| Page Range | 36325-36336 | |
| FR Document | 2016-13206 |
[Federal Register Volume 81, Number 108 (Monday, June 6, 2016)] [Notices] [Pages 36325-36336] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-13206] ----------------------------------------------------------------------- DEPARTMENT OF THE INTERIOR Office of Natural Resources Revenue [Docket No. ONRR-2012-0006; DS63642000 DR2PS0000.CH7000 167D0102R2] Agency Information Collection Activities: Federal Oil and Gas Valuation; Comment Request AGENCY: Office of Natural Resources Revenue (ONRR), Interior. ACTION: Notice of an extension. ----------------------------------------------------------------------- SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), ONRR is inviting comments on a collection of information requests that we will submit to the Office of Management and Budget (OMB) for review and approval. This Information Collection Request (ICR) covers the paperwork requirements in the regulations under title 30, Code of Federal Regulations (CFR), parts 1202, 1204, and 1206. This ICR pertains to Federal oil and gas valuation regulations, which include transportation and processing regulatory allowance limits and accounting and auditing relief for marginal properties. Also, there is one form (ONRR-4393) associated with this information collection. DATES: Submit written comments on or before August 5, 2016. ADDRESSES: You may submit comments on this ICR to ONRR by using one of the following three methods (please reference ``ICR 1012-0005'' in your comments): 1. Electronically go to http://www.regulations.gov. In the entry titled ``Enter Keyword or ID,'' enter ``ONRR-2012-0005'' and then click ``Search.'' Follow the instructions to submit public comments. ONRR will post all comments. 2. Email comments to Mr. Luis Aguilar, Regulatory Specialist, at [email protected]. 3. Hand-carry or mail comments, using an overnight courier service, to ONRR. Our courier address is Building 85, Room A-614, Denver Federal Center, West 6th Ave. and Kipling St., Denver, Colorado 80225. FOR FURTHER INFORMATION CONTACT: For any questions, contact Mr. Luis Aguilar, telephone (303) 231-3418, or email at [email protected]. You may also contact Mr. Aguilar to obtain copies, at no cost, of (1) the ICR, (2) any associated forms, and (3) the regulations that require us to collect the information. SUPPLEMENTARY INFORMATION: I Abstract The Secretary of the United States Department of the Interior is responsible for mineral resource development on Federal and Indian lands and the Outer Continental Shelf (OCS). The Secretary's responsibility, according to various laws, is to manage mineral resource production from Federal and Indian lands and the OCS, collect the royalties and other mineral revenues due, and distribute the funds collected under those laws. We have posted those laws pertaining to mineral leases on Federal and Indian lands and the OCS at http://www.onrr.gov/Laws_R_D/PubLaws/default.htm. The Secretary also has a trust responsibility to manage Indian lands and seek advice and information from Indian beneficiaries. ONRR performs the minerals revenue management functions for the Secretary and assists the Secretary in carrying out the Department's trust responsibility for Indian lands. You can find the information collections covered in this ICR at 30 CFR parts:1202, subparts C and D, which pertain to Federal oil and gas royalties. 1204, subpart C, which pertains to accounting and auditing relief for marginal properties. 1206, subparts C and D, which pertain to Federal oil and gas product valuation. General Information When a company or an individual enters into a lease to explore, develop, produce, and dispose of minerals from Federal or Indian lands, that company or individual agrees to pay the lessor a share in an amount or value of production from the leased lands. The mineral lease laws require the lessee, or his designee, to report various kinds of information to the lessor relative to the [[Page 36326]] disposition of the leased minerals. Such information is generally available within the records of the lessee or others involved in developing, transporting, processing, purchasing, or selling of such minerals. Information Collections ONRR uses the information that we collect in this ICR to ensure that lessees accurately value and appropriately pay royalties on oil and gas produced from Federal onshore and offshore leases. Please refer to the chart for all reporting requirements and associated burden hours. All data submitted is subject to subsequent audit and adjustment. A. Federal Oil and Gas Valuation Regulations The valuation regulations at 30 CFR part 1206, subparts C and D, mandate that companies collect and submit information used to value their Federal oil and gas, including (1) transportation and processing allowances and (2) regulatory allowance limit information. Companies report certain data on form ONRR-2014, Report of Sales and Royalty Remittance. The information that we request is the minimum necessary to carry out our mission and places the least possible burden on respondents. If ONRR does not collect this information, both Federal and State governments may incur a loss of royalties. Transportation and Processing Regulatory Allowance Limits: Lessees may deduct actual costs of transportation and processing from Federal royalties. The lessees report these allowances on form ONRR-2014. For oil and gas, regulations establish the allowable limit on transportation allowance deductions at 50 percent of the value of the oil or gas. For gas only, regulations establish the allowable limit on processing allowance deductions at 66\2/3\ percent of the value of each gas plant product. Request to Exceed Regulatory Allowance Limitation, form ONRR-4393: Lessees may request to exceed regulatory limitations. Upon proper application from the lessee, ONRR may approve oil or gas transportation allowance in excess of 50 percent or gas processing allowance in excess of 66\2/3\ percent on Federal leases. Lessees use form ONRR-4393 for both Federal and Indian leases to request to exceed allowance limitations. This ICR covers only Federal leases; therefore, we have not included burden hours of form ONRR-4393 for Indian leases in this ICR. We include burden hours for form ONRR-4393 for Indian leases in OMB Control Number 1012-0002. B. Accounting and Auditing Relief for Marginal Properties In 2004, we amended our regulations to comply with section 7 of the Federal Oil and Gas Royalty Simplification and Fairness Act of 1996. These regulations provide guidance for lessees and designees seeking accounting and auditing relief for qualifying Federal marginal properties. Under the regulations, both ONRR and the State concerned must approve any relief granted for a marginal property. OMB Approval We will request OMB approval to continue to collect, from companies, lessees, and designees, information used (1) to value their Federal oil and gas, including (a) transportation and processing allowances and (b) regulatory allowance limit information and (2) to request accounting and auditing relief approval for qualifying Federal marginal properties. If ONRR does not collect this information, this would limit the Secretary's ability to discharge fiduciary duties and may also result in loss of royalty payments. ONRR protects the proprietary information that we receive, and we do not collect items of a sensitive nature. ONRR requires lessees to respond to information collections relating to valuation requirements. II. Data Title: 30 CFR parts 1202, 1204, and 1206, Federal Oil and Gas Valuation. OMB Control Number: 1012-0005. Bureau Form Number: Form ONRR-4393. Frequency: Annually and on occasion. Estimated Number and Description of Respondents: 120 Federal lessees/designees and 7 States for Federal oil and gas. Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 9,518 hours. We have not included in our estimates certain requirements performed in the normal course of business and considered as usual and customary. We display the estimated annual burden hours by CFR section and paragraph in the following chart: Respondents' Estimated Annual Burden Hours ---------------------------------------------------------------------------------------------------------------- Average Reporting and recordkeeping number of Annual burden 30 CFR 1202, 1204, 1206, and 1210 requirement Hour burden annual hours responses ---------------------------------------------------------------------------------------------------------------- PART 1202--ROYALTIES ---------------------------------------------------------------------------------------------------------------- Subpart C--Federal and Indian Oil ---------------------------------------------------------------------------------------------------------------- 1202.101........................... Standards for reporting and Burden covered under OMB Control Number 1012- paying royalties. 0004. Oil volumes are to be reported in barrels of clean oil of 42 standard U.S. gallons (231 cubic inches each) at 60 [deg]F . . .. ---------------------------------------------------------------------------------------------------------------- Subpart D--Federal Gas ---------------------------------------------------------------------------------------------------------------- 1202.152(a) and (b)................ Standards for reporting and Burden covered under OMB Control Number 1012- paying royalties on gas. 0004. (a)(1) If you are responsible for reporting production or royalties you must:. (i) Report gas volumes and British thermal unit (Btu) heating values, if applicable, under the same degree of water saturation; (ii) Report gas volumes in units of 1,000 cubic feet (mcf); and [[Page 36327]] (iii) Report gas volumes and Btu heating value at a standard pressure base of 14.73 pounds per square inch absolute (psia) and a standard temperature base of 60 [deg]F . . . (b) Residue gas and gas plant product volumes shall be reported as specified in this paragraph . . . ---------------------------------------------------------------------------------------------------------------- PART 1204--ALTERNATIVES FOR MARGINAL PROPERTIES ---------------------------------------------------------------------------------------------------------------- Subpart C--Accounting and Auditing Relief ---------------------------------------------------------------------------------------------------------------- 1204.202(b)(1)..................... What is the cumulative 40 1 40 royalty reports and payments relief option? (b) To use the cumulative royalty reports and payments relief option, you must do all of the following: (1) Notify ONRR in writing by January 31 of the calendar year for which you begin taking your relief . . . ---------------------------------------------------------------------------------------------------------------- 1204.202(b)(2) and (b)(3).......... (b)(2) Submit your royalty Burden covered under OMB Control Number 1012- report and payment . . . 0004. by the end of February of the year following the calendar year for which you reported annually . . . If you have an estimated payment on file, you must submit your royalty report and payment by the end of March of the year following the calendar year for which you reported annually; (3) Use the sales month prior to the month that you submit your annual report and payment . . . for the entire previous calendar year's production for which you are paying annually . . . ---------------------------------------------------------------------------------------------------------------- 1204.202(b)(4), (b)(5), (c), (b)(4) Report one line of Burden covered under OMB Control Number 1012- (d)(1), (d)(2), (e)(1), and (e)(2). cumulative royalty 0004. information on Form ONRR- 2014 for the calendar year . . . And (5) Report allowances on Form ONRR-2014 on the same annual basis as the royalties for your marginal property production.. (c) If you do not pay your royalty by the date due in paragraph (b) of this section, you will owe late payment interest . . . from the date your payment was due under this section until the date ONRR receives it . . . (d) If you take relief you are not qualified for, you may be liable for civil penalties. Also you must: (1) Pay ONRR late payment interest determined under 30 CFR 1218.54 . . . (2) Amend your Form ONRR-2014 . . .. (e) If you dispose of your ownership interest in a marginal property for which you have taken relief . . . you must: (1) Report and pay royalties for the portion of the calendar year for which you had an ownership interest; and. (2) Make the report and payment by the end of the month after you dispose of the ownership interest in the marginal property. If you do not report and pay timely, you will owe interest . . . from the date the payment was . . . ---------------------------------------------------------------------------------------------------------------- 1204.203(b), 1204.205(a) and (b), What is the other relief 200 1 200 and 1204.206(a)(3)(i) and (b)(1). option? (b) You must request approval from ONRR . . . before taking relief under this option.. ---------------------------------------------------------------------------------------------------------------- 1204.208(c)(1), (d)(1), and (e).... May a State decide that it 40 7 280 will or will not allow one or both of the relief options under this subpart? (c) If a State decides . . . that it will or will not allow one or both of the relief options . . . within 30 days . . . the State must: (1) Notify the Director for Office of Natural Resources Revenue, in writing, of its intent to allow or not allow one or both of the relief options . . . (d) If a State decides in advance . . . that it will not allow one or both of the relief options . . . the State must: (1) Notify the Director for Office of Natural Resources Revenue, in writing, of its intent to allow one or both of the relief options . . . [[Page 36328]] (e) If a State does not notify ONRR . . . the State will be deemed to have decided not to allow either of the relief options . . . ---------------------------------------------------------------------------------------------------------------- 1204.209(b)........................ What if a property ceases 6 1 6 to qualify for relief obtained under this subpart? (b) If a property is no longer eligible for relief . . . the relief for the property terminates as of December 31 of that calendar year. You must notify ONRR in writing by December 31 that the relief for the property has terminated . . . ---------------------------------------------------------------------------------------------------------------- 1204.210(c) and (d)................ What if a property is Burden covered under OMB Control Number 1012- approved as part of 0004. anonqualifying agreement? (c) . . . the volumes on which you report and pay royalty . . . must be amended to reflect all volumes produced on or allocated to your lease under the nonqualifying agreement as modified by BLM. . . . Report and pay royalties for your production using the procedures in Sec. 1204.202(b). (d) If you owe additional royalties based on the retroactive agreement approval and do not pay your royalty by the date due in Sec. 1204.202(b), you will owe late payment interest determined under Sec. 1218.54 from the date your payment was due under Sec. 1204.202(b)(2) until the date ONRR receives it. ---------------------------------------------------------------------------------------------------------------- 1204.214(b)(1) and (b)(2).......... Is minimum royalty due on a Burden covered under OMB Control Number 1012- property for which I took 0004. relief? (b) If you pay minimum royalty on production from a marginal property during a calendar year for which you are taking cumulative royalty reports and payment relief, and:. (1) The annual payment you owe under this subpart is greater than the minimum royalty you paid, you must pay the difference between the minimum royalty you paid and your annual payment due under this subpart; or (2) The annual payment you owe under this subpart is less than the minimum royalty you paid, you are not entitled to a credit because you must pay at least the minimum royalty amount on your lease each year. ---------------------------------------------------------------------------------------------------------------- Accounting and Auditing Relief ........................... .............. 10 526 Subtotal. ---------------------------------------------------------------------------------------------------------------- Part 1206--Product Valuation ---------------------------------------------------------------------------------------------------------------- Subpart C--Federal Oil ---------------------------------------------------------------------------------------------------------------- 1206.102(e)(1)..................... How do I calculate royalty AUDIT PROCESS. See note. value for oil that I or my affiliate sell(s) under an arm's-length contract? (e) If you value oil under paragraph (a) of this section: (1) ONRR may require you to certify that your or your affiliate's arm's-length contract provisions include all of the consideration the buyer must pay, either directly or indirectly, for the oil. ---------------------------------------------------------------------------------------------------------------- 1206.103(a)(1), (a)(2), and (a)(3). How do I value oil that is 45 5 225 not sold under an arm's- length contract? This section explains how to value oil that you may not value under Sec. 1206.102 or that you elect under Sec. 1206.102(d) to value under this section. First determine whether paragraph (a), (b), or (c) of this section applies to production from your lease, or whether you may apply paragraph (d) or (e) with ONRR approval. (a) Production from leases in California or Alaska. Value is the average of the daily mean ANS spot prices published in any ONRR-approved publication during the trading month most concurrent with the production month . . . (1) To calculate the daily mean spot price . . . (2) Use only the days . . . (3) You must adjust the value . . . ---------------------------------------------------------------------------------------------------------------- [[Page 36329]] 1206.103(a)(4)..................... (a)(4) After you select an 8 2 16 ONRR-approved publication, you may not select a different publication more often than once every 2 years, . . . ---------------------------------------------------------------------------------------------------------------- 1206.103(b)(1)..................... (b) Production from leases 400 2 800 in the Rocky Mountain Region . . . (1) If you have an ONRR- approved tendering program, you must value oil . . . ---------------------------------------------------------------------------------------------------------------- 1206.103(b)(1)(ii)................. (b)(1)(ii) If you do not 400 2 800 have an ONRR-approved tendering program, you may elect to value your oil under either paragraph (b)(2) or (b)(3) of this section . . . ---------------------------------------------------------------------------------------------------------------- 1206.103(b)(4)..................... (4) If you demonstrate to 400 2 800 ONRR's satisfaction that paragraphs (b)(1) through (b)(3) of this section result in an unreasonable value for your production as a result of circumstances regarding that production, the ONRR Director may establish an alternative valuation method. ---------------------------------------------------------------------------------------------------------------- 1206.103(c)(1)..................... (c) Production from leases 50 10 500 not located in California, Alaska or the Rocky Mountain Region. (1) Value is the NYMEX price, plus the roll, adjusted for applicable location and quality differentials and transportation costs under Sec. 1206.112. ---------------------------------------------------------------------------------------------------------------- 1206.103(e)(1) and (e)(2).......... (e) Production delivered to 330 2 660 your refinery and the NYMEX price or ANS spot price is an unreasonable value. (1) . . . you may apply to the ONRR Director to establish a value (2) You must provide adequate documentation and evidence demonstrating the market value at the refinery. . . . representing the market at the refinery if: . . . ---------------------------------------------------------------------------------------------------------------- 1206.105........................... What records must I keep to Burden covered under OMB Control Number 1012- support my calculations of 0004. value under this subpart? If you determine the value of your oil under this subpart, you must retain all data relevant to the determination of royalty value . . . ---------------------------------------------------------------------------------------------------------------- 1206.107(a)........................ How do I request a value 40 10 400 determination? (a) You may request a value determination from ONRR . . . ---------------------------------------------------------------------------------------------------------------- 1206.109(c)(2)..................... When may I take a 8 2 16 transportation allowance in determining value? (c) Limits on transportation allowances. (2) You may ask ONRR to approve a transportation allowance in excess of the limitation in paragraph (c)(1) of this section . . . Your application for exception (using Form ONRR- 4393, Request to Exceed Regulatory Allowance Limitation) must contain all relevant and supporting documentation necessary for ONRR to make a determination . . . ---------------------------------------------------------------------------------------------------------------- 1206.110(a)........................ How do I determine a AUDIT PROCESS. See note. transportation allowance under an arm's-length transportation contract? (a) . . . You must be able to demonstrate that your or your affiliate's contract is at arm's length. . . .. ---------------------------------------------------------------------------------------------------------------- 1206.110(d)(3)..................... (d) If your arm's-length 20 2 40 transportation contract includes more than one liquid product, and the transportation costs attributable to each product cannot be determined . . . (3) You may propose to ONRR a cost allocation method . . . ---------------------------------------------------------------------------------------------------------------- 1206.110(e)........................ (e) If your arm's-length 20 1 20 transportation contract includes both gaseous and liquid products, and the transportation costs attributable to each product cannot be determined from the contract, then you must propose an allocation procedure to ONRR. ---------------------------------------------------------------------------------------------------------------- [[Page 36330]] 1206.110(e)(1) and (e)(2).......... (e)(1) . . . If ONRR Burden covered under OMB Control Number 1012- rejects your cost 0004. allocation, you must amend your Form ONRR-2014 . . . (2) You must submit your initial proposal, including all available data, within 3 months after first claiming the allocated deductions on Form ONRR-2014. ---------------------------------------------------------------------------------------------------------------- 1206.110(g)(2)..................... (g) If your arm's-length 5 1 5 sales contract includes a provision reducing the contract price by a transportation factor, . . . (2) You must obtain ONRR approval before claiming a transportation factor in excess of 50 percent of the base price of the product. ---------------------------------------------------------------------------------------------------------------- 1206.111(g)........................ How do I determine a 30 1 30 transportation allowance if I do not have an arm's- length transportation contract or arm's-length tariff? (g) To compute depreciation, you may elect to use either . . . After you make an election, you may not change methods without ONRR approval . . . ---------------------------------------------------------------------------------------------------------------- 1206.111(k)(2)..................... (k)(2) You may propose to 30 1 30 ONRR a cost allocation method on the basis of the values . . . ---------------------------------------------------------------------------------------------------------------- 1206.111(l)(1) and (l)(3).......... (l)(1) Where you transport 20 1 20 both gaseous and liquid products through the same transportation system, you must propose a cost allocation procedure to ONRR . . . (3) You must submit your initial proposal, including all available data, within 3 months after first claiming the allocated deductions on Form ONRR-2014. ---------------------------------------------------------------------------------------------------------------- 1206.111(l)(2)..................... (l)(2) . . . If ONRR Burden covered under OMB Control Number 1012- rejects your cost 0004. allocation, you must amend your Form ONRR-2104 for the months that you used the rejected method and pay any additional royalty and interest due. ---------------------------------------------------------------------------------------------------------------- 1206.112(a)(1)(ii)................. What adjustments and 80 1 80 transportation allowances apply when I value oil production from my lease using NYMEX prices or ANS spot prices? (a)(1)(ii) . . . under an exchange agreement that is not at arm's length, you must obtain approval from ONRR for a location and quality differential . . . ---------------------------------------------------------------------------------------------------------------- 1206.112(a)(1)(ii)................. (a)(1)(ii) . . . If ONRR 20 2 40 prescribes a different differential, you must apply . . . You must pay any additional royalties owed . . . plus the late payment interest from the original royalty due date, or you may report a credit . . . ---------------------------------------------------------------------------------------------------------------- 1206.112(a)(3) and (a)(4).......... (a)(3) If you transport or 80 4 320 exchange at arm's length (or both transport and exchange) at least 20 percent, but not all, of your oil produced from the lease to a market center, determine the adjustment between the lease and the market center for the oil that is not transported or exchanged (or both transported and exchanged) to or through a market center as follows: . . . (4) If you transport or exchange (or both transport and exchange) less than 20 percent of your crude oil produced from the lease between the lease and a market center, you must propose to ONRR an adjustment between the lease and the market center for the portion of the oil that you do not transport or exchange (or both transport and exchange) to a market center. . . . If ONRR prescribes a different adjustment. . . . You must pay any additional royalties owed . . . plus the late payment interest from the original royalty due date, or you may report a credit . . . ---------------------------------------------------------------------------------------------------------------- [[Page 36331]] 1206.112(b)(3)..................... (b)(3) . . . you may 80 4 320 propose an alternative differential to ONRR. . . . If ONRR prescribes a different differential. . . . You must pay any additional royalties owed . . . plus the late payment interest from the original royalty due date, or you may report a credit . . . ---------------------------------------------------------------------------------------------------------------- 1206.112(c)(2)..................... (c)(2) . . . If quality 80 2 160 bank adjustments do not incorporate or provide for adjustments for sulfur content, you may make sulfur adjustments, based on the quality of the representative crude oil at the market center, of 5.0 cents per one-tenth percent difference in sulfur content, unless ONRR approves a higher adjustment. ---------------------------------------------------------------------------------------------------------------- 1206.114........................... What are my reporting requirements under an arm's-length transportation contract? You or your affiliate must Burden covered under OMB Control Number 1012- use a separate entry on 0004. Form ONRR-2014 to notify ONRR of an allowance based on transportation costs you or your affiliate incur. ---------------------------------------------------------------------------- ONRR may require you or AUDIT PROCESS. See note. your affiliate to submit arm's-length transportation contracts, production agreements, operating agreements, and related documents . . . ---------------------------------------------------------------------------------------------------------------- 1206.115(a)........................ What are my reporting Burden covered under OMB Control Number 1012- requirements under a non- 0004. arm's-length transportation arrangement? (a) You or your affiliate must use a separate entry on Form ONRR-2014 to notify ONRR of an allowance based on transportation costs you or your affiliate incur. ---------------------------------------------------------------------------------------------------------------- 1206.115(c)........................ (c) ONRR may require you or AUDIT PROCESS. See note. your affiliate to submit all data used to calculate the allowance deduction . . . ---------------------------------------------------------------------------------------------------------------- Subpart D--Federal Gas ---------------------------------------------------------------------------------------------------------------- 1206.152(b)(1)(i) and (b)(1)(iii).. Valuation standards-- AUDIT PROCESS. See note. unprocessed gas. (b)(1)(i) . . . The lessee shall have the burden of demonstrating that its contract is arm's-length. . . . (iii) . . . When ONRR determines that the value may be unreasonable, ONRR will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee's value. ---------------------------------------------------------------------------------------------------------------- 1206.152(b)(2)..................... (b)(2) . . . The lessee 80 1 80 must request a value determination in accordance with paragraph (g) of this section for gas sold pursuant to a warranty contract; . . . ---------------------------------------------------------------------------------------------------------------- 1206.152(b)(3)..................... (b)(3) ONRR may require a AUDIT PROCESS. See note. lessee to certify that its arm's-length contract provisions include all of the consideration to be paid by the buyer, either directly or indirectly, for the gas. ---------------------------------------------------------------------------------------------------------------- 1206.152(e)(1)..................... (e)(1) Where the value is Burden covered under OMB Control Number 1012- determined pursuant to 0004. paragraph (c) of this section, the lessee shall retain all data relevant to the determination of royalty value . . . ---------------------------------------------------------------------------------------------------------------- 1206.152(e)(2)..................... 206.152(e)(2) Any Federal AUDIT PROCESS. See note. lessee will make available upon request to the authorized ONRR or State representatives, to the Office of the Inspector General of the department of the Interior, or other person authorized to receive such information, arm's-length sales and volume data for like- quality production sold, purchased or otherwise obtained by the lessee from the field or area or from nearby fields or areas. ---------------------------------------------------------------------------------------------------------------- 1206.152(e)(3)..................... (e)(3) A lessee shall 10 10 100 notify ONRR if it has determined value pursuant to paragraph (c)(2) or (c)(3) of this section . . . ---------------------------------------------------------------------------------------------------------------- [[Page 36332]] 1206.152(g)........................ (g) The lessee may request 40 5 200 a value determination from ONRR . . . The lessee shall submit all available data relevant to its proposal . . . ---------------------------------------------------------------------------------------------------------------- 1206.153(b)(1)(i) and (b)(1)(iii).. Valuation standards-- AUDIT PROCESS. See note. processed gas. (b)(1)(i) . . . The lessee shall have the burden of demonstrating that its contract is arm's-length . . . (iii) . . . When ONRR determines that the value may be unreasonable, ONRR will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee's value. ---------------------------------------------------------------------------------------------------------------- 1206.153(b)(2)..................... (b)(2) . . . The lessee 80 1 80 must request a value determination in accordance with paragraph (g) of this section for gas sold pursuant to a warranty contract; . . . ---------------------------------------------------------------------------------------------------------------- 1206.153(b)(3)..................... (b)(3) ONRR may require a AUDIT PROCESS. See note. lessee to certify that its arm's-length contract provisions include all of the consideration to be paid by the buyer, either directly or indirectly, for the residue gas or gas plant product. ---------------------------------------------------------------------------------------------------------------- 1206.153(e)(1)..................... (e)(1) Where the value is Burden covered under OMB Control Number 1012- determined pursuant to 0004. paragraph (c) of this section, the lessee shall retain all data relevant to the determination of royalty value . . . ---------------------------------------------------------------------------------------------------------------- 1206.153(e)(2)..................... (e)(2) Any Federal lessee AUDIT PROCESS. See note. will make available upon request to the authorized ONRR or State representatives, to the Office of the Inspector General of the Department of the Interior, or other persons authorized to receive such information, arm's-length sales and volume data for like- quality residue gas and gas plant products sold, purchased or otherwise obtained by the lessee from the same processing plant or from nearby processing plants. ---------------------------------------------------------------------------------------------------------------- 1206.153(e)(3)..................... (e)(2) A lessee shall 10 2 20 notify ONRR if it has determined any value pursuant to paragraph (c)(2) or (c)(3) of this section . . . ---------------------------------------------------------------------------------------------------------------- 1206.153(g)........................ 206.153(g) The lessee may 80 15 1,200 request a value determination from ONRR . . . The lessee shall submit all available data relevant to its proposal . . . ---------------------------------------------------------------------------------------------------------------- 1206.154(c)(4)..................... Determination of quantities 40 1 40 and qualities for computing royalties. (c)(4) . . . A lessee may request ONRR approval of other methods for determining the quantity of residue gas and gas plant products allocable to each lease . . . ---------------------------------------------------------------------------------------------------------------- 1206.156(c)(3)..................... Transportation allowances-- 40 7 280 general. (c)(3) Upon request of a lessee, ONRR may approve a transportation allowance deduction in excess of the limitation prescribed by paragraphs (c)(1) and (c)(2) of this section . . . An application for exception (using Form ONRR- 4393, Request to Exceed Regulatory Allowance Limitation) must contain all relevant and supporting documentation necessary for ONRR to make a determination. . . . ---------------------------------------------------------------------------------------------------------------- 1206.157(a)(1)(i).................. Determination of transportation allowances. (a) Arm's-length AUDIT PROCESS. See note. transportation contracts. (1)(i) . . . The lessee shall have the burden of demonstrating that its contract is arm's-length . . . ---------------------------------------------------------------------------- The lessee must claim a Burden covered under OMB Control Number 1012- transportation allowance 0004. by reporting it on a separate line entry on the Form ONRR-2014. ---------------------------------------------------------------------------------------------------------------- [[Page 36333]] 1206.157(a)(1)(iii)................ (a)(1)(iii) . . . When ONRR AUDIT PROCESS. See note. determines that the value of the transportation may be unreasonable, ONRR will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee's transportation costs. ---------------------------------------------------------------------------------------------------------------- 1206.157(a)(2)(ii)................. (a)(2)(ii) . . . the lessee 40 1 40 may propose to ONRR a cost allocation method on the basis of the values of the products transported . . . ---------------------------------------------------------------------------------------------------------------- 1206.157(a)(3)..................... (a)(3) If an arm's-length 40 1 40 transportation contract includes both gaseous and liquid products and the transportation costs attributable to each cannot be determined from the contract, the lessee shall propose an allocation procedure to ONRR . . . The lessee shall submit all relevant data to support its proposal . . . ---------------------------------------------------------------------------------------------------------------- 1206.157(a)(5)..................... (a)(5) . . . The 10 3 30 transportation factor may not exceed 50 percent of the base price of the product without ONRR approval. ---------------------------------------------------------------------------------------------------------------- 1206.157(b)(1)..................... (b) Non-arm's-length or no Burden covered under OMB Control Number 1012- contract. (1) The lessee 0004. must claim a transportation allowance by reporting it on a separate line entry on the Form ONRR-2014 . . . ---------------------------------------------------------------------------------------------------------------- 1206.157(b)(2)(iv) and (b)(2)(iv) . . . After a 100 1 100 (b)(2)(iv)(A). lessee has elected to use either method for a transportation system, the lessee may not later elect to change to the other alternative without approval of the ONRR. (A) . . . After an election is made, the lessee may not change methods without ONRR approval . . . ---------------------------------------------------------------------------------------------------------------- 1206.157(b)(3)(i).................. (b)(3)(i) . . . Except as 100 1 100 provided in this paragraph, the lessee may not take an allowance for transporting a product which is not royalty bearing without ONRR approval. ---------------------------------------------------------------------------------------------------------------- 1206.157(b)(3)(ii)................. (b)(3)(ii) . . . the lessee 100 1 100 may propose to the ONRR a cost allocation method on the basis of the values of the products transported . . . ---------------------------------------------------------------------------------------------------------------- 1206.157(b)(4)..................... (b)(4) Where both gaseous 100 1 100 and liquid products are transported through the same transportation system, the lessee shall propose a cost allocation procedure to ONRR . . . The lessee shall submit all relevant data to support its proposal . . . ---------------------------------------------------------------------------------------------------------------- 1206.157(b)(5)..................... (b)(5) You may apply for an 100 1 100 exception from the requirement to compute actual costs under paragraphs (b)(1) through (b)(4) of this section. ---------------------------------------------------------------------------------------------------------------- 1206.157(c)(1)(i).................. (c) Reporting Requirements. Burden covered under OMB Control Number 1012- (1) Arm's-length 0004. contracts. (i) You must use a separate entry on Form ONRR-2014 to notify ONRR of a transportation allowance. ---------------------------------------------------------------------------------------------------------------- 1206.157(c)(1)(ii)................. (c)(1)(ii) ONRR may require AUDIT PROCESS. See note. you to submit arm's-length transportation contracts, production agreements, operating agreements, and related documents . . . ---------------------------------------------------------------------------------------------------------------- 1206.157(c)(2)(i).................. (c)(2) Non-arm's-length or Burden covered under OMB Control Number 1012- no contract. (i) You must 0004. use a separate entry on Form ONRR-2014 to notify ONRR of a transportation allowance. ---------------------------------------------------------------------------------------------------------------- 1206.157(c)(2)(iii)................ (c)(2)(iii) ONRR may AUDIT PROCESS. See note. require you to submit all data used to calculate the allowance deduction . . . ---------------------------------------------------------------------------------------------------------------- [[Page 36334]] 1206.157(e)(2), (e)(3), and (f)(1). (e) Adjustments. (2) For Burden covered under OMB Control Number 1012- lessees transporting 0004. production from onshore Federal leases, the lessee must submit a corrected Form ONRR-2014 to reflect actual costs, together with any payment, in accordance with instructions provided by ONRR. (3) For lessees transporting gas production from leases on the OCS, if the lessee's estimated transportation allowance exceeds the allowance based on actual costs, the lessee must submit a corrected Form ONRR-2014 to reflect actual costs, together with its payments, in accordance with instructions provided by ONRR . . . (f) Allowable costs in determining transportation allowances . . . (1) Firm demand charges paid to pipelines . . . if you receive a payment or credit from the pipeline for penalty refunds, rate case refunds, or other reasons, you must reduce the firm demand charge claimed on the Form ONRR- 2014 by the amount of that payment. You must modify Form ONRR-2014 by the amount received or credited for the affected reporting period and pay any resulting royalty and late payment interest due; ---------------------------------------------------------------------------------------------------------------- 1206.158(c)(3)..................... Processing allowances-- 80 10 800 general. (c)(3) Upon request of a lessee, ONRR may approve a processing allowance in excess of the limitation prescribed by paragraph (c)(2) of this section . . . An application for exception (using Form ONRR- 4393, Request to Exceed Regulatory Allowance Limitation) shall contain all relevant and supporting documentation for ONRR to make a determination . . . ---------------------------------------------------------------------------------------------------------------- 1206.158(d)(2)(i).................. (d)(2)(i) If the lessee 80 1 80 incurs extraordinary costs for processing gas production from a gas production operation, it may apply to ONRR for an allowance for those costs . . . ---------------------------------------------------------------------------------------------------------------- 1206.158(d)(2)(ii)................. (d)(2)(ii) . . . to retain Burden covered under OMB Control Number 1012- the authority to deduct 0004. the allowance the lessee must report the deduction to ONRR in a form and manner prescribed by ONRR. ---------------------------------------------------------------------------------------------------------------- 1206.159(a)(1)(i).................. Determination of processing allowances. ---------------------------------------------------------------------------- (a) Arm's-length processing AUDIT PROCESS. See note. contracts. (1)(i) . . . The lessee shall have the burden of demonstrating that its contract is arm's-length . . . ---------------------------------------------------------------------------- The lessee must claim a Burden covered under OMB Control Number 1012- processing allowance by 0004. reporting it on a separate line entry on the Form ONRR-2014. ---------------------------------------------------------------------------------------------------------------- 1206.159(a)(1)(iii)................ (a)(1)(iii) . . . When ONRR AUDIT PROCESS. See note. determines that the value of the processing may be unreasonable, ONRR will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee's processing costs. ---------------------------------------------------------------------------------------------------------------- 1206.159(a)(3)..................... (a)(3) If an arm's-length 20 1 20 processing contract includes more than one gas plant product and the processing costs attributable to each product cannot be determined from the contract, the lessee shall propose an allocation procedure to ONRR . . . The lessee shall submit all relevant data to support its proposal . . . ---------------------------------------------------------------------------------------------------------------- 1206.159(b)(1)..................... (b) Non-arm's-length or no Burden covered under OMB Control Number 1012- contract. (1) . . . The 0004. lessee must claim a processing allowance by reflecting it as a separate line entry on the Form ONRR-2014 . . . ---------------------------------------------------------------------------------------------------------------- 1206.159(b)(2)(iv) and (b)(2)(iv) . . . When a 100 1 100 (b)(2)(iv)(A). lessee has elected to use either method for a processing plant, the lessee may not later elect to change to the alternative without approval of the ONRR. (A) . . . After an election is made, the lessee may not change methods without ONRR approval . . . ---------------------------------------------------------------------------------------------------------------- [[Page 36335]] 1206.159(b)(4)..................... (b)(4) A lessee may apply 100 1 100 to ONRR for an exception from the requirements that it compute actual costs in accordance with paragraphs (b)(1) through (b)(3) of this section . . . ---------------------------------------------------------------------------------------------------------------- 1206.159(c)(1)(i).................. (c) Reporting requirements-- Burden covered under OMB Control Number 1012- (1) Arm's-length 0004. contracts. (i) The lessee must notify ONRR of an allowance based on incurred costs by using a separate line entry on the Form ONRR-2014. ---------------------------------------------------------------------------------------------------------------- 1206.159(c)(1)(ii)................. (c)(1)(ii) ONRR may require AUDIT PROCESS. See note. that a lessee submit arm's- length processing contracts and related documents . . . ---------------------------------------------------------------------------------------------------------------- 1206.159(c)(2)(i).................. (c)(2) Non-arm's-length or Burden covered under OMB Control Number 1012- no contract. (i) The 0004. lessee must notify ONRR of an allowance based on incurred costs by using a separate line entry on the Form ONRR-2014. ---------------------------------------------------------------------------------------------------------------- 1206.159(c)(2)(iii)................ (c)(2)(iii) Upon request by AUDIT PROCESS. See note. ONRR, the lessee shall submit all data used to prepare the allowance deduction . . . ---------------------------------------------------------------------------------------------------------------- 1206.159(e)(2) and (e)(3).......... (e) Adjustments . . . (2) Burden covered under OMB Control Number 1012- For lessees processing 0004. production from onshore Federal leases, the lessee must submit a corrected Form ONRR-2014 to reflect actual costs, together with any payment, in accordance with instructions provided by ONRR. (3) For lessees processing gas production from leases on the OCS, if the lessee's estimated processing allowance exceeds the allowance based on actual costs, the lessee must submit a corrected Form ONRR-2014 to reflect actual costs, together with its payment, in accordance with instructions provided by ONRR . . . ---------------------------------------------------------------------------------------------------------------- Oil and Gas Valuation Subtotal. ........................... .............. 123 8992 ---------------------------------------------------------------------------------------------------------------- TOTAL...................... ........................... .............. 133 9518 ---------------------------------------------------------------------------------------------------------------- Note: AUDIT PROCESS--The Office of Regulatory Affairs determined that the audit process is exempt from the Paperwork Reduction Act of 1995 because ONRR staff asks non-standard questions to resolve exceptions. This 60-day Federal Register notice burden chart shows an adjustment increase of +320 burden hours. This adjustment is based on analyzed historical data since 2013 for the transportation and processing allowances (1206.156(c)(3) and 1206.158(c)(3)). The transportation processing allowance increased from 120 to 280 burden hours and the processing allowance increased from 640 to 800 burden hours for a total increase of +320 annual burden hours. Estimated Annual Reporting and Recordkeeping ``Non-hour'' Cost Burden: We have not identified a ``non-hour'' cost burden associated with the collection of information. Public Disclosure Statement: The PRA (44 U.S.C. 3501 et seq.) provides that an agency may not conduct or sponsor, and a person does not have to respond to, a collection of information unless it displays a currently valid OMB control number. III. Request for Comments Section 3506(c)(2)(A) of the PRA requires each agency to ``* * * provide 60-day notice in the Federal Register * * * and otherwise consult with members of the public and affected agencies concerning each proposed collection of information * * *.'' Agencies must specifically solicit comments to (a) evaluate whether the proposed collection of information is necessary for the agency to perform its duties, including whether the information is useful; (b) evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) enhance the quality, usefulness, and clarity of the information that ONRR collects; and (d) minimize the burden on the respondents, including the use of automated collection techniques or other forms of information technology. The PRA also requires agencies to estimate the total annual reporting ``non-hour cost'' burden to respondents or record-keepers resulting from the collection of information. If you have costs to generate, maintain, and disclose this information, you should comment and provide your total capital and startup cost components or annual operation, maintenance, and purchase of service components. You should describe the methods that you use to estimate (1) major cost factors, including system and technology acquisition, (2) expected useful life of capital equipment, (3) discount rate(s), and (4) the period over which you incur costs. Capital and startup costs include, among other items, computers and software that you purchase to prepare for collecting information and monitoring, sampling, and testing equipment, and record storage facilities. Generally, your estimates should not include equipment or services purchased (i) before October 1, 1995; (ii) to comply with requirements not associated with the information [[Page 36336]] collection; (iii) for reasons other than to provide information or keep records for the Federal Government; or (iv) as part of customary and usual business, or private practices. We will summarize written responses to this notice and address them in our ICR submission for OMB approval, including appropriate adjustments to the estimated burden. We will provide a copy of the ICR to you, without charge, upon request. We also will post the ICR at http://www.onrr.gov/Laws_R_D/FRNotices/ICR0136.htm. Public Comment Policy: ONRR will post all comments, including names and addresses of respondents at http://www.regulations.gov. Before including Personally Identifiable Information (PII), such as your address, phone number, email address, or other personal information in your comment(s), you should be aware that your entire comment (including PII) may be made available to the public at any time. While you may ask us, in your comment, to withhold PII from public view, we cannot guarantee that we will be able to do so. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid Office of Management and Budget control number. Dated: May 26, 2016. Gregory J. Gould, Director, Office of Natural Resources Revenue. [FR Doc. 2016-13206 Filed 6-3-16; 8:45 am] BILLING CODE 4335-30-P
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Notice of an extension. | |
| Dates | Submit written comments on or before August 5, 2016. | |
| Contact | For any questions, contact Mr. Luis Aguilar, telephone (303) 231-3418, or email at [email protected] You may also contact Mr. Aguilar to obtain copies, at no cost, of (1) the ICR, (2) any associated forms, and (3) the regulations that require us to collect the information. | |
| FR Citation | 81 FR 36325 |