since SPPE components are required to be certified in compliance with incorporated standards, all parties involved should play a significant role in failure reporting and recommended that BSEE develop a process to increase communication and information exchange among end users, manufacturers, certifying bodies, and agencies. Response: BSEE agrees that all parties involved in SPPE design, maintenance, and repair should be involved in collection and assessment of the data. BSEE’s system for implementing the current requirement accomplishes that objective. This communication is expected to increase as the program matures. Design, Installation, and Operation of SSSVs—Dry Trees (Section 250.814) Section summary: This section of the existing regulations establishes requirements for the design, installation, and operation of an SSSV in order to ensure its reliable operation. Among other things, existing § 250.814(d) requires operators to design, install, maintain, inspect, repair, and test all SSSVs in accordance with ANSI/API RP 14B (Fifth Edition 2005). BSEE proposed to revise paragraph (d) to replace the reference to ANSI/API RP 14B (Fifth Edition) with ANSI/API RP 14B (Sixth Edition 2015), which BSEE also proposed to incorporate by reference in § 250.198 in place of ANSI/ API RP 14B (Fifth Edition). BSEE received no comments opposing this E:\FR\FM\28SER4.SGM 28SER4 49234 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations specific revision and the final rule changes the reference to this standard as proposed. Duplicative Requirements Comment: A group of commenters recommended deleting paragraph (b) of existing § 250.814 because it is duplicative of § 250.802(b). Response: BSEE disagrees. Section 250.814 is similar to, but not duplicative of, paragraph (b) of § 250.802. Section 250.802(b) requires that all SSSVs and actuators on dry and subsea trees comply with ANSI/API Spec. 14A, Subsurface Safety Valve Equipment (Eleventh Edition, 2005, reaffirmed 2012), as incorporated by reference in § 250.198(h)(73). Section 250.814, however, applies only to dry trees and specifies that operators must comply with ANSI/API RP 14B (now incorporated by reference in § 250.198(h)(55) of this final rule as the Sixth Edition, 2015) for designing, installing, maintaining, inspecting, repairing, and testing. amozie on DSK3GDR082PROD with RULES4 Third Party Testing Comment: A commenter stated that the proposed modification to the SSSV system equipment requirements that discontinues third party testing is without merit, as the third party testing is essential to the nuclear and fossil fuel industry. The commenter stated that the SSSV system equipment malfunctioned during the DWH incident. Response: This comment apparently concerns BOPs, since SSSVs were not involved in the DWH incident, but the BOP system was. BOPs are not addressed in this rulemaking, but were addressed in the 2016 WCR. In these final regulations, BSEE does not discontinue third party design testing of SSSVs. SSSVs, which are addressed in this final rule, have proven to be extremely reliable over the course of many decades. Manufacturers design SSSVs to fail in a safe mode: for example, most valves are designed so that if they fail (i.e., lose pressure) they automatically close, thus preventing a release of hydrocarbons. In any event, if any leakage occurs, it does so within a closed, multiple barrier system. Use of SSVs (Section 250.820) Section summary: This section of the existing regulations requires operators to comply with API RP 14H (Fifth Edition 2007) for the installation, maintenance, inspection, repair, and testing of all SSVs, including requirements applicable if the SSV does not operate properly or if any gas and/ or liquid fluid flow occurs during the leakage test. BSEE proposed to revise VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 this section to incorporate by reference API STD 6AV2 in place of API RP 14H (which was withdrawn by API). BSEE did not receive any comments on this section of the proposed rule and the final rule revises § 250.820 as proposed. Emergency Action and Safety System Shutdown—Dry Trees (Section 250.821) Section summary: This section of the existing regulations specifies actions that operators must take with respect to wells in the event of an emergency (e.g., an impending hurricane), including installation as soon as possible of a subsurface safety device on any well capable of natural flow that does not already have such a device. The existing regulation also requires shut-in of all oil wells and all gas wells that require compression. BSEE proposed to revise paragraph (a) of this section to clarify that operators must shut in the production on any facility that ‘‘is impacted or that will potentially be impacted by an emergency situation.’’ This proposed clarification was intended to ensure that operators understand their obligation to properly secure wells before the platform is evacuated in the event of an emergency. The proposed rule also included some examples of emergencies (such as named storms, ice events, or earthquakes), but did not specify all emergency events that could trigger this provision; rather, the operator must determine when its facility is impacted or will potentially be impacted due to an emergency situation. (See 82 FR 61710.) The final rule revises this section as proposed, except that, in response to one comment (discussed below), BSEE removed the reference to ‘‘in the Arctic’’ from the example of ice events as a possible emergency. Installation of Subsurface Safety Devices Comment: A commenter expressed concern about installation of a subsurface safety device postearthquake in a Planning Boundary Area that has a high potential for significant seismic activity. The commenter asked BSEE to clarify the times when installation of such a device would not be appropriate in a production well in such an area. Response: Subpart H establishes that production wells must have an SSSV installed. Sections 250.810 through 250.817 address circumstances when an SSSV could potentially be removed from a production well with tubing installations open to hydrocarbonbearing zones. These circumstances generally include: 1. When approved by the BSEE District Manager (or, in Alaska, the OCS PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 Regional Supervisor of Field Operations) for a well incapable of natural flow (§ 250.810); 2. When in the process of changingout an SSSV or the production tubing housing an SSSV (§ 250.812); 3. When an SSSV becomes inoperable and measures are taken to address the issue (§ 250.813); 4. When an SSSV is in the process of being repaired, replaced, or installed (§ 250.814); or 5. When a wireline or pumpdownretrievable SSSV is removed for routine operations (not exceeding 15 days and with prescribed safety mitigations inplace) (§ 250.817). By including ‘‘post-earthquake’’ in this section, BSEE intends to clarify that earthquakes are among the kind of emergency situations in which an operator must follow the requirements of this section, including the requirement to install an SSSV as soon as possible, if for some reason the operator had not already installed it. Consistency With § 250.837(a) Comment: One commenter proposed that BSEE adopt only the proposed language changes in § 250.837(a) and replace § 250.821(a) with § 250.837(a) language or expressly cross-reference that section. Response: BSEE disagrees. The language in final paragraph (a) of § 250.821 and paragraph (a) of § 250.837 is consistent and establishes the safest approach for the types of ‘‘dry’’ and ‘‘subsea’’ systems potentially impacted by those paragraphs, respectively. Section 250.821 specifically addresses Emergency Action and Safety System Shutdowns related to dry trees that do not have BSDVs, USVs, or GLSDVs and related systems found in subsea wells, whereas § 250.837 pertains to subsea trees and their associated systems. Definition of Arctic OCS Comment: A commenter suggested clarification of the additions in §§ 250.821 and 250.837 relating to earthquakes and ice events. Specifically, the commenter suggested that BSEE remove the definition of Arctic OCS in § 250.105 and instead use the definition of Arctic OCS Conditions for defining the Arctic OCS without regard to Planning Boundary Area location. Response: BSEE disagrees with the suggested revisions to the definitions for Arctic OCS and Arctic OCS Conditions in § 250.105, which BSEE did not propose to revise and are not within the scope of this rulemaking. Those definitions were adopted as part of the Arctic Exploratory Drilling Rulemaking, 81 FR 46478 (2016) (the Arctic Rule) to E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations align the scope of that rule with the areas of the Arctic OCS utilized in the DOI OCS Oil and Gas Leasing Program for 2012–2017 (June 2012, available at https://www.boem.gov/Five-YearProgram-2012-2017). Those definitions reflect the conditions and challenges the Arctic Rule was designed to address. Altering these definitions in this rulemaking would increase confusion over the scope and applicability of the regulations specifically associated with the Arctic OCS. To address the commenter’s concern, however, BSEE removed the phrase ‘‘in the Arctic’’ from §§ 250.821 and 250.837 in the final rule. It is not necessary to specify ‘‘ice events in the Arctic,’’ as ‘‘ice events’’ anywhere on the OCS have the potential to impact operations. Further, these provisions do not include a similar geographic specification for the other events— earthquakes or hurricanes—that it uses as examples. amozie on DSK3GDR082PROD with RULES4 Timing of Activities Associated With Emergency Events Comment: A commenter suggested that, if it is BSEE’s intent to require operators to complete the outlined activities prior to the evacuation of the facility, then the regulation should state that specific purpose. The commenter suggested revising § 250.821 to read: ‘‘If your facility is impacted or will potentially be impacted by an emergency situation (e.g., an impending National Weather Service-named tropical storm or hurricane, ice events in the Arctic, or post-earthquake), you must complete the following activities prior to evacuation of the facility:’’ Response: BSEE disagrees with the suggested change. BSEE expects that operators will complete these activities before evacuation. However, as the current regulations acknowledge, that may not always be possible due to concerns for worker safety. Accordingly, operators must complete the installation of the subsurface safety device in event of an emergency ‘‘as soon as possible, with due consideration being given to personnel safety.’’ BSEE does not believe that it would be prudent to replace this with an absolute requirement that does not take such considerations into account. Design, Installation, and Operation of SSSVs—Subsea Trees (Section 250.828) Section summary: This section addresses requirements for the design, installation, and operations of SSSVs installed on subsea trees. These provisions ensure reliable operation and establish that a well with a subsea tree must not be open to flow while an SSSV is inoperable. BSEE proposed to revise VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 § 250.828(c) to update the title of API RP 14B with ANSI/API RP 14B. That proposal is adopted in this final rule. Duplicative Requirements Comment: Although BSEE did not propose any changes to § 250.828(c), one commenter recommended deleting that provision, asserting that it duplicates the requirements of § 250.802(b). Response: BSEE disagrees that § 250.828(c) duplicates the requirements in § 250.802(b). This section applies only to SSSVs installed on subsea trees, while § 250.802(b) addresses general requirements for all SSSVs. Section 250.828(c) specifically addresses provisions related to SSSVs in the regulations, incorporated standards, and the approved deepwater operators plan (DWOP). Specification for Underwater Safety Valves (USVs) (Section 250.833) BSEE proposed revising the introductory paragraph in this section to replace API Spec. 6A with ANSI/API Spec. 6A. BSEE did not receive any comments on this section of the proposed rule. BSEE is finalizing this provision as proposed. Use of USVs (Section 250.834) The final rule revises this section by incorporating API STD 6AV2 in place of API RP 14H, which was withdrawn by API. BSEE did not receive any comments on this section of the proposed rule. BSEE is finalizing this provision as proposed. Specification for All Boarding Shutdown Valves (BSDVs) Associated With Subsea Systems (Section 250.835) Section summary: This section’s requirements in the existing regulations for use of a BSDV are intended to provide the maximum level of safety for the production facility and the people aboard the facility. The BSDV is the most critical component of the subsea system. BSEE did not propose any changes to this section and is not making any changes to the regulatory text of this section in the final rule, however there was a comment submitted on this section. We include it in the preamble only to address the comments received. Location of BSDV Comment: Although BSEE did not propose any changes to this section, one commenter recommended revision of the existing requirement in paragraph (c) that the BSDV be located within 10 feet from the edge of the platform. The commenter stated that this requirement PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 49235 is not feasible for large diameter lines on deepwater facilities and proposed a distance greater than 10 feet or according to the distance specified in the approved DWOP. Response: BSEE does not agree that a change in paragraph (c) is justified. Operators may obtain approval for alternative designs under § 250.141 by demonstrating an equivalent or greater level of safety and environmental protection. This provides the operator with the flexibility to address unique situations involving deepwater facilities. Use of BSDVs (Section 250.836) BSEE proposed revising this section by incorporating API STD 6AV2 in place of API RP 14H, which was withdrawn by API. BSEE did not receive any comments on this section of the proposed rule. The final rule revises this section to update the new incorporation by reference, as proposed. In the final rule, BSEE is also making minor changes in the wording to emphasize that all BSDVs that are removed from service and reinstalled must meet the requirement of this section. This was the case under the existing regulation, but the revision will make the requirement more explicit. Emergency Action and Safety System Shutdown—Subsea Trees (Section 250.837) This section addresses actions operators must take in the event of an emergency situation. These situations include weather events, such as storms. This section includes details on valve closures related to specific conditions on the facility, such as process upsets and emergency shutdown (ESD) events, and it includes requirements pertaining to dropped objects in the vicinity of producing subsea wells. BSEE is revising paragraph (a) of this section to clarify that operators must shut in the production on any facility that ‘‘is impacted or will potentially be impacted by an emergency situation.’’ This revision is consistent with the revision to § 250.821(a) for facilities with dry trees. Paragraph (a) of the final rule includes examples of emergencies, such as named storms, ice events, or earthquakes. It is not BSEE’s intent to specify all emergency events that could trigger actions required by this regulation. The operator must determine when there may be impacts due to an emergency or if an emergency event impacted their facility. BSEE also adds GLSDVs to the list of equipment that must be closed during a shut-in. This is consistent with E:\FR\FM\28SER4.SGM 28SER4 49236 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations amozie on DSK3GDR082PROD with RULES4 identifying GLSDVs as SPPE in § 250.801 and elsewhere in this subpart. In addition, BSEE is revising paragraph (b) of this section to clarify the requirements for dropped objects in an area with subsea operations and for consistency with the provisions of the dropped objects plan required by § 250.714. Section 250.714 does not require operators to submit this plan as part of the application for permit to drill (APD) or application for permit to modify (APM); rather, the operator must make their dropped object plans available to BSEE upon request. A dropped object plan is not a static plan and § 250.714 requires operators to update their dropped objects plans as the subsea infrastructure changes. BSEE proposed revising several paragraphs in this section that address dropped objects to use the phrase ‘‘vessel (e.g., mobile offshore drilling unit (MODU) or other type of workover or intervention vessel)’’ in place of the current regulatory text, which uses ‘‘mobile offshore drilling unit (MODU) or other type of workover vessel.’’ Based on comments, BSEE revised this in the final rule to use ‘‘a mobile offshore drilling unit (MODU) or other type of workover or intervention vessel.’’ As proposed, BSEE is also replacing ‘‘producing subsea wells’’ with ‘‘subsea infrastructure’’ in the final paragraph (b). The current regulatory text limits these requirements to only those areas that have producing subsea wells. This change is more inclusive, requiring operators to address dropped objects in any area with infrastructure on the seafloor. Finally, as proposed, the final rule clarifies and updates the terminology in the second sentence of the existing paragraph (b)(2), while essentially preserving the requirement of the existing sentence. Timing of Shut-Ins Comment: Industry commenters recommended adding a ‘‘boundary condition’’ in § 250.837 as found in § 250.821. A commenter suggested the following examples of ‘‘modified conditions,’’ such as shut-in just prior to evacuation, or if full remote real-time monitoring and control capabilities exist, shut-in prior to exceeding safe environmental operating conditions as stipulated by regulatory approvals. Response: BSEE disagrees with the suggested changes. Section 250.837(a) requires the operator to shut-in the facility in the event of an emergency and already provides an option for the operator to receive approval from the District Manager to address, on a caseby-case basis, situations such as the commenter described. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Use of the Word ‘‘Vessel’’ Comment: Industry commenters opposed adoption of the proposed rule language in § 250.837(b) and (c)(5), stating that adding the generic term ‘‘vessel’’ followed by ‘‘mobile offshore drilling unit (MODU) or other type of workover or intervention vessel’’ as examples would make the requirement more ambiguous. Specifically, the proposed language could be interpreted to mean that the presence of any ‘‘vessel’’—such as an offshore support vessel or standby vessel—would trigger this requirement, even if the vessel is not engaged in well operations. The comments stated that it would be overly burdensome to apply these requirements to vessels that do not latch onto the well for wellbore intervention activities (e.g., remotely operated vehicles (ROVs)) because intervention vessels that do not latch onto the well mitigate dropped object concerns through use of safe overboarding zones. Commenters suggested changing the wording in paragraph (b) to refer to ‘‘a mobile offshore drilling unit (MODU) or other type of workover or intervention vessel.’’ Response: BSEE agrees that using ‘‘vessel’’ with parenthetical examples of MODU or other type of workover vessel, in this context, is too broad. As previously discussed, BSEE revised the final rule text to use ‘‘a mobile offshore drilling unit (MODU) or other type of workover or intervention vessel’’ instead. This captures appropriate types of vessels that would be involved in drilling or workover operations. Period of Lost Communications Comment: Industry commenters suggested revising § 250.837(b)(2) to replace ‘‘minutes or more’’ with ‘‘or more continuous minutes.’’ Response: BSEE disagrees with this suggested change. The suggested changes reduce clarity and do not adequately address the interpretation of ‘‘intermittent communications’’ and ‘‘brief losses of communication.’’ They would, therefore, add to the confusion regarding when the requirement to shutin wells under this provision applies. Pressure Safety High Low (PSHL) Sensor Activation Comment: Industry commenters suggest replacing the final sentence of paragraph (c)(2) with ‘‘If the PSHL sensor activation was not accompanied by an increase in pressure above the [maximum anticipated operating pressure], or the loss of integrity of the pipeline, you may return the wells to production without contacting the appropriate District Manager.’’ PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 Response: BSEE disagrees. The language the commenter recommends is an overly prescriptive description of a false alarm, which limits the situations that could be considered false alarms. It is the operator’s responsibility to identify a false alarm. If the sensor activation is identified as a false alarm, the operator may return the wells to production without notifying the District Manager. Further, the suggested text would represent a substantive change that would require a separate notice and opportunity for comment. Platforms (Section 250.841) Section summary: This section addresses protecting platform production facilities by requiring basic and ancillary surface safety systems to be designed, analyzed, installed, tested, and maintained in operating condition according to the provisions of API RP 14C. In addition, this section has basic requirements for platform production process piping. BSEE adds a new paragraph (c) to this section to address major modifications to a facility, by directing operators to follow the requirements in § 250.900(b)(2). This is not a new requirement, as operators are already required to follow the provisions of § 250.900(b)(2) for major modifications. This simply provides direction to the operator and emphasizes the need to follow § 250.900(b)(2). The final paragraph (c) is substantively the same as the proposed, but with minor clarifying changes in response to comments. In the proposed rule, BSEE also requested comments on paragraph (b) of this section, and whether BSEE needed to make other changes to address corrosion prevented. Existing paragraph (b) of this section requires operators to maintain all piping for platform production processes as specified in API RP 14E, Recommended Practice for Design and Installation of Offshore Production Platform Piping Systems (API RP 14E). Section 6.5(a)(1) of API RP 14E addresses painting of steel piping to prevent corrosion. BSEE solicited comments on this requirement in the proposed rule’s preamble. Corrosion prevention is important for safety and pollution prevention and BSEE is not removing the reference to API RP 14E from this section. Major Modification Comment: A commenter stated that the proposed language in § 250.841(c) could lead an operator to think ‘‘major facility modification’’ is a defined term in the regulation. The term ‘‘major modification’’ in current BSEE E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations regulations only applies to a platform structure. The commenter suggested specific revisions to the regulatory text to clarify this concern. Response: BSEE agrees with the commenter and revises the final regulation to state that, if the operator plans to modify the production safety system in a manner that includes a major modification to the platform structure, then the operator must follow the requirements in § 250.900(b)(2). This adds clarity to the proposed text and merely cross-references existing requirements, rather than creating new ones. Removal of § 250.841(c) Comment: BSEE received multiple comments urging BSEE not to remove § 250.841(c). Response: BSEE is not certain what provision the commenters were referring to, as there is no § 250.841(c) in the current regulations. BSEE proposed adding a new § 250.841(c) to address production safety system modifications. This provision is being retained in the final rule, with modifications to clarify intent with respect to major modifications to platform structures. Approval of Safety Systems Design and Installation Features (Section 250.842) Section summary: This section establishes requirements for safety system design and installation. It describes the information that the operators must include in their production safety system application for new and modified systems. This information is needed to verify that the operator followed the prescribed standards and addressed the critical aspects of the system design. In addition, this section requires the operator to submit as-built diagrams to BSEE, so BSEE has accurate information on file for inspections. Under this section, operators must maintain these and other supporting documents and provide them to BSEE upon request. amozie on DSK3GDR082PROD with RULES4 Existing Regulations and Proposed Changes Paragraph (a) The existing § 250.842(a) regulations require the operator to submit a production safety system application to the District Manager before installing or modifying a production safety system. While this section requires the application to be approved, it does not specify the timing of that approval. To address this, BSEE proposed to revise the introductory provisions in paragraph (a) to state that the District Manager must approve the production VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 safety system application before the operator may commence production through or utilize the new or modified system. BSEE is revising this provision in the final rule for clarity, to state that the District Manager must approve the production safety system application before the operator may commence production ‘‘through or otherwise use the new or modified system.’’ Paragraph (a) of existing § 250.842 also includes a table that details the information that the operator needs to include in the production safety system application. Paragraph (b)(2) of the existing regulations requires the operator to certify that the ‘‘designs for the mechanical and electrical systems under paragraph (a) of this section were reviewed, approved, and stamped by an appropriate registered professional engineer(s).’’ This includes all of the information, diagrams, drawings, and designs that are submitted pursuant to existing paragraph (a). BSEE proposed to revise some requirements in the table in paragraph (a) related to the information, diagrams, drawings, and designs (design documents) operators must submit to BSEE for approval. BSEE proposed to revise this provision to require operators to submit the most critical documents to BSEE, and to have only those documents stamped by a PE. In addition to requiring the operators to submit the most critical designs documents to BSEE and to have only those items sealed by a PE, BSEE proposed in a new paragraph (b) to require operators to develop and maintain other supporting documents. The supporting documents identified in proposed paragraph (b) provide additional details and information related to the design documents required in proposed paragraph (a). While these paragraph (b) documents provide supporting information, they are not critical for BSEE to review during the approval process. However, the operator still must develop these documents and make them available for review and inspection by BSEE upon request. The final rule generally reflects those changes as proposed, with some clarifications based on public comments. BSEE proposed revising the table in paragraph (a) to require operators to submit the safety analysis flow diagram, safety analysis function evaluation (SAFE) chart, electrical one line diagram, and area classification diagram for new facilities and for modifications to existing facilities. BSEE proposed additional revisions and reorganization of the existing table in paragraph (a). Existing provisions in paragraph (a)(1) require the operator to submit a piping PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 49237 and instrumentation diagram; existing paragraphs (a)(1)(i) through (vii) identify the specific information that the piping and instrumentation diagram must include. BSEE proposed changing the requirement in existing paragraph (a)(1) for the piping and instrumentation diagram to instead require a safety analysis flow diagram and a SAFE chart, and also proposed to incorporate references to the relevant sections of API RP 14C that describe the contents of these two items. In addition, BSEE proposed to retain the information requirements for piping and instrumentation diagrams that were already in existing paragraphs (a)(1)(i) through (vii). However, under the proposed rule, the information required by the existing paragraphs (a)(1)(i) through (vii) would be submitted with the safety analysis flow diagram and SAFE chart, instead of the piping and instrumentation diagram. These proposed changes would better align the requirements with the information identified in industry standards, including API RP 14C. In the proposed rule, this information would be required for new facilities and modifications of existing facilities. BSEE proposed additional reorganization of the table in paragraph (a) in conjunction with the proposed changes to paragraph (a)(1). Since the safety analysis flow diagram and SAFE chart are required under paragraph (a)(2) in the existing regulations, BSEE proposed to remove that paragraph in the table. BSEE also proposed to move the requirement for electrical system information from under existing paragraph (a)(3) to new paragraph (a)(2) and proposed to call that information the ‘‘electrical one-line diagram.’’ BSEE proposed revising the requirements for the electrical one-line diagram, to include ‘‘generators, circuit breakers, transformers, bus bars, conductors, battery banks, automatic transfer switches, uninterruptable power supply (UPS), dynamic (motor) loads, and static (e.g., electrostatic treater grid, lighting panels, etc.) loads.’’ This would also include a functional legend. BSEE proposed to move the additional detailed electrical information that is required in existing paragraph (a)(3) to new paragraph (b)(1), as this is supporting information for the electrical systems. Proposed paragraph (b)(1) would require additional supporting electrical system information including: (i) Cable tray/conduit routing plan which identifies the primary wiring method (e.g., type cable, conduit, wire) and (ii) Cable schedule; and (iii) Panel board/junction box location plan. E:\FR\FM\28SER4.SGM 28SER4 49238 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations BSEE proposed to remove from the table the information required in existing paragraph (a)(4) for schematics of the fire and gas-detection systems. Proposed paragraph (a)(4) would instead require a schematic piping and instrumentation diagram and apply to new facilities only. Existing paragraph (a)(5) addresses the service fee for the production safety system application. BSEE did not propose any revisions to that paragraph. amozie on DSK3GDR082PROD with RULES4 Paragraph (b) To accommodate the new paragraph (b), BSEE proposed removing existing paragraph (c) and redesignating existing paragraph (b) as new paragraph (c). New paragraph (b) would require the operator to develop and maintain documents that provide supporting documents to the design documents required in the table in proposed paragraph (a). These documents would contain information that is related to the design documents that would be required in proposed paragraph (a), but this information is not critical for BSEE to review during the approval process. However, the operator would still be required to develop these documents and make them available for review and inspection by BSEE upon request. The final rule generally reflects those changes as proposed, with some clarifications based on public comments. Paragraph (c) Under the proposed rule, new paragraph (c) (which is existing paragraph (b)) would continue to require operators to certify: (1) That all electrical installations were designed according to API RP 14F or API RP 14FZ, as applicable; (2) that an appropriate registered professional engineer(s) reviewed, approved, and stamped the designs for the mechanical and electrical systems that operators are required to submit under paragraph (a) of this section. For modified systems, only appropriate registered professional engineer(s) are required to approve and stamp the modifications. The registered professional engineer must be registered in a State or Territory of the United States and have sufficient expertise and experience to perform the duties; and (3) that a hazards analysis was performed in accordance with § 250.1911 and API RP 14J (incorporated by reference as specified in § 250.198), and that operators have a hazards analysis program in place to assess potential hazards during the operation of the facility. As proposed, BSEE is revising redesignated paragraph (c)(2) of § 250.842 (existing (b)(2)) to require the VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 designs for the mechanical and electrical systems that the operator is required to submit under paragraph (a) of this section be reviewed, approved, and stamped by an appropriate registered professional engineer(s). Existing paragraph (c) requires operators to certify, in a letter to the District Manager, that the mechanical and electrical systems were installed in accordance with the approved designs, before beginning production. The intent of this step was to ensure the operator properly documented the installation of the mechanical and electrical systems. However, this submittal was a burdensome step to assure document management and confirm that operator performed the modification as proposed and approved. Because the operators must submit the as-built drawings, which BSEE uses for field verification, the required certification letter is redundant and not needed. So BSEE proposed to remove this requirement entirely. Paragraph (d) BSEE proposed to revise existing paragraph (d) to clarify requirements regarding PE stamping of required drawings. The rule proposed to require the diagrams that operators submit to BSEE under § 250.842(a)(1), (2), and (3) be reviewed, approved, and stamped by an appropriate registered PE(s). In addition, BSEE proposed moving the requirement from existing paragraph (e)—that the operators submit the asbuilt diagrams within 60 days of commencing production—to new paragraph (d). Paragraphs (e) and (f) Since under the proposed rule, the regulations no longer need existing paragraph (e) and BSEE proposed to delete it, BSEE proposed to redesignate existing paragraph (f) as new paragraph (e). Proposed, redesignated paragraph (e) would continue to address the requirements for maintaining the requisite documents. BSEE did not propose any revisions to the requirements in redesignated paragraph (e). Final Rule Paragraph (a) In the final regulatory text, BSEE changed the language in introductory paragraph (a) to generally refer to the information submitted under § 250.842 as ‘‘design documentation.’’ BSEE made this change throughout § 250.842. This is a clarification and provides consistency in the way the regulations refer to the various diagrams required in this section. PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 BSEE is maintaining the requirements in the existing table in § 250.842(a)(1) through (5), mostly as proposed. However, BSEE made some revisions to these sections in response to comments. In the final rule, BSEE combined the requirement in proposed paragraph (a)(1)(ii), ‘‘piping and specification breaks’’ with proposed paragraph (a)(1)(vii) and revised that requirement to specify ‘‘piping sizes’’ and to include ‘‘the location of piping and specification breaks’’ with the information required in paragraph (a)(1). Since paragraph (a)(1)(ii) was removed, the rest of the provisions in that paragraph were renumbered. BSEE also revised paragraph (a)(2) in the final rule. BSEE removed ‘‘battery banks’’ as a specific item to be included on the required electrical one-line diagram, and added ‘‘associated battery banks’’ as part of what must be included with the uninterruptable power supply. In addition, paragraph (a)(3)(ii) in the final rule removed the location of ‘‘control rooms, motor control center (MCC) buildings, and any other buildings’’ as specific items included as part of the plan for the area classification diagram. The final regulatory text requires ‘‘any buildings’’ to be identified, with control rooms and MCC buildings provided as examples of types of buildings. As was proposed, paragraph (a)(3) will no longer require operators to identify all areas where potential ignition sources are located in the design documents submitted to BSEE. This requirement is addressed under final paragraph (c)(3), which requires operators to perform a hazards analysis in accordance with § 250.1911 and API RP 14J. API RP 14J specifically addresses ignition sources and minimizing the chances of ignition. API RP 14J directs the operator to consider all ignition sources when designing their facility and provides detailed guidance on designing the facility and equipment to prevent the ignition of hydrocarbons. It is not necessary to specify that operators must develop and maintain a separate document identifying ignition sources because this is part of compliance with API RP 14J. In addition, existing paragraph (b)(3) (proposed paragraph (c)(3)) requires operators to have a hazards analysis program in place to assess potential hazards during the operation of the facility. The final rule, as proposed, still requires the operator’s classification diagram to show safety-critical information, such as the locations of significant hydrocarbons and Class I flammable sources, but, in light of the requirement in § 250.842(c) and API RP E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations amozie on DSK3GDR082PROD with RULES4 14J, it is not necessary for the operator’s classification diagram to show this level of detail. The final rule revises the regulatory text for paragraph (a)(4) to state that the production safety system application must include a ‘‘piping and instrumentation diagram, for new facilities,’’ removing the word ‘‘schematic.’’ Also, BSEE added the word ‘‘flow’’ to the description of the detailed information the piping and instrumentation diagram must include; to read, ‘‘a detailed flow diagram.’’ These changes are described in more detail in the comment and response discussion that follows this Section Summary. Paragraph (b) BSEE finalized new proposed paragraph (b), with some revisions. The drawings required under final paragraph (b) include additional electrical system information, schematics of the fire and gas-detection systems, and revised piping and instrumentation diagrams for existing facilities. BSEE revised final paragraph (b) to make clarifications, based on comments; these changes are similar to the changes made to the table in final paragraph (a). As previously discussed, BSEE revised introductory paragraph (b) to refer to ‘‘design documents’’ instead of ‘‘diagrams.’’ BSEE is revising some of the details in the table in final paragraph (b) from the proposed paragraph (b). BSEE is combining the cable schedule that was referenced in proposed paragraph (b)(1)(ii) into final paragraph (b)(1)(i); as an example of the information that needs to be provided with the cable tray/conduit routing plan. Proposed paragraph (b)(1)(iii) will become paragraph (b)(1)(ii) in the final rule and has been revised to state that the panel board/junction box location plan needs to be included with the additional electrical system information only if it ‘‘is not shown on the area classification diagram required in § 250.842(a)(3).’’ BSEE is also removing the requirement in paragraph (b)(2) for the diagram to include ‘‘the method and frequency of calibration’’ for the fire and gas detection systems. As previously discussed, the operator will still be required to develop and maintain all of the supporting diagrams in final paragraph (b) and provide them to BSEE upon request. BSEE is revising final paragraph (b)(3) was revised to be consistent with the final language in paragraph (a)(4), addressing ‘‘revised piping and instrumentation diagrams,’’ including ‘‘a detailed flow diagram.’’ However, as was proposed, these diagrams will no longer require review, VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 approval, and stamping by an appropriate registered PE. This change will reduce the burden on operators by no longer requiring a PE to certify as many diagrams and drawings. Operators are still required to develop these diagrams and drawings and provide them to BSEE upon request. The operators are also still required to maintain them and to ensure they accurately reflect the current production system. Paragraph (c) BSEE is revising final paragraph (c) from proposed paragraph (c). In final paragraph (c)(1), BSEE changed ‘‘electrical installations’’ to ‘‘electrical systems.’’ Final paragraph (c)(2) includes a number of revisions pertaining to the requirements regarding the involvement of the professional engineer. BSEE changed ‘‘reviewed, approved, and stamped by an appropriate registered professional engineer’’ to ‘‘sealed by a licensed professional engineer.’’ Paragraph (c)(2) of the final rule clarifies that only the modifications are required to be sealed by a licensed professional engineer. BSEE made this change in response to comments and recognizes that PEs can only stamp or seal those documents that were developed under their direct supervision; therefore, a PE would not be able to stamp or seal diagrams that were previously developed by someone else. Paragraph (c)(3) is finalized as proposed. Final paragraph (c) continues to require operators to certify that: (1) All electrical systems were designed according to API RP 14F or API RP 14FZ, as applicable; (2) that a licensed professional engineer seal the design documents for the mechanical and electrical systems that operators are required to submit under paragraph (a) of this section. For modified systems, a licensed professional engineer(s) is required to seal only the modifications. The professional engineer must be licensed in a State or Territory of the United States and have sufficient expertise and experience to perform the duties; and (3) a hazards analysis was performed in accordance with § 250.1911 and API RP 14J (incorporated by reference in § 250.198); and that the operator has a hazards analysis program in place to assess potential hazards during the operation of the facility. The final rule adopts the proposal to revise redesignated paragraph (c)(2) of § 250.842 to state that a licensed professional engineer must seal the design documents for the mechanical and electrical systems that the operator PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 49239 is required to submit under paragraph (a) of this section. Paragraph (d) BSEE revised final paragraph (d) from the proposed rule. The final rule will provide operators ‘‘90 days after placing new or modified production safety systems in service’’ to submit the asbuilt diagrams required in this section to the District Manager. The existing regulations and the proposed regulatory text provide 60 days for submitting these diagrams. BSEE also clarified that this time period applies ‘‘after placing new or modified production safety systems in service’’ instead of 60 days after ‘‘production commences,’’ as in the current regulations and proposed rule. Under the existing paragraphs (d) and (e), operators are required to certify that the as-built diagrams are on file and stamped by a PE and to submit the asbuilt diagrams for the new or modified production safety systems to BSEE. The proposed rule would have modified paragraph (d) to continue to require that operators submit PE-stamped as-built diagrams, while removing the requirement of a separate certification. Based on comments, BSEE is revising the final rule from the proposed in several respects. First, paragraph (d) in the final rule changes the timing of the submittal of the as-built diagrams from 60 to 90 days. Second, BSEE is revising the final paragraph (d) from the proposed to require that the operator must submit a letter to the District Manager certifying that the as-built diagrams were reviewed for compliance with applicable regulations and accurately represent the new or modified system as installed. BSEE intends that this requirement for a certification from the operator will serve the same function as the existing and proposed rule’s requirement to have the as-built diagrams PE-stamped. Moreover, it will preserve the intent of the current rule to make the operator responsible for submitting reliable, accurate as-built diagrams. Third, and related, the final rule removes the requirement to have as-built diagrams PE-stamped. This is one of a number of provisions in this final rule that recognize the limitations of a PE’s ability to stamp or seal documents. The existing regulations required stamping of the ‘‘as-built’’ diagrams. As-built diagrams show the final system that actually was constructed. Per PE licensing requirements, the PE would need to be present during the entire building/construction process to stamp those documents. Since the PE is not present for all the work that goes into building and installing production E:\FR\FM\28SER4.SGM 28SER4 49240 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations systems, requiring a PE stamp on an asbuilt diagram is not a realistic way to meet the goals of this paragraph. However, the critical design documents, those required under § 250.842(a), continue to require a PE stamp (§ 250.842(c)(2)) under this final rule. amozie on DSK3GDR082PROD with RULES4 Paragraphs (e) and (f) As proposed, BSEE is redesignating the existing paragraph (f) as paragraph (e), since the requirements from existing paragraph (e) were moved to new paragraph (d). Although BSEE did not propose any changes to the substance of existing paragraph (f), BSEE revised the text in final paragraph (e), based on comments, to clarify requirements related to maintaining the documents required under § 250.842(a) and (b) and how to make those documents available to BSEE. In the final rule, BSEE revised final paragraph (e) to specifically reference the ‘‘approved and supporting design documents’’ required under’’ § 250.842(a) and (b), instead of referencing ‘‘information concerning the approved designs and installation features.’’ This is a clarification and ensures the operator maintains the appropriate required documents, including copies of the documents submitted to BSEE under paragraph (a) and the additional documents the operator is required to develop and make available to BSEE upon request in paragraph (b). The requirement for the operator to maintain these documents at the ‘‘offshore field office nearest the OCS facility or at other locations conveniently available to the District Manager’’ did not change. This allows the operator to determine the appropriate location to store these documents. In the final rule, BSEE is removing the provision specifically requiring operators to maintain the asbuilt piping and instrumentation diagrams at a secure onshore location and the requirement to have those documents readily available offshore. Piping and instrumentation diagrams are now included within the storage requirements of the revised first sentence of the paragraph, as they are required in paragraphs (a) and (b) of this section. The provisions requiring that these documents must be made available to BSEE upon request and must be retained for the life of the facility did not change. The provision that all ‘‘approvals’’ are subject to field verifications (i.e., during inspections) was clarified to refer to ‘‘approved designs.’’ Additional details on these changes are discussed in the following comments and responses. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Design Documents Comment: A commenter recommended that BSEE clarify the provisions in paragraph (a) of this section by changing the first sentence to read, ‘‘You must submit a production safety system application to the District Manager to install or modify a production safety system.’’ The suggested revision removes the word ‘‘before’’ from the proposed provision that would require operators to submit their production safety system applications before installing or modifying a production safety system. This commenter also suggested that BSEE was not using the terms ‘‘information,’’ ‘‘diagrams,’’ and ‘‘designs’’ consistently when describing the required diagrams, charts, schematics, plans, and schedules. The commenter expressed concern that imprecise and/or inconsistent language is undesirable in a regulation and recommended that BSEE consistently use the term ‘‘design documentation’’ or ‘‘design documents’’ when referring to the collective documents that are addressed in this section. Response: BSEE disagrees with the commenter’s suggestion on revising the first sentence of paragraph (a) of this section. The suggested revision would remove the word ‘‘before’’ from the provision, so that it would only state that the operators must submit a production safety system application to BSEE, without addressing the timing of that submission. The proposed revisions to the current language regarding the submittal of the production safety system application would ensure that BSEE receives the production safety system application prior to an operator installing or modifying the production equipment. The current regulations state, ‘‘[b]efore you install or modify a production safety system, you must submit a production safety system application to the District Manager for approval.’’ The current provision did not explicitly state when the system or modifications to the systems must be approved, even though the intent of this existing language was that the operator would receive approval before installing or modifying the system. While the regulatory language will continue to state that the operator must submit the application before installing or modifying the system, the final rule states that the District Manager must approve the production safety system application before the operator commences production through or utilizes the new or modified system. This not only clarifies the timing of the required approval, but also facilitates PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 timely approval of the application by allowing BSEE to begin review as soon as possible and to review while the operator is installing or modifying the system. The commenter did not include a reason for suggesting this change, but BSEE does not see this timing as an issue as all of the design drawings must be submitted before the operator begins to install or modify the system, under the current and revised regulations. If the application is submitted later, the operator may be ready to start production before BSEE has reviewed and approved the applications. BSEE agrees with the commenter’s other suggested revision to consistently use a single term to refer to the documents that are required under this section. BSEE replaced the words ‘‘information’’ and ‘‘diagram’’ with ‘‘design documents’’ in paragraphs (a) and (b) of the final rule. This consistent use of the more inclusive term adds clarity and reduces potential confusion. Piping Specification Breaks Comment: A commenter recommended that the information identified in proposed paragraph (a)(1)(ii), ‘‘piping specification breaks, piping sizes’’ should be included in paragraph (a)(1)(vii), because the content included with piping specification breaks, piping sizes overlaps with the information on ‘‘size and maximum allowable working pressures’’ that is currently required in paragraph (a)(1)(vii). Response: BSEE agrees with the recommended change and revised the language in the final rule as suggested. Metering Devices Comment: A commenter recommended that BSEE remove ‘‘metering devices’’ from paragraph (a)(1)(iv). The commenter asserted that metering devices are considered instrumentation, and size, capacity, and working pressures of metering devices are typically not included on SAFE charts. Response: BSEE disagrees with this commenter’s recommendation to remove ‘‘metering devices’’ from proposed paragraph (a)(1)(iv), now final paragraph (a)(1)(iii). The paragraph addresses requirements for both SAFE charts and the safety flow analysis diagram. Operators would include the metering devices on the safety flow analysis diagram, not the SAFE chart. We agree that metering devices should not be included on the SAFE chart. Chemical Injection Systems Comment: A commenter recommended that BSEE exempt E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations amozie on DSK3GDR082PROD with RULES4 chemical injection systems that have less than 770 gallon storage capacity from proposed § 250.842(a)(1)(vi) (which is paragraph (a)(1)(v) in the final rule). The paragraph, as proposed, would require the operator to include the size, capacity, and design working pressures of all hydrocarbon-handling vessels and chemical injection systems handling a material having a flash point below 100 degrees Fahrenheit for a Class I flammable liquid on the safety flow analysis diagram. This commenter asserted that, for the majority of the Gulf of Mexico shelf facilities, the storage capacity of the injection system is often less than 260 gallons. The commenter stated that, for the majority of the chemicals used, the flammability of the products is lessened extensively due to dilution with water and blending of the chemical, reducing the actual flammability of the total product. In addition, the commenter stated that these low volume chemical systems do not present the same hazards as atmospheric hydrocarbon process vessels, and that process vessels have the potential for constant in and out flow of hydrocarbons under pressure. The commenter asserted that, under API RP14C, low volume chemical systems are already analyzed and protected on the facility, and that adding these systems to the facility drawings will not enhance safety or reduce risk. Response: BSEE disagrees. Tanks and pumps that are tied into the production system should be analyzed on the safety analysis flow diagram (SFD). Atmospheric vessels are used for processing and temporary storage of liquid hydrocarbons, including flammable chemicals. Even a 260 gallon tank containing flammable liquid is a potential hazard when tied to the production system. Although API RP 14C requires analysis of these risks, BSEE still needs to be able to review tanks of all sizes that are connected to the production system. Battery Banks Comment: BSEE received a comment recommending that BSEE remove the term ‘‘battery banks’’ from the list of items included on electrical one line drawings. The commenter stated that battery banks would exist on a direct current system, while everything else is 120 volt alternating current and higher. The commenter asserted that BSEE’s decision to remove ‘‘including the safety shutdown system’’ from the definition that was previously found in § 250.842(a)(3)(iii) supports this change. Response: BSEE partially agrees with this comment. BSEE needs drawings depicting the location of the battery VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 49241 banks associated with the UPS, however it is not necessary to include other battery banks. Consequently, BSEE revised the language in final § 250.842(a)(2) to clarify that the design drawings need to show the UPS and the associated battery banks. submit or maintain electrical design documents, and therefore BSEE believes the commenter’s recommendation is beyond the scope of this rulemaking. Moreover, operators have had enough time to come into compliance with this requirement. Updating Electrical One-Line Drawings for Existing Facilities Comment: A commenter recommended that BSEE add language in § 250.842(a)(2) to exempt existing OCS facilities from the requirement to provide the electrical one-line diagram until a major modification is made to the electrical system. The commenter noted that many existing facilities have changed ownership several times over the years and that the original documents such as electrical one-line drawings are unavailable or have not been updated to reflect modifications after the initial installation and submittal. According to the commenter, BSEE has not requested these documents when facility modifications were submitted for approval; therefore, they have not been generated or produced. The commenter asserted that updating or creating new drawings to this level of detail along with engineering certifications is very expensive and, in some cases, will result in facilities becoming uneconomical. The commenter also asserted that, for existing facilities, the electrical one-line drawings should only be required when major modifications are made to the facility’s electrical system. Response: BSEE disagrees. Since 1988, the regulations (formerly § 250.122(e)(4)(ii) and (e)(5), 63 FR 10596) have required operators to certify that the electrical system design was approved by a registered PE. OCS Order number 8, Platforms, Structures, and Associated Equipment (effective October 1, 1976), included requirements for electrical system information, including certification by the operator ‘‘that the mechanical and electrical systems of the facility will be designed and installed under the supervision of appropriate registered professional engineers.’’ (OCS Order number 8, section 3. paragraph B(2)). Out of date electrical drawings pose a major safety risk. The primary substantive change made in the 2016 rulemaking was the addition of the requirement for submission of a PE stamped diagram. Since 2016, BSEE has granted some departures to allow operators additional time to comply. BSEE did not propose to change the current requirements with respect to whether or not existing facilities need to Identification of Control Rooms and MCC Buildings Comment: A commenter stated that the identification of control rooms and MCC buildings is not included in API RP 500 or API RP 505 and recommended that BSEE remove those items from § 250.842(a)(3)(ii). Response: BSEE disagrees. While control rooms and MCC buildings are not specifically identified in API RP 500 and API RP 505, buildings generally are identified. However, we revised the final regulatory text in § 250.842(a)(3)(ii) to identify these as examples of buildings that need to be included. PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 Clarification of Terminology in (a)(4) Comment: A commenter recommended revising § 250.842(a)(4) to replace the phrase ‘‘schematic piping and instrumentation diagram’’ with ‘‘detailed flow diagram which shows the piping and vessels in the process flow, together with the instrumentation and control devices’’ to provide better clarity. Response: BSEE partially agrees with the commenter and revised the final regulatory text in paragraph (a)(4), under the ‘‘details/additional requirements’’ section, to read ‘‘detailed flow diagrams.’’ However, BSEE is leaving the reference to ‘‘piping and instrumentation diagram’’ as the general title for the type of document operators must submit under (a)(4), and removing the modifier ‘‘schematic,’’ since it is unnecessary. Requirements for Maintaining Documents Are Burdensome Comment: A commenter stated that paragraph (b)(1)(i) is unduly burdensome to operators of older facilities, in cases where these drawings were either never created or were used only for the initial fabrication. The commenter also questioned the need for the cable schedule required by paragraph (b)(1)(ii), because the cable tray/conduit routing plan should provide the relevant information. The commenter recommended that BSEE add the items in paragraph (b)(1)(iii) to the requirements for an area classification drawing in § 250.842(a)(3) to prevent the need for multiple drawing sets. Response: BSEE disagrees. Because the design documents in this paragraph E:\FR\FM\28SER4.SGM 28SER4 49242 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations were already required to be submitted to BSEE (since the 2016 rulemaking), the requirement to prepare and maintain them was implicitly also required. Cable Schedule Comment: A commenter recommended that BSEE remove the requirement for the ‘‘cable schedule’’ associated with additional electrical system information under § 250.842(b)(1)(ii). Response: BSEE agrees and moved the requirement for the cable schedule to be included with the cable tray/conduit routing plan under (b)(1)(i) of that paragraph. Panel Board and Junction Box Comment: A comment recommended that BSEE add a statement to paragraph (b)(1)(iii) that the panel board and junction box location plan does not have to be included with additional electrical system information, if that information is not shown on the area classification drawing required in § 250.843(a)(3). Response: BSEE agrees, the panel board and junction box location plan does not need to be included with both sets of information, and revised the text in final paragraph (b)(1)(ii) as suggested. Method and Frequency of Calibration Comment: A commenter recommended revising § 250.842(b)(2) to remove the phrase ‘‘and the method and frequency of calibration’’ as it is redundant with testing requirements in § 250.880. The commenter also stated that the methods and frequency of calibration for these devices are specified in API RP 14C and § 250.880(c)(3). Response: BSEE agrees with the comment. Other requirements, including § 250.880(c)(3)(ii), prescribe the method and frequency of calibration. Accordingly, BSEE revised the final regulatory text to remove that phrase. amozie on DSK3GDR082PROD with RULES4 Detailed Flow Diagram Comment: A commenter recommended that BSEE revise paragraph (b)(3), using more precise language for the revised piping and instrumentation diagrams for existing facilities, suggesting ‘‘detailed flow diagram.’’ Response: BSEE agrees the use of the phrase ‘‘detailed flow diagram’’ better defines the information that the operator needs to include on the revised piping and instrumentation diagram and made the suggested revision in the final rule. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Electrical Installations Comment: A commenter recommended that BSEE revise paragraph (c)(1) to refer to ‘‘electrical systems’’ instead of ‘‘electrical installations,’’ stating that this language is more precise. Response: BSEE agrees that electrical systems is more appropriate terminology for the information that the operator needs to certify in the production safety system application, and made the suggested revision in the final rule. Professional Engineer Terminology Comment: A commenter recommended revisions to BSEE’s language regarding professional engineers in § 250.842(c)(2), suggesting that statements regarding documents being ‘‘reviewed, approved, and stamped by an appropriate registered professional engineer’’ should be replaced with language stating the documents ‘‘are sealed by a licensed professional engineer(s).’’ The same commenter recommended that BSEE only refer to ‘‘permanent’’ modifications in this section. Response: BSEE agrees that the term ‘‘sealed’’ implies that the document was reviewed and approved and that including those terms is redundant. We also agree that the word ‘‘licensed’’ is more appropriate to use. BSEE made these suggested revisions in the final rule. However, BSEE does not agree with the addition of the word ‘‘permanent’’ to the language on modifications, as the term ‘‘permanent’’ is subjective. As-Built Diagrams Comment: Multiple commenters stated that the requirement for sealing of as-built design documents in § 250.842(d) places a significant undue burden on industry by requiring the PE to be present at all times during all phases of construction over extended periods of time, and multiple locations. Commenters stated that the intent of asbuilt design documents is to ensure that the final design documents accurately reflect what was installed on the location. The commenters recognized the importance of having accurate drawings and BSEE’s desire to ensure that facility drawings are the most recent version. Another commenter also requested that BSEE revise the required time period in which an operator must submit ‘‘as-built’’ diagrams from 60 days to 90 days to allow operators time to perform a thorough verification of the diagrams. PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 Response: BSEE agrees with the commenter’s suggestion that 30 extra days will allow the operator to better verify the designs, which will ensure that BSEE receives accurate as-built drawings and made the suggested revisions in the final rule. BSEE also agrees with the assertion that the proposed rule’s requirement for PE sealing of as-built diagrams is unduly burdensome for the reasons suggested by the commenters. A PE may not stamp a document unless the work reflected therein was performed under his or her direct oversight, which for as-built diagrams would require the PE’s physical presence, at potentially multiple locations, over potentially extended periods of construction and installation. This is not a realistic method for achieving the ultimate goal of ensuring that BSEE has access to reliable and accurate as-built diagrams. As the commenters recognize, it is nonetheless important to retain a requirement in the regulation to reach this goal. In light of these comments, BSEE believes that a revised version of the requirement in the current regulation for operators to certify these drawings is appropriate. Accordingly, the final rule is removing the language in the current rule that requires the operator to certify that the drawings were stamped by a PE and replacing it with language stating that the operator must certify that the drawings have been reviewed for compliance with applicable regulations and accurately represent the new or modified system as installed. BSEE also retained the requirement for the as-built diagrams to be submitted to BSEE and added language requiring the drawings to be clearly stamped or marked as ‘‘as-built.’’ Documentation Requirements Comment: Multiple commenters recommended revisions to proposed paragraph (e) of § 250.842 to improve clarity, proposing to add language to refer specifically to the design documents and the piping and instrumentation diagrams. A commenter also recommended removing the requirement that the operator make these documents available to BSEE upon request and that the documents should be retained for the life of the facility. Response: BSEE partially agrees with the recommended revisions. BSEE revised paragraph (e), as recommended in referring to the supporting design documents. However, BSEE does not agree with removing the requirement that the operator make the documents available to BSEE upon request and that E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations the documents should be retained for the life of the facility. amozie on DSK3GDR082PROD with RULES4 Requirements for Safety System Design Documents Comment: A commenter was concerned that the proposed changes in § 250.842(a) would relax requirements related to safety system design documents that must be submitted and the requirements for certain documents to be stamped by a registered PE. The commenter asserted that BSEE proposed eliminating the requirement for a PE to review and stamp drawings on existing facilities and that the proposed revisions would only require the PE review and stamp on new facilities or substantial changes to existing facilities. The commenter further stated that the proposed regulation did not specify any training or qualifications to do this work that would no longer be performed by a PE. The commenter noted that the PE requirement in the current regulations was a result of lessons learned from the Atlantis investigation report on ‘‘BP’s Atlantis Oil and Gas Production Platform: An Investigation of Allegations that Operations Personnel Did Not Have Access to EngineerApproved Drawings.’’ This report recommended that engineering documents should be stamped by a registered Professional Engineer, that operators certify that all listed diagrams including piping and instrumentation diagrams (P&IDs) are correct and accessible to BSEE upon request, and that all as built diagrams should be submitted to the District Managers. Response: BSEE proposed and is now finalizing revisions to the regulation to require that the information required as part of the P&IDs in the current regulations must be submitted as part of the safety flow analysis, which requires a PE stamp. BSEE understands the importance of the Atlantis report and recognizes that, although the Atlantis report did not make specific recommendations for revisions to subpart H, several of the important issues identified in the report are relevant to the subpart H regulations. Based upon BSEE experience with the implementation of the original 2016 PSSR and review of the requirements of the existing paragraph (a) (and the proposed requirements in paragraphs (a) and (b)), BSEE determined that the documents required under paragraph (a) of this final rule are appropriate to be sealed by a licensed PE. According to paragraph (c)(2) of § 250.842, BSEE requires the PE to be licensed in a State or Territory of the United States and have sufficient VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 expertise and experience to perform the duties. All items required by paragraph (a) of this section must be submitted to BSEE. The diagrams required in paragraph (b) of this section are not required to be submitted to BSEE, however, they must be available to BSEE upon request. The operator will still be required to develop and maintain these diagrams to accurately document any changes made to the production systems. Regarding the commenter’s concern that BSEE is eliminating the requirement for a PE to review and stamp drawings on existing facilities; per PE licensing requirements, a licensed PE cannot stamp design drawings that were not developed under their direct supervision. If the documents for an existing facility were not sealed by a licensed PE or are no longer available, BSEE cannot require a PE to certify that the existing facility was built according to the applicable requirements without the PE violating the terms of the PE license. A PE can seal documents related to modifications of an existing facility, but only for those modifications that were developed under that PE’s direct supervision. As for the commenter’s assertion that the proposal lacked any specification for training or qualification requirements for those who would prepare the documents listed in paragraph (b), BSEE does not think that such specification is necessary. As previously explained, a PE is still required to direct and certify the design of all the production safety systems. The documents in paragraph (b) include specific details related to the same systems that are described in documents required under paragraph (a). This rulemaking is not changing the basic fact that all of these systems must be designed under the oversight of a PE. Rather, this rulemaking is reducing the number of documents that the PE must stamp and that the operator must submit to BSEE with a PE’s stamp. P&IDs Comment: A commenter was concerned that the proposed regulations would eliminate the requirement for operators to submit a P&ID to BSEE for existing facilities. The commenter noted that in the case of a serious incident or disaster, it is important for BSEE to have an up-to-date drawing of the facility. The commenter recommended that BSEE not wait for a disaster and then request a drawing from the operator, as this could cause delays in making decisions regarding safety and spill prevention and response. The commenter stressed that BSEE did not provide any explanation why existing PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 49243 facilities should be removed from the requirements for meeting the PE approval or the submission of a piping and instrumentation diagram, asserting that older, existing facilities are likely a higher risk. The commenter stated that it is critical for BSEE to have access to these drawings during inspections, and incidents, and to ensure older, existing facility drawings are being updated to incorporate facility changes. The comment stated that BSEE did not provide adequate justification to eliminate these requirements and doing so would pose serious environmental and safety risks. Response: BSEE did not propose to eliminate the requirement to submit the information that is required in the P&IDs under existing § 250.842(a)(1). Under the proposed rule and this final rule, the documentation requirements are reorganized and the information required in the P&ID under the existing regulations is still required as part of the SFD (per API RP 14C, Annex B) and the SAFE chart (per API 14C, section 6.3.3). These diagrams still require a PE seal for new facilities and modifications on existing facilities. Operator certification that the electrical system design was approved by a registered PE has been required in regulations since 1988 (63 FR 10596, see § 250.122(e)(4)(ii) and (e)(5)). In addition, OCS Order number 8, effective October 1, 1976, included requirements for electrical system information, including certification by the operator ‘‘that the mechanical and electrical systems of the facility will be designed and installed under the supervision of appropriate registered professional engineers.’’ (OCS Order 8, section 3. B. (2)). The 2016 rule added the requirement that the operator submit the PE stamped designs for specific mechanical and electrical systems. BSEE granted some departures to allow operators additional time to comply. However, requiring operators to submit documents that are stamped by a licensed PE for existing facilities is often not possible. Per PE licensing requirements, a licensed PE cannot stamp design drawings that were not developed under his or her direct supervision. If a licensed PE did not seal the documents for an existing facility or if they are no longer available, BSEE cannot require a PE to certify that the existing facility was built according to the applicable requirements without the PE violating the terms of the PE license. A PE can seal documents related to modifications of an existing facility, but only for those modifications that were designed under that PE’s direct supervision. E:\FR\FM\28SER4.SGM 28SER4 amozie on DSK3GDR082PROD with RULES4 49244 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations Requirement for Professional Engineers Comment: A commenter asked how BSEE would ensure safety without the requirements in § 250.842 for a Professional Engineer to conduct these technical reviews. The commenter was concerned that this work would now be completed by less qualified, in-house company personnel, lacking a PE license. The commenter inquired about who within the companies would have sufficient expertise and experience to perform the review and who within each company will assure BSEE that the equipment is designed and maintained during its entire service life with an acceptable degree of risk. The commenter cited the BP Oil Spill Commission recommendation that ‘‘government agencies that regulate offshore activity should reorient their regulatory approaches to integrate more sophisticated risk assessment and risk management practices into their oversight of energy developers operating offshore.’’ The commenter noted that third party certification provides this type of approach, and the Commission specifically recommended regular thirdparty audits and certification. (BP Oil Spill Report at p. 253). The commenter asserted that this change is a serious rollback of safety and environmental protections. Response: BSEE disagrees that the proposed changes to the production safety system applications will result in a serious rollback of safety and environmental protections. As with any technical project, it is the responsibility of the operator to assign appropriate staff to the project. However, the documents for which BSEE will no longer require PE stamping are not the primary design documents; these documents provide additional details and information and are developed in conjunction with the documents that require a PE stamp. Further, the PE used for the documents required under this section does not need to be a third party under either the existing regulation or this final rule, and this section was never intended to be a third party certification requirement. Therefore, the commenter’s concerns that the documents required under this final rule section would be developed by less qualified, in-house personnel are misplaced. The commenter cited a BP Oil Spill Commission report recommendation that agencies adopt ‘‘risk assessment and risk management practices.’’ This commenter further offered third-party audits and certifications as examples of those practices. Those recommendations are part of that report, however, the VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 third-party audit and certification recommendation was made specifically in reference to SEMS. SEMS programs are required by BSEE regulations under 30 CFR part 250, subpart S, and represent performance based approach for all offshore oil and natural gas operations. The use of a PE is not a riskbased approach. The engineer is verifying compliance with various regulations, codes, and standards; this does not necessarily involve a risk assessment or analysis. As discussed previously, BSEE is implementing other risk-based approaches in its oversight of offshore oil and gas operations. Requirements for Profession Engineers Comment: A commenter asserted that some of the proposed revisions to § 250.842 seek to remove the very provisions that were added to specifically rectify the causes of the DWH explosion. The commenter cited the summary in the proposed rule that stated that ‘‘this proposed rule would fortify the Administration’s objective of facilitating energy dominance through encouraging increased domestic oil and gas production, by reducing unnecessary burdens on stakeholders while maintaining or advancing the level of safety and environmental protection.’’ This commenter stated that the recommended revisions in the proposed rule would endanger rather than advance the level of safety and environmental protection. The comment discussed the proposed revisions to some of the requirements related to the diagrams and drawings the operators must submit to BSEE for approval. The commenter noted that PEs have specific experience, qualifications, and education that enables them to provide the critical engineering expertise to identify potential safety and environmental risks. The existing rules were implemented to ensure that PEs utilize their engineering skills to achieve compliance and incorporate the necessary safety measures that will mitigate the likelihood of future disasters like the DWH explosion. The commenter stated that the need for these standards and the highest level of expertise is particularly great at this time given that, according to energy research firm Wood Mackenzie, oil and gas production could reach an all-time high in the Gulf of Mexico. This commenter strongly urged BSEE to retain all of the requirements for PEs in its revised rulemaking. Response: BSEE disagrees with the main assertions made by this commenter. This commenter conflated the 2017 proposed rule with a planned proposed rule related to well control PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 issues that rulemaking was still under development when BSEE publish the NPRM for this rulemaking. Operators use the production safety systems covered under this rulemaking in production operations, not in well operations (drilling, completions, workovers, and decommissioning). The DWH incident was related to a well operation, not a production operation, and the reports and recommendations related to DWH focused on well control during well operations, not production operations. BSEE does not recommend applying the recommendations from the DWH-related reports to production operations without careful consideration to ensure that those recommendations are appropriate to apply to production. The commenter raised concerns regarding the proposed changes to requirements for PE stamping of design documents. As noted in a previous response, BSEE is moving the information that is required by the current regulations for P&IDs to the SFD under this rulemaking, and the SFD will still require the PE seal. BSEE did remove requirements for a PE to stamp or seal certain design documents when modifying existing facilities. Some of those requirements would require a PE to seal work that was not performed under that engineer’s direct supervision, which would violate the terms of the professional engineer’s license. BSEE will no longer require that certain documents for new facilities or modifications must be stamped or sealed by a professional engineer. The drawings that will no longer require the PE seal are not critical to personnel safety or the environment, but are supporting documents, providing additional information related to the safety critical design documents that will continue to be required to carry a PE seal. Maintaining Required Documents Comment: A commenter recommended specific changes to the provisions in § 250.842(e) for clarity. The commenter recommended moving the provisions regarding P&IDs to the first sentence in this section, instead of including them as a specific separate requirement. The commenter also recommended deleting the statement requiring that the operator make these documents available to BSEE upon request. The commenter did not explain the reasoning behind the specific changes, but stated the changes would improve clarity. Response: BSEE partially agrees. BSEE recognized that it could revise proposed paragraph (e) to improve E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations clarity and did so, as previously discussed, although BSEE did not use the language the commenter suggested. Further, BSEE will not delete the sentence requiring documents to be made available to it upon request, as it needs ready access to these materials to fulfill its regulatory functions. Pressure Vessels (Including Heat Exchangers) and Fired Vessels (Section 250.851) Section summary: This section of the existing regulations includes requirements for the pressure vessels and fired vessels that are used in the production of oil and gas on offshore facilities. Requirements in the existing regulations include design requirements for equipment and relief valves, limits on equipment operating pressures, and specifications for pressure sensors. As proposed, the final rule removes from this section references to compliance dates that have now passed—i.e., the 2016 PSSR required existing uncoded pressure and fired vessels that were in use on November 7, 2016 (the effective date of the previous subpart H rulemaking), to be code stamped before March 1, 2018. These dates no longer need to be included, as they both have already passed as of the time of this final rulemaking. In addition, prior to the 2016 PSSR, the regulations already required most pressure vessels and fired vessels to be code stamped. The previous rulemaking only added vessels with an operating pressure greater than 15 psig to that requirement. amozie on DSK3GDR082PROD with RULES4 Small Hydraulic Accumulators and Pulsation Dampeners Comment: A commenter suggested language to change § 250.851(a)(1) to make clear that small hydraulic accumulators and pulsation dampeners are not intended to be included in this section. Response: BSEE disagrees; this clarification is unnecessary. The incorporated ASME BPVC states what equipment it covers. Therefore, BSEE is not changing the language in this paragraph. Alternative Codes/Standards for Small Hydraulic Accumulators and Pulsation Dampeners Comment: A commenter recommended the following language for § 250.851(a)(2): ‘‘Existing uncoded pressure and fired vessels, except small hydraulic accumulator and pulsation dampeners designed to alternative codes/standards; (i) with an operating pressure greater than 15 psig; and (ii) that are not code stamped in accordance VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 with the ASME Boiler and Pressure Vessel Code.’’ Response: BSEE disagrees and will not approve the blanket use of alternative codes or standards without knowing which alternative code or standards will be used. If an operator believes an alternative standard provides an equal or greater level of safety and environmental protection as the criteria in the regulation, they can apply to use alternate procedures under the existing § 250.141. Compliance Date for Code Stamping Pressure and Fired Vessels Comment: A commenter suggested that January 1, 2019, should be set as the new compliance date for § 250.851(a)(2), rather than merely deleting the March 1, 2018 deadline. The commenter noted that the proposed deletion would imply that this requirement would take effect immediately upon publication of the final rule. Response: Since this final rule is being published after March 1, 2018, the requirement is already in effect. This rulemaking is deleting the date because, after March 1, 2018, the reference in the regulation to that date is unnecessary. Removing this vestigial reference to a date that has already passed has no substantive effect; it merely removes now-superfluous regulatory text. BSEE does not believe a change to the timing of the effectiveness of the requirement from what had been established in 2016 is warranted. Operators have had since 2016 to plan to replace uncoded pressure vessels or to justify their continued use. Size and Pressures Related to ASME Coded Relief Valves Comment: A commenter suggested language for § 250.851(a)(3) to address concerns regarding the size and pressures related to ASME Coded relief valves. Response: BSEE did not propose changes to § 250.851(a)(3). The suggested changes are outside the scope of this rulemaking and would require further review by BSEE. Therefore, this final rule is not changing this language. Flowlines/Headers (Section 250.852) As initially proposed, BSEE is changing the references in § 250.852(e)(1) and (4) from ‘‘API Spec. 17J’’ to ‘‘ANSI/API Spec. 17J,’’ which is the proper title of the standard as incorporated in the existing regulation. BSEE did not receive any comments on this section of the proposed rule. PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 49245 Safety Sensors (Section 250.853) Section summary: This section establishes requirements safety sensors, including shutdown devices, sensors with integral automatic reset, and pressure sensors. As was proposed, this section of the final rule includes requirements for shutdown devices, valves, and pressure sensors, including testing requirements. As was proposed, final § 250.853(d) requires that operators equip all level sensors to permit testing through an external bridle on all new vessel installations, where possible, depending on the type of vessel for which the level sensor is used. As proposed, this section will be revised in the final rule to add a new paragraph (d) that requires that operators equip all level sensors to permit testing through an external bridle on all new vessel installations, where possible, depending on the type of vessel for which the level sensor is used. This change was originally proposed in the 2013 Notice of Proposed Rulemaking that led to the 2016 PSSR. However, it was not included in the final rule, based on concerns raised in public comments. The preamble of the 2016 final rule stated that BSEE removed proposed paragraph (d) from the final rule because BSEE can address level sensors adequately using existing regulatory processes, such as DWOPs and we do not need to specify uses and conditions of such sensors in the regulations. Since the 2016 PSSR, BSEE has reconsidered this provision and determined that including this requirement in the regulations is important, because it clearly states the expectation to have an external bridle to permit testing. This ensures that, where possible, operators make the sensor accessible for testing, which is the accepted approach at this time. A comment on the proposed 2016 PSSR rulemaking asserted that certain sensor testing technologies (e.g., ultrasonic and capacitance) were not suitable for use in external bridles and that some proposed or new projects evaluated using ultrasonic, optical, microwave, conductive, or capacitance sensors, which do not use bridles. BSEE recognizes that there are sensors that do not use bridles and that other equipment options exist. However, the use of a level sensor with an external bridle that allows testing through the bridle remains BSEE’s preferred approach. Sensor testing equipment built according to API standards, which BSEE’s regulations incorporate by reference, should be able to meet this provision. We therefore proposed E:\FR\FM\28SER4.SGM 28SER4 49246 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations adding language to recognize other approaches, stating that operators must ensure that all level sensors are equipped to permit testing through an external bridle ‘‘where possible, depending on the type of vessel for which the level sensor is used.’’ Keeping this language in this final rule allows BSEE more flexibility in approving a different design, without requiring the operator to apply for an alternate procedure or equipment to test the level sensor under § 250.141. Use of Phrase ‘‘Where Possible’’ Comment: One commenter stated that the term ‘‘where possible’’ is ambiguous and open to a wide range of interpretations. The commenter suggested that the language in the proposed § 250.853(d) should be revised to state that this requirement does not apply if other level sensors are approved in the production safety systems applications. Response: BSEE disagrees that the proposed change is necessary. BSEE determined that including this requirement in the regulations is important because it states the expectation to have an external bridle to permit testing. BSEE recognizes that there are sensors that do not use bridles and that other equipment options exist. However, the use of a level sensor with an external bridle that allows testing through the bridle remains BSEE’s preferred approach. The final language recognizes that other approaches are available and the modifier ‘‘where possible’’ allows BSEE more flexibility in approving a different design, without requiring the operator to apply for an alternate procedure or equipment to test the level sensor under § 250.141. BSEE does not believe that being more prescriptive in defining the circumstances that may qualify for this condition is the optimal approach for addressing the relevant circumstances. amozie on DSK3GDR082PROD with RULES4 Surface Pumps (Section 250.865) Section summary: This section provides requirements of surface pumps related to protective equipment, pressure recording devices, and shut-in sensors. Revision for Update of API RP 14C Comment: Although BSEE did not propose any changes to this section, one commenter recommended the revision of the existing requirement in paragraph (a), if BSEE incorporated by reference the Eighth Edition of API RP 14C. Response: No change is necessary at this time since BSEE is not incorporating the Eighth Edition of API RP 14C. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Consistency With § 250.870 Comment: Although BSEE did not propose any changes to § 250.865(d), one commenter recommended that, if the proposed changes in § 250.870 were adopted in the final rule, the text in § 250.865(d) should be changed to reference § 250.870 for consistency of implementation. Response: No change is necessary at this time. Section 250.865(d) addresses when the pressure safety low (PSL) must be placed into service, while § 250.870 addresses time delays on those sensors. Although these are related, BSEE does not agree it is necessary to cross-reference all of the specific requirements that the PSLs or other sensors must follow throughout these regulations. Temporary Quarters and Temporary Equipment (Section 250.867) Section summary: This section of the existing regulations includes requirements for temporary quarters that are located in production processing areas or other classified areas. BSEE intends for these requirements to protect personnel located in these areas and to include the installation safety devices required by API RP 14C and approval by the District Manager. As proposed, the final rule is revising paragraph (a) of this section to require District Manager approval of safety systems and safety devices associated with temporary quarters prior to installation. This applies to all temporary quarters to be installed on OCS production facilities. Existing regulations specify that the operator must receive approval for temporary quarters ‘‘. . . installed in production processing areas or other classified areas on OCS facilities.’’ The revisions will require approval of the safety systems and safety devices, instead of approval of the actual temporary quarters, regardless of where the temporary quarters are located. This change recognizes that risk of a hazard occurring related to production is not restricted to the production areas or classified areas. This change ensures that temporary quarters have the proper safety systems and devices installed to protect individuals in the temporary quarters, regardless of where they are located on the facility. BSEE recognizes the authority of the United States Coast Guard (USCG) as the lead agency for living quarters on the OCS in two Memoranda of Agreement (MOA) between BSEE and USCG related to oil and gas production facilities: MOA OCS–09, Fixed OCS Facilities, dated September 19, 2014 and PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 MOA OCS–04, Floating OCS Facilities, dated January 28, 2016. MOA OCS–09 establishes BSEE as the lead for safety systems, specifically for emergency shutdown systems and gas detection on fixed OCS facilities. MOA OCS–04 establishes BSEE as the lead for emergency shutdown systems and components on floating OCS facilities. The existing requirement that operators equip temporary quarters with all safety devices required by API RP 14C (Appendix C) will not change. This paragraph ensures that operators will install the proper safety devices on or in temporary quarters, including fire and gas detection equipment and emergency shut down stations addressed in API RP 14C. As proposed, BSEE is also adding a new paragraph (d) to § 250.867 of the final rule that states that operators must receive District Manager approval before installing temporary generators that would require a change to the electrical one-line diagram required under § 250.842(a). Approval of Temporary Quarters Comment: A commenter asserted that requiring District Manager approval before installation of temporary quarters is inconsistent with other similar requirements contained in subpart H. The commenter noted that § 250.842 requires submission for approval of drawings for installation or modification of production safety systems followed by submission of as-built drawings 60 days after production commences. The commenter states that District Manager approval is not needed to begin installation of these critical safety systems; however, production cannot commence until District Manager approval is received. The commenter recommended that BSEE should adopt a similar approach for temporary quarters. The commenter suggested language to revise the proposed text to require that the operator submit plans for the safety systems/safety devices to the District Manager before installing temporary quarters and that BSEE should approve the temporary quarters before they are occupied. Response: BSEE disagrees. Temporary quarters are directly related to personnel safety, since they are used for living and sleeping. The nature of the use of temporary quarters necessitates the approval of the safety systems and safety devices before they are installed. Operators often install temporary quarters for a specific short term use, where timing is an important factor in planning. If operators install the quarters before the safety systems and safety devices are approved by the E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations District Manager, there is a risk that the use of the quarters could be delayed if BSEE delays its approval. Approval prior to installation provides for more certainty. BSEE also disagrees with the commenter’s assertion that the approval of safety systems and safety devices on temporary quarters is similar to the approval and installation of production safety systems, because production safety systems need more lead time for installation. amozie on DSK3GDR082PROD with RULES4 Small Temporary Equipment Comment: A commenter stated that it is not feasible to submit certain small temporary equipment meant for testing and maintenance to the District Manager for approval prior to installation and recommended that BSEE revise the final rule to limit this requirement to ‘‘major’’ temporary equipment. Response: BSEE disagrees. BSEE needs to see all temporary equipment that is associated with the production process system, regardless of size, to ensure safety of the system. Therefore, BSEE has not adopted this recommendation in the final rule. Approval of Temporary Generators Comment: A commenter recommended that BSEE not finalize the proposed § 250.867(d). The commenter asserted that generators are a vital piece of equipment that provides power for living conditions and supervisory control and data acquisition (SCADA) systems, gas detection systems, fire detection systems, process systems, and safety/pollution control devices. The commenter stated that requiring BSEE approval prior to installing such a vital piece of equipment creates not only less than desirable living conditions but also loss of control of operations. The commenter noted further that an operator’s SEMS program provides guidance and procedures for the installation of temporary or permanent equipment. The commenter noted that temporary generators result in a minimal impact to the overall safety system. The commenter stated that these generators are put in pre-designated electrical switchgear systems for auxiliary power while the primary generator is inoperable and sent in for repair, and that this spare switchgear breaker should already be identified on one-line electrical drawings. Response: BSEE agrees with the comment, in part, but not with the commenter’s conclusion. Not all temporary generators fall under the situation described in the comment. The final rule requires operators to seek approval only for temporary generators that are not already shown on the one- VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 line drawings. So the regulation does not apply to many of the situations raised in the comment. BSEE did not make any revisions to the regulatory text based on this comment. Time Delays on Pressure Safety Low (PSL) Sensors (Section 250.870) Section summary: This section of the existing regulations provides requirements related to time delays for pressure safety devices. The existing regulations provide a reasonable period for pressure to fluctuate before it becomes necessary to alert the operator to an abnormal condition that must be addressed. The final rule is revising the requirement in paragraph (a) of this section regarding the use of Class B, Class C, or Class B/C logic. This section currently states that the operator ‘‘may apply any or all of the industry standard Class B, Class C, or Class B/C logic to all applicable PSL sensors installed on process equipment, as long as the time delay does not exceed 45 seconds.’’ As proposed, BSEE is deleting the phrase ‘‘any or all of the’’ from that sentence in the final rule, as it is not needed. We will no longer require the operator to seek approval from BSEE for alternate procedures under § 250.141 to use a PSL sensor with a time delay that is greater than 45 seconds. Instead, the revised section states that if the device may be bypassed for greater than 45 seconds, the operator must monitor the bypassed devices in accordance with § 250.869(a). The alternate procedure approval is not needed, since monitoring bypassed devices is authorized in the current § 250.869(a). Impact on Approved Departure Requests Comment: Industry commenters requested clarification as to how the proposed revision to § 250.870 will impact departure requests that were issued under the current (2016) requirements for PSL time delays that are greater than 45 seconds. Response: The changes in the final rule are consistent with departures approved by BSEE. Suggested Revisions to § 250.870(a)(1) Comment: Industry commenters stated that the examples given in § 250.870(a)(1) are non-API RP 14C devices, and on reciprocating compressors the timer typically is set for 90 seconds. Commenters suggested deleting the words ‘‘but not more than 45 seconds’’ since that is covered in § 250.870(a) or changing the example to ‘‘a hydrocarbon pump PSL sensor which typically clears in 15 seconds but before 45 seconds.’’ PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 49247 Response: BSEE disagrees with the suggested change, which is substantive and would require a new proposal and opportunity for comment. The language in the proposed rule and the final rule is consistent with long standing BSEE policy. Monitoring Class C Safety Devices Comment: Industry commenters recommended adding the following sentence at the end of § 250.870(a)(2) for clarification: ‘‘Class C safety devices while bypassed should be monitored until they are in full service.’’ Response: Although this was not part of the proposed rule, BSEE agrees with the comment. Class C devices, by their nature, allow the devices to be bypassed for more than 45 seconds. Therefore, we are including an express statement that, if a Class C safety device is bypassed, the operator must monitor the device until it is in full service. This is consistent with the language of revised § 250.870(a). Suggested Revisions to § 250.870(a)(3) Comment: Industry commenters recommended inserting the sentence, ‘‘They are often used for compressor discharge PSL(s) for the loading process’’ after the first sentence in § 250.870(a)(3) for clarification, and inserting ‘‘also’’ into the following sentence so that the paragraph reads ‘‘Class B/C safety devices have logic that allows for the PSL sensors to incorporate a combination of Class B and Class C circuitry. They are often used for compressor discharge PSL(s) for the loading process. These devices are also used to ensure that the PSL sensors are not unnecessarily bypassed during startup and idle operations (e.g., Class B/C bypass circuitry activates when a pump is shut down during normal operations). The PSL sensor remains bypassed until the pump’s start circuitry is activated and either:’’ Response: BSEE disagrees. The suggested revision does not add value and thus no change was made in the final rule. There is no need to identify every possible application of these sensors and the use that is identified in the regulatory text is not exclusive. The purpose of this regulation is to direct how these sensors are to be used, not the circumstances under which they are to be used. Suggested Revisions to § 250.870(a)(3)(i) Comment: Industry commenters stated that, with regard to § 250.870(a)(3)(i), Class B/C timers are used on Compressor discharge PSL(s), turbine compressors typically take up to 3 minutes to clear the discharge PSL(s) E:\FR\FM\28SER4.SGM 28SER4 49248 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations after loading the compressor, and reciprocating compressors can take more than 45 seconds. Commenters further stated that there are situations (Pigging Pumps, Equalization Pumps, Pipeline Pumps, etc.) where it takes longer than 45 seconds to build up line pressure and clear the PSL to normal operating pressure. Commenters recommended removal of the phrase ‘‘no later than 45 seconds from start activation,’’ as this is covered under § 250.870(a), which allows going beyond 45 seconds provided the Class B timer is monitored and documented. Response: BSEE disagrees with the suggested change. The language in § 250.870(a)(3)(i) defines what a Class B/ C timer is, while the introductory language in § 250.870(a) states what actions the operator must take if the delay could exceed 45 seconds. amozie on DSK3GDR082PROD with RULES4 Recommendation To Delete § 250.870(b) Comment: Industry commenters recommended that BSEE should delete existing § 250.870(b) because it is a duplicative requirement, stating that there are manual bypassing rules in § 250.869 that allow the bypass of a safety device for unlimited time periods provided that the operator is monitoring the sensing device and able to shut it in. Response: BSEE disagrees because these sections are not duplicative. Section 250.869 establishes the general requirements related to monitoring bypassed devices, while § 250.870 addresses specific requirements for bypassing sensors in the absence of time delay circuitry. Atmospheric Vessels (Section 250.872) Section Summary: Paragraph (a) of the existing regulations requires operators to equip atmospheric vessels (except certain Department of Transportation (DOT)-approved transport tanks) that process or store liquid hydrocarbons (or other Class I liquids) with protective equipment identified in section A.5 of API RP 14C (Seventh Edition). Paragraph (b) of the existing section requires operators to ensure that all atmospheric vessels are designed and maintained to ensure the proper working conditions for Level Safety High (LSH) sensors and that LSH sensors on vessels with oil buckets are installed to sense oil levels in the buckets. Paragraph (c) of the existing section requires operators to ensure that flame arrestors are maintained to ensure proper functioning. BSEE proposed to revise paragraph (a) to require that atmospheric vessels connected to the process system and that contain a Class I liquid must be reflected on the corresponding VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 drawings, along with the associated pumps. In addition, BSEE proposed to revise § 250.198 by updating the reference to API RP 14C, as used in § 250.872 and elsewhere, from the Seventh Edition to the Eighth Edition. BSEE proposed to revise paragraph (b) in order to (i) emphasize that operators or manufacturers must design LSH sensors on atmospheric vessels to prevent pollution (per § 250.300(b)(3) and (4)); and (ii) limit the existing requirement applicable to LSH sensors on vessels with oil buckets to newlyinstalled vessels only. BSEE also proposed to eliminate paragraph (c) as unnecessary and redundant with § 250.800. Based on consideration of public comments on this section of the proposed rule, BSEE made some revisions to the proposed text in this final rule to clarify the requirements for LSH sensors on vessels with oil buckets and to provide consistency with other parts of the regulations. As was proposed, BSEE is revising paragraph (a) of this section to state that the operator must include on the design documents atmospheric vessels connected to the process system that contains a Class I liquid and the associated pumps, as required in § 250.842(a)(1) through (4) and (b)(3). In the final rule, BSEE is also revising the existing provisions for oil LSH sensors in paragraph (b). The proposed provision stated that operators must design and install LSH sensors to prevent pollution. In the final rule, BSEE removed this provision from paragraph (b) and moved it to final paragraph (c), with revisions. In addition, the final rule, unlike the proposed rule, removes the provision from existing paragraph (b) that specifies that, for newly installed atmospheric vessels with oil buckets, operators must install the LSH sensor to sense the level in the oil bucket. This requirement regarding LSH sensors on oil buckets was overly prescriptive and too narrow, however new paragraph (c) preserves the intent of the existing requirement. As proposed, BSEE is deleting existing paragraph (c) in the final rule. The existing paragraph added maintenance of flame arrestors and duplicates § 250.880(c)(3)(viii). BSEE is adding a new paragraph (c) to specifically address the design requirements for atmospheric vessels. The new provision in final paragraph (c) requires operators to design, install, and maintain all atmospheric vessels to prevent pollution, as required under § 250.300(b)(3) and (4). BSEE added this language, which was not in the proposed rule, to clarify that the PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 pollution prevention requirements of those paragraphs apply to all atmospheric vessels, including atmospheric vessels that have oil buckets. It reflects existing requirements and does not constitute a substantive change. API RP 14C and Corresponding Drawings Comment: Some commenters made suggestions for changes to this section to address changes in the numbering in the Eighth Edition of API RP 14C from the Seventh Edition. In addition, some commenters recommended that paragraph (a) should be more specific when referencing ‘‘corresponding drawings’’ and recommended that BSEE replace that term with ‘‘design documents listed in § 250.842(a)(1) through (4) and § 250.842(b)(3).’’ Response: The commenters’ suggestion regarding revising the reference to section A of RP 14C is moot because, as explained elsewhere in this final rule, BSEE has decided not to finalize the incorporation of the Eighth Edition of API RP 14C at this time. BSEE agrees with the comment that the proposed revision regarding ‘‘corresponding drawings’’ needed clarification, and has replaced that term in the final rule with the phrase recommended by the commenters; this is also consistent with changes made in § 250.842. Location of LSH Sensor Comment: Some commenters asserted that the location of the LSH sensor in proposed paragraph (b) is not the most relevant criterion [for preventing spills], and that installing an LSH sensor in the oil bucket would not necessarily ensure that oil will not carry over and spill. Those commenters stated that the most important factor is that the vessel should be designed to prevent pollution, and they noted that many atmospheric vessels are designed with the LSH sensor in the tank itself and are capable of preventing spillage. Thus, the commenters recommended that BSEE change the proposed revisions to paragraph (b) to include performancebased language to read: ‘‘You must ensure that all atmospheric vessels installed are designed and maintained to ensure the proper working conditions for LSH sensors. The LSH must be designed and installed in such a way to prevent pollution. The LSH sensor bridle must be designed to prevent different density fluids from impacting sensor functionality.’’ Response: BSEE agrees with most of the commenters’ concerns and with most of commenters’ suggested changes E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations to proposed paragraph (b), except that BSEE has determined that more clarity is appropriate in order to prevent confusion and uncertainty regarding what ‘‘prevent pollution’’ entails. Accordingly, BSEE revised the language in the final rule to address the design of all atmospheric vessels to prevent pollution, including, but not limited to, the displacement of oil out of an overboard water outlet, as previously described. As with the proposed rule, this change to the regulation would not substantively change the existing requirements. amozie on DSK3GDR082PROD with RULES4 Elimination of Existing Paragraph § 250.872(c) Comment: Two commenters agreed with the proposed elimination of existing paragraph (c) from § 250.872. One of those commenters pointed out that paragraph (c) is unnecessary in light of the broader testing provision in § 250.880(c)(3)(viii). Response: BSEE agrees that the proposed elimination of the existing paragraph (c) is appropriate and the final rule eliminates that paragraph. BSEE has reorganized and simplified the remaining requirements of that section in the final rule by adding a new paragraph (c) that addresses requirements for atmospheric vessels. Exempting Small Atmospheric Vessels Comment: One industry commenter recommended that paragraph (a) of the rule exempt small atmospheric vessels (i.e., with design capacity of 770 gallons or less) from the safety equipment requirements of this provision, asserting that those requirements are not practical for such small vessels and the risk posed by small vessels do not warrant the expense. The commenter added that such a volume threshold would exempt most offshore tote tanks, which have historically been considered to be temporary equipment. The same commenter also requested that BSEE limit the applicability of the requirement in paragraph (b) regarding design and maintenance of atmospheric vessels to ensure proper working conditions for LSH sensors to vessels ‘‘installed more than one year after the effective date’’ of the final rule, asserting that requiring that operators retrofit existing vessels with LSH sensors would not be justified by the risk. Response: BSEE disagrees with both of these comments. With respect to an exemption in paragraph (a) for small vessels, these vessels contain liquid hydrocarbons or other Class I liquids, which are flammable. It is important to ensure these tanks are properly protected, regardless of size. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 With respect to limiting paragraph (b) to new vessels installed at least one year after the effective date, BSEE notes that the basic requirement of paragraph (b) regarding proper working conditions for LSH sensors was added to § 250.872 by the 2016 PSSR; thus, operators have had ample time to comply or to address compliance issues. BSEE also notes that operators with vessels that were designed, but not installed, prior to the effective date of the 2016 PSSR may submit a departure request under § 250.142. LSH Sensors Requirements for Newly Installed Equipment Comment: A commenter stated that paragraph (b) should not mandate LSH sensors to address oil buckets on newly installed equipment. The commenter asserted that the language in existing paragraph (b) regarding oil buckets is too prescriptive and that compliance with the general design requirements in the remainder of paragraph (b) would be sufficient. Response: BSEE agrees in general with the commenter’s belief that compliance with the other design requirements in proposed paragraph (b)—modified in the final rule, as previously described in response to a comment—would be sufficient to prevent pollution without the existing language regarding oil buckets. Accordingly, the final rule deletes the existing prescriptive language from the last sentence of paragraph (b), which would have been retained for new oil buckets under the proposed rule. The final rule includes more general design requirements in new paragraph (c), as previously described. Subsea Gas Lift Requirements (Section 250.873) Section summary: This section of the existing regulations addresses requirements for gas lift equipment used in subsea wells, pipelines, and risers. These requirements include: Designing gas lift supply pipelines according to API RP 14C, installation of safety valves, including a GLSDV, valve closure times, and periodic testing of gas lift valve systems. As proposed, the final rule revises the table in paragraph (b) of this section to replace multiple references to API Spec. 6A with ANSI/API Spec. 6A. Recommendation To Delete GLSDVs From SPPE Comment: One commenter recommended revising the table in this section to delete GLSDVs from the list of SPPE. PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 49249 Response: No change is necessary. BSEE did not revise § 250.801 or § 250.802 to delete GLSDVs as SPPE, for the reasons stated in those sections of this preamble. Therefore, a similar reference should be retained here for consistency. Subsea Water Injection Systems (Section 250.874) Section summary: This section of the existing regulations addresses requirements related to water flood injection via subsea wellheads. This includes adherence to API RP 14C for equipment that is located on platforms, the use of safety valves including a water injection valve and water injection shutdown valve, valve closure times, and testing of the water injection valve. BSEE proposed to revise paragraph (g)(2) of this section to replace the references to API Spec. 6A with ANSI/ API Spec. 6A. BSEE received no comments on this proposed revision, and the final rule implements the revision as proposed. Fired and Exhaust Heated Components (Section 250.876) Section summary: This section of the existing regulations contains inspection requirements for certain tube-type heaters to minimize the risks of potential safety issues for offshore personnel. As proposed, the final rule revises this section to delete the requirement to remove the fire tube during inspection. BSEE recognizes that there are other ways to inspect the fire tube, without removing it. For example, operators could use a combination of cameras with thickness sensors to inspect fire tubes that cannot be easily accessed, instead of removing the fire tube completely. This change allows the operator to determine an appropriate method to inspect the fire tube and is a more flexible, performance-based approach. BSEE recognizes the need for fire tube inspections; however, the process to remove the fire tube for inspection can pose its own safety concerns. In some cases, use of an alternative method for inspections would increase safety, since removing the fire tube may present a hazard if the fire tube is located in a place where it is not easy to remove. The existing regulations require that an operator use a qualified third party to remove and inspect the fire tubes of tube-type heaters every five years. Although BSEE did not propose to change this requirement, based on comments BSEE received, BSEE revised the final rule to allow the use of ‘‘qualified third-party.’’ E:\FR\FM\28SER4.SGM 28SER4 49250 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations Qualified Personnel Inspections Comment: A commenter suggested that BSEE revise the phrase a ‘‘qualified third party’’ to ‘‘qualified personnel’’ because the term ‘‘qualified’’ is subject to interpretation and the requirement for a third party to perform the inspection is not consistent with existing regulation. The commenter also stated that BSEE’s requirement for the fire tube inspection to be done by a third party would not be consistent with § 250.851(a)(1)(ii). The commenter stated that revising the term ‘‘a qualified third party’’ to ‘‘qualified personnel’’ should satisfy BSEE’s desire for an inspection to be performed by someone with appropriate knowledge, experience, and training. The commenter asserted that its suggested change would be consistent with § 250.851(a)(1)(ii) by not requiring the inspector to be a third party and that its suggested change would take advantage of a standard already incorporated by reference without conflicting with it. Response: BSEE believes that the commenter’s recommendation has merit; however, because the recommendation is substantive and BSEE did not include it in the proposed rule, we are not implementing it in this final rule. We will take it under advisement for potential future rulemaking. amozie on DSK3GDR082PROD with RULES4 Production Safety System Testing (Section 250.880) Section summary: This section establishes requirements for testing of the various components of the production safety system. In addition, this section requires notifications to BSEE at various stages before and during production. As proposed, BSEE is clarifying language in paragraph (a)(1) of the final rule to state that the operator must notify BSEE at least 72 hours before commencing ‘‘initial’’ production on a facility. The existing language states that the operator must notify BSEE ‘‘at least 72 hours before commencing production.’’ It did not specify that this notification was for initial production, leading to possible confusion as to whether the operator must notify BSEE anytime production on a facility has been shut in and the operator is ready to resume production. This was not BSEE’s intent. BSEE is also rewording the paragraph and adding a crossreference to § 250.800(a)(2) for clarity. As proposed, BSEE is also revising paragraphs (c)(2)(iv) and (c)(4)(iii) of the final rule to replace the incorporation by reference of API RP 14H, which was withdrawn by API, with API STD 6AV2. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Similarly, BSEE is revising § 250.880(c) of the final rule to replace the incorporation by reference of API RP 14B with ANSI/API RP 14B. Commencement of Production Comment: Industry commenters recommended inserting ‘‘initial’’ into § 250.880(a)(2) to be consistent with the proposed language in § 250.880(a)(1), so that the paragraph reads ‘‘Notify the District Manager upon commencement of initial production so that BSEE may conduct a complete inspection.’’ Response: BSEE disagrees. The intent of § 250.880(a)(2) is that it applies any time an operator shuts down and restarts a facility, so that the operator notifies BSEE when a facility is on production. This is different from the intent of the notification required in § 250.880(a)(1), which is to notify BSEE in advance of initial production, so that BSEE may conduct a preproduction inspection. Updating API RP 14C Comment: Industry commenters stated that, if the Eighth Edition of API RP 14C is incorporated by reference as proposed in § 250.198, then BSEE should update § 250.880(b)(2) by deleting ‘‘D’’ in the sentence ‘‘Perform testing and inspection in accordance with API RP 14C, Appendix D I (incorporated by reference as specified in § 250.198), and the additional requirements found in the tables of this section or as approved in the DWOP for your subsea system.’’ Response: As discussed elsewhere in the preamble, BSEE has decided not to incorporate by reference the Eighth Edition of API RP 14C in the final rule. Accordingly, the proposed revision would be inconsistent with that decision. Alternative Method Verifying the Functionality of PSVs Comment: Industry commenters recommended that alternatives for compliance, such as the use of API RP 510, should be incorporated into this section. Specifically, commenters recommended that the final rule explicitly include an alternative method of verifying the functionality of PSVs in § 250.880(c)(1)(i) that allows for an inspection program based on API RP 510 and API RP 576 as an alternative to lifting the main valve piston during the PSV test. Commenters also recommended the inclusion of weighted disc vent valves on atmospheric tanks in an inspection program based on API RP 510 and API RP 576 in lieu of annual disassembly and inspection. PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 Response: BSEE disagrees with the recommendation to include the additional method to verify functionality in the regulations. Testing of the piston movement is a critical test to verify functionality of the PSV. Recommendation To Extend Inspection Intervals for Flame, Spark, and Detonation Arrestors Comment: Industry commenters recommended that § 250.880(c)(3)(viii) should be changed to extend visual inspection intervals from annually, not to exceed 12 calendar months between tests, to not to exceed 3 years, with an exception for stack/spark arrestors on forced draft and natural draft fired components of not to exceed every 5 years. Commenters also recommended further extending inspection intervals where a risk assessment indicates that longer intervals are appropriate, noting that the arrestor performance can be monitored, and issues can be detected by observing the operating conditions of the component on which it is installed. Response: BSEE disagrees. There is insufficient evidence to support extending the current inspection intervals beyond 1 year. Further, API RP 14C, Seventh Edition, section D.2.2., states that all safety devices should be inspected at least once per year. Technology Advances for Fire—(Flame, Heat, or Smoke) and Gas Detection Systems Comment: Commenter suggested that BSEE update § 250.880(c)(3)(ii) to acknowledge technology advances in flame and gas detection devices, noting as an example that infrared gas detectors do not require the same frequency of calibration as electrochemical based detectors to function reliably. The commenter further suggested that the frequency requirement should be as recommended by the manufacturer, but not more than 12 months. Response: BSEE disagrees. The referenced technology is still relatively new. BSEE may consider revising timeframes once industry has proven the efficacy of the technology. PSV Maintenance Programs Comment: An industry commenter stated that its experience with a PSV maintenance program indicated that a risk based overhaul program aligned with API Standard 510 resulted in safe and reliable PSV and vent performance. The commenter recommended adding an alternative option to the testing requirements in § 250.880(c)(2)(i) under which annual testing would not be required if an operator has a risk-based overhaul program in place. Further, if E:\FR\FM\28SER4.SGM 28SER4 amozie on DSK3GDR082PROD with RULES4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations that alternative is not accepted, the commenter recommended that the regulation should allow additional time to perform the first test on those PSVs (and weighted disc vent valves used as PSVs) where it currently is not feasible to lift the piston during the test. The commenter also supported an additional 6 years beyond the effective date of the final rule to complete the first test. The commenter expressed concern that the proposed revision might result in industry and BSEE spending a significant amount of time on filing and responding to departure requests, and that such time could be better spent preparing to implement the rule. Response: BSEE disagrees. The need to verify the piston movement is a safety-critical issue. Allowing an additional 6 years for this requirement to take effect would result in an unreasonable timeframe to come into compliance with a requirement that has been in place since November, 2016. BSEE’s position remains that in order to validate the proper functioning of the PSV, the test must involve the movement of the piston. incorporated edition of API STD 2RD at this time, so no change to this section is included in the final rule. Inspections Frequency for Flame, Spark, and Detonation Arrestors (Flame Arrestors) Comment: An industry commenter recommended that BSEE add a compliance option to § 250.880(c)(2)(viii) to allow annual visual inspections of flame, spark, and detonation arrestors (flame arrestors). Commenter suggested an alternate approach that would allow setting an alternate inspection frequency of up to 6 years based on failure modes and consequence analysis, or replacement of flame arrestors every 6 years, with a 3 to 6 year interval. The commenter also suggested that undertaking inspections too frequently may expose technicians to unnecessary personal safety risk from working at height over water. Response: BSEE disagrees. There is insufficient evidence to support extending the current inspection intervals beyond 1 year. Moreover, BSEE believes that this change would require an additional proposed rule since it is a substantive change to existing requirements that was not in the 2017 proposed rule. Comment: One commenter noted that the existing regulations did not cite the correct title for API STD 2RD. Response: BSEE is not incorporating by reference the latest the edition of this document, which is API STD 2RD. The existing regulations refer accurately to API RP 2RD, which is currently incorporated by reference, so there is no need to revise this paragraph. What industry standards must your platform meet? (Section 250.901) Section summary: This section addresses structural requirements for production facilities. BSEE proposed revising paragraph (a) of § 250.901 and the table in paragraph (d) to update the incorporation by reference of API STD 2RD. However, BSEE is not updating the VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Title of API STD 2RD Comment: One commenter noted that the existing regulations did not cite the correct title for API STD 2RD. Response: BSEE is not incorporating by reference the latest the edition of this document, which is API STD 2RD. The existing regulations refer accurately to API RP 2RD, which is currently incorporated by reference, so there is no need to revise this paragraph. Design Requirements for DOI Pipelines (Section 250.1002) Section summary: This section addresses design requirements for pipelines. The final rule revises paragraph (b) of § 250.1002 to update the references to ANSI/API Spec. 6A and to change the reference from ‘‘API Spec. 17J’’ to ‘‘ANSI/API Spec. 17J,’’ which is the proper title of the standard as incorporated in the existing regulation. Title of API STD 2RD What To Include in Applications (Section 250.1007) Section summary: This section specifies what operators must include in their pipeline applications. As proposed, BSEE is revising paragraph (a) of § 250.1007 to change the reference from ‘‘API Spec. 17J’’ to ‘‘ANSI/API Spec. 17J,’’ which is the proper title of the standard as incorporated in the existing regulation. BSEE did not receive any comments on this section of the proposed rule. H. Additional Comments Solicited In the proposed rule, BSEE solicited comments on a number of issues related to 30 CFR part 250 for which BSEE did not propose any specific revisions to the existing regulations but which BSEE might have addressed in this final rule or might address in possible future rulemakings. See 82 FR 61714–61715. Those issues included: Whether the definition of Best Available and Safest Technology (BAST) in § 250.107(c) properly reflects the statutory intent; how to best organize § 250.198 PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 49251 (‘‘Documents incorporated by reference’’), to make it clearer and even more consistent with OFR’s recommendations for incorporations by reference; whether to modify conditions for SPPE failure analysis under § 250.803; and whether to extend the timeframe for initial pressure testing of PSVs under § 250.880. BSEE also solicited comments on whether BSEE should revise part 250 to address recommendations (such as requiring a safety device to de-energize electrostatic heater treaters) resulting from BSEE’s investigation of the November 2014 explosion and fatality on West Delta Block 105 Platform E (see https:// www.bsee.gov/wd-105-e-panel-report). Finally, BSEE solicited comments on potential obstacles for implementing the proposed requirements in the proposed rule, including comments on the feasibility of implementation and any hardships operators could encounter during implementation of a final rule. With respect to whether the definition of BAST in § 250.107(c), as revised in the 2016 PSSR, properly reflects BSEE’s statutory mandate concerning the use of BAST, BSEE received one comment from industry that suggested language for revising § 250.107(c) in a way that would prevent the Director from making a new BAST determination without going through a prior notice and comment rulemaking process. That same concept was addressed and rejected by BSEE in the 2016 final PSS rulemaking, and BSEE does not believe that the current industry comment on that issue provides any basis for revising § 250.107(c) at this time. Another commenter suggested that BSEE should consider modifying the language of § 250.107(c)(2) to encourage the submission of applications to BSEE to make BAST determinations. BSEE will take that suggestion under advisement. With respect to comments submitted regarding potential problems with implementation of the specific proposed requirements, BSEE has either addressed those concerns in response to the comments on those specific requirements elsewhere in this final rule or has otherwise considered those comments in developing its plans for implementing the final rule. With respect to potential nonsubstantive changes to § 250.198, for the purposes of reorganizing and revising that section, one commenter stated that meaningful comments on possible nonsubstantive changes would not be practical until after BSEE proposes E:\FR\FM\28SER4.SGM 28SER4 49252 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations specific revisions to that section.18 BSEE will continue to consult with the OFR regarding its suggestions for specific, non-substantive organizational and language changes to § 250.198 and expects to address such revisions in a separate rulemaking. With respect to the other issues on which BSEE solicited comments (failure analysis conditions under § 250.802; timeframe for initial PSV testing under § 250.880; and recommendations from the 2014 West Delta Block investigation), BSEE received a number of specific comments and is not implementing any changes based on those comments in this final rule. However, BSEE will consider those comments and decide at a later date whether to propose any additional revisions to the regulations. Procedural Matters Regulatory Planning and Review (E.O. 12866, E.O. 13563, E.O. 13771) E.O. 12866 provides that the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB) will review all significant rules. OIRA has reviewed this final rule and determined that it is significant because it raises novel legal or policy issues. After reviewing the requirements of this rule, BSEE has determined that it will not have an annual effect on the economy of $100 million or more nor adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, public health or safety, the environment, or state, local, or tribal governments or communities. E.O. 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the Nation’s regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The E.O. directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and amozie on DSK3GDR082PROD with RULES4 18 Some commenters made comments that addressed the proposed substantive changes to the specific documents referenced in § 250.198 or raised more general concerns with the merits of, and processes for, incorporation by reference generally. BSEE has responded to those comments elsewhere in this final rule. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 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. We have developed this rule in a manner consistent with these requirements. E.O. 13771 requires Federal agencies to take proactive measures to reduce the costs associated with complying with Federal regulations. BSEE has evaluated this rulemaking based on the requirements of E.O. 13771. Details on the estimated cost savings of this proposed rule are found in the final rule’s economic analyses, available in the public docket for this rulemaking. Important aspects of this rule (e.g., regulatory clarifications, reduction in paperwork burdens, adoption of industry standards, and migration to performance-based standards for select provisions) make it an E.O. 13771 deregulatory action. While this final rule reduces regulated entity compliance burdens, the rule continues to ensure safety and environmental protection for offshore production operations. This rule primarily revises sections of 30 CFR part 250, subpart H, and updates standards referenced therein. BSEE has reassessed a number of the provisions in the existing regulations and determined that some provisions should be written as performance-based standards rather than prescriptive requirements. Other proposed revisions reduce or eliminate parts of the paperwork burden of the existing regulations, while ensuring continued safety and environmental protection. BSEE has reexamined the economic analysis for the 2016 PSSR and now believes that it may have underestimated some compliance costs. BSEE is therefore revising some of the compliance cost assumptions in the economic analysis for this rulemaking. The underestimation of compliance costs in the 2016 analysis was primarily related to (1) the burden for obtaining PE review and stamping of all drawings on a facility if any production equipment modifications are proposed and (2) duplicative independent third PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 party equipment certifications that will no longer be required under this rule (but are incorporated in the baseline). BSEE underestimated both the cost and number of PE reviews required under proposed § 250.842. The cost of independent third party testing and certifications required under proposed § 250.802(c)(1) was also underestimated by BSEE in 2016. BSEE expects this final rule to reduce the regulatory burden on industry. Regulatory compliance cost savings are a result of changes in the rule that will reduce burden hours, PE stamping for production safety system components, and independent third party equipment certifications. BSEE estimates this final rule will reduce industry compliance burdens by $13 million annually. Over 10 years, BSEE estimates the reduced compliance burdens and cost savings will be $112 million discounted at 3 percent or $92 million discounted at 7 percent. The cost savings for revised provisions on PE stamping of production safety system modification documents (§ 250.842) are the single largest cost savings resulting from this rule. The additional PE certifications and stamping will no longer be required for all production safety system documents in an application, but will be required only for the documents for those components being modified. BSEE estimates the net regulatory cost savings for the § 250.842 changes will be $5.7 million in the first year and $40 million over 10 years discounted at 7 percent. The other provision providing substantial regulatory relief is the elimination of the third party reviews and certifications for select SPPE. Compliance with the various required standards (including ANSI/API Spec. Q1, ANSI/API Spec. 14A, ANSI/API RP 14B, ANSI/API Spec. 6A, and API Spec. 6AV1) ensures that each device will function in the conditions for which it was designed. The table below summarizes BSEE’s estimate of the 10year final rule compliance cost savings. Additional information on the compliance costs, savings, and benefits can be found in the final Regulatory Impact Analysis (RIA) posted in the public docket for this final rule. E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations amozie on DSK3GDR082PROD with RULES4 Small Business Regulatory Enforcement Fairness Act and Regulatory Flexibility Act This final rule is not a major rule under the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801 et seq.). This rule: • Will not have an annual effect on the economy of $100 million or more. This rule will revise the requirements for oil and gas production safety systems. The changes will not have any negative impact on the economy or any economic sector, productivity, jobs, the environment, or other units of government. The requirements primarily relate to the incorporated industry standards, to SPPE certification, and to PE stamping and will not add time to development and production processes. • Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. • 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. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 The requirements will apply to all entities operating on the OCS. Regulatory Flexibility Act The Regulatory Flexibility Act, 5 U.S.C. 601–612, requires agencies to analyze the economic impact of regulations when a significant economic impact on a substantial number of small entities is likely and to consider regulatory alternatives that will achieve the agency’s goals while minimizing the burden on small entities. The Regulatory Flexibility Analysis (RFA), which assesses the impact of this rule on small entities, is found in the RIA within the public docket for this rule. As defined by the Small Business Administration (SBA), a small entity is one that is ‘‘independently owned and operated and which is not dominant in its field of operation.’’ What characterizes a small business varies from industry to industry in order to properly reflect industry size differences. This rule would affect lease operators that are conducting OCS production operations. BSEE’s analysis shows this will include about 69 companies with active operations. Of the 69 companies, 21 (30 percent) are large and 48 (70 percent) are small. Entities that will operate under this rule primarily fall under the SBA’s North American Industry Classification System (NAICS) codes 211120 (Crude Petroleum Extraction) and 211130 (Natural Gas Extraction). For NAICS classifications 211120 and 211130, SBA defines a small business as one with fewer than 1,251 employees. BSEE considers that a rule will have an impact on a ‘‘substantial number of small entities’’ when the total number of small entities impacted by the rule is equal to or exceeds 10 percent of the relevant universe of small entities in a given industry. BSEE’s analysis shows that there are 48 small companies with active operations on the OCS. All of the operating businesses meeting the SBA classification are potentially impacted; therefore, BSEE expects that the final rule will affect a substantial number of small entities. PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 This rule is a deregulatory action, and BSEE has estimated the overall associated cost savings. BSEE has estimated the annualized cost savings and allocated those savings to small or large entities based on the number of active or idle OCS production facilities. Using the share of small and large companies’ production facilities, we estimate that small companies will realize 87 percent (∼$11.4 million) of the annualized cost savings from this rule and large companies 13 percent (∼$1.7 million). Additional information can be found in the RFA in the docket for this final rule. Unfunded Mandates Reform Act of 1995 This final rule will not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule will not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required. Takings (E.O. 12630) This final rule does not effect a taking of private property or otherwise have taking implications under E.O. 12630. A Takings Implications Assessment is not required. Federalism (E.O. 13132) Under the criteria in section 1 of E.O. 13132, this final rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. This rule will not substantially and directly affect the relationship between the Federal and State governments. To the extent that State and local governments have a role in OCS activities, this rule will not affect that role. A federalism summary impact statement is not required. The BSEE has the authority to regulate offshore oil and gas production. State governments do not have authority over offshore production on the OCS. None of the changes in this rule will affect areas that are under the E:\FR\FM\28SER4.SGM 28SER4 ER28SE18.003</GPH> BSEE has developed this final rule consistently with the requirements of E.O. 12866, E.O. 13563, and E.O. 13771. This rule revises various provisions in the current regulations with performance-based requirements based upon the best reasonably obtainable safety, technical, economic, and other information. BSEE has provided industry with more flexibility to meet the safety or equipment standards rather than specifying the compliance method when practical. Based on a consideration of the qualitative and quantitative safety and environmental factors related to the rule, BSEE’s assessment is that its promulgation is consistent with the requirements of the applicable E.O.s and of OCSLA and that this rulemaking will reduce unnecessary burdens on stakeholders while ensuring safety and environmental protection for OCS production operations. 49253 49254 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations jurisdiction of the States. It will not change the way that the States and the Federal government interact, or the way that States interact with private companies. Civil Justice Reform (E.O. 12988) This rule complies with the requirements of E.O. 12988. Specifically, this rule: (a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors, ambiguity, and be written to minimize litigation; and (b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards. amozie on DSK3GDR082PROD with RULES4 Consultation With Indian Tribes (E.O. 13175 and Departmental Policy) The Department of the Interior strives to strengthen its government-togovernment relationship with Indian tribes through a commitment to consultation with Indian tribes and recognition of their right to selfgovernance and tribal sovereignty. We have evaluated this rule under the Department’s consultation policy and under the criteria in E.O. 13175 and have determined that it has no substantial direct effects on federally recognized Indian tribes and that consultation under the Department’s tribal consultation policy is not required. Paperwork Reduction Act (PRA) of 1995 This final rule contains a collection of information that has been submitted to OMB for review and approval under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) The title of the collection of information for this rule is 30 CFR part 250, subpart H, Oil and Gas Production Safety Systems—Revisions. The OMB approved the collection under Control Number 1014–0003, expiration August 31, 2019, containing 95,997 hours and $5,582,481 non-hour cost burdens. Due to this rulemaking, the revisions to the collection will result in a total of 93,385 hours and $10,912,696 non-hour cost burdens. Potential respondents comprise Federal OCS oil, gas, and sulfur operators and lessees. Responses to this collection of information are mandatory or are required to obtain or retain a benefit. The frequency of responses submitted varies depending upon the requirement; but are usually on occasion, annually, and as a result of situations encountered. The ICR does not include questions of a sensitive nature. BSEE will protect proprietary information according to the Freedom of Information VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Act (5 U.S.C. 552) and DOI’s implementing regulations (43 CFR part 2), 30 CFR 250.197, Data and information to be made available to the public or for limited inspection, and 30 CFR part 252, OCS Oil and Gas Information Program. Changes to the information collection due to this rulemaking are as follows: BSEE proposed removing the independent third party certification requirements in § 250.802(c)(1) altogether, however a number commenters were concerned that there would be no way to ensure that operators are using SPPE that is designed for the conditions in which it will operate. To address these concerns, BSEE preserved certain independent third party certifications, and otherwise created a requirement to maintain documentation of how operators ensured the device being used is designed to function in the environment to which it will be exposed. • Section 250.802(c)(1) is being rewritten and will add 250 burden hours for developing and maintaining the description of process; as well as make available to BSEE upon request. The revisions to this section will also cause a reduction in third party certification non-hour costs burdens by -$460,000. • § 250.842(c) is being eliminated, which will cause a reduction in hour burden by ¥192 hours. Between the proposed rule and this final rule, BSEE ran a query to get a more accurate number of modifications submitted under § 250.842 due to decommissioning activities and found we have been receiving fewer modifications than currently approved. • Section 250.842 will reduce the hour burden by ¥2,670. • During the 2016 rulemaking (the 2016 PSSR), BSEE inadvertently omitted costs for Professional Engineers required to stamp documents in § 250.842. This revision to the collection requests approval of an additional $5,790,215 non-hour costs (PE Costs). We are adding this category of costs in this rulemaking but note that this rulemaking reduces the amount of information a PE must stamp from the 2016 rule. An agency may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a currently valid OMB control number. The public may comment, at any time, on the accuracy of the IC burden in this rule and may submit any comments to DOI/BSEE; ATTN: Regulations and Standards Branch; VAE–ORP; 45600 Woodland Road, Sterling, VA 20166; email PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 kye.mason@bsee.gov, or fax (703) 787– 1093. National Environmental Policy Act of 1969 This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 is not required because we reached a Finding of No Significant Impact. This finding and the accompanying environmental assessment was placed in the file for BSEE’s Administrative Record for the rule at the address specified in the ADDRESSES section. A copy may also be viewed at the Federal eRulemaking Portal: https://www.regulations.gov (use the keyword/ID ‘‘BSEE–2017–0008’’). Data Quality Act In developing this rule, we did not conduct or use a study, experiment, or survey requiring peer review under the Data Quality Act (Pub. L. 106–554, app. C sec. 515, 114 Stat. 2763, 2763A–153– 154). BSEE received one comment on the Data Quality Act, also known as the Information Quality Act (IQA). The commenter asserted that the draft EA under NEPA seems to be subject to the IQA and, therefore, should have been made available to the public to aid comment. Contrary to the commenter’s assertion, however, BSEE did make the draft EA publicly available for review and public input during the proposed rulemaking by placing that document in the public docket along with the proposed rule. Effects on the Nation’s Energy Supply (E.O. 13211) This final rule is not a significant energy action under the definition in E.O. 13211. A Statement of Energy Effects is not required. The final rule is an E.O. 13771 deregulatory action and does not add any new regulatory compliance requirements that would lead to adverse effects on the nation’s energy supply, distribution, or use. Rather, the regulatory changes will help to reduce compliance burdens on the oil and gas industry that may hinder the development or use of domestically produced energy resources, while still ensuring safety and environmental protection. Severability If a court holds any provisions of this rule or their applicability to any person or circumstances invalid, the remainder of the provisions and their applicability to other people or circumstances will not be affected. E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations List of Subjects in 30 CFR Part 250 Administrative practice and procedure, Continental shelf, Continental Shelf—mineral resources, Continental Shelf—rights-of-way, Environmental impact statements, Environmental protection, Government contracts, Incorporation by reference, Investigations, Oil and gas exploration, Penalties, Pipelines, Reporting and recordkeeping requirements, Sulfur. Joseph R. Balash, Assistant Secretary—Land and Minerals Management. For the reasons stated in the preamble, the Bureau of Safety and Environmental Enforcement (BSEE) amends 30 CFR part 250 as follows: PART 250—OIL AND GAS AND SULFUR OPERATIONS IN THE OUTER CONTINENTAL SHELF 1. The authority citation for part 250 continues to read as follows: ■ Authority: 30 U.S.C. 1751, 31 U.S.C. 9701, 33 U.S.C. 1321(j)(1)(C), 43 U.S.C. 1334. Subpart A—General 2. Amend § 250.198 by: a. Revising paragraphs (g) introductory text and (g)(1) through (3); ■ b. Removing paragraph (g)(6) and redesignating paragraphs (g)(4) and (5) as (g)(6) and (7); ■ c. In newly redesignated paragraphs (g)(6) and (7), removing the semicolon and adding a period in its place; ■ d. Adding new paragraphs (g)(4) and (5); ■ e. Revising paragraphs (h)(1), (52), (55); ■ f. In paragraphs (h)(58) and (62), removing ‘‘250.842(b)’’ and adding in its place ‘‘250.842(c)’’; ■ g. Revising paragraphs (h)(59) through (61), (65), (68), (70), (71) and (96); ■ h. In paragraph (h)(73), removing ‘‘250.802(b)’’ and adding in its place ‘‘250.802(c)’’; and ■ i. Adding paragraph (o). The revisions and additions read as follows: ■ ■ § 250.198 Documents incorporated by reference. amozie on DSK3GDR082PROD with RULES4 * * * * * (g) American Society of Mechanical Engineers (ASME), 22 Law Drive, P.O. Box 2900, Fairfield, NJ 07007–2900; https://www.asme.org; phone: 1–800– 843–2763: (1) 2017 ASME Boiler and Pressure Vessel Code (BPVC), Section I, Rules for Construction of Power Boilers, 2017 Edition, July 1, 2017 incorporated by reference at §§ 250.851(a) and 250.1629(b). VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 (2) 2017 ASME Boiler and Pressure Vessel Code, Section IV, Rules for Construction of Heating Boilers, 2017 Edition, July 1, 2017 incorporated by reference at §§ 250.851(a) and 250.1629(b). (3) 2017 ASME Boiler and Pressure Vessel Code, Section VIII, Rules for Construction of Pressure Vessels; Division 1, 2017 Edition; July 1, 2017 incorporated by reference at §§ 250.851(a) and 250.1629(b). (4) 2017 ASME Boiler and Pressure Vessel Code, Section VIII, Rules for Construction of Pressure Vessels; Division 2: Alternative Rules, 2017 Edition, July 1, 2017 incorporated by reference at §§ 250.851(a) and 250.1629(b). (5) 2017 ASME Boiler and Pressure Vessel Code, Section VIII, Rules for Construction Pressure Vessels; Division 3: Alternative Rules for Construction of High Pressure Vessels, 2017 Edition, July 1, 2017 incorporated by reference at §§ 250.851(a) and 250.1629(b). * * * * * (h) * * * (1) API 510, Pressure Vessel Inspection Code: In-Service Inspection, Rating, Repair, and Alteration, Tenth Edition, May 2014; Addendum 1, May 2017; incorporated by reference at §§ 250.851(a) and 250.1629(b); * * * * * (52) API RP 2SK, Design and Analysis of Stationkeeping Systems for Floating Structures, Third Edition, October 2005, Addendum, May 2008, Reaffirmed June 2015; incorporated by reference at §§ 250.800(c) and 250.901(a) and (d); * * * * * (55) ANSI/API RP 14B, Design, Installation, Operation, Test, and Redress of Subsurface Safety Valve Systems, Sixth Edition, September 2015; incorporated by reference at §§ 250.802(b), 250.803(a), 250.814(d), 250.828(c), and 250.880(c); * * * * * (59) API RP 14FZ, Recommended Practice for Design, Installation, and Maintenance of Electrical Systems for Fixed and Floating Offshore Petroleum Facilities for Unclassified and Class I, Zone 0, Zone 1 and Zone 2 Locations, Second Edition, May 2013; incorporated by reference at §§ 250.114(c), 250.842(c), 250.862(e), and 250.1629(b); (60) API RP 14G, Recommended Practice for Fire Prevention and Control on Fixed Open-type Offshore Production Platforms, Fourth Edition, April 2007: Reaffirmed, January 2013; incorporated by reference at §§ 250.859(a), 250.862(e), 250.880(c), and 250.1629(b); PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 49255 (61) API STD 6AV2, Installation, Maintenance, and Repair of Surface Safety Valves and Underwater Safety Valves Offshore; First Edition, March 2014; Errata 1, August 2014; incorporated by reference at §§ 250.820, 250.834, 250.836, and 250.880(c); * * * * * (65) API RP 500, Recommended Practice for Classification of Locations for Electrical Installations at Petroleum Facilities Classified as Class I, Division 1 and Division 2, Third Edition, December 2012; Errata January 2014; incorporated by reference at §§ 250.114(a), 250.459, 250.842(a), 250.862(a) and (e), 250.872(a), 250.1628(b) and (d), and 250.1629(b); * * * * * (68) ANSI/API Spec. Q1, Specification for Quality Management System Requirements for Manufacturing Organizations for the Petroleum and Natural Gas Industry, Ninth Edition, June 2013; Errata, February 2014; Errata 2, March 2014; Addendum 1, June 2016; incorporated by reference at §§ 250.730 and 250.801(b) and (c); * * * * * (70) ANSI/API Spec. 6A, Specification for Wellhead and Christmas Tree Equipment, Twentieth Edition, October 2010; Addendum 1, November 2011; Errata 2, November 2011; Addendum 2, November 2012; Addendum 3, March 2013; Errata 3, June 2013; Errata 4, August 2013; Errata 5, November 2013; Errata 6, March 2014; Errata 7, December 2014; Errata 8, February 2016; Addendum 4, June 2016; Errata 9, June 2016; Errata 10, August 2016; incorporated by reference at §§ 250.730, 250.802(a), 250.803(a), 250.833, 250.873(b), 250.874(g), and 250.1002(b); (71) API Spec. 6AV1, Specification for Verification Test of Wellhead Surface Safety Valves and Underwater Safety Valves for Offshore Service, Second Edition, February 2013; incorporated by reference at §§ 250.802(a), 250.833, 250.873(b), and 250.874(g); * * * * * (96) API 570, Piping Inspection Code: In-service Inspection, Rating, Repair, and Alteration of Piping Systems, Fourth Edition, February 2016; Addendum, May 2017; incorporated by reference at § 250.841(b). * * * * * (o) American National Standards Institute (ANSI), https://www.webstore. ansi.org; phone: 212–642–4900. (1) ANSI Z88.2–1992, American National Standard for Respiratory Protection, incorporated by reference at § 250.490. (2) [Reserved] E:\FR\FM\28SER4.SGM 28SER4 49256 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations Subpart H—Oil and Gas Production Safety Systems 3. Amend § 250.800 by revising paragraph (a) to read as follows: ■ § 250.800 General. (a) You must design, install, use, maintain, and test production safety equipment in a manner to ensure the safety and protection of the human, marine, and coastal environments. For production safety systems operated in subfreezing climates, you must use equipment and procedures that account for floating ice, icing, and other extreme environmental conditions that may occur in the area. Before you commence production on a new production facility: (1) BSEE must approve your production safety system application, as required in § 250.842. (2) You must request a preproduction inspection by notifying the District Manager at least 72 hours before you plan to commence initial production, as required under § 250.880(a)(1). * * * * * ■ 4. Amend § 250.801 by revising paragraph (a) to read as follows: § 250.801 Safety and pollution prevention equipment (SPPE) certification. (a) SPPE equipment. You must install only safety and pollution prevention equipment (SPPE) considered certified under paragraph (b) of this section or accepted under paragraph (c) of this section. BSEE considers the following equipment to be types of SPPE: § 250.802 Requirements for SPPE. (a) All SSVs, BSDVs, USVs, and GLSDVs and their actuators must meet all of the specifications contained in ANSI/API Spec. 6A and API Spec. 6AV1 (both incorporated by reference in § 250.198). * * * * * (c) Requirements derived from the documents incorporated in this section for SSVs, BSDVs, SSSVs, USVs, GLSDVs, and their actuators, include, but are not limited to, the following: (1) You must ensure that each device is designed to function in the conditions to which it may be exposed; including temperature, pressure, flow rates, and environmental conditions. (i) The device design must be tested by an independent test agency according to the test requirements in the appropriate standard for that device (API Spec. 6AV1 or ANSI/API Spec. 14A), as identified in paragraphs (a) and (b) of this section. (ii) You must maintain a description of the process you used to ensure the device is designed to function as required in paragraphs (a) and (c)(1) of this section and provide that description to BSEE upon request. (iii) If you remove any SPPE from service and install the device at a different location, you must have a qualified third party review and certify that each device will function as designed under the conditions to which it may be exposed. (2) All materials and parts must meet the original equipment manufacturer specifications and acceptance criteria. (3) The device must pass applicable validation tests and functional tests performed by an API-licensed test agency. (4) You must have requalification testing performed following manufacture design changes. (5) You must comply with and document all manufacturing, traceability, quality control, and inspection requirements. (6) You must follow specified installation, testing, and repair protocols. (7) You must use only qualified parts, procedures, and personnel to repair or redress equipment. (d) You must install and use SPPE according to the following table. If . . . Then . . . (1) You need to install any SPPE ............................................................ (2) A non-certified SPPE is already in service ......................................... (3) A non-certified SPPE requires offsite repair, re-manufacturing, or any hot work such as welding. You must install SPPE that conforms to § 250.801. It may remain in service. You must replace it with SPPE that conforms to § 250.801. * ■ * * * * 6. Revise § 250.803 to read as follows: § 250.803 What SPPE failure reporting procedures must I follow? amozie on DSK3GDR082PROD with RULES4 (1) Surface safety valves (SSV) and actuators, including those installed on injection wells capable of natural flow; (2) Boarding shutdown valves (BSDV) and their actuators. For subsea wells, the BSDV is the surface equivalent of an SSV on a surface well; (3) Underwater safety valves (USV) and actuators; (4) Subsurface safety valves (SSSV) and associated safety valve locks and landing nipples; and (5) Gas lift shutdown valves (GLSDV) and their actuators associated with subsea systems. * * * * * ■ 5. Amend § 250.802 by revising paragraphs (a), (c) and (d) to read as follows: (a) You must follow the failure reporting requirements contained in section 10.20.7.4 of ANSI/API Spec. 6A for SSVs, BSDVs, GLSDVs and USVs. You must follow the failure reporting requirements contained in section 7.10 of ANSI/API Spec. 14A and Annex F of ANSI/API RP 14B for SSSVs (all incorporated by reference in § 250.198). Within 30 days after the discovery and identification of the failure, you must provide a written notice of equipment failure to the manufacturer of such equipment and to BSEE through the VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Chief, Office of Offshore Regulatory Programs, unless BSEE has designated a third party as provided in paragraph (d) of this section. A failure is any condition that prevents the equipment from meeting the functional specification or purpose. (b) You must ensure that an investigation and a failure analysis are performed within 120 days of the failure to determine the cause of the failure. If the investigation and analyses are performed by an entity other than the manufacturer, you must ensure that the analysis report is submitted to the manufacturer and to BSEE through the Chief, Office of Offshore Regulatory Programs, unless BSEE has designated a third party as provided in paragraph (d) PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 of this section. You must also ensure that the results of the investigation and any corrective action are documented in the analysis report. (c) If the equipment manufacturer notifies you that it has changed the design of the equipment that failed or if you have changed operating or repair procedures as a result of a failure, then you must, within 30 days of such changes, report the design change or modified procedures in writing to BSEE through the Chief, Office of Offshore Regulatory Programs, unless BSEE has designated a third party as provided in paragraph (d) of this section. (d) BSEE may designate a third party to receive the data required by paragraphs (a) through (c) of this section E:\FR\FM\28SER4.SGM 28SER4 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations on behalf of BSEE. If BSEE designates a third party, you must submit the information required in this section to the designated third party, as directed by BSEE. 7. Amend § 250.814 by revising paragraph (d) to read as follows: ■ § 250.814 Design, installation, and operation of SSSVs—dry trees. * * * * * (d) You must design, install, maintain, inspect, repair, and test all SSSVs in accordance with ANSI/API RP 14B (incorporated by reference in § 250.198). For additional SSSV testing requirements, refer to § 250.880. ■ 8. Revise § 250.820 to read as follows: § 250.820 Use of SSVs. You must install, maintain, inspect, repair, and test all SSVs in accordance with API STD 6AV2 (incorporated by reference in § 250.198). If any SSV does not operate properly, or if any gas and/ or liquid fluid flow is observed during the leakage test as described in § 250.880, then you must shut-in all sources to the SSV and repair or replace the valve before resuming production. 9. Amend § 250.821 by revising paragraphs (a) introductory text and (a)(1) to read as follows: ■ § 250.821 Emergency action and safety system shutdown—dry trees. (a) If your facility is impacted or will potentially be impacted by an emergency situation (e.g., an impending National Weather Service-named tropical storm or hurricane, ice events, or post-earthquake), you must: (1) Properly install a subsurface safety device on any well that is not yet equipped with a subsurface safety device and that is capable of natural flow, as soon as possible, with due consideration being given to personnel safety. * * * * * 10. Amend § 250.828 by revising paragraph (c) to read as follows: ■ § 250.828 Design, installation, and operation of SSSVs—subsea trees. amozie on DSK3GDR082PROD with RULES4 * * * * * (c) You must design, install, maintain, inspect, repair, and test all SSSVs in accordance with your Deepwater Operations Plan (DWOP) and ANSI/API RP 14B (incorporated by reference in § 250.198). For additional SSSV testing requirements, refer to § 250.880. 11. Amend § 250.833 by revising the introductory text to read as follows: ■ VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 § 250.833 Specification for underwater safety valves (USVs). All USVs, including those designated as primary or secondary, and any alternate isolation valve (AIV) that acts as a USV, if applicable, and their actuators, must conform to the requirements specified in §§ 250.801 through 250.803. A production master or wing valve may qualify as a USV under ANSI/API Spec. 6A and API Spec. 6AV1 (both incorporated by reference in § 250.198). * * * * * ■ 12. Revise § 250.834 to read as follows: § 250.834 Use of USVs. You must install, maintain, inspect, repair, and test any valve designated as the primary USV in accordance with this subpart, your DWOP (as specified in §§ 250.286 through 250.295), and API STD 6AV2 (incorporated by reference in § 250.198). For additional USV testing requirements, refer to § 250.880. ■ 13. Revise § 250.836 to read as follows: § 250.836 Use of BSDVs. You must install, inspect, maintain, repair, and test all new BSDVs, as well as all BSDVs that you remove from service for remanufacturing or repair, in accordance with API STD 6AV2 (incorporated by reference in § 250.198) for SSVs. If any BSDV does not operate properly or if any gas fluid and/or liquid fluid flow is observed during the leakage test, as described in § 250.880, you must shut-in all sources to the BSDV and immediately repair or replace the valve. ■ 14. Amend § 250.837 by revising paragraphs (a), (b), and (c)(5) to read as follows: § 250.837 Emergency action and safety system shutdown—subsea trees. (a) If your facility is impacted or will potentially be impacted by an emergency situation (e.g., an impending National Weather Service-named tropical storm or hurricane, ice events, or post-earthquake), you must shut-in all subsea wells unless otherwise approved by the District Manager. A shut-in is defined as a closed BSDV, USV, GLSDV, and surface-controlled SSSV. (b) When operating a mobile offshore drilling unit (MODU) or other type of workover or intervention vessel in an area with subsea infrastructure, you must: (1) Suspend production from all wells that could be affected by a dropped object, including upstream wells that flow through the same pipeline; or PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 49257 (2) Establish direct, real-time communications between the MODU or other type of workover or intervention vessel and the production facility control room and develop a dropped objects plan, as required in § 250.714. If an object is dropped, you must immediately secure the well directly under the MODU or other type of workover or intervention vessel while simultaneously communicating with the platform to shut-in all affected wells. You must also maintain without disruption, and continuously verify, communication between the production facility and the MODU or other type of workover or intervention vessel. If communication is lost between the MODU or other type of workover or intervention vessel and the platform for 20 or more minutes, you must shut-in all wells that could be affected by a dropped object. (c) * * * (5) Subsea ESD (MODU). In the event of an ESD activation that is initiated by a dropped object from a MODU or other type of workover or intervention vessel, you must secure all wells in the proximity of the MODU or other type of workover or intervention vessel by closing the USVs and surface-controlled SSSVs in accordance with the applicable tables in §§ 250.838 and 250.839. You must notify the appropriate District Manager before resuming production. * * * * * 15. Amend § 250.841 by adding a paragraph (c) to read as follows: ■ § 250.841 Platforms. * * * * * (c) If you plan to make a modification to any production safety system that also involves a major modification to the platform structure, you must follow the requirements in § 250.900(b)(2). A major modification to a platform structure is defined in § 250.900(b)(2). 16. Revise § 250.842 to read as follows: ■ § 250.842 Approval of safety systems design and installation features. (a) Before you install or modify a production safety system, you must submit a production safety system application to the District Manager. The District Manager must approve your production safety system application before you commence production through or otherwise use the new or modified system. The application must include the design documentation prescribed as follows: E:\FR\FM\28SER4.SGM 28SER4 49258 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations ER28SE18.005</GPH> make them available to BSEE upon request: VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 PO 00000 Frm 00044 Fmt 4701 Sfmt 4725 E:\FR\FM\28SER4.SGM 28SER4 ER28SE18.004</GPH> amozie on DSK3GDR082PROD with RULES4 (b) You must develop and maintain the following design documents and Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations (3) That a hazards analysis was performed in accordance with § 250.1911 and API RP 14J (incorporated by reference in § 250.198), and that you have a hazards analysis program in place to assess potential hazards during the operation of the facility. (d) Within 90 days after placing new or modified production safety systems in service, you must submit to the District Manager the as-built diagrams for the new or modified production safety systems outlined in paragraphs (a)(1), (2), and (3) of this section. You must certify in an accompanying letter that the as-built design documents have been reviewed for compliance with applicable regulations and accurately represent the new or modified system as * § 250.853 ■ * * * * * 18. Amend § 250.852 by revising paragraphs (e)(1) and (4) to read as follows: § 250.852 Flowlines/Headers. amozie on DSK3GDR082PROD with RULES4 * * * * * (e) * * * (1) Review the manufacturer’s Design Methodology Verification Report and the independent verification agent’s (IVA) certificate for the design methodology contained in that report to ensure that the manufacturer has complied with the requirements of ANSI/API Spec. 17J (incorporated by reference in § 250.198); * * * * * (4) Submit to the District Manager a statement certifying that the pipe is suitable for its intended use and that the manufacturer has complied with the IVA requirements of ANSI/API Spec. 17J (incorporated by reference in § 250.198). * * * * * ■ 19. Amend § 250.853 by: ■ a. In paragraph (b), removing the word ‘‘and’’; ■ b. In paragraph (c), removing the period and adding ‘‘; and’’ in its place; and ■ c. Adding a paragraph (d). The addition reads as follows: VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 Safety sensors. * * * * (d) All level sensors are equipped to permit testing through an external bridle on all new vessel installations where possible, depending on the type of vessel for which the level sensor is used. 20. Amend § 250.867 by revising paragraph (a) and adding paragraph (d) to read as follows: ■ § 250.867 Temporary quarters and temporary equipment. (a) You must equip temporary quarters with all safety devices required by API RP 14C, Appendix C (incorporated by reference as specified in § 250.198). The District Manager must approve the safety system/safety devices associated with the temporary quarters prior to installation. * * * * * (d) The District Manager must approve temporary generators that would require a change to the electrical one-line diagram in § 250.842(a). 21. Amend § 250.870 by revising paragraphs (a) introductory text and (a)(2) to read as follows: ■ PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 installed. The drawings must be clearly marked ‘‘as-built.’’ (e) You must maintain approved and supporting design documents required under paragraphs (a) and (b) of this section at your offshore field office nearest the OCS facility or at other locations conveniently available to the District Manager. These documents must be made available to BSEE upon request and must be retained for the life of the facility. All approved designs are subject to field verifications. 17. Amend § 250.851 by revising paragraph (a)(2) to read as follows: ■ § 250.851 Pressure vessels (including heat exchangers) and fired vessels. (a) * * * § 250.870 Time delays on pressure safety low (PSL) sensors. (a) You may apply industry standard Class B, Class C, or Class B/C logic to applicable PSL sensors installed on process equipment. If the device may be bypassed for greater than 45 seconds, you must monitor the bypassed devices in accordance with § 250.869(a). You must document on your field test records any use of a PSL sensor with a time delay greater than 45 seconds. For purposes of this section, PSL sensors are categorized as follows: * * * * * (2) Class C safety devices have logic that allows for the PSL sensors to be bypassed until the component comes into full service (i.e., the time at which the startup pressure equals or exceeds the set pressure of the PSL sensor, the system reaches a stabilized pressure, and the PSL sensor clears). If a Class C safety device is bypassed, you must monitor the device until it is in full service. * * * * * ■ 22. Revise § 250.872 to read as follows: § 250.872 Atmospheric vessels. (a) You must equip atmospheric vessels used to process and/or store E:\FR\FM\28SER4.SGM 28SER4 ER28SE18.006</GPH> (c) In the production safety system application, you must also certify the following: (1) That all electrical systems were designed according to API RP 14F or API RP 14FZ, as applicable (incorporated by reference in § 250.198); (2) That the design documents for the mechanical and electrical systems that you are required to submit under paragraph (a) of this section are sealed by a licensed professional engineer. For modified systems, only the modifications are required to be sealed by a licensed professional engineer(s). The professional engineer must be licensed in a State or Territory of the United States and have sufficient expertise and experience to perform the duties; and 49259 49260 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations amozie on DSK3GDR082PROD with RULES4 liquid hydrocarbons or other Class I liquids as described in API RP 500 or 505 (both incorporated by reference in § 250.198) with protective equipment identified in API RP 14C, section A.5 (incorporated by reference in § 250.198). Transport tanks approved by the U.S. Department of Transportation, that are sealed and not connected via interconnected piping to the production process train and that are used only for storage of refined liquid hydrocarbons or Class I liquids, are not required to be VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 equipped with the protective equipment identified in API RP 14C, section A.5. The atmospheric vessels connected to the process system that contains a Class I liquid and the associated pumps must be reflected on the design documents listed in § 250.842(a)(1) through (4) and (b)(3). (b) You must ensure that all atmospheric vessels are designed and maintained to ensure the proper working conditions for LSH sensors. The LSH sensor bridle must be designed PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 to prevent different density fluids from impacting sensor functionality. (c) You must ensure that all atmospheric vessels are designed, installed, and maintained to prevent pollution, including the displacement of oil out of an overboard water outlet, as required by § 250.300(b)(3) and (4). ■ 23. Amend § 250.873 by revising paragraph (b)(3) to read as follows: § 250.873 * E:\FR\FM\28SER4.SGM * Subsea gas lift requirements. * 28SER4 * * Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations 49261 Then you must install a If your ANSI/API Spec 6A and API Spec 6A Vl (both ANSI/API subsea gas lift system incorporated by FSV on the Spec 6A and gas-lift introduces reference as specified in API Spec the § 250.1 98) gas-lift supply PSHL on 6AV1 manual lift gas to shutdown valve (GLSDV), pipeline the gas-lift isolation the . . . and . . . supply . . . valve . . . . .. In addition, you must (3) Pipeline Meet all of the upstream flowline downstream risers via a requirements for the (in-board) upstream (out board) gas-lift line GLSDV described in§§ of the (in-board) of the contained 250.835(a), (b), and (d) GLSDV ofthe GLSDV within the and 250.836 on the gasFSV pipeline lift supply pipeline. nser Attach the GLSDV by flanged connection directly to the ANSI/API Spec. 6A component used to suspend and seal the gas-lift line contained within the production riser. To facilitate the repair or replacement of the GLSDV or production riser BSDV, you may install a manual isolation valve between the GLSDV and the ANSI/API Spec. 6A component used to suspend and seal the gas-lift line contained within the production riser, or outboard of the production riser BSDV and inboard of the ANSI/API Spec. 6A component used to suspend and seal the gas-lift line contained within the production nser VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 PO 00000 Frm 00047 Fmt 4701 Sfmt 4725 E:\FR\FM\28SER4.SGM (i) Ensure that the gaslift supply flowline from he gas-lift compressor to the GLSDV is pressure-rated for the MAOP of the pipeline 1ser. (ii) Ensure that any surface equipment associated with the gaslift system is rated for the MAOP ofthe pipeline riser. (iii) Ensure that the gaslift compressor discharge pressure never exceeds the MAOP of he pipeline riser. (iv) Suspend and seal the gas-lift flowline contained within the production riser in a flanged ANSI/API Spec. 6A component such as an ANSI/API Spec. 6A tubing head and tubing hanger or a component designed, constructed, ested, and installed to the requirements of ANSI/API Spec. 6A. (v) Ensure that all potential leak paths upstream or near the production riser BSDV 28SER4 ER28SE18.007</GPH> amozie on DSK3GDR082PROD with RULES4 * * * * * * * 49262 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations § 250.876 Fired and exhaust heated components. * * * * * 24. Amend § 250.874 by revising paragraph (g)(2) to read as follows: ■ § 250.874 Subsea water injection systems. * * * * * (g) * * * (2) If a designated USV on a water injection well fails the applicable test under § 250.880(c)(4)(ii), you must notify the appropriate District Manager and request approval to designate another ANSI/API Spec 6A and API Spec. 6AV1 (both incorporated by reference in § 250.198) certified subsea valve as your USV. * * * * * ■ 25. Revise § 250.876 to read as follows: 26. Amend § 250.880 by revising paragraphs (a) introductory text, (a)(1), (c)(1)(i), (c)(2)(iv), and (c)(4)(i) and (iii) to read as follows: ■ No later than September 7, 2018, and at least once every 5 years thereafter, you must have qualified third-party inspect, and then you must repair or replace, as needed, the fire tube for tube-type heaters that are equipped with either automatically controlled natural or forced draft burners installed in either atmospheric or pressure vessels that heat hydrocarbons and/or glycol. If inspection indicates tube-type heater deficiencies, you must complete and document repairs or replacements. You must document the inspection results, retain such documentation for at least 5 years, and make the documentation available to BSEE upon request. § 250.880 testing. Production safety system (a) Notification. You must: (1) Notify the District Manager at least 72 hours before you commence initial production on a facility as required in § 250.800(a)(2), in order for BSEE to conduct the preproduction inspection of the integrated safety system. * * * * * (c) * * * (1) * * * Item name Testing frequency, allowable leakage rates, and other requirements (i) Surface-controlled SSSVs (including devices installed in shutin and injection wells). Semi-annually, not to exceed 6 calendar months between tests. Also test in place when first installed or reinstalled. If the device does not operate properly, or if a liquid leakage rate > 400 cubic centimeters per minute or a gas leakage rate > 15 standard cubic feet per minute is observed, the device must be removed, repaired, and reinstalled or replaced. Testing must be according to ANSI/API RP 14B (incorporated by reference in § 250.198) to ensure proper operation. * * * * * * * (2) * * * Item name Testing frequency and requirements * * (iv) SSVs ......................................... * * * * * Once each calendar month, not to exceed 6 weeks between tests. Valves must be tested for both operation and leakage. You must test according to API STD 6AV2 (incorporated by reference in § 250.198). If an SSV does not operate properly or if any gas and/or liquid fluid flow is observed during the leakage test, the valve must be immediately repaired or replaced. amozie on DSK3GDR082PROD with RULES4 * * * * * * * * * * * (4) * * * Item name Testing frequency, allowable leakage rates, and other requirements (i) Surface-controlled SSSVs (including devices installed in shutin and injection wells). Tested semiannually, not to exceed 6 months between tests. If the device does not operate properly, or if a liquid leakage rate > 400 cubic centimeters per minute or a gas leakage rate > 15 standard cubic feet per minute is observed, the device must be removed, repaired, and reinstalled or replaced. Testing must be according to ANSI/API RP 14B (incorporated by reference in § 250.198) to ensure proper operation, or as approved in your DWOP. VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 E:\FR\FM\28SER4.SGM 28SER4 ER28SE18.008</GPH> * 49263 Federal Register / Vol. 83, No. 189 / Friday, September 28, 2018 / Rules and Regulations Item name Testing frequency, allowable leakage rates, and other requirements * * (iii) BSDVs ....................................... * * * * * Tested at least once each calendar month, not to exceed 6 weeks between tests. Valves must be tested for both operation and leakage. You must test according to API STD 6AV2 for SSVs (incorporated by reference in § 250.198). If a BSDV does not operate properly or if any fluid flow is observed during the leakage test, the valve must be immediately repaired or replaced. * * * * * * * * 27. Amend § 250.1002 by revising paragraphs (b)(1), (2), and (4) to read as follows: ■ § 250.1002 pipelines. Design requirements for DOI * * * * (b)(1) Pipeline valves shall meet the minimum design requirements of ANSI/ API Spec 6A (as incorporated by reference in § 250.198), ANSI/API Spec 6D (as incorporated by reference in § 250.198), or the equivalent. A valve may not be used under operating conditions that exceed the applicable pressure-temperature ratings contained in those standards. amozie on DSK3GDR082PROD with RULES4 * VerDate Sep<11>2014 20:36 Sep 27, 2018 Jkt 244001 * * (2) Pipeline flanges and flange accessories shall meet the minimum design requirements of ANSI/ASME B16.5, ANSI/API Spec 6A, or the equivalent (as incorporated by reference in § 250.198). Each flange assembly must be able to withstand the maximum pressure at which the pipeline is to be operated and to maintain its physical and chemical properties at any temperature to which it is anticipated that it might be subjected in service. * * * * * (4) If you are installing pipelines constructed of unbonded flexible pipe, you must design them according to the standards and procedures of ANSI/API PO 00000 Frm 00049 Fmt 4701 Sfmt 9990 * * Spec. 17J, as incorporated by reference in § 250.198. * * * * * ■ 28. Amend § 250.1007 by revising paragraph (a)(4)(i)(D) to read as follows: § 250.1007 What to include in applications. (a) * * * (4) * * * (i) * * * (D) A review by a third-party independent verification agent (IVA) according to ANSI/API Spec. 17J (as incorporated by reference in § 250.198), if applicable. * * * * * [FR Doc. 2018–21197 Filed 9–27–18; 8:45 am] BILLING CODE 4310–VH–P E:\FR\FM\28SER4.SGM 28SER4

Agencies

[Federal Register Volume 83, Number 189 (Friday, September 28, 2018)]
[Rules and Regulations]
[Pages 49216-49263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-21197]



[[Page 49215]]

Vol. 83

Friday,

No. 189

September 28, 2018

Part IV





Department of the Interior





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Bureau of Safety and Environmental Enforcement





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30 CFR Part 250





Oil and Gas and Sulphur Operations on the Outer Continental Shelf--Oil 
and Gas Production Safety Systems; Final Rule

Federal Register / Vol. 83 , No. 189 / Friday, September 28, 2018 / 
Rules and Regulations

[[Page 49216]]


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DEPARTMENT OF THE INTERIOR

Bureau of Safety and Environmental Enforcement

30 CFR Part 250

[Docket ID: BSEE-2017-0008; 189E1700D2 ET1SF0000.PSB000 EEEE500000]
RIN 1014-AA37


Oil and Gas and Sulphur Operations on the Outer Continental 
Shelf--Oil and Gas Production Safety Systems

AGENCY: Bureau of Safety and Environmental Enforcement, Interior.

ACTION: Final rule.

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SUMMARY: The Bureau of Safety and Environmental Enforcement (BSEE) is 
amending the regulations regarding oil and natural gas production 
safety systems. After a thorough reexamination of the current 
regulations, and consideration of recent experiences from 
implementation of those regulations and of public comments on the 
proposed rule to amend those regulations, BSEE is revising or removing 
certain regulatory provisions that create unnecessary burdens on 
stakeholders, and clarifying other provisions, while ensuring safety 
and environmental protection.

DATES: This rule becomes effective on December 27, 2018.
    The incorporation by reference of certain publications listed in 
the rule is approved by the Director of the Federal Register as of 
December 27, 2018.

ADDRESSES: 
    Rulemaking documents and public comments on the proposed rule: You 
may review the rulemaking documents, including National Environmental 
Policy Act (NEPA) documents and public comments submitted on the 
proposed rule, by accessing the Federal eRulemaking Portal: https://www.regulations.gov. In the entry entitled, ``Enter Keyword or ID,'' 
enter ``BSEE-2017-0008,'' then click search. Follow the instructions to 
search public comments and view supporting and related materials 
available for this rulemaking.
    Documents incorporated by reference: BSEE provides members of the 
public with website addresses where they may access standards 
incorporated by reference in BSEE's regulations for viewing, sometimes 
for free and sometimes for a fee. In particular, the American Petroleum 
Institute (API) voluntarily makes available all API standards that are 
safety-related and that are incorporated into Federal regulations for 
free viewing by the public online in the Incorporation by Reference 
Reading Room on API's website at: https://publications.api.org.\1\ In 
addition to the free online availability of these standards for viewing 
on API's website, hardcopies and printable versions are available for 
purchase from API. The API website address to purchase standards is: 
https://www.api.org/publications-standards-and-statistics/publications/government-cited-safety-documents.
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    \1\ To view these standards online, go to the API publications 
website at: https://publications.api.org. You must then log-in or 
create a new account, accept API's ``Terms and Conditions,'' click 
on the ``Browse Documents'' button, and then select the applicable 
category (e.g., ``Exploration and Production'') for the standard(s) 
you wish to review.
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    BSEE can make copies of incorporated standards available for review 
at BSEE's office(s) upon advance request. One location where 
incorporated standards can be available for review is BSEE's 
headquarters at 45600 Woodland Road, Sterling, Virginia, 20166. Please 
email: [email protected] to make arrangements to review incorporated 
standards, so BSEE can ensure hard copies of the requested standards 
are available. BSEE may also make the standards available at its other 
offices located in: Washington, DC; New Orleans, Louisiana; Houston, 
Texas; Camarillo, California; and Anchorage, Alaska.

FOR FURTHER INFORMATION CONTACT: Amy White, Regulations and Standards 
Branch, 703-787-1665 or by email: [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

A. BSEE Statutory and Regulatory Authority and Responsibilities
B. Summary of the Rulemaking
C. Recent Executive and Secretary's Orders
D. Incorporation by Reference of Industry Standards
E. Overview of Comments on the Proposed Rule
F. Discussion of General Issues Raised by Commenters
G. Section-by-Section Summaries, Responses to Comments, and Changes 
From the Proposed Rule
H. Additional Comments Solicited
Procedural Matters
Regulatory Planning and Review (E.O. 12866, E.O. 13563, E.O. 13771)
Small Business Regulatory Enforcement Fairness Act and Regulatory 
Flexibility Act
Regulatory Flexibility Act
Unfunded Mandates Reform Act of 1995
Takings (E.O. 12630)
Federalism (E.O. 13132)
Civil Justice Reform (E.O. 12988)
Consultation with Indian Tribes (E.O. 13175)
Paperwork Reduction Act (PRA) of 1995
National Environmental Policy Act of 1969
Data Quality Act
Effects on the Nation's Energy Supply (E.O. 13211)

A. BSEE Statutory and Regulatory Authority and Responsibilities

    BSEE derives its authority primarily from the Outer Continental 
Shelf Lands Act (OCSLA), 43 U.S.C. 1331-1356a. Congress enacted OCSLA 
in 1953, significantly amended it in 1978, and subsequently amended 
specific provisions. As amended, OCSLA authorizes the Secretary of the 
Interior (Secretary) to lease the Outer Continental Shelf (OCS) for 
resource development in a way that makes it available for expeditious 
and orderly development, consistent with national needs and subject to 
environmental safeguards. Among other things, Congress established a 
policy to provide for orderly and expeditious development of oil and 
natural gas resources of the OCS to meet national economic and energy 
policy and which may serve to assure national security and reduce 
dependence on foreign sources. OCSLA also states that, among other 
purposes, OCS oil and gas resources should be managed in a way that 
balances orderly development with protection of the environment. The 
Secretary has delegated authority to perform certain of these functions 
to BSEE.
    To carry out its responsibilities, BSEE regulates offshore oil and 
gas operations to ensure that operations are safe and environmentally 
responsible. See 30 CFR 250.101(b)(2). BSEE's regulatory program covers 
a wide range of operations, including drilling, completion, workover, 
production, pipeline, and decommissioning operations; and associated 
facilities, such as mobile offshore drilling units (MODUs) and 
production platforms. See 30 CFR part 250. BSEE also conducts onsite 
inspections to assure compliance with regulations, lease terms, and 
approved plans and permits. Detailed information concerning BSEE's 
regulations and guidance to the offshore oil and gas industry is on 
BSEE's website at: https://www.bsee.gov/Regulations-and-Guidance/index.

B. Summary of the Rulemaking

    This final rule amends and updates the regulations in 30 CFR part 
250, subpart H, Oil and Gas Production Safety Systems (subpart H). This 
rule supports the Administration's objective of facilitating energy 
dominance by encouraging increased domestic oil and gas production and 
reducing unnecessary burdens on stakeholders, while ensuring safety and 
environmental protection.

[[Page 49217]]

    Since 2010, the Department of the Interior (Department) has 
promulgated several rulemakings (e.g., Safety and Environmental 
Management Systems (SEMS) I and II final rules (75 FR 63610, October 
15, 2010; 78 FR 20423, April 5, 2013), the final Safety Measures rule 
(77 FR 50856, August 22, 2012), and the Blowout Preventer Systems and 
Well Control final rule (the ``2016 Well Control Rule'' or the ``2016 
WCR'') \2\ to improve worker safety and environmental protection. On 
September 7, 2016, the Department published a Production Safety Systems 
final rule substantially revising subpart H (81 FR 61834) (2016 PSSR). 
That final rule addressed issues such as production safety systems, 
subsurface safety devices, and safety device testing. These systems 
play a critical role in protecting workers and the environment. Most of 
the provisions of that rulemaking took effect on November 7, 2016. 
Since that time, BSEE has become aware that certain provisions in that 
rulemaking created potentially unduly burdensome requirements for oil 
and natural gas production operators on the OCS, without meaningfully 
increasing safety of the workers or protection of the environment. 
During implementation of the 2016 PSSR, BSEE reassessed a number of the 
provisions in subpart H and determined that it could revise some 
provisions to reduce or eliminate some of the concerns expressed by the 
operators, thereby reducing the regulatory burden, while ensuring 
safety and protection of the environment.
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    \2\ See 81 FR 25887 (April 29, 2016).
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    On December 29, 2017, BSEE published in the Federal Register a 
proposed rule to revise certain provisions in the subpart H regulations 
(82 FR 61703) (the ``proposed rule'') and to solicit comments on 
several additional issues. After consideration of the public comments 
on the proposed rule, BSEE is publishing this final rule, which revises 
or otherwise addresses the current requirements as follows:
     Updates the incorporation of certain standards referenced 
in subpart H;
     Adds gas lift shut down valves (GLSDVs) to the list of 
safety and pollution prevention equipment (SPPE);
     Revises requirements for SPPE by replacing the requirement 
for independent third parties to certify that each device will function 
in the most extreme conditions to which it will be exposed with 
requirements for device design testing, documentation of the process 
the operator used to ensure the device is designed to function as 
required, and independent third party review and certification of a 
device if the device is moved to a different location \3\;
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    \3\ Incorporated standards address the design of SPPE, based on 
the specific type of device and the conditions where the device will 
be located.
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     Clarifies equipment failure reporting requirements;
     Clarifies and revises some of the production safety system 
design requirements, including revising the requirements for 
professional engineer (PE) stamping, revising the requirements for 
piping schematics, simplifying the requirements for electrical system 
information, revising the requirement for operators to provide certain 
documents to BSEE, and clarifying when operators must update existing 
documents;
     Clarifies requirements for atmospheric vessels containing 
Class I liquids;
     Clarifies requirements for inspection of the fire tube for 
tube-type heaters;
     Clarifies the requirement for notifying the BSEE District 
Manager before commencing production; and
     Makes other conforming changes to ensure consistency 
within the regulations and makes other minor edits.

C. Recent Executive and Secretary's Orders

    Since the start of 2017, the President issued several Executive 
Orders (E.O.) that necessitated the review of BSEE's rules. On January 
30, 2017, the President issued E.O. 13771, entitled, ``Reducing 
Regulation and Controlling Regulatory Costs'' (82 FR 9339), which 
requires Federal agencies to take proactive measures to reduce the 
costs associated with complying with Federal regulations.
    On March 28, 2017, the President issued E.O. 13783, entitled, 
``Promoting Energy Independence and Economic Growth'' (82 FR 16093). 
This E.O. directed Federal agencies to review all existing regulations 
and other agency actions and, ultimately, to suspend, revise, or 
rescind any regulations or actions that unnecessarily burden the 
development of domestic energy resources beyond the degree necessary to 
protect the public interest or otherwise comply with the law.
    On April 28, 2017, the President issued E.O. 13795, entitled, 
``Implementing an America-First Offshore Energy Strategy'' (82 FR 
20815). This E.O. directed the Secretary of the Interior to reconsider 
the 2016 Well Control Rule adopted in April 2016 and to take 
appropriate action to ``revise any related rules'' for consistency with 
E.O. 13795's stated policy ``to encourage energy exploration and 
production, including on the Outer Continental Shelf, in order to 
maintain the Nation's position as a global energy leader and foster 
energy security and resilience for the benefit of the American people, 
while ensuring that any such activity is safe and environmentally 
responsible.''
    To further implement E.O. 13783, the Secretary issued Secretary's 
Order (S.O.) 3349, entitled, ``American Energy Independence,'' on March 
29, 2017. The S.O. directed DOI to review all existing regulations 
``that potentially burden the development or utilization of 
domestically produced energy resources.'' Similarly, to implement E.O. 
13795, the Secretary issued S.O. 3350, entitled, ``America-First 
Offshore Energy Strategy,'' on May 1, 2017, which directed BSEE to 
review the 2016 Well Control Rule and related rulemakings. BSEE 
interpreted each of these orders to apply to the 2016 PSSR.
    As part of its response to E.O.s 13783 and 13795 and to S.O.s 3349 
and 3350, BSEE reviewed the regulations in subpart H, as revised by the 
2016 PSSR, with a view toward the policy of encouraging energy 
exploration and production on the OCS, and reducing unnecessary 
regulatory burdens, while ensuring that any such activity is safe and 
environmentally responsible. Like the 2016 PSSR, BSEE also focused on 
offshore oil and gas production technology and operations, including 
subsea production systems used for production in increasingly deeper 
waters. This focus is unrelated to well control during well operations. 
Nevertheless, BSEE carefully analyzed all the provisions in the 
proposed rule and this final rule and compared them to the 424 
recommendations arising from 26 separate reports from 14 different 
organizations developed in the wake of and in response to the Deepwater 
Horizon (DWH) disaster, and determined that these changes to subpart H 
will not contradict any of those recommendations, nor will they alter 
any provision of the 2016 PSSR in a way that would make the result 
inconsistent with those recommendations. Further, nothing in this final 
rule will alter any elements of other rules promulgated since DWH, 
including the Drilling Safety Rule (Oct. 2010), SEMS I (Oct. 2010), 
SEMS II (April 2013), and 2016 WCR (April 2016). BSEE's review has been 
thorough and tailored to the task of reducing unnecessary regulatory 
burdens while ensuring that OCS activity is safe and environmentally 
responsible.

[[Page 49218]]

D. Incorporation by Reference of Industry Standards

    In accordance with the National Technology Transfer and Advancement 
Act, Public Law 104-113 (NTTAA), 15 U.S.C. 3701 et seq. (Pub. L. 104-
113), and with Office of Management and Budget (OMB) Circular A-119, 
``Federal Participation in the Development and Use of Voluntary 
Consensus Standards and in Conformity Assessment Activities,'' (rev. 
Jan. 2016) implementing the NTTAA, BSEE frequently uses standards 
(e.g., codes, specifications, and recommended practices) that standards 
development organizations (SDOs) have developed through a consensus 
process, with input from the oil and gas industry, as a means of 
establishing requirements for activities on the OCS. The NTTAA charged, 
with few exceptions, that ``all Federal agencies and departments shall 
use technical standards that are developed or adopted by voluntary 
consensus standards bodies, using such technical standards as a means 
to carry out policy objectives or activities determined by the agencies 
and departments.'' BSEE may incorporate these standards into its 
regulations by reference without republishing the standards in their 
entirety in regulations. The legal effect of incorporation by reference 
is that the incorporated standards become regulatory requirements. This 
incorporated material, like any other regulation, has the force and 
effect of law. Operators, lessees, and other regulated parties must 
comply with the documents incorporated by reference in the regulations. 
BSEE currently incorporates by reference over 100 consensus standards 
in its regulations. (See 30 CFR 250.198.)
    The Office of the Federal Register's (OFR) regulations, at 1 CFR 
part 51, govern how BSEE and other Federal agencies incorporate 
documents by reference. Agencies may incorporate a document by 
reference by publishing in the Federal Register the document title, 
edition, date, author, publisher, identification number, and other 
specified information. The preamble of the rule must contain a summary 
of each document incorporated by reference, as well as discuss the ways 
that the incorporated materials are reasonably available to interested 
parties and how interested parties can obtain those materials. The 
Director of the Federal Register will approve publication in a final 
rule of each incorporation by reference that meets the criteria of 1 
CFR part 51. The documents are summarized in section G of this 
preamble.
    When a copyrighted publication is incorporated by reference into 
BSEE regulations, BSEE is obligated to observe and protect that 
copyright. BSEE provides website addresses where members of the public 
may access these standards for viewing, sometimes for free and 
sometimes for a fee. SDOs decide whether to charge a fee. One such 
organization, API, provides free online public access to view read only 
copies of its key industry standards, including a broad range of 
technical standards. In particular, API voluntarily makes available all 
API standards that are safety-related and that are incorporated into 
Federal regulations for free viewing by the public online in the 
Incorporation by Reference Reading Room on API's website at: https://publications.api.org.\4\ In addition to the free online availability of 
these standards for viewing on API's website, hardcopies and printable 
versions are available for purchase from API. The API website address 
to purchase standards is: https://www.api.org/publications-standards-and-statistics/publications/government-cited-safety-documents. BSEE 
also makes copies of incorporated standards available for review at 
BSEE's office(s) upon request. Individuals wishing to view standards at 
a BSEE office may make arrangements by sending an email to: 
[email protected]. BSEE may make standards available at their offices in 
Washington, DC; Sterling, Virginia; New Orleans, Louisiana; Houston, 
Texas; Camarillo, California; and Anchorage, Alaska.
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    \4\ To view these standards online, go to the API publications 
website at: https://publications.api.org. You must then log-in or 
create a new account, accept API's ``Terms and Conditions,'' click 
on the ``Browse Documents'' button, and then select the applicable 
category (e.g., ``Exploration and Production'') for the standard(s) 
you wish to review.
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    BSEE recognizes that there may be additional opportunities to make 
standards more accessible and agrees to work with OMB and the OFR to 
explore potential approaches to improve public access to standards and 
to information about the standards.
    In addition to the legal requirement under the NTTAA for Federal 
agencies to use standards, there are a number of benefits to 
incorporating these documents into the regulations. Standards increase 
consistency for employee training, equipment compatibility, processes, 
and testing during operations. Standards help ensure that operators and 
their contractors take proper precautions during operations; resulting 
in safety performance improvements through the reduction of lost time 
from injuries and incidents, work environment safety standards, proper 
training, product failure reporting, quality control and assurance 
requirements, addressing safety issues, and improved communications 
between user and supplier. Global adoption of standards is a compelling 
reason for the most updated editions to be part of regulatory 
frameworks since they drive consistency, promote competition, and 
reduce the burden of compliance.

E. Overview of Comments on the Proposed Rule

    In response to the proposed rule, BSEE received 733 separate sets 
of comments, including some comments that had a total of over 60,000 
signatures attached to the comments. BSEE received comments from a wide 
range of stakeholders, including industry trade groups and individual 
companies, State and local governments, Tribal authorities, members of 
the U.S. Congress, environmental groups, SDOs, and private citizens. 
All comments are posted at the Federal Rulemaking Portal: https://www.regulations.gov. To access the comments, enter ``BSEE-2017-0008'' 
in the search box. BSEE reviewed all comments submitted.
    Commenters raised issues on a number of topics, including general 
issues, section-by- section comments, and comments on certain 
additional issues on which BSEE solicited comments, including:
     Potential Revisions to Sec.  250.107(c) Best Available and 
Safest Technology (BAST);
     Potential Revisions to Sec.  250.198 Documents 
incorporated by reference;
     Extension of Compliance Deadline for Pressure Safety Valve 
(PSV) Testing Under Sec.  250.880 Production safety system testing;
     Potential Revisions Based on the Investigation of the 
Explosion and Fatality on West Delta Block 105 Platform E; and
     Implementation of This Rulemaking.
    Some commenters opposed any changes to the existing production 
safety regulations, while other commenters supported most of the 
proposed revisions. Many commenters seemed to confuse the 2016 PSSR and 
BSEE's December 2017 proposed rule with the 2016 WCR. The comments 
indicate that those commenters apparently assumed that the proposed 
rule involved revisions to the 2016 WCR, which was not the case.

[[Page 49219]]

F. Discussion of General Issues Raised by Commenters

Requests To Extend the Comment Period

Rulemaking ``Technically Complex''
    Comment: Prior to the proposed rule's public comment deadline 
(January 29, 2018), BSEE received several written requests to extend 
that comment period, most of which requested a 60-day extension. One 
such request provided no explanation for the requested extension, 
except to state that the proposed rule was ``technically complex.'' 
Similarly, another request asserted that the proposed rule was so 
``important in nature'' that a 90-day comment period would be more 
reasonable.
    Response: After considering all the extension requests, BSEE 
determined that no extension was necessary. Although one requester 
stated that the proposed rule was ``technically complex,'' that entity 
provided no examples and identified no aspects of the proposed rule 
that it considered so complex that it could not submit meaningful 
comments by the close of the comment period. Similarly, the entity that 
suggested that a 90-day comment period would be more reasonable due to 
the importance of the proposed rule provided no examples of any 
specific proposed provisions that required more time to analyze, even 
though that request was submitted almost one month after publication of 
the proposed rule. Under the circumstances, BSEE does not believe that 
these entities' requests provided justification for extending the 
comment period.\5\
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    \5\ A different entity submitted a request for an extension on 
January 29, 2018--the deadline set by the proposed rule for public 
comment--but did not suggest a specific extension period. In 
addition, although that request asserted that the proposed rule was 
``unclear, and in some places contradictory,'' it provided no 
examples to support that assertion. For the reasons previously 
explained, BSEE does not believe this last-minute request provided a 
sufficient basis for extending the comment period.
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Volume of Standards To Review
    Comment: Two entities--offshore oil and gas industry 
organizations--asserted that the comment period was not long enough for 
the commenters to analyze and prepare thorough comments on the proposed 
rule. In particular, those commenters asserted that the number and 
``volume'' of the standards that BSEE proposed to update and 
incorporate was too large for the requesters to review and comment on 
in 30 days.
    Response: BSEE does not agree with the industry organizations' 
suggestion that the updated standards and the one new standard that 
BSEE proposed to incorporate were ``too numerous and too voluminous'' 
to be thoroughly analyzed and understood within the time allowed by the 
comment period. In fact, one of those industry organizations is the SDO 
that developed and published 15 out of the 19 standards that BSEE 
proposed to incorporate. BSEE also notes that the other industry 
organization is a committee of virtually all of the offshore producing 
companies and service providers in the Gulf of Mexico, many of whom 
participated, or had the opportunity to participate, in the development 
of the relevant standards. In addition, both industry organizations 
represent companies that have had the opportunity to voluntarily 
implement those standards, in some cases over the course of many years. 
Under the circumstances, BSEE does not agree that those extension 
requests warranted an extension.\6\
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    \6\ Both of the industry organizations and one other entity also 
suggested that the publication of the proposed rule on December 29, 
2017, during the ``holiday season,'' provided more justification for 
their requests for more time. BSEE believes that the important 
reductions in unnecessary burdens on energy production, and the 
other improvements intended by the proposed rule, warranted BSEE 
moving forward with the proposed and final rules as expeditiously as 
practicable, whether or not that entails BSEE or other entities 
devoting some effort during a holiday season.
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Comment Period Inadequate
    Comment: One commenter submitted comments on the proposed rule, 
including an assertion that the comment period was inadequate (although 
the commenter did not request an extension).
    Response: BSEE disagrees. Although this commenter broadly asserted 
that the proposed rule proposed a ``significant number of changes to 
the regulations that incorporate . . . thousands of pages of technical 
documents,'' it failed to provide any specific examples or other 
support for its assertion that the comment period was inadequate. After 
considering this comment, as well as the prior requests for extension 
of the comment period, BSEE determined that the comment period set by 
the proposed rule was reasonably adequate for any interested party to 
submit meaningful comments. BSEE notes that the Administrative 
Procedure Act (APA), which governs the Federal rulemaking process, does 
not specify any minimum period for comments on proposed rules. In 
practice, comment periods of 30 to 60 days are commonplace and 30-day 
comment periods are not uncommon. Moreover, given that the number of 
substantive changes actually proposed was relatively small, that the 
provisions to be revised were previously subject to a lengthy 
rulemaking process that culminated in the 2016 PSSR, and that the need 
to remove unnecessary burdens on offshore energy production is a high-
priority national goal, BSEE believes that the comment period for this 
proposed rule was reasonable and provided a meaningful opportunity for 
public participation. This determination is supported by the fact that 
commenters submitted well over 700 comments, raising a wide variety of 
issues, by the January 29, 2018, deadline.

Comments Related to Deepwater Horizon Recommendations

    Comment: A number of commenters asserted that the proposed rule was 
inconsistent with recommendations in various reports, including ``The 
National Commission on the BP Deepwater Horizon Oil Spill and Offshore 
Drilling'' (the Commission or the Commission Report), that were 
published in the aftermath of the DWH incident. Some commenters 
asserted that the 2016 PSSR was the agency's response to the DWH 
reports' recommendations and that any changes to this rule would reduce 
the protections intended by those recommendations. Several commenters 
also asserted that any changes to the regulations would be arbitrary 
and capricious.
    Response: BSEE disagrees with these comments. The recommendations 
that the commenters cite come from various reports concerning the DWH 
incident. Those recommendations primarily addressed problems with well 
operations (including drilling, completion, workover, and 
decommissioning operations)--some of which led up to the DWH incident--
and suggested ways to reduce risks of other incidents related to well 
operations. Those commenters apparently assumed, incorrectly, that BSEE 
developed the 2016 PSSR as a result of the DWH incident and that it was 
largely based on the Commission's report.
    These commenters evidently confused the 2016 PSSR, which updated 
production safety systems regulations, with the 2016 WCR, which 
discussed the recommendations in the DWH reports and implemented, or 
responded to, many of those recommendations in order to reduce the risk 
of future well operation-related incidents. The well control 
requirements established by the 2016 WCR are primarily in 30 CFR part

[[Page 49220]]

250, subparts D and G, and include requirements for well operations. By 
contrast, the production safety systems requirements at issue here 
apply to production operations and are in subpart H. Well control 
requirements and production safety requirements apply to different 
operations and types of equipment and processes. Well control 
equipment, such as blowout preventers, is used on multiple wells and is 
often moved from site to site; therefore, it must function properly in 
any conditions that may be encountered. By contrast, production safety 
equipment must function properly in the specific conditions applicable 
within the production system on a particular facility, as informed by 
data that were gathered during the drilling and completion operations.
    While the 2016 WCR was responsive to the Commission's and other DWH 
reports on well operations, BSEE did not intend the 2016 final PSSR and 
the 2017 proposed PSSR revisions to directly respond to the 
Commission's report or other DWH reports; nor did the 2016 PSSR and 
2017 proposed rule refer to the DWH reports. In fact, the impetus for 
the 2016 PSSR was unrelated to well control during well operations; 
rather, that rule was focused on the need to address changes in 
offshore oil and gas production technology and operations, including 
subsea production systems used for production in increasingly deeper 
waters. Prior production safety systems regulations did not address 
subsea developments in deepwater production. See 81 FR 61834. 
Accordingly, the commenters' concerns that the proposed revisions to 
the 2016 PSSR would be inconsistent with, and significantly diminish 
the protections intended by, the DWH reports' recommendations are not 
justified. In any case, as previously discussed, BSEE has nevertheless 
carefully analyzed all the provisions in this rule, and determined that 
the changes made will not contradict any of the recommendations from 
the DWH reports, nor will they alter the regulations in a way that 
would make them inconsistent with those recommendations.
    Further, the commenters' suggestions that any changes to the 2016 
PSSR would be ``arbitrary and capricious'' are conclusory in nature, 
and the commenters have not provided support for that conclusion. The 
record of this rulemaking shows that the proposed and now final 
revisions to the PSSR are not arbitrary or capricious. First, as 
already explained, the commenters' underlying assumption that BSEE 
intended for the 2016 PSSR to implement the DWH recommendations is not 
accurate. Second, as discussed in the 2017 proposed rule, many of the 
proposed changes were based on experience from implementation of the 
2016 PSSR. See, e.g., 82 FR 61704, 61709. Also, operators raised 
questions about the 2016 PSSR that BSEE has addressed in Regulatory 
Interpretations on its website, and BSEE is using this rulemaking to 
address issues raised in some of those questions.\7\ In addition, for 
all the reasons described elsewhere in this notice, BSEE has determined 
that the changes to the 2016 PSSR reflected in this final rule will 
reduce unnecessary burdens or provide needed clarifications, while 
still ensuring safety and environmental protection.
---------------------------------------------------------------------------

    \7\ See https://www.bsee.gov/guidance-and-regulations/regulations/regulatory-interpretations#ssr. Examples of such issues 
include requirements in the 2016 PSSR for boarding shut-down valves 
(BSDVs), deferred compliance dates, production notification, 
effective date and annual inspection/testing requirements, and 
alternate compliance requests and/or departures (extensions) for PSV 
testing.
---------------------------------------------------------------------------

    Similarly, BSEE disagrees with one commenter's suggestion that BSEE 
should not make changes to the 2016 PSSR simply because the ``SUMMARY'' 
statement in that final rule said that it was ``necessary to improve . 
. . safety, environmental protection, and regulatory oversight of 
critical equipment involving productions safety systems'' (emphasis 
added). While that statement was accurate as to the 2016 PSSR as a 
whole, it did not indicate that every specific provision in that 
extensive rule was essential in its existing form to ensuring safety 
and environmental protection, or would never be reviewed or revised in 
light of subsequent events or new information. Neither BSEE nor any 
other agency can predict, at the time it promulgates a rule, whether or 
not future circumstances will warrant any revisions. In fact, BSEE 
periodically reviews all of its regulations and makes revisions when 
necessary and appropriate. And, for the reasons explained elsewhere in 
this notice, BSEE has determined that some specific revisions to the 
2016 PSSR are appropriate and that those revisions will achieve the 
goals of energy production and safety and environmental protection.

Timing of Revisions to Subpart H

    Comment: One commenter suggested that BSEE cannot justify making 
any revisions to the 2016 PSSR ``barely a year'' after that rule took 
effect.
    Response: BSEE does not agree that it is too soon to make any 
changes to the 2016 PSSR. The final 2016 PSSR was published in 
September 2016 and took effect on November 7, 2016, more than 17 months 
ago. As stated in the proposed rule (see 82 FR 61704-61705) and 
elsewhere in this final rule, soon after the 2016 PSSR was issued, BSEE 
began receiving requests from the regulated industry to clarify various 
provisions and which raised other concerns with the rule, and several 
of the proposed (and now final) revisions to the 2016 PSSR are intended 
to clarify those provisions or address those concerns. It is common 
practice, especially in complex rulemakings, for an agency to become 
aware of unforeseen confusion or other problems with a final rule after 
it has been published and to revise the final rule as soon as 
practicable to clarify the requirements or otherwise resolve 
unanticipated concerns. In this case, over 17 months have passed since 
the 2016 PSSR was promulgated, and BSEE's experiences during that time 
period demonstrate that it is not too soon to make appropriate 
corrections to that rule.
    Similarly, as explained in the proposed rule, by E.O.s 13783 and 
13795, as well as S.O.s 3349 and 3350, issued in early 2017, obligated 
BSEE to review existing regulations (which include the 2016 PSSR) to 
determine whether it unnecessarily burdened exploration, development, 
or production of energy resources, and whether it would be appropriate 
to revise the rules to reduce those burdens while still ensuring that 
such activities are safe and environmentally responsible. See id. The 
time that has already passed since the 2016 PSSR was published and took 
effect is more than adequate for BSEE to have completed that review.

Review and Certification by Independent Third-Parties and Professional 
Engineers (PEs)

    Comment: A number of commenters expressed concern that the proposed 
(i.e., proposed Sec. Sec.  250.802 and 250.842) elimination of third-
party certification of SPPE and reduction in the number of safety 
system design documents (e.g., drawings and diagrams) required to be 
certified and stamped by a registered PE would significantly reduce 
safety and environmental protection.
    Response: BSEE disagrees. Subpart H continues to impose numerous 
requirements, including provisions in the standards incorporated by 
reference, that effectively provide multiple layers of review to ensure 
safety and environmental protection in the design, installation, and 
testing of certain

[[Page 49221]]

aspects of production safety systems, including the SPPE. As explained 
earlier in this notice, although this final rule reduces the number of 
provisions that require third-party or PE review and certification, 
BSEE expects those procedural changes will continue to ensure safety 
and environmental protection, especially because of the other, more 
substantive, regulatory requirements applicable to safety equipment 
design, function, maintenance, and testing that are being retained or 
enhanced. BSEE carefully considered which documents are most critical 
to these operations and which documents provide information to support 
those critical documents. In addition, the regulations currently 
contain extensive testing provisions for SPPE and other production 
system components (see Sec.  250.880), to ensure the devices will 
function when needed. These provisions clearly state actions that the 
operator must take if a device fails a test, including repairing or 
replacing devices. These requirements remain unchanged in this final 
rule.
    Specifically, several of the standards incorporated into subpart H 
(e.g., ANSI/API Spec. 6A and ANSI/API Spec. 14A) set design criteria 
for SPPE, based on the type of SPPE, and require most types of SPPE to 
be design-tested by an independent third-party testing facility. In 
addition, the following provisions of the regulations effectively 
provide supplemental layers of review: (1) Existing Sec.  250.801(a) 
through (c) requires use of SPPE that is manufactured and marked 
pursuant to a quality assurance program that satisfies ANSI/API Spec. 
Q1 or another equivalent quality assurance program approved by BSEE; 
(2) existing Sec.  250.880 sets detailed production safety system 
testing criteria, and mandates that SPPE failing to meet the testing 
criteria must be repaired or replaced; and (3) Sec.  250.842(a), as 
amended, will still require PE approval of modifications to production 
safety systems (required by Sec.  250.842(c)(2)), while new Sec.  
250.842(b) will require additional design documents to be developed, 
maintained, and provided to BSEE upon request. For all of these 
reasons, BSEE determined that the final revisions to Sec. Sec.  250.802 
and 250.842, which reduce unnecessary burdens on operators, will ensure 
safety and environmental protection.

Comments on Risk-Based Approaches

    Comment: Several commenters stated that BSEE should implement more 
``risk-based'' approaches to regulation of industry.
    Response: BSEE agrees that risk-based approaches are often an 
appropriate way to develop effective regulatory programs. However, no 
changes to the existing regulations are needed for BSEE to implement 
certain risk-based programs. For example, BSEE is currently developing 
ways to deploy inspection resources to focus on operations with higher 
rates of safety events, equipment failure, or incidents of non-
compliance (INCs).
    Risk-based inspections complement BSEE's existing National Safety 
Inspection Program under OCSLA, which requires BSEE to conduct annual 
scheduled inspections and periodic unannounced inspections on all OCS 
oil and gas facilities. Risk-based inspection approaches evaluate 
operational and performance information, such as data from prior 
inspections and failure reporting, to identify those facilities and 
operations that may pose a higher likelihood of an unsafe event or of 
more severe consequences from such an event. BSEE uses this data to 
manage its inspector force and to target their work to address 
production facilities with higher risks of safety incidents, equipment 
failure, or INCs. Accordingly, BSEE implemented a formal risk-based 
inspection program in 2018 following pilot testing.
    The program is comprised of two categories of risk-based 
inspections--a ``facility-based'' category targeting specific 
production facilities identified as higher-risk, and a ``performance-
based'' category targeting specific operations or equipment across 
multiple facilities. Facility-based risk inspections employ a 
quantitative model and additional qualitative evaluation of operational 
and performance information to identify higher-risk facilities, and 
inspection protocols are tailored to facility-specific hazards, 
barriers, and risks. Performance-based risk inspections employ trend 
analysis of performance indicators, such as incident and INC data, to 
identify safety issues (e.g., potential gas releases, lifting 
incidents, and compressor fires) that may pose a risk at multiple 
facilities; thus, those inspection protocols narrowly focus on the 
identified safety issue. BSEE expects to continue to develop and refine 
the risk-based inspection program over time.

Comments on Failure Reporting

    Comment: One commenter suggested that BSEE should modify Sec.  
250.803 to require any failed equipment to be immediately shut-in 
pending replacement with fully functioning, certified SPPE. Where the 
failed SPPE involves equipment that may be common to several production 
facilities, the commenter suggested that BSEE clarify its authority to 
order the immediate shut-down of all processes or equipment that rely 
on the failed SPPE until replaced by certified, functioning SPPE.
    Response: BSEE disagrees with this comment. The proposed revisions 
to Sec.  250.803 were not intended to relax requirements for reporting 
SPPE or safety component failures or the potential for improved safety 
under those requirements. To the contrary, the final revisions to that 
section simply clarify the existing provision for reporting of failures 
to a BSEE designee instead of to BSEE directly. As explained in the 
preamble of the proposed rule (see 82 FR 61710), on October 26, 2016, 
BSEE designated the Bureau of Transportation Statistics (BTS) to 
receive SPPE failure reports. As discussed later in this notice (see 
n.17, infra), the reporting of SPPE and equipment component failure 
information to BTS should increase the potential for improving safety 
by allowing BTS to examine this information in the aggregate and to 
prepare reports on the aggregate analysis to share with the public, 
including the regulated industry. In addition, the final rule retains 
the existing requirement that operators report equipment failures to 
original equipment manufacturers (OEMs), as well as to BSEE (or BSEE's 
designee). By requiring submissions of reports to the OEMs, Sec.  
250.803 ensures an opportunity for the industry best-suited to make 
changes to failed SPPE (i.e., the OEM sources) to address equipment 
design and performance issues.
    BSEE does not believe that the additional measures--for automatic 
shut-in of individual facilities with a failure or for wide-spread 
shut-in of production that uses similar SPPE--suggested by a commenter 
are appropriate or necessary at this time. The testing provisions in 
existing Sec.  250.880 already require operators to repair and 
reinstall or replace many key components in production safety equipment 
(e.g., surface safety valves) if those components fail to function as 
designed. The final rule retains those requirements. By the nature of 
the design and function of the production system and the regulatory 
requirements for that system, multiple barriers must be used throughout 
the production system. Multiple barriers are used in the production 
system to prevent the release of hydrocarbons; these include the SPPE 
that are required under Sec.  250.801 (e.g., the various valves that 
can be shut in, if needed, to discontinue production).

[[Page 49222]]

The existence of multiple barriers generally decreases the need for 
automatic shut-in every time a single piece of equipment fails. In 
addition, BSEE already requires that any non-certified valve that 
requires offsite repair, re-manufacturing, or any hot work (such as 
welding) must be replaced with a certified valve as required by Sec.  
250.801. In any event, BSEE has authority under existing Sec.  
250.107(d) to order equipment repairs or replacement in order to ensure 
compliance with the regulations, and to issue orders to shut-in 
operations of a component or facility when appropriate to prevent 
threats of serious or immediate harm. In light of these existing 
protections, BSEE does not believe that any additional requirements to 
automatically shut-in the failed equipment, or additional authority for 
BSEE to order more widespread shut-ins, are needed.

BOEM's Proposed 2019-2024 National OCS Leasing Program

    Comment: A number of comments addressed provisions of the Bureau of 
Ocean Energy Management (BOEM) draft proposed 2019-2024 National OCS 
Leasing Program (Leasing Program). Some comments stated that the 
proposal in the Leasing Program to expand OCS leasing into additional 
geographic areas would magnify any reduction in safety and 
environmental protection resulting from the proposed revisions to the 
PSSR.
    Response: The proposed Leasing Program is a separate action by 
BOEM, which is a separate agency from BSEE within the Department, and 
was not addressed in the 2017 proposed PSSR. The Leasing Program 
specifies the size, timing, and location of potential leasing activity 
that the Secretary determines will best meet national energy needs for 
the five-year period under consideration. The Draft Proposed Program, 
the first of three stages of developing the Leasing Program for 2019-
2024, was released on January 4, 2018, with a 60-day comment period 
that ended on March 9, 2018. See BOEM's website, www.boem.gov/National-Program, for additional details. There will be additional opportunities 
for public review and comment on the Leasing Program at later stages of 
its development. Thus, any concern the commenters may have about the 
potential impact that an expansion of the Leasing Program might have on 
the level of safety and environmental protection provided by the 
revised PSSR is premature and speculative at this time.

Prioritizing Safety and Environmental Protection

    Comments: Several commenters stated that OCSLA requires BSEE to 
prioritize ``environmental safeguards'' among other goals identified in 
the statute and that section 3 of OCSLA (43 U.S.C. 1332(3)) requires 
BSEE to ensure that regulated activities are ``safe and environmentally 
responsible.'' Some commenters also stated that BSEE is required by 43 
U.S.C 1802(2)(B) to ``balance orderly energy resource development with 
[environmental] protection.'' The commenters suggested that some or all 
of the proposed changes (e.g., revisions to independent third-party 
certification of SPPE; incorporation by reference of industry 
standards) to the existing rule would not comply with these 
congressional policy declarations.
    Response: BSEE agrees that Congress intended that development and 
production of offshore energy resources should be carried out in a safe 
and environmentally protective manner. However, BSEE disagrees with the 
commenters' assertion that the proposed rule (or this final rule) is 
inconsistent with the policies embodied in OCSLA at 43 U.S.C. 1332(3) 
and 1802(2)(B). Although some of the commenters suggested that 
environmental or safety protection must be the overriding--or even the 
exclusive--goal of all agency actions under OCSLA, these commenters 
failed to acknowledge that section 1332 also states the principle that 
the OCS should be managed to ensure ``expeditious and orderly 
development [of OCS resources] . . . in a manner . . . consistent with 
competition and other national needs'' (See 43 U.S.C. 1332(3) 
Similarly, the commenters failed to acknowledge that 43 U.S.C. 1802 
specifically states that the Department should manage OCS oil and gas 
resources ``expedite[] exploration and development of the . . . [OCS] 
in order to achieve national economic and energy policy goals, assure 
national security, reduce dependence on foreign sources, and maintain a 
favorable balance of payments.'' (See 43 U.S.C. 1802(1).) \8\ Moreover, 
despite the commenter's assertions, sections 1332 and 1802(2) primarily 
relate to the way that the Department manages oil and gas resources at 
the National Program and lease sale stages of OCS development and do 
not expressly mandate how BSEE exercises its authority to issue safety 
regulations. More directly relevant to this rulemaking, however, are 
the specific provisions of OCLSA that authorize the Secretary to 
regulate activities on the OCS, which contain broad grants of 
discretion to issue regulations and do not contain any specific 
limitation that would prevent BSEE from eliminating undue burdens while 
still ensuring the safety of operations overall.
---------------------------------------------------------------------------

    \8\ Likewise, 43 U.S.C. 1802(2) makes it Federal policy that to 
``(2) preserve, protect, and develop oil and natural gas resources 
in the . . . [OCS] in a manner . . . consistent with the need (A) to 
make such resources available to meet the Nation's energy needs as 
rapidly as possible, (B) to balance orderly energy resource 
development with protection of the human, marine, and coastal 
environments, (C) to insure the public a fair and equitable return 
on [OCS] resources . . . and (D) to preserve and maintain free 
enterprise competition.''
---------------------------------------------------------------------------

    Although the commenters may disagree with how BSEE has balanced 
those statutory principles and goals, the difficult and complex task of 
balancing those policies is committed to BSEE's discretion and expert 
judgment. And for all the reasons discussed in the proposed rule and in 
this notice, BSEE has determined that the proposed revisions to subpart 
H (including those singled out by these commenters), as finalized in 
this rule, will reduce unnecessary regulatory burdens while ensuring 
safe and environmentally responsible operations on the OCS.
    In addition, BSEE notes that subpart H, as a whole, ensures safety 
and environmental protection safeguards at every stage of the 
production process, including with regard to: Design and approval of 
safety equipment and safety systems; installation of such equipment and 
systems at production facilities; personnel safety device training; 
continuous maintenance, field testing, and reporting of failures and 
problems to BSEE and manufacturers; equipment repair/removal/
replacement, when needed, to ensure ongoing functionality; and shut-in, 
shutdown, and emergency procedures to deal with potential and impending 
risks. See, e.g., Sec. Sec.  250.837, 250.842, 250.855, 250.880(b) and 
(c), 250.891.
    Moreover, many of the specific requirements that apply at these 
stages of production, especially during production operations, are 
intended to prevent harm to safety or the environment. For example, if 
the required SPPE fails, the default setting for the valves is to fail 
in ``safe mode''; in most cases, that is the ``closed'' position, thus 
preventing the release of hydrocarbons within the production system and 
limiting the impact of equipment failures. In addition, the SPPE in 
production safety systems are typically part of a closed system. Thus, 
when components fail, releasing hydrocarbons, another barrier confines 
the oil or gas within the system.

[[Page 49223]]

    Accordingly, BSEE is confident that the final rule changes, which 
should reasonably reduce burdens (e.g., by clarifying some provisions 
and revising or eliminating certain redundant, needlessly burdensome or 
marginally useful provisions), will continue to ensure safety and 
environmentally protective operations, especially when viewed in the 
context of the full suite of protective measures established by subpart 
H.

General Comments on Incorporation by Reference of Industry Standards

Enforcement of Compliance With Documents Incorporated by Reference
    Comment: A number of commenters asserted that, by relying on 
incorporation by reference of industry standards, the proposed rule 
would allow the oil and gas industry to regulate itself without 
government oversight.
    Response: BSEE disagrees. As discussed elsewhere in this final 
rule, BSEE incorporates industry standards by reference in accordance 
with the requirements of the NTTAA and implementing OMB guidance, OFR 
regulations (1 CFR part 51), and BSEE's own procedures for 
incorporation (Sec.  250.198). The effect of incorporation by reference 
of an industry standard into the regulations is that the incorporated 
document becomes a regulatory requirement, see Sec.  250.198(a)(3), 
and, thus, becomes subject to BSEE oversight and enforcement in the 
same manner as other regulatory requirements. See 82 FR 61705. If an 
SDO later revises a standard that BSEE has previously incorporated in a 
final rule, the BSEE would need to evaluate the revised standard before 
incorporating it through rulemaking in the regulations; in other words, 
industry itself cannot change the regulatory requirements by revising a 
standard after it has been incorporated in the regulations.
    Comment: One commenter asserted that the regulations should state 
that, where the regulatory requirements are more specific or stringent 
than incorporated industry standards, the regulations should take 
precedence.
    Response: There is no need for further regulation in response to 
this comment. The 2016 PSSR already inserted a provision in subpart H--
at Sec.  250.800(d)--clarifying that if there is any conflict between 
the standards incorporated by reference and any other requirements in 
subpart H, the operator must follow the other subpart H requirements.
    Comment: Another commenter suggested that the regulations should 
state that compliance with incorporated industry standards is 
mandatory.
    Response: BSEE does not agree that such a broad statement needs to 
be added to the regulations. Existing Sec.  250.198(a)(3) already 
provides that incorporation of an industry standard into the 
regulations makes that standard a regulatory requirement. BSEE has 
repeatedly referred to this principle in the PSSR and other 
rulemakings. In addition, BSEE concluded in an earlier rulemaking that 
a blanket statement, such as the one commenter suggested, is not 
needed, based on the wording of Sec.  250.198(a)(3) and the bureau's 
reliance on the specific regulatory language of incorporation for each 
incorporated standard. See 77 FR 50855 (August 22, 2012).
Availability of Standards for Public Review
    Comment: Some commenters expressed concern about the availability 
of the standards proposed to be incorporated by reference in the 
proposed rule. The commenters asserted that the industry standards were 
not easily accessible or generally available to the public as part of 
the rulemaking process. Several commenters advocated that BSEE make the 
full text of any existing or proposed technical standards that are, or 
will be, incorporated by reference into BSEE's regulations freely 
available for public download in a searchable format to facilitate 
public review.
    Response: The OFR requires standards incorporated by reference in 
its regulations to be made ``reasonably available'' for review by the 
public. Moreover, BSEE is required by law to describe how those 
incorporated documents are reasonably available. However, BSEE is not 
required, and often is not even permitted, to make industry standards 
downloadable and searchable for the convenience of commenters. Nor does 
BSEE agree with the suggestion that the standards at issue in the 
proposed rule were not reasonably available for public review by 
commenters in preparing their comments.
    As discussed in the proposed rule (82 FR 61705), all standards 
incorporated in BSEE's regulations are available to view for free at 
BSEE's headquarters office in Sterling, Virginia and at BSEE's other 
office locations, during normal working hours, upon request. BSEE 
received no requests to examine the standards proposed for 
incorporation in the proposed rule at BSEE's office.
    In addition to making standards available at BSEE for in-office 
examination, API voluntarily allows the public to view documents cited 
in government regulations free of charge on its website. (See, e,g., 
https://www.api.org/publications-standards-and-statistics/publications/government-cited-safety-documents). Documents from API and other SDOs 
(such as the American Society of Mechanical Engineers (ASME)) may also 
be purchased directly from those organizations.
    In this case, the updated or reaffirmed editions of the API 
standards referred to in the proposed rule (as well as one new 
replacement standard) were made available for free viewing on API's 
website beginning on January 19, 2018. BSEE recognizes that those 
editions of the API standards were not available for viewing on API's 
website during the entire comment period. Nonetheless, those editions 
could be accessed for public viewing during a significant portion of 
the comment period. Moreover, at all times during the comment period, 
commenters could have requested to view the relevant editions of API's 
standards at BSEE's office or purchased copies of those editions from 
API for a fee.\9\ In any event, because API based the updated or 
reaffirmed editions of the API standards at issue in the proposed rule 
on prior editions already incorporated in BSEE's existing regulations, 
which were previously available for free viewing on API's website, 
stakeholders interested in those API standards should have already been 
familiar with the basic subject matter of the current editions even 
before the new editions were made available for viewing by API.\10\

[[Page 49224]]

    In addition, although some commenters suggested or implied that 
BSEE should make incorporated industry standards freely downloadable 
and searchable, apparently without regard to whether the standards are 
protected by copyright under U.S. and international law. Federal law--
including the NTTAA, which authorizes and requires BSEE to incorporate 
industry-developed consensus standards by reference under appropriate 
circumstances, and the OFR regulations (1 CFR part 51) that govern all 
incorporations by reference in Federal regulations--does not eliminate 
copyright protection for incorporated standards. In fact, OFR, which 
has authority to approve all incorporations by reference, has 
considered and expressly rejected the idea that either the NTTAA or 
OFR's own regulations remove copyright protections. See 79 FR 66267, 
66273 (Nov. 7, 2014).\11\ Accordingly, as explained in the proposed 
rule (82 FR 61705), BSEE must respect the publisher's copyright, which 
means that BSEE could not make and provide copies of the copyrighted 
standards to other parties without the copyright-holder's consent.
---------------------------------------------------------------------------

    \9\ One commenter stated that it emailed BSEE during the comment 
period to request that BSEE provide the commenter with copies of all 
of the API standards currently incorporated and proposed for 
incorporation in BSEE's regulations, which BSEE did not provide. As 
explained in the proposed rule and elsewhere in this notice, BSEE 
must respect API's and other SDO's copyright protections and cannot 
provide free copies of a copyrighted document without the copyright-
holder's consent. That is why BSEE makes copies of all incorporated 
standards (proposed or final) available for viewing at BSEE's 
office(s) and why BSEE provides instructions for how interested 
parties can either view such standards on the SDO's website or 
purchase the standards from the SDO.
    \10\ The new, updated editions of API standards that the 
proposed rule proposed for incorporation are API 510, API STD 2RD, 
API RP 2SM, ANSI/API RP 14B, API RP 14C, API RP 14FZ, API RP 14G, 
API RP 500, ANSI/API Spec. Q1, ANSI/API Spec. 6A, API Spec. 6AV1, 
ANSI/API Spec. 14A, ANSI/API Spec. 17J, and API 570. The reaffirmed 
standard is API RP 2SK (Third ed.). The only standard that BSEE 
proposed to incorporate that was not an updated edition or a 
reaffirmation of a currently-incorporated standard was API STD 6AV2, 
which API had substituted for the former API RP 14H (which was 
previously incorporated in Sec.  250.198). See 82 FR 61706.
    \11\ In OFR's most recent revision of its regulations governing 
incorporation by reference, OFR stated that ``t``[he NTTAA [has] not 
eliminated the availability of copyright protection for privately 
developed codes and standards that are referenced in or incorporated 
into federal regulations. Therefore, we [OFR] cannot issue 
regulations that could be interpreted as removing copyright 
protection from [incorporated by reference] IBR'd standards.'' 79 FR 
66273.
---------------------------------------------------------------------------

    Further, OFR's rules for incorporation by reference require only 
that an agency discuss in the final rule the ways that the incorporated 
document(s) are ``reasonably available'' to interested parties and how 
interested parties can obtain the documents. See 1 CFR 51.5(b)(2).\12\ 
Elsewhere in the final rule, as well as in the proposed rule (82 FR 
61705), BSEE discusses how the editions of the standards to be 
incorporated here are reasonably available by free viewing at BSEE's 
office, or viewing on the SDO's website(s), or by purchase from the 
SDO.\13\ Those procedures are consistent with BSEE's longstanding 
practice in many other rulemakings and OFR has reviewed and approved 
the incorporations by reference in this final rule in accordance with 
OFR's own regulations.
---------------------------------------------------------------------------

    \12\ Similarly, OFR's regulations require that proposed rules 
discuss the ways that materials proposed for incorporation are 
``reasonably available'' or how the agency worked to make those 
materials reasonably available. See 1 CFR 51.5(a)(1).
    \13\ 1 CFR 51.7 of OFR's regulations indicates that, to be 
eligible for incorporation by reference, a document needs only to be 
reasonably available to (and usable by) ``the class of persons 
affected.'' BSEE is confident that members of the regulated industry 
that are affected by the incorporated standards are able to purchase 
copies of the standards from API or other SDOs for their use.
---------------------------------------------------------------------------

Other Concerns About Using Incorporation by Reference
    Comment: One commenter stated that incorporation by reference can 
be cumbersome and that, in many cases, it reduces clarity of the 
regulatory requirements. This commenter suggested that BSEE use caution 
in this process and recommended that BSEE develop a way to provide a 
short summary of the incorporated document that will aid the reviewer 
in determining the document's applicability and whether the reviewer 
needs to review that document in order to clarify the Federal 
regulatory requirements.
    Response: BSEE understands that the incorporation by reference of 
standards may sometimes appear cumbersome and may result in some 
questions that need further clarification. When BSEE decides to 
incorporate a standard by reference, it uses its best efforts to 
anticipate potential problems and to make the incorporation as simple, 
clear, and straightforward as possible. And if some confusion 
nonetheless arises after a standard is incorporated, BSEE can and does 
use several means to provide more clarity (e.g., Regulatory 
Interpretations, guidance through Notices to Lessees and Operators 
(NTLs)).
    BSEE disagrees, however, with the commenter's suggestion that the 
incorporation of documents by reference in general is overly cumbersome 
and often reduces clarity, and with the implication that BSEE therefore 
should not use incorporated standards. Standards typically address 
complex technical issues, often at great length and in great detail, 
and it would be difficult and impracticable to duplicate that effort by 
drafting and inserting such detailed standards in the regulations. In 
fact, the NTTAA requires Federal agencies to use technical standards 
developed by voluntary consensus organizations to carry out the 
agencies' objectives, when consistent with Federal law, in lieu of 
creating new Federal standards. And it is frequently more practical and 
efficient for agencies to incorporate such standards--with which the 
regulated industry is typically already familiar through their 
development by industry experts--by reference in the regulatory text 
rather than for the agencies to develop separate Federal standards. 
Moreover, OMB Circular A-119, which instructs agencies on compliance 
with the NTTAA, expressly recognizes incorporation by reference of such 
standards as an acceptable means of using such standards in 
regulations.
    Consistent with the NTTAA, BSEE frequently participates in the 
standards development process by attending relevant standards 
development committee meetings and commenting on the documents as they 
are developed. Furthermore, requiring operators to follow specific 
standards documents that are incorporated by reference in the 
regulations often helps operators by providing detailed instructions 
for meeting the standards that would be impracticable to include in 
regulatory text. These instructions can help ensure consistency in 
operators' approaches to carrying out regulatory requirements. This 
consistency, in turn, helps BSEE in reviewing and approving plans, 
permits, and other applications and simplifies the inspection process.
    With regard to the commenter's suggestion that BSEE provide 
summaries of the relevant standards, BSEE notes that it is already 
required, by OFR's regulations governing incorporations by reference, 
to summarize the incorporated materials in preambles to proposed and 
final rules (see 1 CFR 51.5(a)(2), 51.5(b)(3)), which are provided to 
OFR for review before the proposed and final rules are published. In 
this case, BSEE provided such summaries in the proposed rule (82 FR 
61706-61709) and elsewhere in this final rule that have been reviewed 
and approved by OFR. BSEE has also provided summaries of the standards 
incorporated with this final rule in a document titled, ``AA37--Oil and 
Gas Production Safety Systems--Revisions (Subpart H), Summary of 
standards incorporated by reference that are being updated to newer 
editions in this final rule.'' That document may be viewed by accessing 
the online docket for this rulemaking action located at the Federal 
eRulemaking Portal: https://www.regulations.gov.
    Comment: A commenter noted that BSEE proposed to adopt certain 
industry standards although it had not yet completed its own technical 
and regulatory evaluations (at the time of the proposal) of each 
standard to ensure that it provides superior safety and environmental 
protection. The commenter also stated that ``The Report to the 
President by the National Commission on the BP Deepwater Horizon Oil 
Spill and Offshore Drilling . . . sounded a strong warning'' about DOI 
relying too heavily on API standards and on incorporating those

[[Page 49225]]

standards into agency regulations. The commenter asserted that the 
Report raised concerns that API's role in developing standards could 
compromise BSEE's regulatory framework, since API also serves as the 
industry's principal lobbyist and advocate. The commenter also asserted 
that the report noted that API standards increasingly fail to reflect 
``best industry practices'' and that, because the Department had relied 
on API in developing its own regulatory safety standards, any 
shortfalls in API's objectivity could also undermine the Department's 
regulatory system.
    Response: BSEE acknowledges some of the commenter's concerns 
regarding the use of industry standards in its regulations, but 
disagrees with much of this comment and with the commenter's 
conclusions. First, BSEE notes that the Report's concerns with 
incorporation of industry standards were based on agency practices and 
other circumstances pre-dating the 2010 DWH incident. Since that event, 
many of those practices and circumstances have changed significantly.
    With regard to the commenter's concern that BSEE had not completed 
its own evaluation of the new editions of certain standards that BSEE 
proposed to update, BSEE agrees that was the case at the time the 
proposed rule was published. However, BSEE did not intend to 
incorporate into a final rule any standards for which it had not 
completed its evaluation and is not doing so. Rather, BSEE sought to 
use the proposed rulemaking to solicit public feedback on those 
documents for BSEE to take into consideration while BSEE continued its 
internal review of these documents. See 82 FR 61705. In fact, BSEE has 
benefited from consideration of the public comments on the proposed 
incorporations, and those comments have helped inform BSEE's 
determinations as to whether the new (or reaffirmed) editions proposed 
for incorporation are appropriate for inclusion in this final rule. In 
addition, soliciting comments on the proposed incorporations during 
BSEE's continued evaluation of those newer versions of the standards 
has enabled BSEE to proceed more expeditiously to the incorporation in 
this final rule of those standards that BSEE has now determined will 
provide the same or higher levels of safety and environmental 
protection. As discussed in part G of this notice, BSEE has completed 
its review of most of the updated editions or new standards proposed 
for incorporation in the proposed rule and has included those editions 
and the one new standard in this final rule. However, BSEE is still 
evaluating several remaining editions proposed for incorporation and is 
not including those remaining editions in this final rule. BSEE needs 
more time to complete its evaluation of those standards and will make 
final decisions on whether to incorporate some or all of those editions 
in a final rule at a later date.
    Concerning the comments on BSEE's use of API standards, and the 
assertion that API standards increasingly do not represent best 
industry practices, BSEE does not agree that incorporation and use of 
the standards referenced in this final rule is either inappropriate or 
detrimental to safety and environmental protection. BSEE has evaluated 
the API standards incorporated in this final rule, and determined that 
they are at least as protective as the previously incorporated versions 
of those standards and serve as a valuable complement to BSEE's 
regulations in helping to achieve the statutory objectives. These 
standards provide a baseline. BSEE adds supplemental requirements where 
appropriate. Moreover, as previously discussed, the NTTAA mandates that 
Federal agencies use technical standards developed by voluntary 
consensus standards organizations, instead of government-developed 
standards, where practicable and consistent with applicable law. There 
are only a few SDOs, including API, that address issues related to 
offshore oil and gas operations. Also, API provides standards on 
technical topics that are not addressed by other SDOs. And, consistent 
with the NTTAA's preference for agency use of consensus standards (see 
15 U.S.C. 272(e)(1)(A)(v)), API develops its standards through a 
``general consensus'' process, which provides for input from those who 
are potentially ``materially impacted'' by the standard.
    In addition, based on recommendations in other post-DWH reports 
(see, e.g., Final Report on the Investigation of the Macondo Well 
Blowout, Deepwater Horizon Study Group (March 1, 2011) at pp. 94-98), 
BSEE has expanded its standards program and increased its involvement 
in the standards development process, including development of many API 
standards, and is continuously improving and formalizing BSEE's 
internal process for reviewing standards relevant to the regulatory 
program. These developments will help BSEE to identify issues that may 
not be adequately addressed in incorporated standards and to supplement 
those standards, as necessary, in its regulations.
    Comment: A commenter asserted that BSEE should provide a technical 
analysis of any new or updated industry standards proposed for 
incorporation. The commenter suggested that this analysis should be 
publicly available at the same time as the proposed rule and should 
verify that the new standard represents BAST. This commenter noted that 
BSEE had not completed its own technical review before proposing these 
changes. The commenter requested that BSEE complete this work, and then 
reissue proposed regulations with an appropriate technical 
justification that is made available to the public before the public is 
asked to submit comments on the proposed changes. The commenter also 
suggested that the Department should establish a process with the 
National Academy of Engineering to assess proposed changes in standards 
and to determine if the new editions of incorporated standards 
``enhance safety and environmental protection and represent the highest 
level of international regulatory practice.''
    Response: BSEE does not agree with the commenters' suggestions. 
First, the incorporation of industry standards in BSEE's regulations 
does not reflect a specific BAST determination by BSEE; those actions 
derive from separate authorities and are governed by different 
criteria. Thus, there is no support for the commenter's suggestion that 
``technical analysis'' of a standard should include verification that 
it represents BAST.
    In addition, the issue of whether BSEE should modify its procedures 
for incorporating industry standards in the future is beyond the scope 
of this rulemaking. As previously discussed, in this rulemaking BSEE 
made all of the documents incorporated by reference available for 
public review in connection with the comment period provided for the 
proposed rule and continues to make publicly available at its office 
all of the standards incorporated by reference in the final rule.
    Similarly, BSEE does not agree that a ``technical analysis'' of the 
kind suggested by the commenter prior to a proposed incorporation by 
reference is necessary in order for commenters to be able to comment on 
such a proposal. As discussed previously, BSEE complies with the NTTAA 
requirement that an agency use standards developed or adopted by 
``voluntary consensus standards bodies'' rather than government-unique 
standards, except where inconsistent with applicable law or otherwise 
impractical. (See OMB Circular A-119). BSEE also complies

[[Page 49226]]

with the OFR regulations governing incorporation by reference. Those 
regulations (see Sec. Sec.  51.5(a)(2) and (b)(3) and 51.11(a)) specify 
the process for updating an incorporated standard, including the types 
of descriptions required in connection with proposed and final rule 
documents, and a requirement that the descriptions must be provided to 
OFR for its review. BSEE complied with those requirements by providing 
for public notice and comment through the proposed rule and by seeking 
OFR's approval for changes to the standards incorporated by reference 
in the final rule.\14\ This process does not require an agency to 
complete its review of a document it proposes to incorporate by 
reference prior to the proposed rule stage, and BSEE does not here in 
the final rule incorporate any standard for which it has not completed 
its review.
---------------------------------------------------------------------------

    \14\ Under certain circumstances, existing Sec.  250.198(a)(2) 
authorizes BSEE to incorporate a newer edition of an industry 
standard through a direct final rule (i.e., without a prior 
proposal); however, that authority was not exercised in this 
rulemaking.
---------------------------------------------------------------------------

G. Section-by-Section Summaries, Responses to Comments, and Changes 
From the Proposed Rule

Documents Incorporated by Reference. (Section 250.198)

    Section summary: Section 250.198 of the existing regulations 
contains provisions regarding how BSEE incorporates documents by 
reference in BSEE's regulations, lists all of the documents BSEE has 
incorporated by reference in 30 CFR part 250, and states BSEE's general 
expectations for compliance with those documents. The requirements for 
complying with a specific incorporated document can be found where the 
document is referenced in the regulations, as specified in Sec.  
250.198.
    BSEE proposed to revise Sec.  250.198 by replacing older editions 
of certain standards incorporated in the regulations with new or 
recently reaffirmed editions of those standards.\15\ In addition, BSEE 
proposed to replace API RP 14H (Installation, Maintenance and Repair of 
Surface Safety Valves and Underwater Safety Valves Offshore, Fifth 
Edition 2007), currently incorporated in the regulations but 
subsequently withdrawn by API, with a new standard, API STD 6AV2 
(Installation, Maintenance and Repair of Surface Safety Valves and 
Underwater Safety Valves Offshore, First Edition 2014). Finally, BSEE 
proposed to revise Sec.  250.198(h)(58) and (62) in order to change 
cross-references (from to ``Sec.  250.842(b)'' to ``Sec.  250.842(c)'') 
to the regulations which mention the two standards incorporated at 
those locations.\16\
---------------------------------------------------------------------------

    \15\ As described in more detail later, the provisions proposed 
to be updated in this way included: ASME Boiler and Pressure Codes, 
Sections I, IV and VIII; API 510; API RP 2SK; ANSI/API RP 14B; API 
RP 14FZ; API RP 14G; API RP 500; ANSI/API Spec. Q1; ANSI/API Spec. 
6A; API Spec. 6AV1; API STD 6AV2; and API 570.
    \16\ The references in Sec.  250.198 to be modified in this way 
are related to: API RP 14F, Design, Installation, and Maintenance of 
Electrical Systems for Fixed and Floating Offshore Petroleum 
Facilities for Unclassified and Class 1, Division 1 and Division 2 
Locations, Upstream Segment, Fifth Edition (2008, reaff. 2013): and 
API RP 14J, Design and Hazards Analysis for Offshore Production 
Facilities, Second Edition (2001; reaff. 2013).
---------------------------------------------------------------------------

    BSEE received numerous comments that raised several issues (e.g., 
public availability of standards) related to the proposed revisions to 
Sec.  250.198. BSEE responded to those general comments elsewhere in 
this final rule. Several commenters also stated that they either 
supported or did not oppose the proposed incorporations, but provided 
no details regarding the merits of those documents. Several commenters, 
however, raised significant concerns with the merits of incorporating 
API RP 14C (Eighth Edition 2017) and API RP 500 (Third Edition 2012) at 
this time. For the reasons explained earlier in this notice, this final 
rule updates the incorporation by reference of 12 standards (including 
API RP 500, Third Edition) as proposed, but does not update the 
remaining five standards at this time.
    BSEE received no comments on the proposed revisions to the cross-
references in Sec.  250.198(h)(58) and (62) and the final rule makes 
those revisions.
    Comment: One industry commenter asserted that, although it did not 
oppose the proposed incorporation of the Third Edition of API RP 500, 
it needed more time to fully evaluate the impacts of the Third Edition 
(including the potential costs of implementation, especially for 
facilities that are under construction at the time the final rule takes 
effect) before compliance with that edition of the standard becomes 
mandatory. Therefore, the commenter recommended delaying the 
incorporation of the Third Edition of API RP 500 until a later date.
    Response: BSEE does not agree that such a delay is warranted. API 
RP 500 (Second Edition) was adopted in 1997 and has long been 
incorporated in BSEE's regulations. The regulated industry has 
longstanding experience with how to implement that standard. Although 
the Third Edition made some significant revisions to the Second 
Edition, the commenter did not explain or offer any examples as to why 
those differences would require more time to evaluate potential 
implementation concerns or costs. Moreover, although API was one of the 
joint commenters requesting a delay, API itself adopted the Third 
Edition (with the consensus of the industry) in 2012, and it has 
already had over five years to consider what the impacts of its own 
revised standard would be on the industry it represents. Thus, no delay 
in finalizing the proposed incorporation of the Third Edition of API RP 
500 is necessary.
    Comment: One commenter, although not opposed to the proposed 
incorporation of API RP 14C (Eighth Edition), raised strong concerns 
about the inclusion of that edition in the final rule at this time. The 
commenter asserted that, in light of the many substantive changes to 
the Eighth Edition, which was recently adopted (February 2017), more 
time is needed to assess the potential impacts and costs from 
implementation of those changes, especially with respect to facilities 
still under construction. Two commenters also pointed out that there 
are a number of significant organizational and other clerical errors, 
as well as several apparent inconsistencies, in the Eighth Edition that 
need correction and that would cause substantial confusion and 
implementation problems if incorporated at this time.
    Response: The standards being incorporated into the regulations are 
updated editions to what is already incorporated by reference, not 
adoptions of novel standards. At the time BSEE or its predecessor 
originally incorporated the standards in the regulations, BSEE 
determined that they would improve safety and environmental protection 
for their respective applications. Subsequently, BSEE reviewed updated 
editions of each standard and concluded in this final rule that the new 
editions increase the overall safety baseline from the previously 
incorporated editions. Since the nature of operations evolves and 
equipment changes over time, standards also change to keep up-to-date. 
Updating the incorporation of standards to newer editions helps 
maintain and improve the safety and environmental integrity of 
operations. BSEE does not anticipate the change in burden to be 
significant, since updating to the new editions will not require 
retrofit of equipment. The revised maintenance and testing procedures 
contained in these standards are generally modifications of existing 
procedures, which are already required. BSEE is aware that there are a 
number of organizational problems and clerical and other non-
substantive errors in the

[[Page 49227]]

Eighth Edition that could significantly affect other standards that 
refer to and rely on API RP 14C, and that could interfere with the 
industry's and BSEE's ability to implement the regulations. BSEE is 
also aware that API is currently considering how to resolve these 
concerns. BSEE has therefore decided not to update the reference to API 
RP 14C in Sec.  250.198 in the final rule at this time.
    In addition, although BSEE has completed its evaluation of most of 
the standards proposed for incorporation (including the Third Edition 
of API RP 500), BSEE needs more time to complete its evaluation of the 
other five standards (including the Eighth Edition of API RP 14C). 
Accordingly, BSEE will not finalize the proposed incorporation of the 
following standards at this time and will make final decisions as to 
whether to incorporate some or all of these standards in a final rule 
at a later date:
     API RP 14C, Analysis, Design, Installation, and Testing of 
Basic Surface Safety Systems for Offshore Production Platforms, Eighth 
Edition (February 2017). BSEE proposed to substitute the Eighth Edition 
for the currently incorporated Seventh Edition (2001, reaffirmed 2007). 
The Eighth Edition contains extensive substantive changes compared to 
the last substantive revision (the Sixth Edition) in 1998 and makes 
numerous organizational changes as compared to the Seventh Edition.
     API STD 2RD, Dynamic Risers for Floating Production 
Systems, Second Edition, September 2013. BSEE proposed to substitute 
this standard for the currently incorporated First Edition of API RP 
2RD (1998, Errata 2009) of the same standard.
     ANSI/API Spec. 14A, Subsurface Safety Valve Equipment, 
Twelfth Edition (January 2015; Errata, July 2015; Addendum, June 2017). 
BSEE proposed to substitute the Twelfth Edition for the currently 
incorporated Eleventh Edition (2005) of the same standard.
     ANSI/API Spec. 17J, Unbonded Flexible Pipe, Fourth Edition 
May 2014; Errata 1, September 2016; Errata 2, May 2017; Addendum 1, 
October 2017. BSEE proposed to substitute this edition for the 
currently incorporated Third Edition (2008) of the same standard.
     API RP 2SM, Design, Manufacture, Installation, and 
Maintenance of Synthetic Fiber Ropes for Offshore Mooring, Second 
Edition (2014). BSEE proposed to substitute this edition for the 
currently incorporated First Edition (2001; 2007 Addendum) of the same 
standard.
    BSEE is carrying forward with certain proposed revisions to Sec.  
250.198 in the final rule. First, as previously mentioned, and as 
proposed, the final rule revises Sec.  250.198(h)(58) (which 
incorporates API RP 14F, Recommended Practice for Design, Installation, 
and Maintenance of Electrical Systems for Fixed and Floating Offshore 
Petroleum Facilities for Unclassified and Class 1, Division 1 and 
Division 2 Locations, Upstream Segment) and Sec.  250.198(h)(62) (which 
incorporates API RP 14J, Recommended Practice for Design and Hazards 
Analysis for Offshore Production Facilities) to update the cross-
references to Sec.  250.842(b), which this final rule has redesignated 
as Sec.  250.842(c). Second, BSEE has completed its evaluations of the 
following standards, as well as any comments received on their proposed 
incorporation, and determined that these standards are at least as 
protective of safety and the environment as the standards previously 
incorporated in the regulations. Accordingly, this final rule revises 
existing Sec.  250.198 to incorporate the following updated standards:
     ASME Boiler and Pressure Vessel Code (BPVC)
    [cir] Section I, Rules for Construction of Power Boilers including 
Appendices (2017 Edition). This edition replaces the previously 
incorporated 2004 edition of that standard, including the July 2005 
Addenda and all Section I Interpretations Volume 55. ASME BPVC Section 
1 provides methods and requirements for: construction of power, 
electric, and miniature boilers; high temperature water boilers, heat 
recovery steam generators, and certain fired pressure vessels to be 
used in stationary service; and power boilers used in locomotive, 
portable, and traction service. Major changes in the 2017 edition 
include: (a) New guidance on visual examination in the fabrication 
process; (b) a non-mandatory option for ultrasonic examination 
acceptance criteria; (c) requirements for retaining radiographs as 
digital images; (d) clarification of material identification 
requirements for a ``pressure part material;'' (e) updated mandatory 
training requirements for qualified personnel for various non-
destructive examination (NDE) techniques; (f) updated provisions on the 
types of auxiliary lift devices that operators can use for alternative 
testing of valves to align with current state of the art; (g) 
clarification that welded pressure parts must be hydrostatic-tested 
with the completed boiler; and (h) references to other updated 
standards.
    [cir] Section IV, Rules for Construction of Heating Boilers; 
including Appendices 1, 2, 3, 5, 6, and Non-mandatory Appendices B, C, 
D, E, F, H, I, K, L, and M, and the Guide to Manufacturers Data Report 
Forms (2017 Edition). This edition replaces the previously incorporated 
2004 Edition and 2005 Addenda of that standard. The updated standard 
provides requirements for design, fabrication, installation, and 
inspection of steam heating, hot water heating, hot water supply 
boilers, and potable water heaters intended for low pressure service 
that are directly fired by oil, gas, electricity, coal, or other solid 
or liquid fuels. The new edition also (a) provides equipment scope 
clarifications, (b) includes a new mandatory appendix for feedwater 
economizers, (c) deletes conformity assessments requirements and moves 
them to normative reference ASME CA-1, (d) provides new corrosion 
resistant alloy requirements for internal tank surfaces of heat 
exchangers installed in storage tanks, and (e) clarifies requirements 
for modular boilers.
    [cir] Section VIII, Rules for Construction of Pressure Vessels; 
Divisions 1, 2, and 3 (2017 Edition) and all Section VIII 
Interpretations Volumes 54 and 55. This edition replaces the previously 
incorporated 2004 Edition and 2005 Addenda, Divisions 1, 2, and 3 and 
all Section VIII Interpretations Volumes 54 and 55. Since the 2004 
edition was issued, ASME has rewritten the BPVC code to incorporate the 
latest technologies and engineering knowledge. The 2017 Edition gives 
detailed requirements for the design, fabrication, testing, inspection, 
and certification of both fired and unfired pressure vessels. This 
updated edition specifically refers to those pressure vessels that 
operate at pressures, either internal or external, that exceed 15 
pounds per square inch gauge (psig). Section VIII contains three 
divisions, each of which covers different vessel specifications.
     API 510, Pressure Vessel Inspection Code: In-Service 
Inspection, Rating, Repair, and Alteration, Downstream Segment, Tenth 
Edition (May 2014), including Addendum 1 (May 2017). This edition 
replaces the previously incorporated Ninth Edition of the same 
standard. API 510 covers the in-service inspection, repair, alteration, 
and re-rating activities for pressure vessels and the pressure-
relieving devices protecting these vessels. API 510 is intended to 
specify the in-service inspection and condition-monitoring program that 
is needed to determine the integrity of pressure vessels and pressure-
relieving devices. The Tenth Edition includes updated normative 
references, updated definitions, and new requirements for inspection 
programs, corrective actions,

[[Page 49228]]

management of change, integrity operating windows, pressure testing, 
corrosion considerations, and marking requirements.
     API RP 2SK, Design and Analysis of Stationkeeping Systems 
for Floating Structures, Third Edition (October 2005), Addendum (May 
2008), reaffirmed edition of June 2015. The reaffirmed document makes 
no changes to the previously incorporated 2008 Third Edition. It 
provides a method for analyzing, designing, or evaluating station-
keeping systems (mooring, dynamic positioning, or thruster-assisted 
mooring) that operators use for floating units. The reaffirmed standard 
also addresses some operational aspects of such systems and provides 
different design requirements for mobile and permanent moorings.
     ANSI/API RP 14B, Design, Installation, Operation, Test and 
Redress of Subsurface Safety Valve Systems, Sixth Edition (September 
2015). This edition replaces the previously incorporated Fifth Edition 
(2005) of the same standard. This standard creates requirements and 
provides guidelines for subsurface safety valve (SSSV) system 
equipment. Manufacturers and operators design and install SSSVs to 
prevent an uncontrolled well flow, when actuated. The Sixth Edition 
addresses system design, installation, operation, testing, redress, 
support activities, documentation, and failure reporting. The Sixth 
Edition covers specific equipment including control systems, control 
lines, SSSVs, and secondary tools and provides criteria for proper 
redress for replacement or disassembly of an SSSV. In contrast to the 
Fifth Edition, the Sixth Edition also emphasizes supplier and 
manufacturer operating manuals, systems integration manuals, handling, 
system quality, documentation, and data control.
     API RP 14FZ, Design, Installation, and Maintenance of 
Electrical Systems for Fixed and Floating Offshore Petroleum Facilities 
for Unclassified and Class I, Zone 0, Zone 1 and Zone 2 Locations, 
Second Edition (May 2013). This edition replaces the previously 
incorporated First Edition (2001, reaffirmed 2007) of the same 
standard. The Second Edition contains substantial changes from the 
First Edition. The Second Edition establishes minimum requirements and 
guidelines for design and installation of electrical systems on fixed 
and floating petroleum facilities located offshore in hazardous 
locations classified as Zone 0, Zone 1, or Zone 2. As revised, the 
Second Edition of API RP 14FZ applies to both permanent and temporary 
electrical installations and describes basic desirable electrical 
practices for offshore electrical systems.
     API RP 14G, Fire Prevention and Control on Fixed Open-type 
Offshore Production Platforms, Fourth Edition (April 2007), reaffirmed 
January 2013. The reaffirmed document makes no changes to the 
previously-incorporated standard. This reaffirmed standard includes 
provisions for minimizing the likelihood of an accidental fire, and for 
designing, inspecting, and maintaining fire control systems. The 
reaffirmed standard emphasizes the need to train personnel in 
firefighting, to conduct routine drills, and to establish methods and 
procedures for safe evacuation. API's intent in this standard is for 
fire control systems to provide an early response to prevent incipient 
fires from spreading; however, the intent is not to preclude the 
application of more extensive practices to meet special situations or 
the substitution of other systems that will provide an equivalent or 
greater level of protection. This reaffirmed standard is applicable to 
fixed open-type offshore production platforms, which are generally 
installed in moderate climates and which have sufficient natural 
ventilation to minimize the accumulation of vapors; enclosed areas, 
such as quarters buildings and equipment enclosures, normally installed 
on this type platform are addressed. Totally enclosed platforms 
installed for extreme weather conditions or other reasons, however, are 
beyond the scope of this standard.
     API STD 6AV2, Installation, Maintenance, and Repair of 
Surface Safety Valves and Underwater Safety Valves Offshore (First 
Edition March 2014) and Errata 1, August 2014. This standard replaces 
the previously incorporated API RP 14H, Installation, Maintenance and 
Repair of Surface Safety Valves and Underwater Safety Valves Offshore 
(Fifth Edition 2007), which API withdrew when it adopted API STD 6AV2. 
The new standard provides practices for installing and maintaining 
Surface Safety Valves (SSVs) and Underwater Safety Valves (USVs) used 
or intended to be used as part of a safety system (as defined by 
documents such as API RP 14C) and includes provisions for conducting 
inspections, installations, and maintenance, field and off-site repair 
as well as provisions addressing testing procedures, acceptance 
criteria, failure reporting, and documentation. API STD 6AV2 also 
includes updated definitions, new provisions for qualified personnel, 
new documentation and test procedures, acceptance criteria for post-
installation and post-field repair, and provisions for offsite repair 
and remanufacture alignment to ANSI/API Spec. 6A.
     API RP 500, Classification of Locations for Electrical 
Installations at Petroleum Facilities Classified as Class I, Division 1 
and Division 2, Third Edition (December 2012; Errata January 2014). 
This edition replaces the previously incorporated Second Edition (1997, 
reaffirmed 2002) of the same standard. The purpose of this standard is 
to provide guidelines for classifying locations (Class I, Division 1 
and Class I, Division 2) at petroleum facilities for the selection and 
installation of electrical equipment. This standard followed the basic 
definitions given in the 2011 edition of National Fire Protection 
Association (NFPA) 70, National Electrical Code (NEC).
     ANSI/API Spec. Q1, Specification for Quality Management 
System Requirements for Manufacturing Organizations for the Petroleum 
and Natural Gas Industry, Ninth Edition (June 2013; Errata, February 
2014; Errata 2, March 2014) and Addendum 1 (June 2016). This edition 
replaces the previously incorporated Eighth Edition (2007) of the same 
standard. This updated standard features over 85 new clauses and five 
new sections, creating a major shift in quality management as it 
applies to the oil and gas industry. A thematic change is the approach 
to quality through risk assessment and risk management. The five new 
sections include risk assessment and management, contingency planning, 
product quality planning, preventative maintenance, and management of 
change. The Ninth Edition is also intended to align with API Spec. Q2, 
Quality Management System Requirements for Service Supply Organizations 
for the Petroleum and Natural Gas Industries, First Edition (2011). 
Overall, the goal of ANSI/API Spec. Q1 Ninth Edition is to further 
enhance the minimum baseline requirements of quality management systems 
of oil and gas equipment manufacturers.
     ANSI/API Spec. 6A, Wellhead and Christmas Tree Equipment, 
Twentieth Edition (October 2010; Addendum 1, November 2011; Errata 2, 
November 2011; Addendum 2, November 2012; Addendum 3, March 2013; 
Errata 3, June 2013; Errata 4, August 2013; Errata 5, November 2013; 
Errata 6, March 2014; Errata 7, December 2014; Errata 8, February 2016; 
Addendum 4, June 2016; Errata 9, June 2016; Errata 10, August 2016). 
This edition replaces the previously incorporated Nineteenth Edition 
(2004) of the same standard. The Twentieth Edition includes significant 
changes from the previous edition, such

[[Page 49229]]

as: (a) Updated definitions and terms; (b) updated normative references 
to other standards; (c) temperature ratings; (d) more stringent 
material performance requirements; (e) a revised repair and 
remanufacture annex; (f) updated requirements for equipment in hydrogen 
sulfide (H2S) service; and (g) SSV and USV performance requirements. 
The Twentieth Edition also aligns with other standards, such as NACE 
MR0175 (for use in H2S-containing environments), and 
contains options to use various American Society for Testing and 
Materials (ASTM) International documents for material testing. The 
authors removed references to obsolete standards and requirements for 
obsolete equipment from the Twentieth Edition.
     API Spec. 6AV1, Specification for Verification Test of 
Wellhead Surface Safety Valves and Underwater Safety Valves for 
Offshore Service, Second Edition (February 2013). This edition replaces 
the previously incorporated First Edition (1996, reaffirmed 2008) of 
the same standard. The Second Edition establishes design validation 
requirements for ANSI/API Spec. 6A, Specification for Wellhead and 
Christmas Tree Equipment, for SSVs and USVs as well as associated valve 
bore sealing mechanisms for Class II and Class III SSVs and USVs. Major 
changes from the First Edition include: replacing ``Performance 
Requirement'' with the term ``Class;'' phasing out the use of Class 1/
PR1 valves; establishment of API licensing of test agencies; updated 
facility requirements; more specificity on the validation testing 
procedures of Class II valves; and new validation tests for Class III 
SSVs and USVs.
     API 570, Piping Inspection Code: In-service Inspection, 
Rating, Repair, and Alteration of Piping Systems, Fourth Edition 
(February 2016; Addendum 1, May 2017). This edition replaces the 
previously incorporated Third Edition (2009). API 570 covers 
inspection, rating, repair, and alteration procedures for metallic and 
fiberglass-reinforced plastic piping systems and their associated 
pressure relieving devices that have been placed in service. This 
inspection code applies to all hydrocarbon and chemical process piping 
covered in section 1.2.1 that have been placed in service (unless 
specifically designated as optional per section 1.2.2). This 
publication does not cover inspection of specialty equipment, including 
instrumentation, exchanger tubes and control valves. The ``in service 
inspection'' Code in this standard no longer covers process piping 
systems that have been retired from service and abandoned in place. 
However, piping that is abandoned in place may still need some amount 
of inspection and/or risk mitigation to ensure that it does not become 
a process safety hazard because of continuing deterioration. Process 
piping systems that are temporarily out of service, but have been 
preserved for potential future use, are still covered by the new 
edition of this Code.

Timing of Compliance With New Editions of Standards

    Comment: Several commenters suggested that, if BSEE updated certain 
standards in the final rule, it should clarify that some of the updated 
standards would apply only to new equipment or to new offshore 
facilities; i.e., that those updated standards would not require 
replacement of existing facilities or equipment that do not meet the 
updated standards' requirements.
    Response: BSEE does not believe that it is necessary to revise the 
regulatory text for the updated standards that are included in this 
final rule to specify which standards, or which provisions in those 
standards, apply prospectively. BSEE does not intend to require, and 
the standards themselves do not envision, replacement of existing 
facilities or equipment (that meet the applicable requirements that 
were in effect when the facilities or equipment were installed) simply 
because updated standards have been incorporated in this final rule. 
The updated standards will apply to all BSEE approvals of facilities 
and equipment prospectively (as of the effective date of the final 
rule). By the nature of the standards and the way in which they are 
incorporated in BSEE's regulations, some of the updated standards' 
provisions can apply only to new facilities or equipment (e.g., 
provisions for design, analysis, and/or installation of certain new 
systems or new equipment). The language of the regulations and the 
referenced standards will result in their application to new and 
existing facilities or equipment, and require certain future actions 
(e.g., equipment inspection, testing, removal/repair/replacement). 
Operators must ensure that those future actions are taken and that all 
existing facilities/equipment comply with those applicable 
requirements. Although BSEE believes that the nature, purpose, and 
scope of the updated standards--and of the regulations which reference 
those standards--in this final rule are clear as to which requirements 
apply only to new equipment/facilities and which requirements apply to 
both new and existing equipment/facilities, BSEE notes that:
     API STD 6AV2 (First Edition), API 510 (Tenth Edition), and 
API 570 (Fourth Edition) apply to both new and existing facilities and 
equipment;
     API RP 2SK (Third Edition, reaffirmed 2015), API RP 14FZ 
(Second Edition), and API RP 500 (Third Edition) apply only to new 
facilities installed after the final rule effective date; and
     ANSI/API RP 14B (Sixth Edition), ANSI/API Spec. Q1 (Ninth 
Edition), and API Spec. 6AV1 (Second Edition) apply only to new 
equipment installed after the effective date.

What must the DWOP contain? (Section 250.292)

    BSEE did not receive any comments on this section of the proposed 
rule. Since BSEE decided not to incorporate by reference the second 
edition of API STD 2RD, as proposed, the final rule implements no 
changes to this section of the regulations.

General (Section 250.800)

    BSEE proposed updating API RP 2RD to API STD 2RD in this rule. BSEE 
did not receive any comments on this section of the proposed rule. BSEE 
decided not to incorporate by reference the second edition of API STD 
2RD, as proposed.
    However, BSEE is revising paragraph (a) of this section to clarify 
expectations for preproduction inspections of new facilities, adding 
two new subordinate paragraphs to paragraph (a). In the current 
regulations, paragraph (a) of this section already requires operators 
to receive BSEE approval of their production safety system application 
and request a preproduction inspection from BSEE before commencing 
production. BSEE added a new paragraph (a)(1) to clarify the 
requirement to obtain approval of the production safety system 
application by referencing Sec.  250.842, which contains the 
requirements for that application. BSEE also added new paragraph (a)(2) 
to highlight and clarify the requirement to request a preproduction 
inspection, including language noting that the operator must notify the 
District Manager 72 hours before it plans to commence initial 
production and adding a cross reference to that existing requirement in 
Sec.  250.880(a)(1). These revisions are purely organizational and 
clarifying and do not impose any new substantive requirements.

Safety and Pollution Prevention Equipment (SPPE) Certification (Section 
250.801)

    Section summary: This section of the existing regulations contains 
requirements for the installation of certified SPPE on OCS wells or as 
part

[[Page 49230]]

of the system associated with the wells. It also clarified that (as of 
September 2017) SPPE includes SSVs and actuators, such as those 
installed on injection wells capable of natural flow, as well as BSDVs. 
This section of the existing regulations also specifies that BSEE will 
not allow subsurface-controlled SSSVs on subsea wells and provides that 
SPPE manufactured and marked pursuant to ANSI/API Spec. Q1 will be 
considered certified SPPE under part 250. Section 250.801(c) of the 
existing regulations also provides that BSEE may exercise its 
discretion, under certain conditions, to accept SPPE manufactured under 
quality assurance programs other than ANSI/API Spec. Q1.
    In the proposed rule, BSEE proposed to clarify that GSLDVs are a 
type of SPPE, since, for reasons explained in the 2017 proposed rule 
(82 FR 61709), GLSDVs already must follow Sec.  250.801. BSEE also 
proposed to revise the introductory sentence in paragraph (a) of this 
section to remove the phrase ``[i]n wells located on the OCS,'' since 
all of the equipment that is considered SPPE is either located in a 
well or a riser. After consideration of comments submitted on the 
proposed revisions to this section, as discussed below, the final rule 
revises Sec.  250.801(a) to expressly include GLSDVs in the list of 
equipment that BSEE considers to be SPPE. In addition, as proposed, the 
final rule revises paragraph (a) to remove the phrase, ``[i]n wells 
located on the OCS.''
Addition of GLSDVs to SPPE List
    Comment: Commenters generally questioned the proposed addition of 
GLSDVs to the list of equipment that is considered SPPE. One comment 
asserted that GLSDVs are installed in a departing capacity (direction 
of flow into the well). The commenter stated that there is a check 
valve to prevent backflow and that there are no testing frequency or 
leakage rate requirements for GLSDVs and there is no mention of GLSDVs 
in the Eighth Edition of API RP 14C. Comments also stated that BSEE did 
not provide statistics or failure data to justify the proposed addition 
of GLSDVs as SPPE.
    Response: BSEE does not believe that the assertions made in these 
comments warrant a change to the proposed revision. As explained in the 
proposed rule, the addition of GLSDVs to the list of SPPE is merely a 
clarification of what is already required by the current regulations. 
Section 250.835 currently requires that BSDVs meet the requirements in 
Sec.  250.801, and Sec.  250.873 states that GLSDVs must meet the 
requirements for BSDVs in Sec.  250.835, so it follows that GLSDVs are 
already required to meet the requirements of Sec.  250.801. The GLSDV 
acts as a robust, tested barrier to prevent backflow to the platform. 
The configuration of many subsea fields is such that it is important to 
prevent the continuous feeding of gas lift gas to the facility in the 
event of an emergency. Regarding the comment that GLSDVs are not 
addressed in API RP 14C, BSEE does not believe that the lack of direct 
mention of GLSDVs in that document is dispositive of whether the 
requirements for SPPE in subpart H should apply to those valves, which 
in fact they already did under the pre-existing regulations. BSEE notes 
that GLSDVs are mentioned in API RP 17V, Recommended Practice for 
Analysis, Design, Installation, and Testing of Safety Systems for 
Subsea Applications, First Edition, which was adopted by API in 2015 
and includes the subsea requirements that were found in the Seventh 
Edition of API RP 14C. Although BSEE does not incorporate API RP 17V by 
reference in its regulations, that standard is considered a companion 
document for API RP 14C, and BSEE believes that the regulated industry 
is well aware of the connection between those standards. Regarding the 
assertion that there are no testing frequency or leakage rate 
requirements for GLSDVs, the current regulations include specific 
testing requirements for GLSDVs under Sec.  250.873(d).
    Comment: A commenter asserted that GLSDV requirements should apply 
only to subsea systems.
    Response: BSEE agrees. In fact, GLSDVs are listed only under the 
subsea systems sections in the regulations. However, to clarify this 
point, BSEE added ``associated with subsea systems'' to Sec.  
250.801(a)(5) in the final rule.

Requirements for SPPE (Section 250.802)

    Section summary: This section provides the requirements for SPPE. 
SPPE are key safety barriers that prevent catastrophic events from 
occurring on offshore platforms. This section requires compliance with 
a variety of industry standards and includes repair and documentation 
requirements. BSEE requested comments on the proposed elimination 
within Sec.  250.802(c)(1) of a requirement that an independent third 
party certify that each device will function under the most extreme 
conditions to which it may be exposed. Based on the comments received, 
BSEE is revising existing paragraph (c)(1) and renumbering the 
remaining paragraphs of this section. In paragraph (c)(1) of the final 
rule, BSEE is removing the requirement for an independent third party 
certification of the design of the SPPE. In the final rule BSEE is 
maintaining the requirement in the existing regulations that each 
device must be designed to function in the conditions to which it may 
be exposed, while deleting the phrase ``most extreme.'' BSEE is adding 
a provision in the final rule in paragraph (c)(1)(i) that was not in 
the proposed rule requiring the operator to have each device design 
tested by an independent test agency, according to the testing criteria 
in the appropriate standard as incorporated into the regulations. This 
change does not reflect any new substantive requirements or burdens, 
but rather merely reinforces existing requirements from documents that 
are already incorporated by reference in Sec.  250.802. In addition, 
the final rule requires operators to maintain a description of the 
process used to ensure the device is designed to function as required 
in paragraph (a) and final paragraph (c)(1) of this section. The 
operator must provide this documentation to BSEE upon request. BSEE 
also included a provision in final paragraph (c)(1)(iii) that preserves 
the requirement for a qualified third party certification of a device, 
if that device is removed from service and installed at a different 
location. This ensures that the device will function as designed under 
the conditions to which it may be exposed in the new location.
    Consistent with the proposed revision to Sec.  250.801, BSEE is 
revising this section to include GLSDVs in the equipment addressed in 
paragraphs (a) and (c) of this section, as well. BSEE also is revising 
paragraph (d)(2) of Sec.  250.802 to remove the phrase ``on that 
well,'' as proposed. BSEE does not need to specify the location of the 
SPPE since all of the equipment that is considered SPPE is either 
located in a well or a riser.
Third Party Certifications
    Comment: BSEE received many comments on the proposed deletion of 
the requirements for third party certifications. Industry groups 
supported elimination of this requirement and concurred with the 
rationale in the proposed rule that suggested that this requirement 
duplicated validation and functional tests required in other sections 
of the regulations. Other commenters highlighted the importance of this 
equipment in preventing major incidents, noted recommendations arising 
out of the DWH incident related to the need for the use of third party 
certification programs, described the

[[Page 49231]]

value of independent third party verification, and asserted that BSEE 
had not provided any evidence to support a revision of the 2016 
requirement. Many commenters believe that deletion of this requirement 
will increase the risks arising out of offshore oil and gas 
development. Commenters asked how BSEE would ensure the operators 
followed the standards as required, and met the design requirements for 
the SPPE, if the independent third party certification requirement was 
removed.
    Response: BSEE agrees that the current industry standards and 
quality assurance certification programs related to SPPE have played an 
important role in improving the reliability of equipment that is 
manufactured for use on the OCS. Industry certification practices, such 
as the API Monogram Program, provide a level of assurance that these 
critical barriers are designed and manufactured according to good 
engineering practices. However, there are limits to the scope of these 
certification and verification programs. For example, these programs 
apply only to new equipment at the time of manufacture and the 
certifications are made by the OEMs rather than the operator (see 
industry comments: ``it is the manufacturer's responsibility to meet 
the design requirements of API standards, not the operator'' and ``it 
is the responsibility of the manufacturer to meet certification 
requirement of ANSI/API Spec Q1'').
    However, the responsibility for verifying that the SPPE is fit-for-
service on a specific facility ultimately rests with the operator and 
BSEE, not the OEM. The existing requirement for independent third party 
certification helps to supplement BSEE's review process. Based on the 
public comments, BSEE reviewed this process and the existing third 
party certification programs and is revising the current requirements 
regarding the independent third party certifications as previously 
described.
    BSEE determined that it is appropriate to retain the existing 
language requiring the device to be designed to function under the 
conditions to which it may be exposed, while deleting the phrase ``most 
extreme.'' The recommendations arising from the DHW incident included 
the use of the phrase ``most extreme conditions'' in the criteria for 
the blowout preventer (BOP), and BSEE then applied it to SPPE. However, 
unlike BOPs, operators do not generally move SPPE to other locations 
after it is installed. Manufacturers and operators design SPPE to be 
used in a specific well/location for the life of the equipment. The 
potential for unanticipated extremes during production is less than 
during drilling or completion operations. Manufacturers and operators 
know the operating environment when they design the SPPE, and the basic 
design criteria includes temperature, pressure and flow rate for the 
well where the SPPE will be installed. The valves used are normally 
commercial, off the shelf products that are designed to function in a 
range of operating conditions. The most extreme production conditions 
generally occur at the beginning of production operations, since 
operating pressures decrease over time as the reservoir is produced. In 
addition, BSEE is retaining long standing requirements for design 
testing, as provided in the incorporated standards, as well as 
associated requirements for documentation of the design process. The 
final rule still provides that any SPPE that is removed from service, 
then installed in another location, must have independent third party 
certification. To the extent the final rule will no longer require 
independent third party certification in other contexts, the final rule 
will require the operator to maintain documentation of the process used 
to ensure the device is designed to function in the conditions to which 
it may be exposed and to provide that documentation to BSEE upon 
request. These elements of the final rule help address concerns raised 
by commenters regarding BSEE's ability to verify compliance with the 
standards for design. As a result, we revised the language of the 
proposed rule in the final rule to state that the operator must have 
the device design tested by an independent test agency and must 
maintain documentation of the design process used to ensure that the 
device is designed to function under the conditions to which it may be 
exposed.
    The independent third party certification required by existing 
regulations is a one-time certification of each device. A one-time 
certification will not guarantee that a device will function as 
designed for the life of the device. Accordingly, an independent third 
party's certification that the device will function is inherently of 
limited value. The existing regulations already include additional 
requirements to ensure that SPPE will function when needed. For 
example, Sec.  250.880 establishes detailed testing requirements for 
SPPE, based on the specific type of device, ensuring that all SPPE are 
tested on a regular basis and repaired or replaced, as appropriate. 
This regular testing is designed to ensure the SPPE will function when 
needed, preventing failures during operations.
Existing BSDV Inventory
    BSEE requested comments concerning a method of using BSDVs which 
were already in the operator's inventory, but had not been certified 
pursuant to the SPPE requirements. BSEE also requested information on 
the size of this non-certified BSDV inventory. The comments from 
industry associations included a recommendation that would allow the 
use of non-certified equipment if a purchase order had been signed by 
the effective date of the 2016 rule. BSEE notes that operators were 
aware of the likely SPPE requirements long before the effective date of 
the 2016 rule. In addition, operators have options under the existing 
regulations for obtaining approval to use non-certified SPPE. We 
believe that this case-by case approval process is a better approach 
than attempting to address the issue through a modification of the SPPE 
requirements. Consequently, BSEE made no change to the regulations 
regarding existing BSDV inventory.
Requirements for Non-Certified Equipment
    Comment: According to the commenter, the proposed regulations 
(presumably, the specific proposal to remove the phrase ``on that 
well'' from Sec.  250.802(d)(2)) would allow pulling non-certified 
safety equipment from one well and moving it to another well. The 
commenter noted that current regulations allow non-certified equipment 
to remain in service on a specific well, until it is time to replace 
that equipment. The commenter went on to assert that the regulations 
allow this because there is a cost of pulling and replacing it, and 
BSEE provided operators the opportunity to use non-certified equipment 
for their useful remaining life in a specific well. The commenter noted 
that, therefore, the regulations would ``grandfather'' non-certified 
equipment for use in that specific well. The commenter concluded that, 
if the industry is allowed to pull non-certified equipment and move it 
to another well, new certified equipment will not be purchased and 
installed as planned. The commenter stated that continuing to use non-
certified safety equipment is not in the public interest and could 
increase the risk of a spill. For those reasons, the commenter opposed 
this revision.
    Response: BSEE disagrees. Whenever SPPE is installed on a well, it 
must be certified according to Sec. Sec.  250.801 and 250.802(d)(1), 
neither of which is being modified to allow the behavior the

[[Page 49232]]

commenter describes. The existing provisions that allow operators to 
continue to use non-certified SPPE that is currently installed on a 
well applies only to equipment that was installed before the 
certification requirement was in the regulations. Any new SPPE or SPPE 
that requires offsite repair, re-manufacturing, or any hot work, must 
be replaced with certified SPPE. Operators are not allowed to remove 
non-certified SPPE from one well and install it on another well. The 
reason that BSEE is removing the phrase ``on that well'' is not to 
allow for the conduct described by the commenter, but to recognize that 
SPPE may also be installed on risers or locations in production systems 
other than a well itself.

What SPPE failure reporting procedures must I follow? (Section 250.803)

    Section summary: Section 250.803(a) of the existing regulations: 
Requires operators to follow failure reporting requirements in ANSI/API 
Spec. 6A (Nineteenth Edition) for SSVs, BSDVs, and USVs, and to follow 
the requirements in ANSI/API Spec. 14A (Eleventh Edition) and Annex F 
of ANSI/API RP 14B (Fifth Edition) for SSSVs; defines a failure as 
``any condition that prevents the equipment from meeting the functional 
specification;'' and requires operators to provide written notice of 
equipment failure to BSEE and the equipment manufacturer within 30 days 
after the discovery of the failure.
    Existing Sec.  250.803(b) requires operators to ensure that an 
investigation and a failure analysis to determine the cause of the 
failure are performed within 120 days of the failure and that the 
conclusions and any corrective action are documented. If an entity 
other than the manufacturer performs the investigation and analysis, 
the regulation requires operators to ensure that the manufacturer and 
BSEE receive copies of the analysis report. Existing Sec.  250.803(c) 
specifies that if an equipment manufacturer notifies an operator that 
it changed the design of the equipment that failed, or if the operator 
changes operating or repair procedures as a result of a failure, then 
the operator must, within 30 days of such changes, report the design 
change or modified procedures in writing to the Chief of BSEE's Office 
of Offshore Regulatory Programs (OORP) (at the address specified in 
existing paragraph (d)) or to the Chief's designee.
    BSEE proposed to revise Sec.  250.803(a) to expressly include 
GLSDVs in the list of equipment that are subject to the failure 
reporting requirements and to clarify that operators must submit their 
SPPE failure information to BSEE through the Chief, OORP, unless BSEE 
has designated a third-party under proposed paragraph (d), to whom 
operators would then be required to submit their failure 
information.\17\ Similarly, BSEE proposed to revise existing Sec.  
250.803(b) of this section to clarify that, when anyone other than the 
equipment manufacture performs an investigation and analysis, operators 
must submit the investigation and analysis results to the Chief of OORP 
in accordance with proposed paragraph (d). BSEE also proposed to revise 
existing paragraph (d) to further clarify the requirement to submit 
failure information to a BSEE-designated third party. The final rule 
implements these revisions as proposed. Finally, although BSEE proposed 
no changes to the existing definition of ``failure'' in this section, 
the proposed rule invited input on whether or how to revise the 
definition to ensure consistency. The final rule makes no change to 
that definition.
---------------------------------------------------------------------------

    \17\ Currently, the designee of the Chief of OORP is the U.S. 
Department of Transportation's Bureau of Transportation Statistics 
(BTS). Operators submit this information through www.SafeOCS.gov, 
where it is received and processed by BTS. BSEE identified BTS as 
the designee and recommended that SPPE failure information should be 
sent to BTS via www.SafeOCS.gov through a press release issued on 
October 26, 2016 (https://www.bsee.gov/newsroom/latest-news/statements-and-releases/press-releases/bsee-expands-safeocs-program). BSEE and BTS have a Memorandum of Understanding (MOU) that 
provides for BTS collection of BOP and SPPE failure reports. The MOU 
may be viewed on BSEE's website at: https://www.bsee.gov/sites/bsee.gov/files/bsee-bts-mou-08-18-2016_0.pdf. Reporting instructions 
are on the SafeOCS website at: https://www.SafeOCS.gov. Reports 
submitted through www.SafeOCS.gov are collected and analyzed by BTS 
and protected from release under the Confidential Information 
Protection and Statistical Efficiency Act (CIPSEA) (44 U.S.C. 101). 
CIPSEA requires that BTS treat and store such reports 
confidentially, under strict criminal and civil penalties for 
noncompliance. Information submitted under CIPSEA also is protected 
from release to other government agencies (including BSEE), from 
Freedom of Information Act (FOIA) requests and subpoena. If the 
information were to be submitted to BSEE, BSEE could only protect 
its confidentiality to the extent allowed by Federal law other than 
CIPSEA. The SafeOCS program was designed to protect the 
confidentiality of information submitted and promote failure 
reporting without fear of reprisals. The ``Oil and Gas Production 
Safety System Events 2017 Annual Report'' is available at https://www.safeocs.gov/sppe_home.htm.
---------------------------------------------------------------------------

Definition of ``Failure''
    Comment: Industry commenters requested that BSEE clarify the 
definition of ``failure'' of SPPE, which was added in the 2016 PSSR, 
and recommended that BSEE provide a definition to align with industry 
standards. Commenters further recommended that, until they and BSEE 
could reach a ``mutually agreeable'' resolution, industry should 
document and maintain failure reports in accordance with applicable API 
standards, and provide failure reports to BSEE upon request. These 
commenters recommended that BSEE and industry hold workshops to 
determine the best repository or clearinghouse for collecting failure 
data.
    Commenters asserted that the ``failure'' definition proposed in 
Sec.  250.803(a) could be interpreted so broadly as to include 
maintenance issues and routine repair items that would create an 
administrative burden with no safety or environmental protection 
improvement, while noting that some operators disagree with this 
position. Those operators recognize that parts wear over time, and due 
to the wear, the SPPE device would ``fail to meet the functional 
specification.''
    Response: BSEE disagrees. Although BSEE sought input in the 
proposed rule about how to revise the current language specifying how 
``failure'' is defined in this regulation, BSEE did not receive any 
specific proposals for modifying the existing definition of 
``failure.'' Currently, according to BTS, the designated third party to 
receive SPPE failure information, submitters for each of the specific 
SPPE types appear to be following the definitions within the applicable 
API standard for individual equipment types. BSEE finds this to be a 
logical and reasonable approach that is consistent with the regulatory 
requirement; thus, no change to the ``failure'' definition has been 
made.
    With regard to the commenters' suggestion that BSEE hold workshops 
with industry to determine the best repository or clearinghouse for 
collecting failure data, BSEE does not agree that this approach is 
necessary, at this time. BSEE already has identified BTS as an 
appropriate clearinghouse for this data. The commenters did not raise 
specific objections or concerns related to BSEE's designation of BTS to 
collect the failure data. BSEE's collaboration with BTS allows the 
collection and analysis of failure data under strict standards of 
confidentiality, which supports robust reporting.
    With regard to commenters' assertion that the existing definition 
could be interpreted so broadly as to include maintenance issues and 
routine repair items, BSEE observes that the types of devices included 
as SPPE in the final rule represent primary and secondary barriers to 
prevent the loss of well control and subsequent potentially 
catastrophic events. In a study recently completed for BSEE by 
ExproSoft

[[Page 49233]]

(https://www.bsee.gov/sites/bsee.gov/files/tap-technical-assessment-program/765aa.pdf), approximately 30 percent of well control events 
worldwide were found to be related to such barriers for production 
platforms, especially after large storms such as hurricanes. Thus, 
commenters and others should not view failure reporting as 
inconsequential or unimportant to concerns such as safety and 
environmental protection.
Reporting Requirements
    Comment: A commenter recommended that BSEE consider using the API 
Standard 689/ISO 14224 Collection and Exchange of Reliability and 
Maintenance Data for Equipment to clarify reporting requirements and 
standardize data collection processes.
    Response: As the SPPE failure reporting program is relatively new, 
it is premature to require adherence to the referenced standard. BTS 
has prepared the first public report of aggregated statistics covering 
SPPE reports submitted by industry from the effective date of the 
requirement, November 7, 2016 through December 2017. BSEE still needs 
to assess results from the first year and identify any issues with 
regard to reporting or collection processes. In conducting this 
evaluation, BSEE plans to consider the potential usefulness of industry 
standards such as API Standard 689/ISO 14224 to improve the failure 
reporting program. At this time, however, the focus for the requested 
data is described within each of the cited standards and is intended to 
increase both the volume and quality of the aggregated equipment 
component failure data for SPPE shared among the regulated community 
and the OEMs that serve that community. BSEE is not adopting a change 
at this time.
Root Cause Analysis
    Comment: A commenter recommended that BSEE incorporate 
internationally recognized good practice standards, coupled with 
verification; employ incident reporting with root cause analysis (RCA); 
and seek prevention of major incidents through research and development 
on emerging threats and use of various risk tools. Regarding failure 
reporting, the commenter asserted that the issue of what is considered 
a failure is tied to its root cause, and that operators should use RCA 
to analyze what systemic causes allowed the failure to occur, in 
addition to the immediate cause.
    Response: BSEE agrees in general with the comment. In Sec.  
250.803, as revised by this final rule, BSEE establishes a system that 
is consistent with globally recognized good-practice standards, 
complemented by verification. The equipment component failure 
notification, analysis, and reporting process implemented through this 
final rule applies the identified good practices to equipment component 
failures, use of RCA to aid in the prevention of catastrophic events, 
and proper consideration of emerging threats. The final rule also 
applies the concept of barrier management by requiring reporting on all 
failures of SPPE that represent sequential barriers to catastrophic 
events.
    BSEE agrees that a failure is ultimately a result of its root 
cause, and BSEE is implementing the failure reporting requirements to 
promote confidence that there will be no adverse impact on entities 
that report failures by designating BTS as the third party to receive 
and analyze information submitted under this section (see n.17). As 
discussed above, BTS is able to analyze and store reports 
confidentially. BSEE also has included consideration of root cause at 
two levels within the current collection methods. The fields within the 
form include initial root cause information. For failures that require 
equipment to be returned to a shore facility for repair, BSEE requires 
a formal RCA report. Such an analysis looks beyond the immediate cause 
and investigates systemic factors. The use of probabilistic risk 
methods for catastrophic risk assessment is outside the scope of this 
rule, but BSEE might consider them in the future.
Strengthen Requirements
    Comment: One commenter recommended that any revisions to Sec.  
250.803 failure reporting requirements should only strengthen them and 
not weaken them in any way. The commenter asserted that the current 
regulation does not require the processes or equipment that rely on the 
failed SPPE to be immediately shut-in until the equipment can be 
replaced with a certified, functioning SPPE and the commenter 
recommended that Sec.  250.803 be revised to require immediate 
reporting of failed SPPE to BSEE and immediate shut-down of all 
processes or equipment that rely on the failed SPPE until replaced with 
a certified functioning SPPE. The commenter also recommended that, 
after investigation and collaboration with the equipment manufacturer 
is complete, the regulations should require the operator to notify BSEE 
of the long-term, permanent solution developed to either change the 
equipment design or modify operating, testing, maintenance, or repair 
procedures.
    Response: BSEE did not propose to, and does not here, relax the 
standards of safety in relation to equipment component safety 
reporting. To the contrary, the final rule continues to recognize the 
importance of improving safety and reducing burdens on operators while 
continuing to ensure safety and environmental protection. The 
collection of equipment component failure information promotes 
continuous safety improvement by enabling examination of this 
information in the aggregate, and by requiring submissions of reports 
to the OEMs where the opportunity to address design issues is greatest. 
Accordingly, BSEE disagrees that the additional measures suggested by 
the commenter are needed at this time. BSEE regulations already require 
multiple barriers within each well under Sec.  250.801. Those 
requirements minimize the possibility that a single SPPE failure would 
result in the release of hydrocarbons to the environment.
Communication on Failure Reporting
    Comment: A commenter stated that since SPPE components are required 
to be certified in compliance with incorporated standards, all parties 
involved should play a significant role in failure reporting and 
recommended that BSEE develop a process to increase communication and 
information exchange among end users, manufacturers, certifying bodies, 
and agencies.
    Response: BSEE agrees that all parties involved in SPPE design, 
maintenance, and repair should be involved in collection and assessment 
of the data. BSEE's system for implementing the current requirement 
accomplishes that objective. This communication is expected to increase 
as the program matures.

Design, Installation, and Operation of SSSVs--Dry Trees (Section 
250.814)

    Section summary: This section of the existing regulations 
establishes requirements for the design, installation, and operation of 
an SSSV in order to ensure its reliable operation. Among other things, 
existing Sec.  250.814(d) requires operators to design, install, 
maintain, inspect, repair, and test all SSSVs in accordance with ANSI/
API RP 14B (Fifth Edition 2005). BSEE proposed to revise paragraph (d) 
to replace the reference to ANSI/API RP 14B (Fifth Edition) with ANSI/
API RP 14B (Sixth Edition 2015), which BSEE also proposed to 
incorporate by reference in Sec.  250.198 in place of ANSI/API RP 14B 
(Fifth Edition). BSEE received no comments opposing this

[[Page 49234]]

specific revision and the final rule changes the reference to this 
standard as proposed.
Duplicative Requirements
    Comment: A group of commenters recommended deleting paragraph (b) 
of existing Sec.  250.814 because it is duplicative of Sec.  
250.802(b).
    Response: BSEE disagrees. Section 250.814 is similar to, but not 
duplicative of, paragraph (b) of Sec.  250.802. Section 250.802(b) 
requires that all SSSVs and actuators on dry and subsea trees comply 
with ANSI/API Spec. 14A, Subsurface Safety Valve Equipment (Eleventh 
Edition, 2005, reaffirmed 2012), as incorporated by reference in Sec.  
250.198(h)(73). Section 250.814, however, applies only to dry trees and 
specifies that operators must comply with ANSI/API RP 14B (now 
incorporated by reference in Sec.  250.198(h)(55) of this final rule as 
the Sixth Edition, 2015) for designing, installing, maintaining, 
inspecting, repairing, and testing.
Third Party Testing
    Comment: A commenter stated that the proposed modification to the 
SSSV system equipment requirements that discontinues third party 
testing is without merit, as the third party testing is essential to 
the nuclear and fossil fuel industry. The commenter stated that the 
SSSV system equipment malfunctioned during the DWH incident.
    Response: This comment apparently concerns BOPs, since SSSVs were 
not involved in the DWH incident, but the BOP system was. BOPs are not 
addressed in this rulemaking, but were addressed in the 2016 WCR. In 
these final regulations, BSEE does not discontinue third party design 
testing of SSSVs. SSSVs, which are addressed in this final rule, have 
proven to be extremely reliable over the course of many decades. 
Manufacturers design SSSVs to fail in a safe mode: for example, most 
valves are designed so that if they fail (i.e., lose pressure) they 
automatically close, thus preventing a release of hydrocarbons. In any 
event, if any leakage occurs, it does so within a closed, multiple 
barrier system.

Use of SSVs (Section 250.820)

    Section summary: This section of the existing regulations requires 
operators to comply with API RP 14H (Fifth Edition 2007) for the 
installation, maintenance, inspection, repair, and testing of all SSVs, 
including requirements applicable if the SSV does not operate properly 
or if any gas and/or liquid fluid flow occurs during the leakage test. 
BSEE proposed to revise this section to incorporate by reference API 
STD 6AV2 in place of API RP 14H (which was withdrawn by API). BSEE did 
not receive any comments on this section of the proposed rule and the 
final rule revises Sec.  250.820 as proposed.

Emergency Action and Safety System Shutdown--Dry Trees (Section 
250.821)

    Section summary: This section of the existing regulations specifies 
actions that operators must take with respect to wells in the event of 
an emergency (e.g., an impending hurricane), including installation as 
soon as possible of a subsurface safety device on any well capable of 
natural flow that does not already have such a device. The existing 
regulation also requires shut-in of all oil wells and all gas wells 
that require compression.
    BSEE proposed to revise paragraph (a) of this section to clarify 
that operators must shut in the production on any facility that ``is 
impacted or that will potentially be impacted by an emergency 
situation.'' This proposed clarification was intended to ensure that 
operators understand their obligation to properly secure wells before 
the platform is evacuated in the event of an emergency. The proposed 
rule also included some examples of emergencies (such as named storms, 
ice events, or earthquakes), but did not specify all emergency events 
that could trigger this provision; rather, the operator must determine 
when its facility is impacted or will potentially be impacted due to an 
emergency situation. (See 82 FR 61710.) The final rule revises this 
section as proposed, except that, in response to one comment (discussed 
below), BSEE removed the reference to ``in the Arctic'' from the 
example of ice events as a possible emergency.
Installation of Subsurface Safety Devices
    Comment: A commenter expressed concern about installation of a 
subsurface safety device post-earthquake in a Planning Boundary Area 
that has a high potential for significant seismic activity. The 
commenter asked BSEE to clarify the times when installation of such a 
device would not be appropriate in a production well in such an area.
    Response: Subpart H establishes that production wells must have an 
SSSV installed. Sections 250.810 through 250.817 address circumstances 
when an SSSV could potentially be removed from a production well with 
tubing installations open to hydrocarbon-bearing zones. These 
circumstances generally include:
    1. When approved by the BSEE District Manager (or, in Alaska, the 
OCS Regional Supervisor of Field Operations) for a well incapable of 
natural flow (Sec.  250.810);
    2. When in the process of changing-out an SSSV or the production 
tubing housing an SSSV (Sec.  250.812);
    3. When an SSSV becomes inoperable and measures are taken to 
address the issue (Sec.  250.813);
    4. When an SSSV is in the process of being repaired, replaced, or 
installed (Sec.  250.814); or
    5. When a wireline or pumpdown-retrievable SSSV is removed for 
routine operations (not exceeding 15 days and with prescribed safety 
mitigations in-place) (Sec.  250.817).

By including ``post-earthquake'' in this section, BSEE intends to 
clarify that earthquakes are among the kind of emergency situations in 
which an operator must follow the requirements of this section, 
including the requirement to install an SSSV as soon as possible, if 
for some reason the operator had not already installed it.
Consistency With Sec.  250.837(a)
    Comment: One commenter proposed that BSEE adopt only the proposed 
language changes in Sec.  250.837(a) and replace Sec.  250.821(a) with 
Sec.  250.837(a) language or expressly cross-reference that section.
    Response: BSEE disagrees. The language in final paragraph (a) of 
Sec.  250.821 and paragraph (a) of Sec.  250.837 is consistent and 
establishes the safest approach for the types of ``dry'' and ``subsea'' 
systems potentially impacted by those paragraphs, respectively. Section 
250.821 specifically addresses Emergency Action and Safety System 
Shutdowns related to dry trees that do not have BSDVs, USVs, or GLSDVs 
and related systems found in subsea wells, whereas Sec.  250.837 
pertains to subsea trees and their associated systems.
Definition of Arctic OCS
    Comment: A commenter suggested clarification of the additions in 
Sec. Sec.  250.821 and 250.837 relating to earthquakes and ice events. 
Specifically, the commenter suggested that BSEE remove the definition 
of Arctic OCS in Sec.  250.105 and instead use the definition of Arctic 
OCS Conditions for defining the Arctic OCS without regard to Planning 
Boundary Area location.
    Response: BSEE disagrees with the suggested revisions to the 
definitions for Arctic OCS and Arctic OCS Conditions in Sec.  250.105, 
which BSEE did not propose to revise and are not within the scope of 
this rulemaking. Those definitions were adopted as part of the Arctic 
Exploratory Drilling Rulemaking, 81 FR 46478 (2016) (the Arctic Rule) 
to

[[Page 49235]]

align the scope of that rule with the areas of the Arctic OCS utilized 
in the DOI OCS Oil and Gas Leasing Program for 2012-2017 (June 2012, 
available at https://www.boem.gov/Five-Year-Program-2012-2017). Those 
definitions reflect the conditions and challenges the Arctic Rule was 
designed to address. Altering these definitions in this rulemaking 
would increase confusion over the scope and applicability of the 
regulations specifically associated with the Arctic OCS. To address the 
commenter's concern, however, BSEE removed the phrase ``in the Arctic'' 
from Sec. Sec.  250.821 and 250.837 in the final rule. It is not 
necessary to specify ``ice events in the Arctic,'' as ``ice events'' 
anywhere on the OCS have the potential to impact operations. Further, 
these provisions do not include a similar geographic specification for 
the other events--earthquakes or hurricanes--that it uses as examples.
Timing of Activities Associated With Emergency Events
    Comment: A commenter suggested that, if it is BSEE's intent to 
require operators to complete the outlined activities prior to the 
evacuation of the facility, then the regulation should state that 
specific purpose. The commenter suggested revising Sec.  250.821 to 
read: ``If your facility is impacted or will potentially be impacted by 
an emergency situation (e.g., an impending National Weather Service-
named tropical storm or hurricane, ice events in the Arctic, or post-
earthquake), you must complete the following activities prior to 
evacuation of the facility:''
    Response: BSEE disagrees with the suggested change. BSEE expects 
that operators will complete these activities before evacuation. 
However, as the current regulations acknowledge, that may not always be 
possible due to concerns for worker safety. Accordingly, operators must 
complete the installation of the subsurface safety device in event of 
an emergency ``as soon as possible, with due consideration being given 
to personnel safety.'' BSEE does not believe that it would be prudent 
to replace this with an absolute requirement that does not take such 
considerations into account.

Design, Installation, and Operation of SSSVs--Subsea Trees (Section 
250.828)

    Section summary: This section addresses requirements for the 
design, installation, and operations of SSSVs installed on subsea 
trees. These provisions ensure reliable operation and establish that a 
well with a subsea tree must not be open to flow while an SSSV is 
inoperable. BSEE proposed to revise Sec.  250.828(c) to update the 
title of API RP 14B with ANSI/API RP 14B. That proposal is adopted in 
this final rule.
Duplicative Requirements
    Comment: Although BSEE did not propose any changes to Sec.  
250.828(c), one commenter recommended deleting that provision, 
asserting that it duplicates the requirements of Sec.  250.802(b).
    Response: BSEE disagrees that Sec.  250.828(c) duplicates the 
requirements in Sec.  250.802(b). This section applies only to SSSVs 
installed on subsea trees, while Sec.  250.802(b) addresses general 
requirements for all SSSVs. Section 250.828(c) specifically addresses 
provisions related to SSSVs in the regulations, incorporated standards, 
and the approved deepwater operators plan (DWOP).

Specification for Underwater Safety Valves (USVs) (Section 250.833)

    BSEE proposed revising the introductory paragraph in this section 
to replace API Spec. 6A with ANSI/API Spec. 6A. BSEE did not receive 
any comments on this section of the proposed rule. BSEE is finalizing 
this provision as proposed.

Use of USVs (Section 250.834)

    The final rule revises this section by incorporating API STD 6AV2 
in place of API RP 14H, which was withdrawn by API. BSEE did not 
receive any comments on this section of the proposed rule. BSEE is 
finalizing this provision as proposed.

Specification for All Boarding Shutdown Valves (BSDVs) Associated With 
Subsea Systems (Section 250.835)

    Section summary: This section's requirements in the existing 
regulations for use of a BSDV are intended to provide the maximum level 
of safety for the production facility and the people aboard the 
facility. The BSDV is the most critical component of the subsea system. 
BSEE did not propose any changes to this section and is not making any 
changes to the regulatory text of this section in the final rule, 
however there was a comment submitted on this section. We include it in 
the preamble only to address the comments received.
Location of BSDV
    Comment: Although BSEE did not propose any changes to this section, 
one commenter recommended revision of the existing requirement in 
paragraph (c) that the BSDV be located within 10 feet from the edge of 
the platform. The commenter stated that this requirement is not 
feasible for large diameter lines on deepwater facilities and proposed 
a distance greater than 10 feet or according to the distance specified 
in the approved DWOP.
    Response: BSEE does not agree that a change in paragraph (c) is 
justified. Operators may obtain approval for alternative designs under 
Sec.  250.141 by demonstrating an equivalent or greater level of safety 
and environmental protection. This provides the operator with the 
flexibility to address unique situations involving deepwater 
facilities.

Use of BSDVs (Section 250.836)

    BSEE proposed revising this section by incorporating API STD 6AV2 
in place of API RP 14H, which was withdrawn by API. BSEE did not 
receive any comments on this section of the proposed rule. The final 
rule revises this section to update the new incorporation by reference, 
as proposed. In the final rule, BSEE is also making minor changes in 
the wording to emphasize that all BSDVs that are removed from service 
and reinstalled must meet the requirement of this section. This was the 
case under the existing regulation, but the revision will make the 
requirement more explicit.

Emergency Action and Safety System Shutdown--Subsea Trees (Section 
250.837)

    This section addresses actions operators must take in the event of 
an emergency situation. These situations include weather events, such 
as storms. This section includes details on valve closures related to 
specific conditions on the facility, such as process upsets and 
emergency shutdown (ESD) events, and it includes requirements 
pertaining to dropped objects in the vicinity of producing subsea 
wells.
    BSEE is revising paragraph (a) of this section to clarify that 
operators must shut in the production on any facility that ``is 
impacted or will potentially be impacted by an emergency situation.'' 
This revision is consistent with the revision to Sec.  250.821(a) for 
facilities with dry trees. Paragraph (a) of the final rule includes 
examples of emergencies, such as named storms, ice events, or 
earthquakes. It is not BSEE's intent to specify all emergency events 
that could trigger actions required by this regulation. The operator 
must determine when there may be impacts due to an emergency or if an 
emergency event impacted their facility.
    BSEE also adds GLSDVs to the list of equipment that must be closed 
during a shut-in. This is consistent with

[[Page 49236]]

identifying GLSDVs as SPPE in Sec.  250.801 and elsewhere in this 
subpart.
    In addition, BSEE is revising paragraph (b) of this section to 
clarify the requirements for dropped objects in an area with subsea 
operations and for consistency with the provisions of the dropped 
objects plan required by Sec.  250.714. Section 250.714 does not 
require operators to submit this plan as part of the application for 
permit to drill (APD) or application for permit to modify (APM); 
rather, the operator must make their dropped object plans available to 
BSEE upon request. A dropped object plan is not a static plan and Sec.  
250.714 requires operators to update their dropped objects plans as the 
subsea infrastructure changes.
    BSEE proposed revising several paragraphs in this section that 
address dropped objects to use the phrase ``vessel (e.g., mobile 
offshore drilling unit (MODU) or other type of workover or intervention 
vessel)'' in place of the current regulatory text, which uses ``mobile 
offshore drilling unit (MODU) or other type of workover vessel.'' Based 
on comments, BSEE revised this in the final rule to use ``a mobile 
offshore drilling unit (MODU) or other type of workover or intervention 
vessel.'' As proposed, BSEE is also replacing ``producing subsea 
wells'' with ``subsea infrastructure'' in the final paragraph (b). The 
current regulatory text limits these requirements to only those areas 
that have producing subsea wells. This change is more inclusive, 
requiring operators to address dropped objects in any area with 
infrastructure on the seafloor. Finally, as proposed, the final rule 
clarifies and updates the terminology in the second sentence of the 
existing paragraph (b)(2), while essentially preserving the requirement 
of the existing sentence.
Timing of Shut-Ins
    Comment: Industry commenters recommended adding a ``boundary 
condition'' in Sec.  250.837 as found in Sec.  250.821. A commenter 
suggested the following examples of ``modified conditions,'' such as 
shut-in just prior to evacuation, or if full remote real-time 
monitoring and control capabilities exist, shut-in prior to exceeding 
safe environmental operating conditions as stipulated by regulatory 
approvals.
    Response: BSEE disagrees with the suggested changes. Section 
250.837(a) requires the operator to shut-in the facility in the event 
of an emergency and already provides an option for the operator to 
receive approval from the District Manager to address, on a case-by-
case basis, situations such as the commenter described.
Use of the Word ``Vessel''
    Comment: Industry commenters opposed adoption of the proposed rule 
language in Sec.  250.837(b) and (c)(5), stating that adding the 
generic term ``vessel'' followed by ``mobile offshore drilling unit 
(MODU) or other type of workover or intervention vessel'' as examples 
would make the requirement more ambiguous. Specifically, the proposed 
language could be interpreted to mean that the presence of any 
``vessel''--such as an offshore support vessel or standby vessel--would 
trigger this requirement, even if the vessel is not engaged in well 
operations. The comments stated that it would be overly burdensome to 
apply these requirements to vessels that do not latch onto the well for 
wellbore intervention activities (e.g., remotely operated vehicles 
(ROVs)) because intervention vessels that do not latch onto the well 
mitigate dropped object concerns through use of safe overboarding 
zones. Commenters suggested changing the wording in paragraph (b) to 
refer to ``a mobile offshore drilling unit (MODU) or other type of 
workover or intervention vessel.''
    Response: BSEE agrees that using ``vessel'' with parenthetical 
examples of MODU or other type of workover vessel, in this context, is 
too broad. As previously discussed, BSEE revised the final rule text to 
use ``a mobile offshore drilling unit (MODU) or other type of workover 
or intervention vessel'' instead. This captures appropriate types of 
vessels that would be involved in drilling or workover operations.
Period of Lost Communications
    Comment: Industry commenters suggested revising Sec.  250.837(b)(2) 
to replace ``minutes or more'' with ``or more continuous minutes.''
    Response: BSEE disagrees with this suggested change. The suggested 
changes reduce clarity and do not adequately address the interpretation 
of ``intermittent communications'' and ``brief losses of 
communication.'' They would, therefore, add to the confusion regarding 
when the requirement to shut-in wells under this provision applies.
Pressure Safety High Low (PSHL) Sensor Activation
    Comment: Industry commenters suggest replacing the final sentence 
of paragraph (c)(2) with ``If the PSHL sensor activation was not 
accompanied by an increase in pressure above the [maximum anticipated 
operating pressure], or the loss of integrity of the pipeline, you may 
return the wells to production without contacting the appropriate 
District Manager.''
    Response: BSEE disagrees. The language the commenter recommends is 
an overly prescriptive description of a false alarm, which limits the 
situations that could be considered false alarms. It is the operator's 
responsibility to identify a false alarm. If the sensor activation is 
identified as a false alarm, the operator may return the wells to 
production without notifying the District Manager. Further, the 
suggested text would represent a substantive change that would require 
a separate notice and opportunity for comment.

Platforms (Section 250.841)

    Section summary: This section addresses protecting platform 
production facilities by requiring basic and ancillary surface safety 
systems to be designed, analyzed, installed, tested, and maintained in 
operating condition according to the provisions of API RP 14C. In 
addition, this section has basic requirements for platform production 
process piping.
    BSEE adds a new paragraph (c) to this section to address major 
modifications to a facility, by directing operators to follow the 
requirements in Sec.  250.900(b)(2). This is not a new requirement, as 
operators are already required to follow the provisions of Sec.  
250.900(b)(2) for major modifications. This simply provides direction 
to the operator and emphasizes the need to follow Sec.  250.900(b)(2). 
The final paragraph (c) is substantively the same as the proposed, but 
with minor clarifying changes in response to comments.
    In the proposed rule, BSEE also requested comments on paragraph (b) 
of this section, and whether BSEE needed to make other changes to 
address corrosion prevented. Existing paragraph (b) of this section 
requires operators to maintain all piping for platform production 
processes as specified in API RP 14E, Recommended Practice for Design 
and Installation of Offshore Production Platform Piping Systems (API RP 
14E). Section 6.5(a)(1) of API RP 14E addresses painting of steel 
piping to prevent corrosion. BSEE solicited comments on this 
requirement in the proposed rule's preamble. Corrosion prevention is 
important for safety and pollution prevention and BSEE is not removing 
the reference to API RP 14E from this section.
Major Modification
    Comment: A commenter stated that the proposed language in Sec.  
250.841(c) could lead an operator to think ``major facility 
modification'' is a defined term in the regulation. The term ``major 
modification'' in current BSEE

[[Page 49237]]

regulations only applies to a platform structure. The commenter 
suggested specific revisions to the regulatory text to clarify this 
concern.
    Response: BSEE agrees with the commenter and revises the final 
regulation to state that, if the operator plans to modify the 
production safety system in a manner that includes a major modification 
to the platform structure, then the operator must follow the 
requirements in Sec.  250.900(b)(2). This adds clarity to the proposed 
text and merely cross-references existing requirements, rather than 
creating new ones.
Removal of Sec.  250.841(c)
    Comment: BSEE received multiple comments urging BSEE not to remove 
Sec.  250.841(c).
    Response: BSEE is not certain what provision the commenters were 
referring to, as there is no Sec.  250.841(c) in the current 
regulations. BSEE proposed adding a new Sec.  250.841(c) to address 
production safety system modifications. This provision is being 
retained in the final rule, with modifications to clarify intent with 
respect to major modifications to platform structures.

Approval of Safety Systems Design and Installation Features (Section 
250.842)

    Section summary: This section establishes requirements for safety 
system design and installation. It describes the information that the 
operators must include in their production safety system application 
for new and modified systems. This information is needed to verify that 
the operator followed the prescribed standards and addressed the 
critical aspects of the system design. In addition, this section 
requires the operator to submit as-built diagrams to BSEE, so BSEE has 
accurate information on file for inspections. Under this section, 
operators must maintain these and other supporting documents and 
provide them to BSEE upon request.
Existing Regulations and Proposed Changes
Paragraph (a)
    The existing Sec.  250.842(a) regulations require the operator to 
submit a production safety system application to the District Manager 
before installing or modifying a production safety system. While this 
section requires the application to be approved, it does not specify 
the timing of that approval. To address this, BSEE proposed to revise 
the introductory provisions in paragraph (a) to state that the District 
Manager must approve the production safety system application before 
the operator may commence production through or utilize the new or 
modified system. BSEE is revising this provision in the final rule for 
clarity, to state that the District Manager must approve the production 
safety system application before the operator may commence production 
``through or otherwise use the new or modified system.''
    Paragraph (a) of existing Sec.  250.842 also includes a table that 
details the information that the operator needs to include in the 
production safety system application. Paragraph (b)(2) of the existing 
regulations requires the operator to certify that the ``designs for the 
mechanical and electrical systems under paragraph (a) of this section 
were reviewed, approved, and stamped by an appropriate registered 
professional engineer(s).'' This includes all of the information, 
diagrams, drawings, and designs that are submitted pursuant to existing 
paragraph (a). BSEE proposed to revise some requirements in the table 
in paragraph (a) related to the information, diagrams, drawings, and 
designs (design documents) operators must submit to BSEE for approval. 
BSEE proposed to revise this provision to require operators to submit 
the most critical documents to BSEE, and to have only those documents 
stamped by a PE.
    In addition to requiring the operators to submit the most critical 
designs documents to BSEE and to have only those items sealed by a PE, 
BSEE proposed in a new paragraph (b) to require operators to develop 
and maintain other supporting documents. The supporting documents 
identified in proposed paragraph (b) provide additional details and 
information related to the design documents required in proposed 
paragraph (a). While these paragraph (b) documents provide supporting 
information, they are not critical for BSEE to review during the 
approval process. However, the operator still must develop these 
documents and make them available for review and inspection by BSEE 
upon request. The final rule generally reflects those changes as 
proposed, with some clarifications based on public comments.
    BSEE proposed revising the table in paragraph (a) to require 
operators to submit the safety analysis flow diagram, safety analysis 
function evaluation (SAFE) chart, electrical one line diagram, and area 
classification diagram for new facilities and for modifications to 
existing facilities. BSEE proposed additional revisions and 
reorganization of the existing table in paragraph (a).
    Existing provisions in paragraph (a)(1) require the operator to 
submit a piping and instrumentation diagram; existing paragraphs 
(a)(1)(i) through (vii) identify the specific information that the 
piping and instrumentation diagram must include. BSEE proposed changing 
the requirement in existing paragraph (a)(1) for the piping and 
instrumentation diagram to instead require a safety analysis flow 
diagram and a SAFE chart, and also proposed to incorporate references 
to the relevant sections of API RP 14C that describe the contents of 
these two items. In addition, BSEE proposed to retain the information 
requirements for piping and instrumentation diagrams that were already 
in existing paragraphs (a)(1)(i) through (vii). However, under the 
proposed rule, the information required by the existing paragraphs 
(a)(1)(i) through (vii) would be submitted with the safety analysis 
flow diagram and SAFE chart, instead of the piping and instrumentation 
diagram. These proposed changes would better align the requirements 
with the information identified in industry standards, including API RP 
14C. In the proposed rule, this information would be required for new 
facilities and modifications of existing facilities.
    BSEE proposed additional reorganization of the table in paragraph 
(a) in conjunction with the proposed changes to paragraph (a)(1). Since 
the safety analysis flow diagram and SAFE chart are required under 
paragraph (a)(2) in the existing regulations, BSEE proposed to remove 
that paragraph in the table. BSEE also proposed to move the requirement 
for electrical system information from under existing paragraph (a)(3) 
to new paragraph (a)(2) and proposed to call that information the 
``electrical one-line diagram.'' BSEE proposed revising the 
requirements for the electrical one-line diagram, to include 
``generators, circuit breakers, transformers, bus bars, conductors, 
battery banks, automatic transfer switches, uninterruptable power 
supply (UPS), dynamic (motor) loads, and static (e.g., electrostatic 
treater grid, lighting panels, etc.) loads.'' This would also include a 
functional legend.
    BSEE proposed to move the additional detailed electrical 
information that is required in existing paragraph (a)(3) to new 
paragraph (b)(1), as this is supporting information for the electrical 
systems. Proposed paragraph (b)(1) would require additional supporting 
electrical system information including: (i) Cable tray/conduit routing 
plan which identifies the primary wiring method (e.g., type cable, 
conduit, wire) and (ii) Cable schedule; and (iii) Panel board/junction 
box location plan.

[[Page 49238]]

    BSEE proposed to remove from the table the information required in 
existing paragraph (a)(4) for schematics of the fire and gas-detection 
systems. Proposed paragraph (a)(4) would instead require a schematic 
piping and instrumentation diagram and apply to new facilities only.
    Existing paragraph (a)(5) addresses the service fee for the 
production safety system application. BSEE did not propose any 
revisions to that paragraph.
Paragraph (b)
    To accommodate the new paragraph (b), BSEE proposed removing 
existing paragraph (c) and redesignating existing paragraph (b) as new 
paragraph (c). New paragraph (b) would require the operator to develop 
and maintain documents that provide supporting documents to the design 
documents required in the table in proposed paragraph (a). These 
documents would contain information that is related to the design 
documents that would be required in proposed paragraph (a), but this 
information is not critical for BSEE to review during the approval 
process. However, the operator would still be required to develop these 
documents and make them available for review and inspection by BSEE 
upon request. The final rule generally reflects those changes as 
proposed, with some clarifications based on public comments.
Paragraph (c)
    Under the proposed rule, new paragraph (c) (which is existing 
paragraph (b)) would continue to require operators to certify: (1) That 
all electrical installations were designed according to API RP 14F or 
API RP 14FZ, as applicable; (2) that an appropriate registered 
professional engineer(s) reviewed, approved, and stamped the designs 
for the mechanical and electrical systems that operators are required 
to submit under paragraph (a) of this section. For modified systems, 
only appropriate registered professional engineer(s) are required to 
approve and stamp the modifications. The registered professional 
engineer must be registered in a State or Territory of the United 
States and have sufficient expertise and experience to perform the 
duties; and (3) that a hazards analysis was performed in accordance 
with Sec.  250.1911 and API RP 14J (incorporated by reference as 
specified in Sec.  250.198), and that operators have a hazards analysis 
program in place to assess potential hazards during the operation of 
the facility. As proposed, BSEE is revising redesignated paragraph 
(c)(2) of Sec.  250.842 (existing (b)(2)) to require the designs for 
the mechanical and electrical systems that the operator is required to 
submit under paragraph (a) of this section be reviewed, approved, and 
stamped by an appropriate registered professional engineer(s).
    Existing paragraph (c) requires operators to certify, in a letter 
to the District Manager, that the mechanical and electrical systems 
were installed in accordance with the approved designs, before 
beginning production. The intent of this step was to ensure the 
operator properly documented the installation of the mechanical and 
electrical systems. However, this submittal was a burdensome step to 
assure document management and confirm that operator performed the 
modification as proposed and approved. Because the operators must 
submit the as-built drawings, which BSEE uses for field verification, 
the required certification letter is redundant and not needed. So BSEE 
proposed to remove this requirement entirely.
Paragraph (d)
    BSEE proposed to revise existing paragraph (d) to clarify 
requirements regarding PE stamping of required drawings. The rule 
proposed to require the diagrams that operators submit to BSEE under 
Sec.  250.842(a)(1), (2), and (3) be reviewed, approved, and stamped by 
an appropriate registered PE(s). In addition, BSEE proposed moving the 
requirement from existing paragraph (e)--that the operators submit the 
as-built diagrams within 60 days of commencing production--to new 
paragraph (d).
Paragraphs (e) and (f)
    Since under the proposed rule, the regulations no longer need 
existing paragraph (e) and BSEE proposed to delete it, BSEE proposed to 
redesignate existing paragraph (f) as new paragraph (e). Proposed, 
redesignated paragraph (e) would continue to address the requirements 
for maintaining the requisite documents. BSEE did not propose any 
revisions to the requirements in redesignated paragraph (e).
Final Rule
Paragraph (a)
    In the final regulatory text, BSEE changed the language in 
introductory paragraph (a) to generally refer to the information 
submitted under Sec.  250.842 as ``design documentation.'' BSEE made 
this change throughout Sec.  250.842. This is a clarification and 
provides consistency in the way the regulations refer to the various 
diagrams required in this section.
    BSEE is maintaining the requirements in the existing table in Sec.  
250.842(a)(1) through (5), mostly as proposed. However, BSEE made some 
revisions to these sections in response to comments. In the final rule, 
BSEE combined the requirement in proposed paragraph (a)(1)(ii), 
``piping and specification breaks'' with proposed paragraph (a)(1)(vii) 
and revised that requirement to specify ``piping sizes'' and to include 
``the location of piping and specification breaks'' with the 
information required in paragraph (a)(1). Since paragraph (a)(1)(ii) 
was removed, the rest of the provisions in that paragraph were 
renumbered.
    BSEE also revised paragraph (a)(2) in the final rule. BSEE removed 
``battery banks'' as a specific item to be included on the required 
electrical one-line diagram, and added ``associated battery banks'' as 
part of what must be included with the uninterruptable power supply. In 
addition, paragraph (a)(3)(ii) in the final rule removed the location 
of ``control rooms, motor control center (MCC) buildings, and any other 
buildings'' as specific items included as part of the plan for the area 
classification diagram. The final regulatory text requires ``any 
buildings'' to be identified, with control rooms and MCC buildings 
provided as examples of types of buildings.
    As was proposed, paragraph (a)(3) will no longer require operators 
to identify all areas where potential ignition sources are located in 
the design documents submitted to BSEE. This requirement is addressed 
under final paragraph (c)(3), which requires operators to perform a 
hazards analysis in accordance with Sec.  250.1911 and API RP 14J. API 
RP 14J specifically addresses ignition sources and minimizing the 
chances of ignition. API RP 14J directs the operator to consider all 
ignition sources when designing their facility and provides detailed 
guidance on designing the facility and equipment to prevent the 
ignition of hydrocarbons. It is not necessary to specify that operators 
must develop and maintain a separate document identifying ignition 
sources because this is part of compliance with API RP 14J. In 
addition, existing paragraph (b)(3) (proposed paragraph (c)(3)) 
requires operators to have a hazards analysis program in place to 
assess potential hazards during the operation of the facility. The 
final rule, as proposed, still requires the operator's classification 
diagram to show safety-critical information, such as the locations of 
significant hydrocarbons and Class I flammable sources, but, in light 
of the requirement in Sec.  250.842(c) and API RP

[[Page 49239]]

14J, it is not necessary for the operator's classification diagram to 
show this level of detail.
    The final rule revises the regulatory text for paragraph (a)(4) to 
state that the production safety system application must include a 
``piping and instrumentation diagram, for new facilities,'' removing 
the word ``schematic.'' Also, BSEE added the word ``flow'' to the 
description of the detailed information the piping and instrumentation 
diagram must include; to read, ``a detailed flow diagram.'' These 
changes are described in more detail in the comment and response 
discussion that follows this Section Summary.
Paragraph (b)
    BSEE finalized new proposed paragraph (b), with some revisions. The 
drawings required under final paragraph (b) include additional 
electrical system information, schematics of the fire and gas-detection 
systems, and revised piping and instrumentation diagrams for existing 
facilities. BSEE revised final paragraph (b) to make clarifications, 
based on comments; these changes are similar to the changes made to the 
table in final paragraph (a). As previously discussed, BSEE revised 
introductory paragraph (b) to refer to ``design documents'' instead of 
``diagrams.'' BSEE is revising some of the details in the table in 
final paragraph (b) from the proposed paragraph (b). BSEE is combining 
the cable schedule that was referenced in proposed paragraph (b)(1)(ii) 
into final paragraph (b)(1)(i); as an example of the information that 
needs to be provided with the cable tray/conduit routing plan. Proposed 
paragraph (b)(1)(iii) will become paragraph (b)(1)(ii) in the final 
rule and has been revised to state that the panel board/junction box 
location plan needs to be included with the additional electrical 
system information only if it ``is not shown on the area classification 
diagram required in Sec.  250.842(a)(3).'' BSEE is also removing the 
requirement in paragraph (b)(2) for the diagram to include ``the method 
and frequency of calibration'' for the fire and gas detection systems. 
As previously discussed, the operator will still be required to develop 
and maintain all of the supporting diagrams in final paragraph (b) and 
provide them to BSEE upon request. BSEE is revising final paragraph 
(b)(3) was revised to be consistent with the final language in 
paragraph (a)(4), addressing ``revised piping and instrumentation 
diagrams,'' including ``a detailed flow diagram.'' However, as was 
proposed, these diagrams will no longer require review, approval, and 
stamping by an appropriate registered PE. This change will reduce the 
burden on operators by no longer requiring a PE to certify as many 
diagrams and drawings. Operators are still required to develop these 
diagrams and drawings and provide them to BSEE upon request. The 
operators are also still required to maintain them and to ensure they 
accurately reflect the current production system.
Paragraph (c)
    BSEE is revising final paragraph (c) from proposed paragraph (c). 
In final paragraph (c)(1), BSEE changed ``electrical installations'' to 
``electrical systems.'' Final paragraph (c)(2) includes a number of 
revisions pertaining to the requirements regarding the involvement of 
the professional engineer. BSEE changed ``reviewed, approved, and 
stamped by an appropriate registered professional engineer'' to 
``sealed by a licensed professional engineer.'' Paragraph (c)(2) of the 
final rule clarifies that only the modifications are required to be 
sealed by a licensed professional engineer. BSEE made this change in 
response to comments and recognizes that PEs can only stamp or seal 
those documents that were developed under their direct supervision; 
therefore, a PE would not be able to stamp or seal diagrams that were 
previously developed by someone else. Paragraph (c)(3) is finalized as 
proposed.
    Final paragraph (c) continues to require operators to certify that: 
(1) All electrical systems were designed according to API RP 14F or API 
RP 14FZ, as applicable; (2) that a licensed professional engineer seal 
the design documents for the mechanical and electrical systems that 
operators are required to submit under paragraph (a) of this section. 
For modified systems, a licensed professional engineer(s) is required 
to seal only the modifications. The professional engineer must be 
licensed in a State or Territory of the United States and have 
sufficient expertise and experience to perform the duties; and (3) a 
hazards analysis was performed in accordance with Sec.  250.1911 and 
API RP 14J (incorporated by reference in Sec.  250.198); and that the 
operator has a hazards analysis program in place to assess potential 
hazards during the operation of the facility. The final rule adopts the 
proposal to revise redesignated paragraph (c)(2) of Sec.  250.842 to 
state that a licensed professional engineer must seal the design 
documents for the mechanical and electrical systems that the operator 
is required to submit under paragraph (a) of this section.
Paragraph (d)
    BSEE revised final paragraph (d) from the proposed rule. The final 
rule will provide operators ``90 days after placing new or modified 
production safety systems in service'' to submit the as-built diagrams 
required in this section to the District Manager. The existing 
regulations and the proposed regulatory text provide 60 days for 
submitting these diagrams. BSEE also clarified that this time period 
applies ``after placing new or modified production safety systems in 
service'' instead of 60 days after ``production commences,'' as in the 
current regulations and proposed rule.
    Under the existing paragraphs (d) and (e), operators are required 
to certify that the as-built diagrams are on file and stamped by a PE 
and to submit the as-built diagrams for the new or modified production 
safety systems to BSEE. The proposed rule would have modified paragraph 
(d) to continue to require that operators submit PE-stamped as-built 
diagrams, while removing the requirement of a separate certification. 
Based on comments, BSEE is revising the final rule from the proposed in 
several respects. First, paragraph (d) in the final rule changes the 
timing of the submittal of the as-built diagrams from 60 to 90 days. 
Second, BSEE is revising the final paragraph (d) from the proposed to 
require that the operator must submit a letter to the District Manager 
certifying that the as-built diagrams were reviewed for compliance with 
applicable regulations and accurately represent the new or modified 
system as installed. BSEE intends that this requirement for a 
certification from the operator will serve the same function as the 
existing and proposed rule's requirement to have the as-built diagrams 
PE-stamped. Moreover, it will preserve the intent of the current rule 
to make the operator responsible for submitting reliable, accurate as-
built diagrams. Third, and related, the final rule removes the 
requirement to have as-built diagrams PE-stamped. This is one of a 
number of provisions in this final rule that recognize the limitations 
of a PE's ability to stamp or seal documents. The existing regulations 
required stamping of the ``as-built'' diagrams. As-built diagrams show 
the final system that actually was constructed. Per PE licensing 
requirements, the PE would need to be present during the entire 
building/construction process to stamp those documents. Since the PE is 
not present for all the work that goes into building and installing 
production

[[Page 49240]]

systems, requiring a PE stamp on an as-built diagram is not a realistic 
way to meet the goals of this paragraph. However, the critical design 
documents, those required under Sec.  250.842(a), continue to require a 
PE stamp (Sec.  250.842(c)(2)) under this final rule.
Paragraphs (e) and (f)
    As proposed, BSEE is redesignating the existing paragraph (f) as 
paragraph (e), since the requirements from existing paragraph (e) were 
moved to new paragraph (d). Although BSEE did not propose any changes 
to the substance of existing paragraph (f), BSEE revised the text in 
final paragraph (e), based on comments, to clarify requirements related 
to maintaining the documents required under Sec.  250.842(a) and (b) 
and how to make those documents available to BSEE. In the final rule, 
BSEE revised final paragraph (e) to specifically reference the 
``approved and supporting design documents'' required under'' Sec.  
250.842(a) and (b), instead of referencing ``information concerning the 
approved designs and installation features.'' This is a clarification 
and ensures the operator maintains the appropriate required documents, 
including copies of the documents submitted to BSEE under paragraph (a) 
and the additional documents the operator is required to develop and 
make available to BSEE upon request in paragraph (b). The requirement 
for the operator to maintain these documents at the ``offshore field 
office nearest the OCS facility or at other locations conveniently 
available to the District Manager'' did not change. This allows the 
operator to determine the appropriate location to store these 
documents. In the final rule, BSEE is removing the provision 
specifically requiring operators to maintain the as-built piping and 
instrumentation diagrams at a secure onshore location and the 
requirement to have those documents readily available offshore. Piping 
and instrumentation diagrams are now included within the storage 
requirements of the revised first sentence of the paragraph, as they 
are required in paragraphs (a) and (b) of this section. The provisions 
requiring that these documents must be made available to BSEE upon 
request and must be retained for the life of the facility did not 
change. The provision that all ``approvals'' are subject to field 
verifications (i.e., during inspections) was clarified to refer to 
``approved designs.''
    Additional details on these changes are discussed in the following 
comments and responses.
Design Documents
    Comment: A commenter recommended that BSEE clarify the provisions 
in paragraph (a) of this section by changing the first sentence to 
read, ``You must submit a production safety system application to the 
District Manager to install or modify a production safety system.'' The 
suggested revision removes the word ``before'' from the proposed 
provision that would require operators to submit their production 
safety system applications before installing or modifying a production 
safety system. This commenter also suggested that BSEE was not using 
the terms ``information,'' ``diagrams,'' and ``designs'' consistently 
when describing the required diagrams, charts, schematics, plans, and 
schedules. The commenter expressed concern that imprecise and/or 
inconsistent language is undesirable in a regulation and recommended 
that BSEE consistently use the term ``design documentation'' or 
``design documents'' when referring to the collective documents that 
are addressed in this section.
    Response: BSEE disagrees with the commenter's suggestion on 
revising the first sentence of paragraph (a) of this section. The 
suggested revision would remove the word ``before'' from the provision, 
so that it would only state that the operators must submit a production 
safety system application to BSEE, without addressing the timing of 
that submission. The proposed revisions to the current language 
regarding the submittal of the production safety system application 
would ensure that BSEE receives the production safety system 
application prior to an operator installing or modifying the production 
equipment. The current regulations state, ``[b]efore you install or 
modify a production safety system, you must submit a production safety 
system application to the District Manager for approval.'' The current 
provision did not explicitly state when the system or modifications to 
the systems must be approved, even though the intent of this existing 
language was that the operator would receive approval before installing 
or modifying the system. While the regulatory language will continue to 
state that the operator must submit the application before installing 
or modifying the system, the final rule states that the District 
Manager must approve the production safety system application before 
the operator commences production through or utilizes the new or 
modified system. This not only clarifies the timing of the required 
approval, but also facilitates timely approval of the application by 
allowing BSEE to begin review as soon as possible and to review while 
the operator is installing or modifying the system. The commenter did 
not include a reason for suggesting this change, but BSEE does not see 
this timing as an issue as all of the design drawings must be submitted 
before the operator begins to install or modify the system, under the 
current and revised regulations. If the application is submitted later, 
the operator may be ready to start production before BSEE has reviewed 
and approved the applications.
    BSEE agrees with the commenter's other suggested revision to 
consistently use a single term to refer to the documents that are 
required under this section. BSEE replaced the words ``information'' 
and ``diagram'' with ``design documents'' in paragraphs (a) and (b) of 
the final rule. This consistent use of the more inclusive term adds 
clarity and reduces potential confusion.
Piping Specification Breaks
    Comment: A commenter recommended that the information identified in 
proposed paragraph (a)(1)(ii), ``piping specification breaks, piping 
sizes'' should be included in paragraph (a)(1)(vii), because the 
content included with piping specification breaks, piping sizes 
overlaps with the information on ``size and maximum allowable working 
pressures'' that is currently required in paragraph (a)(1)(vii).
    Response: BSEE agrees with the recommended change and revised the 
language in the final rule as suggested.
Metering Devices
    Comment: A commenter recommended that BSEE remove ``metering 
devices'' from paragraph (a)(1)(iv). The commenter asserted that 
metering devices are considered instrumentation, and size, capacity, 
and working pressures of metering devices are typically not included on 
SAFE charts.
    Response: BSEE disagrees with this commenter's recommendation to 
remove ``metering devices'' from proposed paragraph (a)(1)(iv), now 
final paragraph (a)(1)(iii). The paragraph addresses requirements for 
both SAFE charts and the safety flow analysis diagram. Operators would 
include the metering devices on the safety flow analysis diagram, not 
the SAFE chart. We agree that metering devices should not be included 
on the SAFE chart.
Chemical Injection Systems
    Comment: A commenter recommended that BSEE exempt

[[Page 49241]]

chemical injection systems that have less than 770 gallon storage 
capacity from proposed Sec.  250.842(a)(1)(vi) (which is paragraph 
(a)(1)(v) in the final rule). The paragraph, as proposed, would require 
the operator to include the size, capacity, and design working 
pressures of all hydrocarbon-handling vessels and chemical injection 
systems handling a material having a flash point below 100 degrees 
Fahrenheit for a Class I flammable liquid on the safety flow analysis 
diagram. This commenter asserted that, for the majority of the Gulf of 
Mexico shelf facilities, the storage capacity of the injection system 
is often less than 260 gallons. The commenter stated that, for the 
majority of the chemicals used, the flammability of the products is 
lessened extensively due to dilution with water and blending of the 
chemical, reducing the actual flammability of the total product. In 
addition, the commenter stated that these low volume chemical systems 
do not present the same hazards as atmospheric hydrocarbon process 
vessels, and that process vessels have the potential for constant in 
and out flow of hydrocarbons under pressure. The commenter asserted 
that, under API RP14C, low volume chemical systems are already analyzed 
and protected on the facility, and that adding these systems to the 
facility drawings will not enhance safety or reduce risk.
    Response: BSEE disagrees. Tanks and pumps that are tied into the 
production system should be analyzed on the safety analysis flow 
diagram (SFD). Atmospheric vessels are used for processing and 
temporary storage of liquid hydrocarbons, including flammable 
chemicals. Even a 260 gallon tank containing flammable liquid is a 
potential hazard when tied to the production system. Although API RP 
14C requires analysis of these risks, BSEE still needs to be able to 
review tanks of all sizes that are connected to the production system.
Battery Banks
    Comment: BSEE received a comment recommending that BSEE remove the 
term ``battery banks'' from the list of items included on electrical 
one line drawings. The commenter stated that battery banks would exist 
on a direct current system, while everything else is 120 volt 
alternating current and higher. The commenter asserted that BSEE's 
decision to remove ``including the safety shutdown system'' from the 
definition that was previously found in Sec.  250.842(a)(3)(iii) 
supports this change.
    Response: BSEE partially agrees with this comment. BSEE needs 
drawings depicting the location of the battery banks associated with 
the UPS, however it is not necessary to include other battery banks. 
Consequently, BSEE revised the language in final Sec.  250.842(a)(2) to 
clarify that the design drawings need to show the UPS and the 
associated battery banks.
Updating Electrical One-Line Drawings for Existing Facilities
    Comment: A commenter recommended that BSEE add language in Sec.  
250.842(a)(2) to exempt existing OCS facilities from the requirement to 
provide the electrical one-line diagram until a major modification is 
made to the electrical system. The commenter noted that many existing 
facilities have changed ownership several times over the years and that 
the original documents such as electrical one-line drawings are 
unavailable or have not been updated to reflect modifications after the 
initial installation and submittal. According to the commenter, BSEE 
has not requested these documents when facility modifications were 
submitted for approval; therefore, they have not been generated or 
produced. The commenter asserted that updating or creating new drawings 
to this level of detail along with engineering certifications is very 
expensive and, in some cases, will result in facilities becoming 
uneconomical. The commenter also asserted that, for existing 
facilities, the electrical one-line drawings should only be required 
when major modifications are made to the facility's electrical system.
    Response: BSEE disagrees. Since 1988, the regulations (formerly 
Sec.  250.122(e)(4)(ii) and (e)(5), 63 FR 10596) have required 
operators to certify that the electrical system design was approved by 
a registered PE.
    OCS Order number 8, Platforms, Structures, and Associated Equipment 
(effective October 1, 1976), included requirements for electrical 
system information, including certification by the operator ``that the 
mechanical and electrical systems of the facility will be designed and 
installed under the supervision of appropriate registered professional 
engineers.'' (OCS Order number 8, section 3. paragraph B(2)).
    Out of date electrical drawings pose a major safety risk. The 
primary substantive change made in the 2016 rulemaking was the addition 
of the requirement for submission of a PE stamped diagram. Since 2016, 
BSEE has granted some departures to allow operators additional time to 
comply. BSEE did not propose to change the current requirements with 
respect to whether or not existing facilities need to submit or 
maintain electrical design documents, and therefore BSEE believes the 
commenter's recommendation is beyond the scope of this rulemaking. 
Moreover, operators have had enough time to come into compliance with 
this requirement.
Identification of Control Rooms and MCC Buildings
    Comment: A commenter stated that the identification of control 
rooms and MCC buildings is not included in API RP 500 or API RP 505 and 
recommended that BSEE remove those items from Sec.  250.842(a)(3)(ii).
    Response: BSEE disagrees. While control rooms and MCC buildings are 
not specifically identified in API RP 500 and API RP 505, buildings 
generally are identified. However, we revised the final regulatory text 
in Sec.  250.842(a)(3)(ii) to identify these as examples of buildings 
that need to be included.
Clarification of Terminology in (a)(4)
    Comment: A commenter recommended revising Sec.  250.842(a)(4) to 
replace the phrase ``schematic piping and instrumentation diagram'' 
with ``detailed flow diagram which shows the piping and vessels in the 
process flow, together with the instrumentation and control devices'' 
to provide better clarity.
    Response: BSEE partially agrees with the commenter and revised the 
final regulatory text in paragraph (a)(4), under the ``details/
additional requirements'' section, to read ``detailed flow diagrams.'' 
However, BSEE is leaving the reference to ``piping and instrumentation 
diagram'' as the general title for the type of document operators must 
submit under (a)(4), and removing the modifier ``schematic,'' since it 
is unnecessary.
Requirements for Maintaining Documents Are Burdensome
    Comment: A commenter stated that paragraph (b)(1)(i) is unduly 
burdensome to operators of older facilities, in cases where these 
drawings were either never created or were used only for the initial 
fabrication. The commenter also questioned the need for the cable 
schedule required by paragraph (b)(1)(ii), because the cable tray/
conduit routing plan should provide the relevant information. The 
commenter recommended that BSEE add the items in paragraph (b)(1)(iii) 
to the requirements for an area classification drawing in Sec.  
250.842(a)(3) to prevent the need for multiple drawing sets.
    Response: BSEE disagrees. Because the design documents in this 
paragraph

[[Page 49242]]

were already required to be submitted to BSEE (since the 2016 
rulemaking), the requirement to prepare and maintain them was 
implicitly also required.
Cable Schedule
    Comment: A commenter recommended that BSEE remove the requirement 
for the ``cable schedule'' associated with additional electrical system 
information under Sec.  250.842(b)(1)(ii).
    Response: BSEE agrees and moved the requirement for the cable 
schedule to be included with the cable tray/conduit routing plan under 
(b)(1)(i) of that paragraph.
Panel Board and Junction Box
    Comment: A comment recommended that BSEE add a statement to 
paragraph (b)(1)(iii) that the panel board and junction box location 
plan does not have to be included with additional electrical system 
information, if that information is not shown on the area 
classification drawing required in Sec.  250.843(a)(3).
    Response: BSEE agrees, the panel board and junction box location 
plan does not need to be included with both sets of information, and 
revised the text in final paragraph (b)(1)(ii) as suggested.
Method and Frequency of Calibration
    Comment: A commenter recommended revising Sec.  250.842(b)(2) to 
remove the phrase ``and the method and frequency of calibration'' as it 
is redundant with testing requirements in Sec.  250.880. The commenter 
also stated that the methods and frequency of calibration for these 
devices are specified in API RP 14C and Sec.  250.880(c)(3).
    Response: BSEE agrees with the comment. Other requirements, 
including Sec.  250.880(c)(3)(ii), prescribe the method and frequency 
of calibration. Accordingly, BSEE revised the final regulatory text to 
remove that phrase.
Detailed Flow Diagram
    Comment: A commenter recommended that BSEE revise paragraph (b)(3), 
using more precise language for the revised piping and instrumentation 
diagrams for existing facilities, suggesting ``detailed flow diagram.''
    Response: BSEE agrees the use of the phrase ``detailed flow 
diagram'' better defines the information that the operator needs to 
include on the revised piping and instrumentation diagram and made the 
suggested revision in the final rule.
Electrical Installations
    Comment: A commenter recommended that BSEE revise paragraph (c)(1) 
to refer to ``electrical systems'' instead of ``electrical 
installations,'' stating that this language is more precise.
    Response: BSEE agrees that electrical systems is more appropriate 
terminology for the information that the operator needs to certify in 
the production safety system application, and made the suggested 
revision in the final rule.
Professional Engineer Terminology
    Comment: A commenter recommended revisions to BSEE's language 
regarding professional engineers in Sec.  250.842(c)(2), suggesting 
that statements regarding documents being ``reviewed, approved, and 
stamped by an appropriate registered professional engineer'' should be 
replaced with language stating the documents ``are sealed by a licensed 
professional engineer(s).'' The same commenter recommended that BSEE 
only refer to ``permanent'' modifications in this section.
    Response: BSEE agrees that the term ``sealed'' implies that the 
document was reviewed and approved and that including those terms is 
redundant. We also agree that the word ``licensed'' is more appropriate 
to use. BSEE made these suggested revisions in the final rule. However, 
BSEE does not agree with the addition of the word ``permanent'' to the 
language on modifications, as the term ``permanent'' is subjective.
As-Built Diagrams
    Comment: Multiple commenters stated that the requirement for 
sealing of as-built design documents in Sec.  250.842(d) places a 
significant undue burden on industry by requiring the PE to be present 
at all times during all phases of construction over extended periods of 
time, and multiple locations. Commenters stated that the intent of as-
built design documents is to ensure that the final design documents 
accurately reflect what was installed on the location. The commenters 
recognized the importance of having accurate drawings and BSEE's desire 
to ensure that facility drawings are the most recent version.
    Another commenter also requested that BSEE revise the required time 
period in which an operator must submit ``as-built'' diagrams from 60 
days to 90 days to allow operators time to perform a thorough 
verification of the diagrams.
    Response: BSEE agrees with the commenter's suggestion that 30 extra 
days will allow the operator to better verify the designs, which will 
ensure that BSEE receives accurate as-built drawings and made the 
suggested revisions in the final rule. BSEE also agrees with the 
assertion that the proposed rule's requirement for PE sealing of as-
built diagrams is unduly burdensome for the reasons suggested by the 
commenters. A PE may not stamp a document unless the work reflected 
therein was performed under his or her direct oversight, which for as-
built diagrams would require the PE's physical presence, at potentially 
multiple locations, over potentially extended periods of construction 
and installation. This is not a realistic method for achieving the 
ultimate goal of ensuring that BSEE has access to reliable and accurate 
as-built diagrams. As the commenters recognize, it is nonetheless 
important to retain a requirement in the regulation to reach this goal. 
In light of these comments, BSEE believes that a revised version of the 
requirement in the current regulation for operators to certify these 
drawings is appropriate. Accordingly, the final rule is removing the 
language in the current rule that requires the operator to certify that 
the drawings were stamped by a PE and replacing it with language 
stating that the operator must certify that the drawings have been 
reviewed for compliance with applicable regulations and accurately 
represent the new or modified system as installed. BSEE also retained 
the requirement for the as-built diagrams to be submitted to BSEE and 
added language requiring the drawings to be clearly stamped or marked 
as ``as-built.''
Documentation Requirements
    Comment: Multiple commenters recommended revisions to proposed 
paragraph (e) of Sec.  250.842 to improve clarity, proposing to add 
language to refer specifically to the design documents and the piping 
and instrumentation diagrams. A commenter also recommended removing the 
requirement that the operator make these documents available to BSEE 
upon request and that the documents should be retained for the life of 
the facility.
    Response: BSEE partially agrees with the recommended revisions. 
BSEE revised paragraph (e), as recommended in referring to the 
supporting design documents. However, BSEE does not agree with removing 
the requirement that the operator make the documents available to BSEE 
upon request and that

[[Page 49243]]

the documents should be retained for the life of the facility.
Requirements for Safety System Design Documents
    Comment: A commenter was concerned that the proposed changes in 
Sec.  250.842(a) would relax requirements related to safety system 
design documents that must be submitted and the requirements for 
certain documents to be stamped by a registered PE. The commenter 
asserted that BSEE proposed eliminating the requirement for a PE to 
review and stamp drawings on existing facilities and that the proposed 
revisions would only require the PE review and stamp on new facilities 
or substantial changes to existing facilities. The commenter further 
stated that the proposed regulation did not specify any training or 
qualifications to do this work that would no longer be performed by a 
PE. The commenter noted that the PE requirement in the current 
regulations was a result of lessons learned from the Atlantis 
investigation report on ``BP's Atlantis Oil and Gas Production 
Platform: An Investigation of Allegations that Operations Personnel Did 
Not Have Access to Engineer-Approved Drawings.'' This report 
recommended that engineering documents should be stamped by a 
registered Professional Engineer, that operators certify that all 
listed diagrams including piping and instrumentation diagrams (P&IDs) 
are correct and accessible to BSEE upon request, and that all as built 
diagrams should be submitted to the District Managers.
    Response: BSEE proposed and is now finalizing revisions to the 
regulation to require that the information required as part of the 
P&IDs in the current regulations must be submitted as part of the 
safety flow analysis, which requires a PE stamp.
    BSEE understands the importance of the Atlantis report and 
recognizes that, although the Atlantis report did not make specific 
recommendations for revisions to subpart H, several of the important 
issues identified in the report are relevant to the subpart H 
regulations. Based upon BSEE experience with the implementation of the 
original 2016 PSSR and review of the requirements of the existing 
paragraph (a) (and the proposed requirements in paragraphs (a) and 
(b)), BSEE determined that the documents required under paragraph (a) 
of this final rule are appropriate to be sealed by a licensed PE. 
According to paragraph (c)(2) of Sec.  250.842, BSEE requires the PE to 
be licensed in a State or Territory of the United States and have 
sufficient expertise and experience to perform the duties.
    All items required by paragraph (a) of this section must be 
submitted to BSEE. The diagrams required in paragraph (b) of this 
section are not required to be submitted to BSEE, however, they must be 
available to BSEE upon request. The operator will still be required to 
develop and maintain these diagrams to accurately document any changes 
made to the production systems.
    Regarding the commenter's concern that BSEE is eliminating the 
requirement for a PE to review and stamp drawings on existing 
facilities; per PE licensing requirements, a licensed PE cannot stamp 
design drawings that were not developed under their direct supervision. 
If the documents for an existing facility were not sealed by a licensed 
PE or are no longer available, BSEE cannot require a PE to certify that 
the existing facility was built according to the applicable 
requirements without the PE violating the terms of the PE license. A PE 
can seal documents related to modifications of an existing facility, 
but only for those modifications that were developed under that PE's 
direct supervision.
    As for the commenter's assertion that the proposal lacked any 
specification for training or qualification requirements for those who 
would prepare the documents listed in paragraph (b), BSEE does not 
think that such specification is necessary. As previously explained, a 
PE is still required to direct and certify the design of all the 
production safety systems. The documents in paragraph (b) include 
specific details related to the same systems that are described in 
documents required under paragraph (a). This rulemaking is not changing 
the basic fact that all of these systems must be designed under the 
oversight of a PE. Rather, this rulemaking is reducing the number of 
documents that the PE must stamp and that the operator must submit to 
BSEE with a PE's stamp.
P&IDs
    Comment: A commenter was concerned that the proposed regulations 
would eliminate the requirement for operators to submit a P&ID to BSEE 
for existing facilities. The commenter noted that in the case of a 
serious incident or disaster, it is important for BSEE to have an up-
to-date drawing of the facility. The commenter recommended that BSEE 
not wait for a disaster and then request a drawing from the operator, 
as this could cause delays in making decisions regarding safety and 
spill prevention and response. The commenter stressed that BSEE did not 
provide any explanation why existing facilities should be removed from 
the requirements for meeting the PE approval or the submission of a 
piping and instrumentation diagram, asserting that older, existing 
facilities are likely a higher risk. The commenter stated that it is 
critical for BSEE to have access to these drawings during inspections, 
and incidents, and to ensure older, existing facility drawings are 
being updated to incorporate facility changes. The comment stated that 
BSEE did not provide adequate justification to eliminate these 
requirements and doing so would pose serious environmental and safety 
risks.
    Response: BSEE did not propose to eliminate the requirement to 
submit the information that is required in the P&IDs under existing 
Sec.  250.842(a)(1). Under the proposed rule and this final rule, the 
documentation requirements are reorganized and the information required 
in the P&ID under the existing regulations is still required as part of 
the SFD (per API RP 14C, Annex B) and the SAFE chart (per API 14C, 
section 6.3.3). These diagrams still require a PE seal for new 
facilities and modifications on existing facilities. Operator 
certification that the electrical system design was approved by a 
registered PE has been required in regulations since 1988 (63 FR 10596, 
see Sec.  250.122(e)(4)(ii) and (e)(5)). In addition, OCS Order number 
8, effective October 1, 1976, included requirements for electrical 
system information, including certification by the operator ``that the 
mechanical and electrical systems of the facility will be designed and 
installed under the supervision of appropriate registered professional 
engineers.'' (OCS Order 8, section 3. B. (2)). The 2016 rule added the 
requirement that the operator submit the PE stamped designs for 
specific mechanical and electrical systems. BSEE granted some 
departures to allow operators additional time to comply.
    However, requiring operators to submit documents that are stamped 
by a licensed PE for existing facilities is often not possible. Per PE 
licensing requirements, a licensed PE cannot stamp design drawings that 
were not developed under his or her direct supervision. If a licensed 
PE did not seal the documents for an existing facility or if they are 
no longer available, BSEE cannot require a PE to certify that the 
existing facility was built according to the applicable requirements 
without the PE violating the terms of the PE license. A PE can seal 
documents related to modifications of an existing facility, but only 
for those modifications that were designed under that PE's direct 
supervision.

[[Page 49244]]

Requirement for Professional Engineers
    Comment: A commenter asked how BSEE would ensure safety without the 
requirements in Sec.  250.842 for a Professional Engineer to conduct 
these technical reviews. The commenter was concerned that this work 
would now be completed by less qualified, in-house company personnel, 
lacking a PE license. The commenter inquired about who within the 
companies would have sufficient expertise and experience to perform the 
review and who within each company will assure BSEE that the equipment 
is designed and maintained during its entire service life with an 
acceptable degree of risk. The commenter cited the BP Oil Spill 
Commission recommendation that ``government agencies that regulate 
offshore activity should reorient their regulatory approaches to 
integrate more sophisticated risk assessment and risk management 
practices into their oversight of energy developers operating 
offshore.'' The commenter noted that third party certification provides 
this type of approach, and the Commission specifically recommended 
regular third-party audits and certification. (BP Oil Spill Report at 
p. 253). The commenter asserted that this change is a serious rollback 
of safety and environmental protections.
    Response: BSEE disagrees that the proposed changes to the 
production safety system applications will result in a serious rollback 
of safety and environmental protections. As with any technical project, 
it is the responsibility of the operator to assign appropriate staff to 
the project. However, the documents for which BSEE will no longer 
require PE stamping are not the primary design documents; these 
documents provide additional details and information and are developed 
in conjunction with the documents that require a PE stamp. Further, the 
PE used for the documents required under this section does not need to 
be a third party under either the existing regulation or this final 
rule, and this section was never intended to be a third party 
certification requirement. Therefore, the commenter's concerns that the 
documents required under this final rule section would be developed by 
less qualified, in-house personnel are misplaced.
    The commenter cited a BP Oil Spill Commission report recommendation 
that agencies adopt ``risk assessment and risk management practices.'' 
This commenter further offered third-party audits and certifications as 
examples of those practices. Those recommendations are part of that 
report, however, the third-party audit and certification recommendation 
was made specifically in reference to SEMS. SEMS programs are required 
by BSEE regulations under 30 CFR part 250, subpart S, and represent 
performance based approach for all offshore oil and natural gas 
operations. The use of a PE is not a risk-based approach. The engineer 
is verifying compliance with various regulations, codes, and standards; 
this does not necessarily involve a risk assessment or analysis. As 
discussed previously, BSEE is implementing other risk-based approaches 
in its oversight of offshore oil and gas operations.
Requirements for Profession Engineers
    Comment: A commenter asserted that some of the proposed revisions 
to Sec.  250.842 seek to remove the very provisions that were added to 
specifically rectify the causes of the DWH explosion. The commenter 
cited the summary in the proposed rule that stated that ``this proposed 
rule would fortify the Administration's objective of facilitating 
energy dominance through encouraging increased domestic oil and gas 
production, by reducing unnecessary burdens on stakeholders while 
maintaining or advancing the level of safety and environmental 
protection.'' This commenter stated that the recommended revisions in 
the proposed rule would endanger rather than advance the level of 
safety and environmental protection. The comment discussed the proposed 
revisions to some of the requirements related to the diagrams and 
drawings the operators must submit to BSEE for approval.
    The commenter noted that PEs have specific experience, 
qualifications, and education that enables them to provide the critical 
engineering expertise to identify potential safety and environmental 
risks. The existing rules were implemented to ensure that PEs utilize 
their engineering skills to achieve compliance and incorporate the 
necessary safety measures that will mitigate the likelihood of future 
disasters like the DWH explosion. The commenter stated that the need 
for these standards and the highest level of expertise is particularly 
great at this time given that, according to energy research firm Wood 
Mackenzie, oil and gas production could reach an all-time high in the 
Gulf of Mexico.
    This commenter strongly urged BSEE to retain all of the 
requirements for PEs in its revised rulemaking.
    Response: BSEE disagrees with the main assertions made by this 
commenter. This commenter conflated the 2017 proposed rule with a 
planned proposed rule related to well control issues that rulemaking 
was still under development when BSEE publish the NPRM for this 
rulemaking. Operators use the production safety systems covered under 
this rulemaking in production operations, not in well operations 
(drilling, completions, workovers, and decommissioning). The DWH 
incident was related to a well operation, not a production operation, 
and the reports and recommendations related to DWH focused on well 
control during well operations, not production operations. BSEE does 
not recommend applying the recommendations from the DWH-related reports 
to production operations without careful consideration to ensure that 
those recommendations are appropriate to apply to production.
    The commenter raised concerns regarding the proposed changes to 
requirements for PE stamping of design documents. As noted in a 
previous response, BSEE is moving the information that is required by 
the current regulations for P&IDs to the SFD under this rulemaking, and 
the SFD will still require the PE seal. BSEE did remove requirements 
for a PE to stamp or seal certain design documents when modifying 
existing facilities. Some of those requirements would require a PE to 
seal work that was not performed under that engineer's direct 
supervision, which would violate the terms of the professional 
engineer's license.
    BSEE will no longer require that certain documents for new 
facilities or modifications must be stamped or sealed by a professional 
engineer. The drawings that will no longer require the PE seal are not 
critical to personnel safety or the environment, but are supporting 
documents, providing additional information related to the safety 
critical design documents that will continue to be required to carry a 
PE seal.
Maintaining Required Documents
    Comment: A commenter recommended specific changes to the provisions 
in Sec.  250.842(e) for clarity. The commenter recommended moving the 
provisions regarding P&IDs to the first sentence in this section, 
instead of including them as a specific separate requirement. The 
commenter also recommended deleting the statement requiring that the 
operator make these documents available to BSEE upon request. The 
commenter did not explain the reasoning behind the specific changes, 
but stated the changes would improve clarity.
    Response: BSEE partially agrees. BSEE recognized that it could 
revise proposed paragraph (e) to improve

[[Page 49245]]

clarity and did so, as previously discussed, although BSEE did not use 
the language the commenter suggested. Further, BSEE will not delete the 
sentence requiring documents to be made available to it upon request, 
as it needs ready access to these materials to fulfill its regulatory 
functions.

Pressure Vessels (Including Heat Exchangers) and Fired Vessels (Section 
250.851)

    Section summary: This section of the existing regulations includes 
requirements for the pressure vessels and fired vessels that are used 
in the production of oil and gas on offshore facilities. Requirements 
in the existing regulations include design requirements for equipment 
and relief valves, limits on equipment operating pressures, and 
specifications for pressure sensors.
    As proposed, the final rule removes from this section references to 
compliance dates that have now passed--i.e., the 2016 PSSR required 
existing uncoded pressure and fired vessels that were in use on 
November 7, 2016 (the effective date of the previous subpart H 
rulemaking), to be code stamped before March 1, 2018. These dates no 
longer need to be included, as they both have already passed as of the 
time of this final rulemaking. In addition, prior to the 2016 PSSR, the 
regulations already required most pressure vessels and fired vessels to 
be code stamped. The previous rulemaking only added vessels with an 
operating pressure greater than 15 psig to that requirement.
Small Hydraulic Accumulators and Pulsation Dampeners
    Comment: A commenter suggested language to change Sec.  
250.851(a)(1) to make clear that small hydraulic accumulators and 
pulsation dampeners are not intended to be included in this section.
    Response: BSEE disagrees; this clarification is unnecessary. The 
incorporated ASME BPVC states what equipment it covers. Therefore, BSEE 
is not changing the language in this paragraph.
Alternative Codes/Standards for Small Hydraulic Accumulators and 
Pulsation Dampeners
    Comment: A commenter recommended the following language for Sec.  
250.851(a)(2): ``Existing uncoded pressure and fired vessels, except 
small hydraulic accumulator and pulsation dampeners designed to 
alternative codes/standards; (i) with an operating pressure greater 
than 15 psig; and (ii) that are not code stamped in accordance with the 
ASME Boiler and Pressure Vessel Code.''
    Response: BSEE disagrees and will not approve the blanket use of 
alternative codes or standards without knowing which alternative code 
or standards will be used. If an operator believes an alternative 
standard provides an equal or greater level of safety and environmental 
protection as the criteria in the regulation, they can apply to use 
alternate procedures under the existing Sec.  250.141.
Compliance Date for Code Stamping Pressure and Fired Vessels
    Comment: A commenter suggested that January 1, 2019, should be set 
as the new compliance date for Sec.  250.851(a)(2), rather than merely 
deleting the March 1, 2018 deadline. The commenter noted that the 
proposed deletion would imply that this requirement would take effect 
immediately upon publication of the final rule.
    Response: Since this final rule is being published after March 1, 
2018, the requirement is already in effect. This rulemaking is deleting 
the date because, after March 1, 2018, the reference in the regulation 
to that date is unnecessary. Removing this vestigial reference to a 
date that has already passed has no substantive effect; it merely 
removes now-superfluous regulatory text. BSEE does not believe a change 
to the timing of the effectiveness of the requirement from what had 
been established in 2016 is warranted. Operators have had since 2016 to 
plan to replace uncoded pressure vessels or to justify their continued 
use.
Size and Pressures Related to ASME Coded Relief Valves
    Comment: A commenter suggested language for Sec.  250.851(a)(3) to 
address concerns regarding the size and pressures related to ASME Coded 
relief valves.
    Response: BSEE did not propose changes to Sec.  250.851(a)(3). The 
suggested changes are outside the scope of this rulemaking and would 
require further review by BSEE. Therefore, this final rule is not 
changing this language.

Flowlines/Headers (Section 250.852)

    As initially proposed, BSEE is changing the references in Sec.  
250.852(e)(1) and (4) from ``API Spec. 17J'' to ``ANSI/API Spec. 17J,'' 
which is the proper title of the standard as incorporated in the 
existing regulation. BSEE did not receive any comments on this section 
of the proposed rule.

Safety Sensors (Section 250.853)

    Section summary: This section establishes requirements safety 
sensors, including shutdown devices, sensors with integral automatic 
reset, and pressure sensors. As was proposed, this section of the final 
rule includes requirements for shutdown devices, valves, and pressure 
sensors, including testing requirements. As was proposed, final Sec.  
250.853(d) requires that operators equip all level sensors to permit 
testing through an external bridle on all new vessel installations, 
where possible, depending on the type of vessel for which the level 
sensor is used.
    As proposed, this section will be revised in the final rule to add 
a new paragraph (d) that requires that operators equip all level 
sensors to permit testing through an external bridle on all new vessel 
installations, where possible, depending on the type of vessel for 
which the level sensor is used. This change was originally proposed in 
the 2013 Notice of Proposed Rulemaking that led to the 2016 PSSR. 
However, it was not included in the final rule, based on concerns 
raised in public comments. The preamble of the 2016 final rule stated 
that BSEE removed proposed paragraph (d) from the final rule because 
BSEE can address level sensors adequately using existing regulatory 
processes, such as DWOPs and we do not need to specify uses and 
conditions of such sensors in the regulations.
    Since the 2016 PSSR, BSEE has reconsidered this provision and 
determined that including this requirement in the regulations is 
important, because it clearly states the expectation to have an 
external bridle to permit testing. This ensures that, where possible, 
operators make the sensor accessible for testing, which is the accepted 
approach at this time. A comment on the proposed 2016 PSSR rulemaking 
asserted that certain sensor testing technologies (e.g., ultrasonic and 
capacitance) were not suitable for use in external bridles and that 
some proposed or new projects evaluated using ultrasonic, optical, 
microwave, conductive, or capacitance sensors, which do not use 
bridles. BSEE recognizes that there are sensors that do not use bridles 
and that other equipment options exist. However, the use of a level 
sensor with an external bridle that allows testing through the bridle 
remains BSEE's preferred approach. Sensor testing equipment built 
according to API standards, which BSEE's regulations incorporate by 
reference, should be able to meet this provision. We therefore proposed

[[Page 49246]]

adding language to recognize other approaches, stating that operators 
must ensure that all level sensors are equipped to permit testing 
through an external bridle ``where possible, depending on the type of 
vessel for which the level sensor is used.'' Keeping this language in 
this final rule allows BSEE more flexibility in approving a different 
design, without requiring the operator to apply for an alternate 
procedure or equipment to test the level sensor under Sec.  250.141.
Use of Phrase ``Where Possible''
    Comment: One commenter stated that the term ``where possible'' is 
ambiguous and open to a wide range of interpretations. The commenter 
suggested that the language in the proposed Sec.  250.853(d) should be 
revised to state that this requirement does not apply if other level 
sensors are approved in the production safety systems applications.
    Response: BSEE disagrees that the proposed change is necessary. 
BSEE determined that including this requirement in the regulations is 
important because it states the expectation to have an external bridle 
to permit testing. BSEE recognizes that there are sensors that do not 
use bridles and that other equipment options exist. However, the use of 
a level sensor with an external bridle that allows testing through the 
bridle remains BSEE's preferred approach. The final language recognizes 
that other approaches are available and the modifier ``where possible'' 
allows BSEE more flexibility in approving a different design, without 
requiring the operator to apply for an alternate procedure or equipment 
to test the level sensor under Sec.  250.141. BSEE does not believe 
that being more prescriptive in defining the circumstances that may 
qualify for this condition is the optimal approach for addressing the 
relevant circumstances.

Surface Pumps (Section 250.865)

    Section summary: This section provides requirements of surface 
pumps related to protective equipment, pressure recording devices, and 
shut-in sensors.
Revision for Update of API RP 14C
    Comment: Although BSEE did not propose any changes to this section, 
one commenter recommended the revision of the existing requirement in 
paragraph (a), if BSEE incorporated by reference the Eighth Edition of 
API RP 14C.
    Response: No change is necessary at this time since BSEE is not 
incorporating the Eighth Edition of API RP 14C.
Consistency With Sec.  250.870
    Comment: Although BSEE did not propose any changes to Sec.  
250.865(d), one commenter recommended that, if the proposed changes in 
Sec.  250.870 were adopted in the final rule, the text in Sec.  
250.865(d) should be changed to reference Sec.  250.870 for consistency 
of implementation.
    Response: No change is necessary at this time. Section 250.865(d) 
addresses when the pressure safety low (PSL) must be placed into 
service, while Sec.  250.870 addresses time delays on those sensors. 
Although these are related, BSEE does not agree it is necessary to 
cross-reference all of the specific requirements that the PSLs or other 
sensors must follow throughout these regulations.

Temporary Quarters and Temporary Equipment (Section 250.867)

    Section summary: This section of the existing regulations includes 
requirements for temporary quarters that are located in production 
processing areas or other classified areas. BSEE intends for these 
requirements to protect personnel located in these areas and to include 
the installation safety devices required by API RP 14C and approval by 
the District Manager.
    As proposed, the final rule is revising paragraph (a) of this 
section to require District Manager approval of safety systems and 
safety devices associated with temporary quarters prior to 
installation. This applies to all temporary quarters to be installed on 
OCS production facilities. Existing regulations specify that the 
operator must receive approval for temporary quarters ``. . . installed 
in production processing areas or other classified areas on OCS 
facilities.'' The revisions will require approval of the safety systems 
and safety devices, instead of approval of the actual temporary 
quarters, regardless of where the temporary quarters are located. This 
change recognizes that risk of a hazard occurring related to production 
is not restricted to the production areas or classified areas. This 
change ensures that temporary quarters have the proper safety systems 
and devices installed to protect individuals in the temporary quarters, 
regardless of where they are located on the facility.
    BSEE recognizes the authority of the United States Coast Guard 
(USCG) as the lead agency for living quarters on the OCS in two 
Memoranda of Agreement (MOA) between BSEE and USCG related to oil and 
gas production facilities: MOA OCS-09, Fixed OCS Facilities, dated 
September 19, 2014 and MOA OCS-04, Floating OCS Facilities, dated 
January 28, 2016. MOA OCS-09 establishes BSEE as the lead for safety 
systems, specifically for emergency shutdown systems and gas detection 
on fixed OCS facilities. MOA OCS-04 establishes BSEE as the lead for 
emergency shutdown systems and components on floating OCS facilities. 
The existing requirement that operators equip temporary quarters with 
all safety devices required by API RP 14C (Appendix C) will not change. 
This paragraph ensures that operators will install the proper safety 
devices on or in temporary quarters, including fire and gas detection 
equipment and emergency shut down stations addressed in API RP 14C.
    As proposed, BSEE is also adding a new paragraph (d) to Sec.  
250.867 of the final rule that states that operators must receive 
District Manager approval before installing temporary generators that 
would require a change to the electrical one-line diagram required 
under Sec.  250.842(a).
Approval of Temporary Quarters
    Comment: A commenter asserted that requiring District Manager 
approval before installation of temporary quarters is inconsistent with 
other similar requirements contained in subpart H. The commenter noted 
that Sec.  250.842 requires submission for approval of drawings for 
installation or modification of production safety systems followed by 
submission of as-built drawings 60 days after production commences. The 
commenter states that District Manager approval is not needed to begin 
installation of these critical safety systems; however, production 
cannot commence until District Manager approval is received. The 
commenter recommended that BSEE should adopt a similar approach for 
temporary quarters. The commenter suggested language to revise the 
proposed text to require that the operator submit plans for the safety 
systems/safety devices to the District Manager before installing 
temporary quarters and that BSEE should approve the temporary quarters 
before they are occupied.
    Response: BSEE disagrees. Temporary quarters are directly related 
to personnel safety, since they are used for living and sleeping. The 
nature of the use of temporary quarters necessitates the approval of 
the safety systems and safety devices before they are installed. 
Operators often install temporary quarters for a specific short term 
use, where timing is an important factor in planning. If operators 
install the quarters before the safety systems and safety devices are 
approved by the

[[Page 49247]]

District Manager, there is a risk that the use of the quarters could be 
delayed if BSEE delays its approval. Approval prior to installation 
provides for more certainty. BSEE also disagrees with the commenter's 
assertion that the approval of safety systems and safety devices on 
temporary quarters is similar to the approval and installation of 
production safety systems, because production safety systems need more 
lead time for installation.
Small Temporary Equipment
    Comment: A commenter stated that it is not feasible to submit 
certain small temporary equipment meant for testing and maintenance to 
the District Manager for approval prior to installation and recommended 
that BSEE revise the final rule to limit this requirement to ``major'' 
temporary equipment.
    Response: BSEE disagrees. BSEE needs to see all temporary equipment 
that is associated with the production process system, regardless of 
size, to ensure safety of the system. Therefore, BSEE has not adopted 
this recommendation in the final rule.
Approval of Temporary Generators
    Comment: A commenter recommended that BSEE not finalize the 
proposed Sec.  250.867(d). The commenter asserted that generators are a 
vital piece of equipment that provides power for living conditions and 
supervisory control and data acquisition (SCADA) systems, gas detection 
systems, fire detection systems, process systems, and safety/pollution 
control devices. The commenter stated that requiring BSEE approval 
prior to installing such a vital piece of equipment creates not only 
less than desirable living conditions but also loss of control of 
operations. The commenter noted further that an operator's SEMS program 
provides guidance and procedures for the installation of temporary or 
permanent equipment. The commenter noted that temporary generators 
result in a minimal impact to the overall safety system. The commenter 
stated that these generators are put in pre-designated electrical 
switchgear systems for auxiliary power while the primary generator is 
inoperable and sent in for repair, and that this spare switchgear 
breaker should already be identified on one-line electrical drawings.
    Response: BSEE agrees with the comment, in part, but not with the 
commenter's conclusion. Not all temporary generators fall under the 
situation described in the comment. The final rule requires operators 
to seek approval only for temporary generators that are not already 
shown on the one-line drawings. So the regulation does not apply to 
many of the situations raised in the comment. BSEE did not make any 
revisions to the regulatory text based on this comment.

Time Delays on Pressure Safety Low (PSL) Sensors (Section 250.870)

    Section summary: This section of the existing regulations provides 
requirements related to time delays for pressure safety devices. The 
existing regulations provide a reasonable period for pressure to 
fluctuate before it becomes necessary to alert the operator to an 
abnormal condition that must be addressed.
    The final rule is revising the requirement in paragraph (a) of this 
section regarding the use of Class B, Class C, or Class B/C logic. This 
section currently states that the operator ``may apply any or all of 
the industry standard Class B, Class C, or Class B/C logic to all 
applicable PSL sensors installed on process equipment, as long as the 
time delay does not exceed 45 seconds.'' As proposed, BSEE is deleting 
the phrase ``any or all of the'' from that sentence in the final rule, 
as it is not needed. We will no longer require the operator to seek 
approval from BSEE for alternate procedures under Sec.  250.141 to use 
a PSL sensor with a time delay that is greater than 45 seconds. 
Instead, the revised section states that if the device may be bypassed 
for greater than 45 seconds, the operator must monitor the bypassed 
devices in accordance with Sec.  250.869(a). The alternate procedure 
approval is not needed, since monitoring bypassed devices is authorized 
in the current Sec.  250.869(a).
Impact on Approved Departure Requests
    Comment: Industry commenters requested clarification as to how the 
proposed revision to Sec.  250.870 will impact departure requests that 
were issued under the current (2016) requirements for PSL time delays 
that are greater than 45 seconds.
    Response: The changes in the final rule are consistent with 
departures approved by BSEE.
Suggested Revisions to Sec.  250.870(a)(1)
    Comment: Industry commenters stated that the examples given in 
Sec.  250.870(a)(1) are non-API RP 14C devices, and on reciprocating 
compressors the timer typically is set for 90 seconds. Commenters 
suggested deleting the words ``but not more than 45 seconds'' since 
that is covered in Sec.  250.870(a) or changing the example to ``a 
hydrocarbon pump PSL sensor which typically clears in 15 seconds but 
before 45 seconds.''
    Response: BSEE disagrees with the suggested change, which is 
substantive and would require a new proposal and opportunity for 
comment. The language in the proposed rule and the final rule is 
consistent with long standing BSEE policy.
Monitoring Class C Safety Devices
    Comment: Industry commenters recommended adding the following 
sentence at the end of Sec.  250.870(a)(2) for clarification: ``Class C 
safety devices while bypassed should be monitored until they are in 
full service.''
    Response: Although this was not part of the proposed rule, BSEE 
agrees with the comment. Class C devices, by their nature, allow the 
devices to be bypassed for more than 45 seconds. Therefore, we are 
including an express statement that, if a Class C safety device is 
bypassed, the operator must monitor the device until it is in full 
service. This is consistent with the language of revised Sec.  
250.870(a).
Suggested Revisions to Sec.  250.870(a)(3)
    Comment: Industry commenters recommended inserting the sentence, 
``They are often used for compressor discharge PSL(s) for the loading 
process'' after the first sentence in Sec.  250.870(a)(3) for 
clarification, and inserting ``also'' into the following sentence so 
that the paragraph reads ``Class B/C safety devices have logic that 
allows for the PSL sensors to incorporate a combination of Class B and 
Class C circuitry. They are often used for compressor discharge PSL(s) 
for the loading process. These devices are also used to ensure that the 
PSL sensors are not unnecessarily bypassed during startup and idle 
operations (e.g., Class B/C bypass circuitry activates when a pump is 
shut down during normal operations). The PSL sensor remains bypassed 
until the pump's start circuitry is activated and either:''
    Response: BSEE disagrees. The suggested revision does not add value 
and thus no change was made in the final rule. There is no need to 
identify every possible application of these sensors and the use that 
is identified in the regulatory text is not exclusive. The purpose of 
this regulation is to direct how these sensors are to be used, not the 
circumstances under which they are to be used.
Suggested Revisions to Sec.  250.870(a)(3)(i)
    Comment: Industry commenters stated that, with regard to Sec.  
250.870(a)(3)(i), Class B/C timers are used on Compressor discharge 
PSL(s), turbine compressors typically take up to 3 minutes to clear the 
discharge PSL(s)

[[Page 49248]]

after loading the compressor, and reciprocating compressors can take 
more than 45 seconds. Commenters further stated that there are 
situations (Pigging Pumps, Equalization Pumps, Pipeline Pumps, etc.) 
where it takes longer than 45 seconds to build up line pressure and 
clear the PSL to normal operating pressure. Commenters recommended 
removal of the phrase ``no later than 45 seconds from start 
activation,'' as this is covered under Sec.  250.870(a), which allows 
going beyond 45 seconds provided the Class B timer is monitored and 
documented.
    Response: BSEE disagrees with the suggested change. The language in 
Sec.  250.870(a)(3)(i) defines what a Class B/C timer is, while the 
introductory language in Sec.  250.870(a) states what actions the 
operator must take if the delay could exceed 45 seconds.
Recommendation To Delete Sec.  250.870(b)
    Comment: Industry commenters recommended that BSEE should delete 
existing Sec.  250.870(b) because it is a duplicative requirement, 
stating that there are manual bypassing rules in Sec.  250.869 that 
allow the bypass of a safety device for unlimited time periods provided 
that the operator is monitoring the sensing device and able to shut it 
in.
    Response: BSEE disagrees because these sections are not 
duplicative. Section 250.869 establishes the general requirements 
related to monitoring bypassed devices, while Sec.  250.870 addresses 
specific requirements for bypassing sensors in the absence of time 
delay circuitry.

Atmospheric Vessels (Section 250.872)

    Section Summary: Paragraph (a) of the existing regulations requires 
operators to equip atmospheric vessels (except certain Department of 
Transportation (DOT)-approved transport tanks) that process or store 
liquid hydrocarbons (or other Class I liquids) with protective 
equipment identified in section A.5 of API RP 14C (Seventh Edition). 
Paragraph (b) of the existing section requires operators to ensure that 
all atmospheric vessels are designed and maintained to ensure the 
proper working conditions for Level Safety High (LSH) sensors and that 
LSH sensors on vessels with oil buckets are installed to sense oil 
levels in the buckets. Paragraph (c) of the existing section requires 
operators to ensure that flame arrestors are maintained to ensure 
proper functioning.
    BSEE proposed to revise paragraph (a) to require that atmospheric 
vessels connected to the process system and that contain a Class I 
liquid must be reflected on the corresponding drawings, along with the 
associated pumps. In addition, BSEE proposed to revise Sec.  250.198 by 
updating the reference to API RP 14C, as used in Sec.  250.872 and 
elsewhere, from the Seventh Edition to the Eighth Edition. BSEE 
proposed to revise paragraph (b) in order to (i) emphasize that 
operators or manufacturers must design LSH sensors on atmospheric 
vessels to prevent pollution (per Sec.  250.300(b)(3) and (4)); and 
(ii) limit the existing requirement applicable to LSH sensors on 
vessels with oil buckets to newly-installed vessels only. BSEE also 
proposed to eliminate paragraph (c) as unnecessary and redundant with 
Sec.  250.800. Based on consideration of public comments on this 
section of the proposed rule, BSEE made some revisions to the proposed 
text in this final rule to clarify the requirements for LSH sensors on 
vessels with oil buckets and to provide consistency with other parts of 
the regulations.
    As was proposed, BSEE is revising paragraph (a) of this section to 
state that the operator must include on the design documents 
atmospheric vessels connected to the process system that contains a 
Class I liquid and the associated pumps, as required in Sec.  
250.842(a)(1) through (4) and (b)(3).
    In the final rule, BSEE is also revising the existing provisions 
for oil LSH sensors in paragraph (b). The proposed provision stated 
that operators must design and install LSH sensors to prevent 
pollution. In the final rule, BSEE removed this provision from 
paragraph (b) and moved it to final paragraph (c), with revisions. In 
addition, the final rule, unlike the proposed rule, removes the 
provision from existing paragraph (b) that specifies that, for newly 
installed atmospheric vessels with oil buckets, operators must install 
the LSH sensor to sense the level in the oil bucket. This requirement 
regarding LSH sensors on oil buckets was overly prescriptive and too 
narrow, however new paragraph (c) preserves the intent of the existing 
requirement.
    As proposed, BSEE is deleting existing paragraph (c) in the final 
rule. The existing paragraph added maintenance of flame arrestors and 
duplicates Sec.  250.880(c)(3)(viii). BSEE is adding a new paragraph 
(c) to specifically address the design requirements for atmospheric 
vessels. The new provision in final paragraph (c) requires operators to 
design, install, and maintain all atmospheric vessels to prevent 
pollution, as required under Sec.  250.300(b)(3) and (4). BSEE added 
this language, which was not in the proposed rule, to clarify that the 
pollution prevention requirements of those paragraphs apply to all 
atmospheric vessels, including atmospheric vessels that have oil 
buckets. It reflects existing requirements and does not constitute a 
substantive change.
API RP 14C and Corresponding Drawings
    Comment: Some commenters made suggestions for changes to this 
section to address changes in the numbering in the Eighth Edition of 
API RP 14C from the Seventh Edition. In addition, some commenters 
recommended that paragraph (a) should be more specific when referencing 
``corresponding drawings'' and recommended that BSEE replace that term 
with ``design documents listed in Sec.  250.842(a)(1) through (4) and 
Sec.  250.842(b)(3).''
    Response: The commenters' suggestion regarding revising the 
reference to section A of RP 14C is moot because, as explained 
elsewhere in this final rule, BSEE has decided not to finalize the 
incorporation of the Eighth Edition of API RP 14C at this time. BSEE 
agrees with the comment that the proposed revision regarding 
``corresponding drawings'' needed clarification, and has replaced that 
term in the final rule with the phrase recommended by the commenters; 
this is also consistent with changes made in Sec.  250.842.
Location of LSH Sensor
    Comment: Some commenters asserted that the location of the LSH 
sensor in proposed paragraph (b) is not the most relevant criterion 
[for preventing spills], and that installing an LSH sensor in the oil 
bucket would not necessarily ensure that oil will not carry over and 
spill. Those commenters stated that the most important factor is that 
the vessel should be designed to prevent pollution, and they noted that 
many atmospheric vessels are designed with the LSH sensor in the tank 
itself and are capable of preventing spillage. Thus, the commenters 
recommended that BSEE change the proposed revisions to paragraph (b) to 
include performance-based language to read: ``You must ensure that all 
atmospheric vessels installed are designed and maintained to ensure the 
proper working conditions for LSH sensors. The LSH must be designed and 
installed in such a way to prevent pollution. The LSH sensor bridle 
must be designed to prevent different density fluids from impacting 
sensor functionality.''
    Response: BSEE agrees with most of the commenters' concerns and 
with most of commenters' suggested changes

[[Page 49249]]

to proposed paragraph (b), except that BSEE has determined that more 
clarity is appropriate in order to prevent confusion and uncertainty 
regarding what ``prevent pollution'' entails. Accordingly, BSEE revised 
the language in the final rule to address the design of all atmospheric 
vessels to prevent pollution, including, but not limited to, the 
displacement of oil out of an overboard water outlet, as previously 
described. As with the proposed rule, this change to the regulation 
would not substantively change the existing requirements.
Elimination of Existing Paragraph Sec.  250.872(c)
    Comment: Two commenters agreed with the proposed elimination of 
existing paragraph (c) from Sec.  250.872. One of those commenters 
pointed out that paragraph (c) is unnecessary in light of the broader 
testing provision in Sec.  250.880(c)(3)(viii).
    Response: BSEE agrees that the proposed elimination of the existing 
paragraph (c) is appropriate and the final rule eliminates that 
paragraph. BSEE has reorganized and simplified the remaining 
requirements of that section in the final rule by adding a new 
paragraph (c) that addresses requirements for atmospheric vessels.
Exempting Small Atmospheric Vessels
    Comment: One industry commenter recommended that paragraph (a) of 
the rule exempt small atmospheric vessels (i.e., with design capacity 
of 770 gallons or less) from the safety equipment requirements of this 
provision, asserting that those requirements are not practical for such 
small vessels and the risk posed by small vessels do not warrant the 
expense. The commenter added that such a volume threshold would exempt 
most offshore tote tanks, which have historically been considered to be 
temporary equipment. The same commenter also requested that BSEE limit 
the applicability of the requirement in paragraph (b) regarding design 
and maintenance of atmospheric vessels to ensure proper working 
conditions for LSH sensors to vessels ``installed more than one year 
after the effective date'' of the final rule, asserting that requiring 
that operators retrofit existing vessels with LSH sensors would not be 
justified by the risk.
    Response: BSEE disagrees with both of these comments. With respect 
to an exemption in paragraph (a) for small vessels, these vessels 
contain liquid hydrocarbons or other Class I liquids, which are 
flammable. It is important to ensure these tanks are properly 
protected, regardless of size.
    With respect to limiting paragraph (b) to new vessels installed at 
least one year after the effective date, BSEE notes that the basic 
requirement of paragraph (b) regarding proper working conditions for 
LSH sensors was added to Sec.  250.872 by the 2016 PSSR; thus, 
operators have had ample time to comply or to address compliance 
issues. BSEE also notes that operators with vessels that were designed, 
but not installed, prior to the effective date of the 2016 PSSR may 
submit a departure request under Sec.  250.142.
LSH Sensors Requirements for Newly Installed Equipment
    Comment: A commenter stated that paragraph (b) should not mandate 
LSH sensors to address oil buckets on newly installed equipment. The 
commenter asserted that the language in existing paragraph (b) 
regarding oil buckets is too prescriptive and that compliance with the 
general design requirements in the remainder of paragraph (b) would be 
sufficient.
    Response: BSEE agrees in general with the commenter's belief that 
compliance with the other design requirements in proposed paragraph 
(b)--modified in the final rule, as previously described in response to 
a comment--would be sufficient to prevent pollution without the 
existing language regarding oil buckets. Accordingly, the final rule 
deletes the existing prescriptive language from the last sentence of 
paragraph (b), which would have been retained for new oil buckets under 
the proposed rule. The final rule includes more general design 
requirements in new paragraph (c), as previously described.

Subsea Gas Lift Requirements (Section 250.873)

    Section summary: This section of the existing regulations addresses 
requirements for gas lift equipment used in subsea wells, pipelines, 
and risers. These requirements include: Designing gas lift supply 
pipelines according to API RP 14C, installation of safety valves, 
including a GLSDV, valve closure times, and periodic testing of gas 
lift valve systems.
    As proposed, the final rule revises the table in paragraph (b) of 
this section to replace multiple references to API Spec. 6A with ANSI/
API Spec. 6A.
Recommendation To Delete GLSDVs From SPPE
    Comment: One commenter recommended revising the table in this 
section to delete GLSDVs from the list of SPPE.
    Response: No change is necessary. BSEE did not revise Sec.  250.801 
or Sec.  250.802 to delete GLSDVs as SPPE, for the reasons stated in 
those sections of this preamble. Therefore, a similar reference should 
be retained here for consistency.

Subsea Water Injection Systems (Section 250.874)

    Section summary: This section of the existing regulations addresses 
requirements related to water flood injection via subsea wellheads. 
This includes adherence to API RP 14C for equipment that is located on 
platforms, the use of safety valves including a water injection valve 
and water injection shutdown valve, valve closure times, and testing of 
the water injection valve.
    BSEE proposed to revise paragraph (g)(2) of this section to replace 
the references to API Spec. 6A with ANSI/API Spec. 6A. BSEE received no 
comments on this proposed revision, and the final rule implements the 
revision as proposed.

Fired and Exhaust Heated Components (Section 250.876)

    Section summary: This section of the existing regulations contains 
inspection requirements for certain tube-type heaters to minimize the 
risks of potential safety issues for offshore personnel. As proposed, 
the final rule revises this section to delete the requirement to remove 
the fire tube during inspection. BSEE recognizes that there are other 
ways to inspect the fire tube, without removing it. For example, 
operators could use a combination of cameras with thickness sensors to 
inspect fire tubes that cannot be easily accessed, instead of removing 
the fire tube completely. This change allows the operator to determine 
an appropriate method to inspect the fire tube and is a more flexible, 
performance-based approach. BSEE recognizes the need for fire tube 
inspections; however, the process to remove the fire tube for 
inspection can pose its own safety concerns. In some cases, use of an 
alternative method for inspections would increase safety, since 
removing the fire tube may present a hazard if the fire tube is located 
in a place where it is not easy to remove.
    The existing regulations require that an operator use a qualified 
third party to remove and inspect the fire tubes of tube-type heaters 
every five years. Although BSEE did not propose to change this 
requirement, based on comments BSEE received, BSEE revised the final 
rule to allow the use of ``qualified third-party.''

[[Page 49250]]

Qualified Personnel Inspections
    Comment: A commenter suggested that BSEE revise the phrase a 
``qualified third party'' to ``qualified personnel'' because the term 
``qualified'' is subject to interpretation and the requirement for a 
third party to perform the inspection is not consistent with existing 
regulation. The commenter also stated that BSEE's requirement for the 
fire tube inspection to be done by a third party would not be 
consistent with Sec.  250.851(a)(1)(ii). The commenter stated that 
revising the term ``a qualified third party'' to ``qualified 
personnel'' should satisfy BSEE's desire for an inspection to be 
performed by someone with appropriate knowledge, experience, and 
training. The commenter asserted that its suggested change would be 
consistent with Sec.  250.851(a)(1)(ii) by not requiring the inspector 
to be a third party and that its suggested change would take advantage 
of a standard already incorporated by reference without conflicting 
with it.
    Response: BSEE believes that the commenter's recommendation has 
merit; however, because the recommendation is substantive and BSEE did 
not include it in the proposed rule, we are not implementing it in this 
final rule. We will take it under advisement for potential future 
rulemaking.

Production Safety System Testing (Section 250.880)

    Section summary: This section establishes requirements for testing 
of the various components of the production safety system. In addition, 
this section requires notifications to BSEE at various stages before 
and during production.
    As proposed, BSEE is clarifying language in paragraph (a)(1) of the 
final rule to state that the operator must notify BSEE at least 72 
hours before commencing ``initial'' production on a facility. The 
existing language states that the operator must notify BSEE ``at least 
72 hours before commencing production.'' It did not specify that this 
notification was for initial production, leading to possible confusion 
as to whether the operator must notify BSEE anytime production on a 
facility has been shut in and the operator is ready to resume 
production. This was not BSEE's intent. BSEE is also rewording the 
paragraph and adding a cross-reference to Sec.  250.800(a)(2) for 
clarity.
    As proposed, BSEE is also revising paragraphs (c)(2)(iv) and 
(c)(4)(iii) of the final rule to replace the incorporation by reference 
of API RP 14H, which was withdrawn by API, with API STD 6AV2. 
Similarly, BSEE is revising Sec.  250.880(c) of the final rule to 
replace the incorporation by reference of API RP 14B with ANSI/API RP 
14B.
Commencement of Production
    Comment: Industry commenters recommended inserting ``initial'' into 
Sec.  250.880(a)(2) to be consistent with the proposed language in 
Sec.  250.880(a)(1), so that the paragraph reads ``Notify the District 
Manager upon commencement of initial production so that BSEE may 
conduct a complete inspection.''
    Response: BSEE disagrees. The intent of Sec.  250.880(a)(2) is that 
it applies any time an operator shuts down and restarts a facility, so 
that the operator notifies BSEE when a facility is on production. This 
is different from the intent of the notification required in Sec.  
250.880(a)(1), which is to notify BSEE in advance of initial 
production, so that BSEE may conduct a preproduction inspection.
Updating API RP 14C
    Comment: Industry commenters stated that, if the Eighth Edition of 
API RP 14C is incorporated by reference as proposed in Sec.  250.198, 
then BSEE should update Sec.  250.880(b)(2) by deleting ``D'' in the 
sentence ``Perform testing and inspection in accordance with API RP 
14C, Appendix D I (incorporated by reference as specified in Sec.  
250.198), and the additional requirements found in the tables of this 
section or as approved in the DWOP for your subsea system.''
    Response: As discussed elsewhere in the preamble, BSEE has decided 
not to incorporate by reference the Eighth Edition of API RP 14C in the 
final rule. Accordingly, the proposed revision would be inconsistent 
with that decision.
Alternative Method Verifying the Functionality of PSVs
    Comment: Industry commenters recommended that alternatives for 
compliance, such as the use of API RP 510, should be incorporated into 
this section. Specifically, commenters recommended that the final rule 
explicitly include an alternative method of verifying the functionality 
of PSVs in Sec.  250.880(c)(1)(i) that allows for an inspection program 
based on API RP 510 and API RP 576 as an alternative to lifting the 
main valve piston during the PSV test. Commenters also recommended the 
inclusion of weighted disc vent valves on atmospheric tanks in an 
inspection program based on API RP 510 and API RP 576 in lieu of annual 
disassembly and inspection.
    Response: BSEE disagrees with the recommendation to include the 
additional method to verify functionality in the regulations. Testing 
of the piston movement is a critical test to verify functionality of 
the PSV.
Recommendation To Extend Inspection Intervals for Flame, Spark, and 
Detonation Arrestors
    Comment: Industry commenters recommended that Sec.  
250.880(c)(3)(viii) should be changed to extend visual inspection 
intervals from annually, not to exceed 12 calendar months between 
tests, to not to exceed 3 years, with an exception for stack/spark 
arrestors on forced draft and natural draft fired components of not to 
exceed every 5 years. Commenters also recommended further extending 
inspection intervals where a risk assessment indicates that longer 
intervals are appropriate, noting that the arrestor performance can be 
monitored, and issues can be detected by observing the operating 
conditions of the component on which it is installed.
    Response: BSEE disagrees. There is insufficient evidence to support 
extending the current inspection intervals beyond 1 year. Further, API 
RP 14C, Seventh Edition, section D.2.2., states that all safety devices 
should be inspected at least once per year.
Technology Advances for Fire--(Flame, Heat, or Smoke) and Gas Detection 
Systems
    Comment: Commenter suggested that BSEE update Sec.  
250.880(c)(3)(ii) to acknowledge technology advances in flame and gas 
detection devices, noting as an example that infrared gas detectors do 
not require the same frequency of calibration as electrochemical based 
detectors to function reliably. The commenter further suggested that 
the frequency requirement should be as recommended by the manufacturer, 
but not more than 12 months.
    Response: BSEE disagrees. The referenced technology is still 
relatively new. BSEE may consider revising timeframes once industry has 
proven the efficacy of the technology.
PSV Maintenance Programs
    Comment: An industry commenter stated that its experience with a 
PSV maintenance program indicated that a risk based overhaul program 
aligned with API Standard 510 resulted in safe and reliable PSV and 
vent performance. The commenter recommended adding an alternative 
option to the testing requirements in Sec.  250.880(c)(2)(i) under 
which annual testing would not be required if an operator has a risk-
based overhaul program in place. Further, if

[[Page 49251]]

that alternative is not accepted, the commenter recommended that the 
regulation should allow additional time to perform the first test on 
those PSVs (and weighted disc vent valves used as PSVs) where it 
currently is not feasible to lift the piston during the test. The 
commenter also supported an additional 6 years beyond the effective 
date of the final rule to complete the first test. The commenter 
expressed concern that the proposed revision might result in industry 
and BSEE spending a significant amount of time on filing and responding 
to departure requests, and that such time could be better spent 
preparing to implement the rule.
    Response: BSEE disagrees. The need to verify the piston movement is 
a safety-critical issue. Allowing an additional 6 years for this 
requirement to take effect would result in an unreasonable timeframe to 
come into compliance with a requirement that has been in place since 
November, 2016. BSEE's position remains that in order to validate the 
proper functioning of the PSV, the test must involve the movement of 
the piston.
Inspections Frequency for Flame, Spark, and Detonation Arrestors (Flame 
Arrestors)
    Comment: An industry commenter recommended that BSEE add a 
compliance option to Sec.  250.880(c)(2)(viii) to allow annual visual 
inspections of flame, spark, and detonation arrestors (flame 
arrestors). Commenter suggested an alternate approach that would allow 
setting an alternate inspection frequency of up to 6 years based on 
failure modes and consequence analysis, or replacement of flame 
arrestors every 6 years, with a 3 to 6 year interval. The commenter 
also suggested that undertaking inspections too frequently may expose 
technicians to unnecessary personal safety risk from working at height 
over water.
    Response: BSEE disagrees. There is insufficient evidence to support 
extending the current inspection intervals beyond 1 year. Moreover, 
BSEE believes that this change would require an additional proposed 
rule since it is a substantive change to existing requirements that was 
not in the 2017 proposed rule.

What industry standards must your platform meet? (Section 250.901)

    Section summary: This section addresses structural requirements for 
production facilities. BSEE proposed revising paragraph (a) of Sec.  
250.901 and the table in paragraph (d) to update the incorporation by 
reference of API STD 2RD. However, BSEE is not updating the 
incorporated edition of API STD 2RD at this time, so no change to this 
section is included in the final rule.
Title of API STD 2RD
    Comment: One commenter noted that the existing regulations did not 
cite the correct title for API STD 2RD.
    Response: BSEE is not incorporating by reference the latest the 
edition of this document, which is API STD 2RD. The existing 
regulations refer accurately to API RP 2RD, which is currently 
incorporated by reference, so there is no need to revise this 
paragraph.

Design Requirements for DOI Pipelines (Section 250.1002)

    Section summary: This section addresses design requirements for 
pipelines. The final rule revises paragraph (b) of Sec.  250.1002 to 
update the references to ANSI/API Spec. 6A and to change the reference 
from ``API Spec. 17J'' to ``ANSI/API Spec. 17J,'' which is the proper 
title of the standard as incorporated in the existing regulation.
Title of API STD 2RD
    Comment: One commenter noted that the existing regulations did not 
cite the correct title for API STD 2RD.
    Response: BSEE is not incorporating by reference the latest the 
edition of this document, which is API STD 2RD. The existing 
regulations refer accurately to API RP 2RD, which is currently 
incorporated by reference, so there is no need to revise this 
paragraph.

What To Include in Applications (Section 250.1007)

    Section summary: This section specifies what operators must include 
in their pipeline applications. As proposed, BSEE is revising paragraph 
(a) of Sec.  250.1007 to change the reference from ``API Spec. 17J'' to 
``ANSI/API Spec. 17J,'' which is the proper title of the standard as 
incorporated in the existing regulation. BSEE did not receive any 
comments on this section of the proposed rule.

H. Additional Comments Solicited

    In the proposed rule, BSEE solicited comments on a number of issues 
related to 30 CFR part 250 for which BSEE did not propose any specific 
revisions to the existing regulations but which BSEE might have 
addressed in this final rule or might address in possible future 
rulemakings. See 82 FR 61714-61715. Those issues included: Whether the 
definition of Best Available and Safest Technology (BAST) in Sec.  
250.107(c) properly reflects the statutory intent; how to best organize 
Sec.  250.198 (``Documents incorporated by reference''), to make it 
clearer and even more consistent with OFR's recommendations for 
incorporations by reference; whether to modify conditions for SPPE 
failure analysis under Sec.  250.803; and whether to extend the 
timeframe for initial pressure testing of PSVs under Sec.  250.880. 
BSEE also solicited comments on whether BSEE should revise part 250 to 
address recommendations (such as requiring a safety device to de-
energize electrostatic heater treaters) resulting from BSEE's 
investigation of the November 2014 explosion and fatality on West Delta 
Block 105 Platform E (see https://www.bsee.gov/wd-105-e-panel-report). 
Finally, BSEE solicited comments on potential obstacles for 
implementing the proposed requirements in the proposed rule, including 
comments on the feasibility of implementation and any hardships 
operators could encounter during implementation of a final rule.
    With respect to whether the definition of BAST in Sec.  250.107(c), 
as revised in the 2016 PSSR, properly reflects BSEE's statutory mandate 
concerning the use of BAST, BSEE received one comment from industry 
that suggested language for revising Sec.  250.107(c) in a way that 
would prevent the Director from making a new BAST determination without 
going through a prior notice and comment rulemaking process. That same 
concept was addressed and rejected by BSEE in the 2016 final PSS 
rulemaking, and BSEE does not believe that the current industry comment 
on that issue provides any basis for revising Sec.  250.107(c) at this 
time. Another commenter suggested that BSEE should consider modifying 
the language of Sec.  250.107(c)(2) to encourage the submission of 
applications to BSEE to make BAST determinations. BSEE will take that 
suggestion under advisement.
    With respect to comments submitted regarding potential problems 
with implementation of the specific proposed requirements, BSEE has 
either addressed those concerns in response to the comments on those 
specific requirements elsewhere in this final rule or has otherwise 
considered those comments in developing its plans for implementing the 
final rule.
    With respect to potential non-substantive changes to Sec.  250.198, 
for the purposes of reorganizing and revising that section, one 
commenter stated that meaningful comments on possible non-substantive 
changes would not be practical until after BSEE proposes

[[Page 49252]]

specific revisions to that section.\18\ BSEE will continue to consult 
with the OFR regarding its suggestions for specific, non-substantive 
organizational and language changes to Sec.  250.198 and expects to 
address such revisions in a separate rulemaking.
---------------------------------------------------------------------------

    \18\ Some commenters made comments that addressed the proposed 
substantive changes to the specific documents referenced in Sec.  
250.198 or raised more general concerns with the merits of, and 
processes for, incorporation by reference generally. BSEE has 
responded to those comments elsewhere in this final rule.
---------------------------------------------------------------------------

    With respect to the other issues on which BSEE solicited comments 
(failure analysis conditions under Sec.  250.802; timeframe for initial 
PSV testing under Sec.  250.880; and recommendations from the 2014 West 
Delta Block investigation), BSEE received a number of specific comments 
and is not implementing any changes based on those comments in this 
final rule. However, BSEE will consider those comments and decide at a 
later date whether to propose any additional revisions to the 
regulations.

Procedural Matters

Regulatory Planning and Review (E.O. 12866, E.O. 13563, E.O. 13771)

    E.O. 12866 provides that the Office of Information and Regulatory 
Affairs (OIRA) within the Office of Management and Budget (OMB) will 
review all significant rules. OIRA has reviewed this final rule and 
determined that it is significant because it raises novel legal or 
policy issues. After reviewing the requirements of this rule, BSEE has 
determined that it will not have an annual effect on the economy of 
$100 million or more nor adversely affect in a material way the 
economy, a sector of the economy, productivity, competition, jobs, 
public health or safety, the environment, or state, local, or tribal 
governments or communities.
    E.O. 13563 reaffirms the principles of E.O. 12866 while calling for 
improvements in the Nation's regulatory system to promote 
predictability, to reduce uncertainty, and to use the best, most 
innovative, and least burdensome tools for achieving regulatory ends. 
The E.O. 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. E.O. 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. We have developed this rule in a manner consistent with these 
requirements.
    E.O. 13771 requires Federal agencies to take proactive measures to 
reduce the costs associated with complying with Federal regulations. 
BSEE has evaluated this rulemaking based on the requirements of E.O. 
13771. Details on the estimated cost savings of this proposed rule are 
found in the final rule's economic analyses, available in the public 
docket for this rulemaking. Important aspects of this rule (e.g., 
regulatory clarifications, reduction in paperwork burdens, adoption of 
industry standards, and migration to performance-based standards for 
select provisions) make it an E.O. 13771 deregulatory action. While 
this final rule reduces regulated entity compliance burdens, the rule 
continues to ensure safety and environmental protection for offshore 
production operations.
    This rule primarily revises sections of 30 CFR part 250, subpart H, 
and updates standards referenced therein. BSEE has reassessed a number 
of the provisions in the existing regulations and determined that some 
provisions should be written as performance-based standards rather than 
prescriptive requirements. Other proposed revisions reduce or eliminate 
parts of the paperwork burden of the existing regulations, while 
ensuring continued safety and environmental protection. BSEE has 
reexamined the economic analysis for the 2016 PSSR and now believes 
that it may have underestimated some compliance costs. BSEE is 
therefore revising some of the compliance cost assumptions in the 
economic analysis for this rulemaking. The underestimation of 
compliance costs in the 2016 analysis was primarily related to (1) the 
burden for obtaining PE review and stamping of all drawings on a 
facility if any production equipment modifications are proposed and (2) 
duplicative independent third party equipment certifications that will 
no longer be required under this rule (but are incorporated in the 
baseline). BSEE underestimated both the cost and number of PE reviews 
required under proposed Sec.  250.842. The cost of independent third 
party testing and certifications required under proposed Sec.  
250.802(c)(1) was also underestimated by BSEE in 2016.
    BSEE expects this final rule to reduce the regulatory burden on 
industry. Regulatory compliance cost savings are a result of changes in 
the rule that will reduce burden hours, PE stamping for production 
safety system components, and independent third party equipment 
certifications. BSEE estimates this final rule will reduce industry 
compliance burdens by $13 million annually. Over 10 years, BSEE 
estimates the reduced compliance burdens and cost savings will be $112 
million discounted at 3 percent or $92 million discounted at 7 percent.
    The cost savings for revised provisions on PE stamping of 
production safety system modification documents (Sec.  250.842) are the 
single largest cost savings resulting from this rule. The additional PE 
certifications and stamping will no longer be required for all 
production safety system documents in an application, but will be 
required only for the documents for those components being modified. 
BSEE estimates the net regulatory cost savings for the Sec.  250.842 
changes will be $5.7 million in the first year and $40 million over 10 
years discounted at 7 percent. The other provision providing 
substantial regulatory relief is the elimination of the third party 
reviews and certifications for select SPPE. Compliance with the various 
required standards (including ANSI/API Spec. Q1, ANSI/API Spec. 14A, 
ANSI/API RP 14B, ANSI/API Spec. 6A, and API Spec. 6AV1) ensures that 
each device will function in the conditions for which it was designed. 
The table below summarizes BSEE's estimate of the 10-year final rule 
compliance cost savings. Additional information on the compliance 
costs, savings, and benefits can be found in the final Regulatory 
Impact Analysis (RIA) posted in the public docket for this final rule.

[[Page 49253]]

[GRAPHIC] [TIFF OMITTED] TR28SE18.003

    BSEE has developed this final rule consistently with the 
requirements of E.O. 12866, E.O. 13563, and E.O. 13771. This rule 
revises various provisions in the current regulations with performance-
based requirements based upon the best reasonably obtainable safety, 
technical, economic, and other information. BSEE has provided industry 
with more flexibility to meet the safety or equipment standards rather 
than specifying the compliance method when practical. Based on a 
consideration of the qualitative and quantitative safety and 
environmental factors related to the rule, BSEE's assessment is that 
its promulgation is consistent with the requirements of the applicable 
E.O.s and of OCSLA and that this rulemaking will reduce unnecessary 
burdens on stakeholders while ensuring safety and environmental 
protection for OCS production operations.

Small Business Regulatory Enforcement Fairness Act and Regulatory 
Flexibility Act

    This final rule is not a major rule under the Small Business 
Regulatory Enforcement Fairness Act (5 U.S.C. 801 et seq.). This rule:
     Will not have an annual effect on the economy of $100 
million or more. This rule will revise the requirements for oil and gas 
production safety systems. The changes will not have any negative 
impact on the economy or any economic sector, productivity, jobs, the 
environment, or other units of government. The requirements primarily 
relate to the incorporated industry standards, to SPPE certification, 
and to PE stamping and will not add time to development and production 
processes.
     Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
     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. The 
requirements will apply to all entities operating on the OCS.

Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires agencies 
to analyze the economic impact of regulations when a significant 
economic impact on a substantial number of small entities is likely and 
to consider regulatory alternatives that will achieve the agency's 
goals while minimizing the burden on small entities. The Regulatory 
Flexibility Analysis (RFA), which assesses the impact of this rule on 
small entities, is found in the RIA within the public docket for this 
rule.
    As defined by the Small Business Administration (SBA), a small 
entity is one that is ``independently owned and operated and which is 
not dominant in its field of operation.'' What characterizes a small 
business varies from industry to industry in order to properly reflect 
industry size differences. This rule would affect lease operators that 
are conducting OCS production operations. BSEE's analysis shows this 
will include about 69 companies with active operations. Of the 69 
companies, 21 (30 percent) are large and 48 (70 percent) are small. 
Entities that will operate under this rule primarily fall under the 
SBA's North American Industry Classification System (NAICS) codes 
211120 (Crude Petroleum Extraction) and 211130 (Natural Gas 
Extraction). For NAICS classifications 211120 and 211130, SBA defines a 
small business as one with fewer than 1,251 employees.
    BSEE considers that a rule will have an impact on a ``substantial 
number of small entities'' when the total number of small entities 
impacted by the rule is equal to or exceeds 10 percent of the relevant 
universe of small entities in a given industry. BSEE's analysis shows 
that there are 48 small companies with active operations on the OCS. 
All of the operating businesses meeting the SBA classification are 
potentially impacted; therefore, BSEE expects that the final rule will 
affect a substantial number of small entities.
    This rule is a deregulatory action, and BSEE has estimated the 
overall associated cost savings. BSEE has estimated the annualized cost 
savings and allocated those savings to small or large entities based on 
the number of active or idle OCS production facilities. Using the share 
of small and large companies' production facilities, we estimate that 
small companies will realize 87 percent (~$11.4 million) of the 
annualized cost savings from this rule and large companies 13 percent 
(~$1.7 million). Additional information can be found in the RFA in the 
docket for this final rule.

Unfunded Mandates Reform Act of 1995

    This final rule will not impose an unfunded mandate on State, 
local, or tribal governments or the private sector of more than $100 
million per year. The rule will not have a significant or unique effect 
on State, local, or tribal governments or the private sector. A 
statement containing the information required by Unfunded Mandates 
Reform Act (2 U.S.C. 1531 et seq.) is not required.

Takings (E.O. 12630)

    This final rule does not effect a taking of private property or 
otherwise have taking implications under E.O. 12630. A Takings 
Implications Assessment is not required.

Federalism (E.O. 13132)

    Under the criteria in section 1 of E.O. 13132, this final rule does 
not have sufficient federalism implications to warrant the preparation 
of a federalism summary impact statement. This rule will not 
substantially and directly affect the relationship between the Federal 
and State governments. To the extent that State and local governments 
have a role in OCS activities, this rule will not affect that role. A 
federalism summary impact statement is not required.
    The BSEE has the authority to regulate offshore oil and gas 
production. State governments do not have authority over offshore 
production on the OCS. None of the changes in this rule will affect 
areas that are under the

[[Page 49254]]

jurisdiction of the States. It will not change the way that the States 
and the Federal government interact, or the way that States interact 
with private companies.

Civil Justice Reform (E.O. 12988)

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

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

    The Department of the Interior strives to strengthen its 
government-to-government relationship with Indian tribes through a 
commitment to consultation with Indian tribes and recognition of their 
right to self-governance and tribal sovereignty. We have evaluated this 
rule under the Department's consultation policy and under the criteria 
in E.O. 13175 and have determined that it has no substantial direct 
effects on federally recognized Indian tribes and that consultation 
under the Department's tribal consultation policy is not required.

Paperwork Reduction Act (PRA) of 1995

    This final rule contains a collection of information that has been 
submitted to OMB for review and approval under the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.) The title of the collection of 
information for this rule is 30 CFR part 250, subpart H, Oil and Gas 
Production Safety Systems--Revisions. The OMB approved the collection 
under Control Number 1014-0003, expiration August 31, 2019, containing 
95,997 hours and $5,582,481 non-hour cost burdens. Due to this 
rulemaking, the revisions to the collection will result in a total of 
93,385 hours and $10,912,696 non-hour cost burdens. Potential 
respondents comprise Federal OCS oil, gas, and sulfur operators and 
lessees. Responses to this collection of information are mandatory or 
are required to obtain or retain a benefit. The frequency of responses 
submitted varies depending upon the requirement; but are usually on 
occasion, annually, and as a result of situations encountered. The ICR 
does not include questions of a sensitive nature. BSEE will protect 
proprietary information according to the Freedom of Information Act (5 
U.S.C. 552) and DOI's implementing regulations (43 CFR part 2), 30 CFR 
250.197, Data and information to be made available to the public or for 
limited inspection, and 30 CFR part 252, OCS Oil and Gas Information 
Program.
    Changes to the information collection due to this rulemaking are as 
follows:
    BSEE proposed removing the independent third party certification 
requirements in Sec.  250.802(c)(1) altogether, however a number 
commenters were concerned that there would be no way to ensure that 
operators are using SPPE that is designed for the conditions in which 
it will operate. To address these concerns, BSEE preserved certain 
independent third party certifications, and otherwise created a 
requirement to maintain documentation of how operators ensured the 
device being used is designed to function in the environment to which 
it will be exposed.
     Section 250.802(c)(1) is being rewritten and will add 250 
burden hours for developing and maintaining the description of process; 
as well as make available to BSEE upon request. The revisions to this 
section will also cause a reduction in third party certification non-
hour costs burdens by -$460,000.
     Sec.  250.842(c) is being eliminated, which will cause a 
reduction in hour burden by -192 hours.
    Between the proposed rule and this final rule, BSEE ran a query to 
get a more accurate number of modifications submitted under Sec.  
250.842 due to decommissioning activities and found we have been 
receiving fewer modifications than currently approved.
     Section 250.842 will reduce the hour burden by -2,670.
     During the 2016 rulemaking (the 2016 PSSR), BSEE 
inadvertently omitted costs for Professional Engineers required to 
stamp documents in Sec.  250.842. This revision to the collection 
requests approval of an additional $5,790,215 non-hour costs (PE 
Costs). We are adding this category of costs in this rulemaking but 
note that this rulemaking reduces the amount of information a PE must 
stamp from the 2016 rule.
    An agency may not conduct or sponsor, and you are not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number. The public may comment, at any time, on the 
accuracy of the IC burden in this rule and may submit any comments to 
DOI/BSEE; ATTN: Regulations and Standards Branch; VAE-ORP; 45600 
Woodland Road, Sterling, VA 20166; email [email protected], or fax 
(703) 787-1093.

National Environmental Policy Act of 1969

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. A detailed statement 
under the National Environmental Policy Act of 1969 is not required 
because we reached a Finding of No Significant Impact. This finding and 
the accompanying environmental assessment was placed in the file for 
BSEE's Administrative Record for the rule at the address specified in 
the ADDRESSES section. A copy may also be viewed at the Federal 
eRulemaking Portal: https://www.regulations.gov (use the keyword/ID 
``BSEE-2017-0008'').

Data Quality Act

    In developing this rule, we did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Pub. L. 106-554, app. C sec. 515, 114 Stat. 2763, 2763A-153-154). BSEE 
received one comment on the Data Quality Act, also known as the 
Information Quality Act (IQA). The commenter asserted that the draft EA 
under NEPA seems to be subject to the IQA and, therefore, should have 
been made available to the public to aid comment. Contrary to the 
commenter's assertion, however, BSEE did make the draft EA publicly 
available for review and public input during the proposed rulemaking by 
placing that document in the public docket along with the proposed 
rule.

Effects on the Nation's Energy Supply (E.O. 13211)

    This final rule is not a significant energy action under the 
definition in E.O. 13211. A Statement of Energy Effects is not 
required. The final rule is an E.O. 13771 deregulatory action and does 
not add any new regulatory compliance requirements that would lead to 
adverse effects on the nation's energy supply, distribution, or use. 
Rather, the regulatory changes will help to reduce compliance burdens 
on the oil and gas industry that may hinder the development or use of 
domestically produced energy resources, while still ensuring safety and 
environmental protection.

Severability

    If a court holds any provisions of this rule or their applicability 
to any person or circumstances invalid, the remainder of the provisions 
and their applicability to other people or circumstances will not be 
affected.

[[Page 49255]]

List of Subjects in 30 CFR Part 250

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

Joseph R. Balash,
Assistant Secretary--Land and Minerals Management.
    For the reasons stated in the preamble, the Bureau of Safety and 
Environmental Enforcement (BSEE) amends 30 CFR part 250 as follows:

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

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

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

Subpart A--General

0
2. Amend Sec.  250.198 by:
0
a. Revising paragraphs (g) introductory text and (g)(1) through (3);
0
b. Removing paragraph (g)(6) and redesignating paragraphs (g)(4) and 
(5) as (g)(6) and (7);
0
c. In newly redesignated paragraphs (g)(6) and (7), removing the 
semicolon and adding a period in its place;
0
d. Adding new paragraphs (g)(4) and (5);
0
e. Revising paragraphs (h)(1), (52), (55);
0
f. In paragraphs (h)(58) and (62), removing ``250.842(b)'' and adding 
in its place ``250.842(c)'';
0
g. Revising paragraphs (h)(59) through (61), (65), (68), (70), (71) and 
(96);
0
h. In paragraph (h)(73), removing ``250.802(b)'' and adding in its 
place ``250.802(c)''; and
0
i. Adding paragraph (o).
    The revisions and additions read as follows:


Sec.  250.198   Documents incorporated by reference.

* * * * *
    (g) American Society of Mechanical Engineers (ASME), 22 Law Drive, 
P.O. Box 2900, Fairfield, NJ 07007-2900; https://www.asme.org; phone: 1-
800-843-2763:
    (1) 2017 ASME Boiler and Pressure Vessel Code (BPVC), Section I, 
Rules for Construction of Power Boilers, 2017 Edition, July 1, 2017 
incorporated by reference at Sec. Sec.  250.851(a) and 250.1629(b).
    (2) 2017 ASME Boiler and Pressure Vessel Code, Section IV, Rules 
for Construction of Heating Boilers, 2017 Edition, July 1, 2017 
incorporated by reference at Sec. Sec.  250.851(a) and 250.1629(b).
    (3) 2017 ASME Boiler and Pressure Vessel Code, Section VIII, Rules 
for Construction of Pressure Vessels; Division 1, 2017 Edition; July 1, 
2017 incorporated by reference at Sec. Sec.  250.851(a) and 
250.1629(b).
    (4) 2017 ASME Boiler and Pressure Vessel Code, Section VIII, Rules 
for Construction of Pressure Vessels; Division 2: Alternative Rules, 
2017 Edition, July 1, 2017 incorporated by reference at Sec. Sec.  
250.851(a) and 250.1629(b).
    (5) 2017 ASME Boiler and Pressure Vessel Code, Section VIII, Rules 
for Construction Pressure Vessels; Division 3: Alternative Rules for 
Construction of High Pressure Vessels, 2017 Edition, July 1, 2017 
incorporated by reference at Sec. Sec.  250.851(a) and 250.1629(b).
* * * * *
    (h) * * *
    (1) API 510, Pressure Vessel Inspection Code: In-Service 
Inspection, Rating, Repair, and Alteration, Tenth Edition, May 2014; 
Addendum 1, May 2017; incorporated by reference at Sec. Sec.  
250.851(a) and 250.1629(b);
* * * * *
    (52) API RP 2SK, Design and Analysis of Stationkeeping Systems for 
Floating Structures, Third Edition, October 2005, Addendum, May 2008, 
Reaffirmed June 2015; incorporated by reference at Sec. Sec.  
250.800(c) and 250.901(a) and (d);
* * * * *
    (55) ANSI/API RP 14B, Design, Installation, Operation, Test, and 
Redress of Subsurface Safety Valve Systems, Sixth Edition, September 
2015; incorporated by reference at Sec. Sec.  250.802(b), 250.803(a), 
250.814(d), 250.828(c), and 250.880(c);
* * * * *
    (59) API RP 14FZ, Recommended Practice for Design, Installation, 
and Maintenance of Electrical Systems for Fixed and Floating Offshore 
Petroleum Facilities for Unclassified and Class I, Zone 0, Zone 1 and 
Zone 2 Locations, Second Edition, May 2013; incorporated by reference 
at Sec. Sec.  250.114(c), 250.842(c), 250.862(e), and 250.1629(b);
    (60) API RP 14G, Recommended Practice for Fire Prevention and 
Control on Fixed Open-type Offshore Production Platforms, Fourth 
Edition, April 2007: Reaffirmed, January 2013; incorporated by 
reference at Sec. Sec.  250.859(a), 250.862(e), 250.880(c), and 
250.1629(b);
    (61) API STD 6AV2, Installation, Maintenance, and Repair of Surface 
Safety Valves and Underwater Safety Valves Offshore; First Edition, 
March 2014; Errata 1, August 2014; incorporated by reference at 
Sec. Sec.  250.820, 250.834, 250.836, and 250.880(c);
* * * * *
    (65) API RP 500, Recommended Practice for Classification of 
Locations for Electrical Installations at Petroleum Facilities 
Classified as Class I, Division 1 and Division 2, Third Edition, 
December 2012; Errata January 2014; incorporated by reference at 
Sec. Sec.  250.114(a), 250.459, 250.842(a), 250.862(a) and (e), 
250.872(a), 250.1628(b) and (d), and 250.1629(b);
* * * * *
    (68) ANSI/API Spec. Q1, Specification for Quality Management System 
Requirements for Manufacturing Organizations for the Petroleum and 
Natural Gas Industry, Ninth Edition, June 2013; Errata, February 2014; 
Errata 2, March 2014; Addendum 1, June 2016; incorporated by reference 
at Sec. Sec.  250.730 and 250.801(b) and (c);
* * * * *
    (70) ANSI/API Spec. 6A, Specification for Wellhead and Christmas 
Tree Equipment, Twentieth Edition, October 2010; Addendum 1, November 
2011; Errata 2, November 2011; Addendum 2, November 2012; Addendum 3, 
March 2013; Errata 3, June 2013; Errata 4, August 2013; Errata 5, 
November 2013; Errata 6, March 2014; Errata 7, December 2014; Errata 8, 
February 2016; Addendum 4, June 2016; Errata 9, June 2016; Errata 10, 
August 2016; incorporated by reference at Sec. Sec.  250.730, 
250.802(a), 250.803(a), 250.833, 250.873(b), 250.874(g), and 
250.1002(b);
    (71) API Spec. 6AV1, Specification for Verification Test of 
Wellhead Surface Safety Valves and Underwater Safety Valves for 
Offshore Service, Second Edition, February 2013; incorporated by 
reference at Sec. Sec.  250.802(a), 250.833, 250.873(b), and 
250.874(g);
* * * * *
    (96) API 570, Piping Inspection Code: In-service Inspection, 
Rating, Repair, and Alteration of Piping Systems, Fourth Edition, 
February 2016; Addendum, May 2017; incorporated by reference at Sec.  
250.841(b).
* * * * *
    (o) American National Standards Institute (ANSI), https://www.webstore.ansi.org; phone: 212-642-4900.
    (1) ANSI Z88.2-1992, American National Standard for Respiratory 
Protection, incorporated by reference at Sec.  250.490.
    (2) [Reserved]

[[Page 49256]]

Subpart H--Oil and Gas Production Safety Systems

0
3. Amend Sec.  250.800 by revising paragraph (a) to read as follows:


Sec.  250.800  General.

    (a) You must design, install, use, maintain, and test production 
safety equipment in a manner to ensure the safety and protection of the 
human, marine, and coastal environments. For production safety systems 
operated in subfreezing climates, you must use equipment and procedures 
that account for floating ice, icing, and other extreme environmental 
conditions that may occur in the area. Before you commence production 
on a new production facility:
    (1) BSEE must approve your production safety system application, as 
required in Sec.  250.842.
    (2) You must request a preproduction inspection by notifying the 
District Manager at least 72 hours before you plan to commence initial 
production, as required under Sec.  250.880(a)(1).
* * * * *

0
4. Amend Sec.  250.801 by revising paragraph (a) to read as follows:


Sec.  250.801  Safety and pollution prevention equipment (SPPE) 
certification.

    (a) SPPE equipment. You must install only safety and pollution 
prevention equipment (SPPE) considered certified under paragraph (b) of 
this section or accepted under paragraph (c) of this section. BSEE 
considers the following equipment to be types of SPPE:
    (1) Surface safety valves (SSV) and actuators, including those 
installed on injection wells capable of natural flow;
    (2) Boarding shutdown valves (BSDV) and their actuators. For subsea 
wells, the BSDV is the surface equivalent of an SSV on a surface well;
    (3) Underwater safety valves (USV) and actuators;
    (4) Subsurface safety valves (SSSV) and associated safety valve 
locks and landing nipples; and
    (5) Gas lift shutdown valves (GLSDV) and their actuators associated 
with subsea systems.
* * * * *

0
5. Amend Sec.  250.802 by revising paragraphs (a), (c) and (d) to read 
as follows:


Sec.  250.802   Requirements for SPPE.

    (a) All SSVs, BSDVs, USVs, and GLSDVs and their actuators must meet 
all of the specifications contained in ANSI/API Spec. 6A and API Spec. 
6AV1 (both incorporated by reference in Sec.  250.198).
* * * * *
    (c) Requirements derived from the documents incorporated in this 
section for SSVs, BSDVs, SSSVs, USVs, GLSDVs, and their actuators, 
include, but are not limited to, the following:
    (1) You must ensure that each device is designed to function in the 
conditions to which it may be exposed; including temperature, pressure, 
flow rates, and environmental conditions.
    (i) The device design must be tested by an independent test agency 
according to the test requirements in the appropriate standard for that 
device (API Spec. 6AV1 or ANSI/API Spec. 14A), as identified in 
paragraphs (a) and (b) of this section.
    (ii) You must maintain a description of the process you used to 
ensure the device is designed to function as required in paragraphs (a) 
and (c)(1) of this section and provide that description to BSEE upon 
request.
    (iii) If you remove any SPPE from service and install the device at 
a different location, you must have a qualified third party review and 
certify that each device will function as designed under the conditions 
to which it may be exposed.
    (2) All materials and parts must meet the original equipment 
manufacturer specifications and acceptance criteria.
    (3) The device must pass applicable validation tests and functional 
tests performed by an API-licensed test agency.
    (4) You must have requalification testing performed following 
manufacture design changes.
    (5) You must comply with and document all manufacturing, 
traceability, quality control, and inspection requirements.
    (6) You must follow specified installation, testing, and repair 
protocols.
    (7) You must use only qualified parts, procedures, and personnel to 
repair or redress equipment.
    (d) You must install and use SPPE according to the following table.

------------------------------------------------------------------------
                If . . .                            Then . . .
------------------------------------------------------------------------
(1) You need to install any SPPE.......  You must install SPPE that
                                          conforms to Sec.   250.801.
(2) A non-certified SPPE is already in   It may remain in service.
 service.
(3) A non-certified SPPE requires        You must replace it with SPPE
 offsite repair, re-manufacturing, or     that conforms to Sec.
 any hot work such as welding.            250.801.
------------------------------------------------------------------------

* * * * *

0
6. Revise Sec.  250.803 to read as follows:


Sec.  250.803  What SPPE failure reporting procedures must I follow?

    (a) You must follow the failure reporting requirements contained in 
section 10.20.7.4 of ANSI/API Spec. 6A for SSVs, BSDVs, GLSDVs and 
USVs. You must follow the failure reporting requirements contained in 
section 7.10 of ANSI/API Spec. 14A and Annex F of ANSI/API RP 14B for 
SSSVs (all incorporated by reference in Sec.  250.198). Within 30 days 
after the discovery and identification of the failure, you must provide 
a written notice of equipment failure to the manufacturer of such 
equipment and to BSEE through the Chief, Office of Offshore Regulatory 
Programs, unless BSEE has designated a third party as provided in 
paragraph (d) of this section. A failure is any condition that prevents 
the equipment from meeting the functional specification or purpose.
    (b) You must ensure that an investigation and a failure analysis 
are performed within 120 days of the failure to determine the cause of 
the failure. If the investigation and analyses are performed by an 
entity other than the manufacturer, you must ensure that the analysis 
report is submitted to the manufacturer and to BSEE through the Chief, 
Office of Offshore Regulatory Programs, unless BSEE has designated a 
third party as provided in paragraph (d) of this section. You must also 
ensure that the results of the investigation and any corrective action 
are documented in the analysis report.
    (c) If the equipment manufacturer notifies you that it has changed 
the design of the equipment that failed or if you have changed 
operating or repair procedures as a result of a failure, then you must, 
within 30 days of such changes, report the design change or modified 
procedures in writing to BSEE through the Chief, Office of Offshore 
Regulatory Programs, unless BSEE has designated a third party as 
provided in paragraph (d) of this section.
    (d) BSEE may designate a third party to receive the data required 
by paragraphs (a) through (c) of this section

[[Page 49257]]

on behalf of BSEE. If BSEE designates a third party, you must submit 
the information required in this section to the designated third party, 
as directed by BSEE.

0
7. Amend Sec.  250.814 by revising paragraph (d) to read as follows:


Sec.  250.814  Design, installation, and operation of SSSVs--dry trees.

* * * * *
    (d) You must design, install, maintain, inspect, repair, and test 
all SSSVs in accordance with ANSI/API RP 14B (incorporated by reference 
in Sec.  250.198). For additional SSSV testing requirements, refer to 
Sec.  250.880.

0
8. Revise Sec.  250.820 to read as follows:


Sec.  250.820   Use of SSVs.

    You must install, maintain, inspect, repair, and test all SSVs in 
accordance with API STD 6AV2 (incorporated by reference in Sec.  
250.198). If any SSV does not operate properly, or if any gas and/or 
liquid fluid flow is observed during the leakage test as described in 
Sec.  250.880, then you must shut-in all sources to the SSV and repair 
or replace the valve before resuming production.

0
9. Amend Sec.  250.821 by revising paragraphs (a) introductory text and 
(a)(1) to read as follows:


Sec.  250.821  Emergency action and safety system shutdown--dry trees.

    (a) If your facility is impacted or will potentially be impacted by 
an emergency situation (e.g., an impending National Weather Service-
named tropical storm or hurricane, ice events, or post-earthquake), you 
must:
    (1) Properly install a subsurface safety device on any well that is 
not yet equipped with a subsurface safety device and that is capable of 
natural flow, as soon as possible, with due consideration being given 
to personnel safety.
* * * * *

0
10. Amend Sec.  250.828 by revising paragraph (c) to read as follows:


Sec.  250.828  Design, installation, and operation of SSSVs--subsea 
trees.

* * * * *
    (c) You must design, install, maintain, inspect, repair, and test 
all SSSVs in accordance with your Deepwater Operations Plan (DWOP) and 
ANSI/API RP 14B (incorporated by reference in Sec.  250.198). For 
additional SSSV testing requirements, refer to Sec.  250.880.

0
11. Amend Sec.  250.833 by revising the introductory text to read as 
follows:


Sec.  250.833   Specification for underwater safety valves (USVs).

    All USVs, including those designated as primary or secondary, and 
any alternate isolation valve (AIV) that acts as a USV, if applicable, 
and their actuators, must conform to the requirements specified in 
Sec. Sec.  250.801 through 250.803. A production master or wing valve 
may qualify as a USV under ANSI/API Spec. 6A and API Spec. 6AV1 (both 
incorporated by reference in Sec.  250.198).
* * * * *

0
12. Revise Sec.  250.834 to read as follows:


Sec.  250.834   Use of USVs.

    You must install, maintain, inspect, repair, and test any valve 
designated as the primary USV in accordance with this subpart, your 
DWOP (as specified in Sec. Sec.  250.286 through 250.295), and API STD 
6AV2 (incorporated by reference in Sec.  250.198). For additional USV 
testing requirements, refer to Sec.  250.880.

0
13. Revise Sec.  250.836 to read as follows:


Sec.  250.836   Use of BSDVs.

    You must install, inspect, maintain, repair, and test all new 
BSDVs, as well as all BSDVs that you remove from service for 
remanufacturing or repair, in accordance with API STD 6AV2 
(incorporated by reference in Sec.  250.198) for SSVs. If any BSDV does 
not operate properly or if any gas fluid and/or liquid fluid flow is 
observed during the leakage test, as described in Sec.  250.880, you 
must shut-in all sources to the BSDV and immediately repair or replace 
the valve.

0
14. Amend Sec.  250.837 by revising paragraphs (a), (b), and (c)(5) to 
read as follows:


Sec.  250.837   Emergency action and safety system shutdown--subsea 
trees.

    (a) If your facility is impacted or will potentially be impacted by 
an emergency situation (e.g., an impending National Weather Service-
named tropical storm or hurricane, ice events, or post-earthquake), you 
must shut-in all subsea wells unless otherwise approved by the District 
Manager. A shut-in is defined as a closed BSDV, USV, GLSDV, and 
surface-controlled SSSV.
    (b) When operating a mobile offshore drilling unit (MODU) or other 
type of workover or intervention vessel in an area with subsea 
infrastructure, you must:
    (1) Suspend production from all wells that could be affected by a 
dropped object, including upstream wells that flow through the same 
pipeline; or
    (2) Establish direct, real-time communications between the MODU or 
other type of workover or intervention vessel and the production 
facility control room and develop a dropped objects plan, as required 
in Sec.  250.714. If an object is dropped, you must immediately secure 
the well directly under the MODU or other type of workover or 
intervention vessel while simultaneously communicating with the 
platform to shut-in all affected wells. You must also maintain without 
disruption, and continuously verify, communication between the 
production facility and the MODU or other type of workover or 
intervention vessel. If communication is lost between the MODU or other 
type of workover or intervention vessel and the platform for 20 or more 
minutes, you must shut-in all wells that could be affected by a dropped 
object.
    (c) * * *
    (5) Subsea ESD (MODU). In the event of an ESD activation that is 
initiated by a dropped object from a MODU or other type of workover or 
intervention vessel, you must secure all wells in the proximity of the 
MODU or other type of workover or intervention vessel by closing the 
USVs and surface-controlled SSSVs in accordance with the applicable 
tables in Sec. Sec.  250.838 and 250.839. You must notify the 
appropriate District Manager before resuming production.
* * * * *

0
15. Amend Sec.  250.841 by adding a paragraph (c) to read as follows:


Sec.  250.841   Platforms.

* * * * *
    (c) If you plan to make a modification to any production safety 
system that also involves a major modification to the platform 
structure, you must follow the requirements in Sec.  250.900(b)(2). A 
major modification to a platform structure is defined in Sec.  
250.900(b)(2).

0
16. Revise Sec.  250.842 to read as follows:


Sec.  250.842   Approval of safety systems design and installation 
features.

    (a) Before you install or modify a production safety system, you 
must submit a production safety system application to the District 
Manager. The District Manager must approve your production safety 
system application before you commence production through or otherwise 
use the new or modified system. The application must include the design 
documentation prescribed as follows:

[[Page 49258]]

[GRAPHIC] [TIFF OMITTED] TR28SE18.004

    (b) You must develop and maintain the following design documents 
and make them available to BSEE upon request:
[GRAPHIC] [TIFF OMITTED] TR28SE18.005


[[Page 49259]]


    (c) In the production safety system application, you must also 
certify the following:
    (1) That all electrical systems were designed according to API RP 
14F or API RP 14FZ, as applicable (incorporated by reference in Sec.  
250.198);
    (2) That the design documents for the mechanical and electrical 
systems that you are required to submit under paragraph (a) of this 
section are sealed by a licensed professional engineer. For modified 
systems, only the modifications are required to be sealed by a licensed 
professional engineer(s). The professional engineer must be licensed in 
a State or Territory of the United States and have sufficient expertise 
and experience to perform the duties; and
    (3) That a hazards analysis was performed in accordance with Sec.  
250.1911 and API RP 14J (incorporated by reference in Sec.  250.198), 
and that you have a hazards analysis program in place to assess 
potential hazards during the operation of the facility.
    (d) Within 90 days after placing new or modified production safety 
systems in service, you must submit to the District Manager the as-
built diagrams for the new or modified production safety systems 
outlined in paragraphs (a)(1), (2), and (3) of this section. You must 
certify in an accompanying letter that the as-built design documents 
have been reviewed for compliance with applicable regulations and 
accurately represent the new or modified system as installed. The 
drawings must be clearly marked ``as-built.''
    (e) You must maintain approved and supporting design documents 
required under paragraphs (a) and (b) of this section at your offshore 
field office nearest the OCS facility or at other locations 
conveniently available to the District Manager. These documents must be 
made available to BSEE upon request and must be retained for the life 
of the facility. All approved designs are subject to field 
verifications.

0
17. Amend Sec.  250.851 by revising paragraph (a)(2) to read as 
follows:


Sec.  250.851   Pressure vessels (including heat exchangers) and fired 
vessels.

    (a) * * *
    [GRAPHIC] [TIFF OMITTED] TR28SE18.006
    
* * * * *

0
18. Amend Sec.  250.852 by revising paragraphs (e)(1) and (4) to read 
as follows:


Sec.  250.852   Flowlines/Headers.

* * * * *
    (e) * * *
    (1) Review the manufacturer's Design Methodology Verification 
Report and the independent verification agent's (IVA) certificate for 
the design methodology contained in that report to ensure that the 
manufacturer has complied with the requirements of ANSI/API Spec. 17J 
(incorporated by reference in Sec.  250.198);
* * * * *
    (4) Submit to the District Manager a statement certifying that the 
pipe is suitable for its intended use and that the manufacturer has 
complied with the IVA requirements of ANSI/API Spec. 17J (incorporated 
by reference in Sec.  250.198).
* * * * *

0
19. Amend Sec.  250.853 by:
0
a. In paragraph (b), removing the word ``and'';
0
b. In paragraph (c), removing the period and adding ``; and'' in its 
place; and
0
c. Adding a paragraph (d).
    The addition reads as follows:


Sec.  250.853   Safety sensors.

* * * * *
    (d) All level sensors are equipped to permit testing through an 
external bridle on all new vessel installations where possible, 
depending on the type of vessel for which the level sensor is used.

0
20. Amend Sec.  250.867 by revising paragraph (a) and adding paragraph 
(d) to read as follows:


Sec.  250.867  Temporary quarters and temporary equipment.

    (a) You must equip temporary quarters with all safety devices 
required by API RP 14C, Appendix C (incorporated by reference as 
specified in Sec.  250.198). The District Manager must approve the 
safety system/safety devices associated with the temporary quarters 
prior to installation.
* * * * *
    (d) The District Manager must approve temporary generators that 
would require a change to the electrical one-line diagram in Sec.  
250.842(a).

0
21. Amend Sec.  250.870 by revising paragraphs (a) introductory text 
and (a)(2) to read as follows:


Sec.  250.870   Time delays on pressure safety low (PSL) sensors.

    (a) You may apply industry standard Class B, Class C, or Class B/C 
logic to applicable PSL sensors installed on process equipment. If the 
device may be bypassed for greater than 45 seconds, you must monitor 
the bypassed devices in accordance with Sec.  250.869(a). You must 
document on your field test records any use of a PSL sensor with a time 
delay greater than 45 seconds. For purposes of this section, PSL 
sensors are categorized as follows:
* * * * *
    (2) Class C safety devices have logic that allows for the PSL 
sensors to be bypassed until the component comes into full service 
(i.e., the time at which the startup pressure equals or exceeds the set 
pressure of the PSL sensor, the system reaches a stabilized pressure, 
and the PSL sensor clears). If a Class C safety device is bypassed, you 
must monitor the device until it is in full service.
* * * * *

0
22. Revise Sec.  250.872 to read as follows:


Sec.  250.872   Atmospheric vessels.

    (a) You must equip atmospheric vessels used to process and/or store

[[Page 49260]]

liquid hydrocarbons or other Class I liquids as described in API RP 500 
or 505 (both incorporated by reference in Sec.  250.198) with 
protective equipment identified in API RP 14C, section A.5 
(incorporated by reference in Sec.  250.198). Transport tanks approved 
by the U.S. Department of Transportation, that are sealed and not 
connected via interconnected piping to the production process train and 
that are used only for storage of refined liquid hydrocarbons or Class 
I liquids, are not required to be equipped with the protective 
equipment identified in API RP 14C, section A.5. The atmospheric 
vessels connected to the process system that contains a Class I liquid 
and the associated pumps must be reflected on the design documents 
listed in Sec.  250.842(a)(1) through (4) and (b)(3).
    (b) You must ensure that all atmospheric vessels are designed and 
maintained to ensure the proper working conditions for LSH sensors. The 
LSH sensor bridle must be designed to prevent different density fluids 
from impacting sensor functionality.
    (c) You must ensure that all atmospheric vessels are designed, 
installed, and maintained to prevent pollution, including the 
displacement of oil out of an overboard water outlet, as required by 
Sec.  250.300(b)(3) and (4).

0
23. Amend Sec.  250.873 by revising paragraph (b)(3) to read as 
follows:


Sec.  250.873   Subsea gas lift requirements.

* * * * *

[[Page 49261]]

[GRAPHIC] [TIFF OMITTED] TR28SE18.007


[[Page 49262]]


[GRAPHIC] [TIFF OMITTED] TR28SE18.008

* * * * *

0
24. Amend Sec.  250.874 by revising paragraph (g)(2) to read as 
follows:


Sec.  250.874   Subsea water injection systems.

* * * * *
    (g) * * *
    (2) If a designated USV on a water injection well fails the 
applicable test under Sec.  250.880(c)(4)(ii), you must notify the 
appropriate District Manager and request approval to designate another 
ANSI/API Spec 6A and API Spec. 6AV1 (both incorporated by reference in 
Sec.  250.198) certified subsea valve as your USV.
* * * * *

0
25. Revise Sec.  250.876 to read as follows:


Sec.  250.876  Fired and exhaust heated components.

    No later than September 7, 2018, and at least once every 5 years 
thereafter, you must have qualified third-party inspect, and then you 
must repair or replace, as needed, the fire tube for tube-type heaters 
that are equipped with either automatically controlled natural or 
forced draft burners installed in either atmospheric or pressure 
vessels that heat hydrocarbons and/or glycol. If inspection indicates 
tube-type heater deficiencies, you must complete and document repairs 
or replacements. You must document the inspection results, retain such 
documentation for at least 5 years, and make the documentation 
available to BSEE upon request.

0
26. Amend Sec.  250.880 by revising paragraphs (a) introductory text, 
(a)(1), (c)(1)(i), (c)(2)(iv), and (c)(4)(i) and (iii) to read as 
follows:


Sec.  250.880  Production safety system testing.

    (a) Notification. You must:
    (1) Notify the District Manager at least 72 hours before you 
commence initial production on a facility as required in Sec.  
250.800(a)(2), in order for BSEE to conduct the preproduction 
inspection of the integrated safety system.
* * * * *
    (c) * * *
    (1) * * *

------------------------------------------------------------------------
                                    Testing frequency, allowable leakage
             Item name                  rates, and other requirements
------------------------------------------------------------------------
(i) Surface-controlled SSSVs        Semi-annually, not to exceed 6
 (including devices installed in     calendar months between tests. Also
 shut-in and injection wells).       test in place when first installed
                                     or reinstalled. If the device does
                                     not operate properly, or if a
                                     liquid leakage rate > 400 cubic
                                     centimeters per minute or a gas
                                     leakage rate > 15 standard cubic
                                     feet per minute is observed, the
                                     device must be removed, repaired,
                                     and reinstalled or replaced.
                                     Testing must be according to ANSI/
                                     API RP 14B (incorporated by
                                     reference in Sec.   250.198) to
                                     ensure proper operation.
 
                              * * * * * * *
------------------------------------------------------------------------

    (2) * * *

------------------------------------------------------------------------
             Item name               Testing frequency and requirements
------------------------------------------------------------------------
 
                              * * * * * * *
(iv) SSVs.........................  Once each calendar month, not to
                                     exceed 6 weeks between tests.
                                     Valves must be tested for both
                                     operation and leakage. You must
                                     test according to API STD 6AV2
                                     (incorporated by reference in Sec.
                                      250.198). If an SSV does not
                                     operate properly or if any gas and/
                                     or liquid fluid flow is observed
                                     during the leakage test, the valve
                                     must be immediately repaired or
                                     replaced.
 
                              * * * * * * *
------------------------------------------------------------------------

* * * * *
    (4) * * *

------------------------------------------------------------------------
                                    Testing frequency, allowable leakage
             Item name                  rates, and other requirements
------------------------------------------------------------------------
(i) Surface-controlled SSSVs        Tested semiannually, not to exceed 6
 (including devices installed in     months between tests. If the device
 shut-in and injection wells).       does not operate properly, or if a
                                     liquid leakage rate > 400 cubic
                                     centimeters per minute or a gas
                                     leakage rate > 15 standard cubic
                                     feet per minute is observed, the
                                     device must be removed, repaired,
                                     and reinstalled or replaced.
                                     Testing must be according to ANSI/
                                     API RP 14B (incorporated by
                                     reference in Sec.   250.198) to
                                     ensure proper operation, or as
                                     approved in your DWOP.
 

[[Page 49263]]

 
                              * * * * * * *
(iii) BSDVs.......................  Tested at least once each calendar
                                     month, not to exceed 6 weeks
                                     between tests. Valves must be
                                     tested for both operation and
                                     leakage. You must test according to
                                     API STD 6AV2 for SSVs (incorporated
                                     by reference in Sec.   250.198). If
                                     a BSDV does not operate properly or
                                     if any fluid flow is observed
                                     during the leakage test, the valve
                                     must be immediately repaired or
                                     replaced.
 
                              * * * * * * *
------------------------------------------------------------------------

* * * * *

0
27. Amend Sec.  250.1002 by revising paragraphs (b)(1), (2), and (4) to 
read as follows:


Sec.  250.1002  Design requirements for DOI pipelines.

* * * * *
    (b)(1) Pipeline valves shall meet the minimum design requirements 
of ANSI/API Spec 6A (as incorporated by reference in Sec.  250.198), 
ANSI/API Spec 6D (as incorporated by reference in Sec.  250.198), or 
the equivalent. A valve may not be used under operating conditions that 
exceed the applicable pressure-temperature ratings contained in those 
standards.
    (2) Pipeline flanges and flange accessories shall meet the minimum 
design requirements of ANSI/ASME B16.5, ANSI/API Spec 6A, or the 
equivalent (as incorporated by reference in Sec.  250.198). Each flange 
assembly must be able to withstand the maximum pressure at which the 
pipeline is to be operated and to maintain its physical and chemical 
properties at any temperature to which it is anticipated that it might 
be subjected in service.
* * * * *
    (4) If you are installing pipelines constructed of unbonded 
flexible pipe, you must design them according to the standards and 
procedures of ANSI/API Spec. 17J, as incorporated by reference in Sec.  
250.198.
* * * * *

0
28. Amend Sec.  250.1007 by revising paragraph (a)(4)(i)(D) to read as 
follows:


Sec.  250.1007  What to include in applications.

    (a) * * *
    (4) * * *
    (i) * * *
    (D) A review by a third-party independent verification agent (IVA) 
according to ANSI/API Spec. 17J (as incorporated by reference in Sec.  
250.198), if applicable.
* * * * *
[FR Doc. 2018-21197 Filed 9-27-18; 8:45 am]
 BILLING CODE 4310-VH-P