Clarifying the Implementation of Certain BLM Oil and Gas Measurement Regulations, 90037-90038 [2024-26475]

Agencies

• DEPARTMENT OF THE INTERIOR
• Bureau of Land Management

[Federal Register Volume 89, Number 220 (Thursday, November 14, 2024)]
[Notices]
[Pages 90037-90038]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26475]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

[BLM_HQ_FRN_MO4500178504]


Clarifying the Implementation of Certain BLM Oil and Gas 
Measurement Regulations

AGENCY: Bureau of Land Management, Interior.

ACTION: Proposed notice to lessees.

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SUMMARY: The Bureau of Land Management (BLM) is proposing to adopt 
Notice to Lessees No. 5 (NTL-5), clarifying when and how operators are 
expected to comply with certain requirements in the oil and gas 
measurement regulations, which became effective in January 2017.

DATES: Send your comments on the proposed NTL-5, included below and 
entitled, Compliance with the Site Security, Measurement of Oil, and 
Measurement of Gas, 43 CFR part 3170, to the BLM on or before December 
16, 2024. The BLM is not obligated to consider any comments received 
after this date in making its decision on the final NTL-5.

ADDRESSES: You may send written comments by any of the following 
methods:
    Mail, personal, or messenger delivery: U.S. Department of the 
Interior, Director (630), Bureau of Land Management, 1849 C St. NW, 
Room 5646, Washington, DC 20240, Attention: NTL-5.
    Electronic mail: [email protected].

FOR FURTHER INFORMATION CONTACT: John Ajak, Acting Division Chief, 
Fluid Minerals Division, telephone: 505-549-9654, email: [email protected], 
or by mail to Bureau of Land Management, 1849 C St. NW, Room 5633, 
Washington, DC 20240, for information regarding the substance of this 
Notice to Lessees.
    Individuals in the United States who are deaf, deafblind, hard of 
hearing, or have a speech disability may dial 711 (TTY, TDD, or 
TeleBraille) to access telecommunications relay services. Individuals 
outside the United States should use the relay services offered within 
their country to make international calls to the point-of-contact in 
the United States.

SUPPLEMENTARY INFORMATION: The BLM will respond to any relevant and 
substantive public comments it receives on this proposed NTL-5 when it 
ultimately publishes any final NTL-5 in the Federal Register. If the 
BLM publishes a final NTL-5, it will take effect 30 days after its 
publication date. Because the oil and gas measurement rules (43 CFR 
subparts 3174 and 3175) became effective on January 17, 2017, operators 
of onshore oil and gas leases have had sufficient time to prepare for 
compliance. Further, each of the three notifications within this 
proposed NTL-5 have additional, independent compliance dates--ranging 
from 3 months to 1 year--depending upon the requirement. Therefore, if 
the BLM publishes a final NTL-5, it will consider an effective date of 
30 days following the publication of the final NTL-5 as sufficient 
notice for operator compliance.

Compliance With the Site Security, Measurement of Oil, and Measurement 
of Gas

43 CFR Part 3170

(Proposed NTL-5)

    This proposed Notice is issued pursuant to 43 CFR 3164.2, which 
authorizes the Bureau of Land Management (BLM) to issue a Notice to 
Lessees (NTL) when necessary to implement the BLM's oil and gas 
regulations. As explained in detail below, there is a need to clarify 
when and how operators are expected to comply with certain requirements 
in the oil and gas measurement regulations (43 CFR subparts 3174 and 
3175), which became effective in January of 2017. Therefore, the BLM is 
hereby notifying

[[Page 90038]]

operators of onshore Federal and Indian oil and gas leases of the 
following:
    (1) The BLM will, beginning 3 months after the effective date of 
this NTL, no longer decline to enforce the requirements of subpart 3174 
on operators of oil measurement facilities in use prior to January 17, 
2017.
    (2) The BLM will delay enforcement of each of the requirements for 
BLM-approved equipment and software for 1 year following the BLM's 
publication of applicable test procedures.
    (3) In compliance with 43 CFR 3175.120(e), operators must submit 
gas analysis reports to the Authorized Officer (AO) upon request until 
such time as the Gas Analysis Reporting and Verification System (GARVS) 
becomes available for use.

Full Implementation of 43 CFR 3174 Measurement of Oil

    On November 17, 2016, the BLM published final rules in the Federal 
Register pertaining to oil and gas site security and measurement (43 
CFR subparts 3170, 3173, 3174, and 3175) with an effective date of 
January 17, 2017 (81 FR 81516, 81 FR 81462, and 81 FR 81356). Section 
3173.12(e) requires operators to apply for approval of a facility 
measurement point (FMP). For permanent measurement facilities in place 
prior to January 17, 2017, the rule provided operators with between 1 
and 3 years to apply for an FMP, depending on the average volume of oil 
and gas produced from the lease, Communitization Agreement, or unit 
Participating Area. Under Sec.  3174.2(f), oil measurement facilities 
in use prior to January 17, 2017, are required to comply with subpart 
3174 ``on or before the date the operator is required to apply for an 
FMP number under Sec.  3173.12(e).''
    The BLM had anticipated that the Automated Fluid Minerals Support 
System (AFMSS) module for FMP applications would be fully functional 
prior to January 17, 2017. As of this date, the AFMSS FMP application 
module remains unavailable. Since promulgation of the final rule, 
therefore, the BLM has been unable to accept operators' electronic FMP 
applications and assign FMP numbers due to competing priorities in 
updating AFMSS.
    In January 2017, the BLM issued Instruction Memorandum (IM) 2017-
032 (Jan. 17, 2017). Recognizing the delay in finalizing the AFMSS FMP 
application module, the IM explained that: ``State and field offices 
will delay implementation and enforcement of new oil measurement 
regulations under 3174 as they apply to permanent oil measurement 
facilities in place before January 17, 2017. The length of the delay 
will be the number of days between January 17, 2017, and the date when 
the BLM fully implements FMP functionality in [AFMSS]. The phase-in 
periods in Sec.  3174.2(f) will apply this same delay.'' As provided in 
the IM, the BLM sent a letter to operators informing stakeholders of 
this delay in enforcement.
    By its own terms, the IM expired on September 30, 2020, or 1,353 
days after January 17, 2017. Thus, the BLM's discretionary delay of 
enforcement of the subpart 3174 requirements terminated, at the latest, 
on September 30, 2020.
    Although the BLM remains unable to accept electronic FMP 
applications, such applications are not a practical or legal 
prerequisite \1\ for measurement operations in use prior to January 17, 
2017, to comply with the requirements of subpart 3174. Operators of oil 
measurement facilities in use prior to January 17, 2017, have been on 
notice at least since the expiration of IM 2017-032--if not November 
17, 2016, when the relevant final rule was published--that the 
requirements of subpart 3174 would eventually apply to them by 
operation of regulation and in the absence of any BLM policy of non-
enforcement. Particularly in view of this extended notice period, the 
BLM will, beginning 3 months after the effective date of this NTL, no 
longer decline to enforce the requirements of subpart 3174 to operators 
of oil measurement facilities in use prior to January 17, 2017.
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    \1\ The preamble to final subpart 3174 demonstrates that the 
intent of the cross-reference in Sec.  3174.2(f) to the FMP 
application deadlines in Sec.  3173.12(e) was to tether the 
subpart's requirements to the date that application requirements 
were effective, not to tether (practically or legally) the subpart's 
requirement to the act of filing an FMP application itself. See 81 
FR 81462, 81468 (Nov. 17, 2016).
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Use of Approved Equipment and Software for the Measurement of Oil and 
Gas

    Certain provisions in subparts 3174 and 3175 require operators to 
use BLM-approved measurement equipment and software. In 2018, IM 2018-
077 explained that the BLM would delay its enforcement of the use of 
approved measurement equipment ``until the BLM has executed the 
prerequisite approvals of equipment and software, and operators are 
afforded a reasonable opportunity to comply.'' That IM, like IM 2017-
32, expired on September 30, 2020.
    In fiscal year 2024, the BLM anticipates publishing additional 
recommended test procedures on the BLM website (www.blm.gov) and will 
notify local and national industry groups of the availability of these 
test procedures. The BLM is hereby notifying operators that, following 
the effective date of this NTL, the BLM will delay enforcement of each 
of the requirements for BLM-approved equipment and software for 1 year 
following the BLM's publication of applicable test procedures. For 
example, operators are expected to use BLM-approved Coriolis meters for 
liquid measurement, the test procedure for which is currently available 
on the BLM website,\2\ by no later than 1 year after [THE EFFECTIVE 
DATE OF THE FINAL NTL]. Prior to a BLM approval of measurement 
equipment or software, equipment or software must be installed and 
operated within the manufacturer's recommendations and meet the BLM's 
measurement uncertainty requirements (Sec.  3174.4 Table 1 and Sec.  
3175.31(a)).
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    \2\ https://www.blm.gov/sites/default/files/docs/2022-06/BLM_Testing_Procedure_Coriolis_Liquid.pdf.
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Gas Analysis Reporting

    Under Sec.  3175.120(e), the ``operator must submit all gas 
analysis reports to the BLM within 15 days of the due date for the 
sample.'' Section 3175.120(f) requires operators to ``submit all gas 
analysis reports and other required related information electronically 
through the GARVS.''
    IM 2018-077 noted delays in the development of GARVS based on 
competing work priorities. At that time, the BLM anticipated that GARVS 
would be available no earlier than June 2019. IM 2018-077 instructed 
the BLM to require submission of the gas analysis reports, whenever 
appropriate, in the interim until GARVS became available. GARVS remains 
unavailable, and the BLM has no timeline for its development. In the 
interim, operators must continue to submit gas analysis reports to an 
AO upon request pursuant to the BLM's recordkeeping requirement at 43 
CFR 3170.7(h). The BLM further notifies operators that the submission 
of electronic gas analysis reports through GARVS will not be required 
until 3 months following the BLM publicly announcing GARVS availability 
on the BLM website.

(Authority: 43 CFR 3164.2)

David Rosenkrance,
Assistant Director, Energy, Minerals, and Realty Management.
[FR Doc. 2024-26475 Filed 11-13-24; 8:45 am]
BILLING CODE 4331-29-P