82 FR 27430 - Waste Prevention, Production Subject to Royalties, and Resource Conservation; Postponement of Certain Compliance Dates

DEPARTMENT OF THE INTERIOR
Bureau of Land Management

Federal Register Volume 82, Issue 114 (June 15, 2017)

On November 18, 2016, the Bureau of Land Management (BLM) issued a final rule entitled, ``Waste Prevention, Production Subject to Royalties, and Resource Conservation'' (the ``Waste Prevention Rule'' or ``Rule''). Immediately after the Waste Prevention Rule was issued, petitions for judicial review of the Rule were filed by industry groups and States with significant BLM-managed Federal and Indian minerals. This litigation has been consolidated and is now pending in the U.S. District Court for the District of Wyoming. In light of the existence and potential consequences of the pending litigation, the BLM has concluded that justice requires it to postpone the compliance dates for certain sections of the Rule pursuant to the Administrative Procedure Act, pending judicial review.

[Federal Register Volume 82, Number 114 (Thursday, June 15, 2017)]
[Rules and Regulations]
[Pages 27430-27431]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-12325]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3170

[17X.LLWO310000.L13100000.PP0000]
RIN 1004-AE14


Waste Prevention, Production Subject to Royalties, and Resource 
Conservation; Postponement of Certain Compliance Dates

AGENCY: Bureau of Land Management, Interior.

ACTION: Notification; postponement of compliance dates.

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SUMMARY: On November 18, 2016, the Bureau of Land Management (BLM) 
issued a final rule entitled, ``Waste Prevention, Production Subject to 
Royalties, and Resource Conservation'' (the ``Waste Prevention Rule'' 
or ``Rule''). Immediately after the Waste Prevention Rule was issued, 
petitions for judicial review of the Rule were filed by industry groups 
and States with significant BLM-managed Federal and Indian minerals. 
This litigation has been consolidated and is now pending in the U.S. 
District Court for the District of Wyoming. In light of the existence 
and potential consequences of the pending litigation, the BLM has 
concluded that justice requires it to postpone the compliance dates for 
certain sections of the Rule pursuant to the Administrative Procedure 
Act, pending judicial review.

DATES: June 15, 2017.

FOR FURTHER INFORMATION CONTACT: Timothy Spisak at the BLM Washington 
Office, 20 M Street SE., Room 2134 LM, Washington, DC 20003, or by 
telephone at 202-912-7311. For questions relating to regulatory process 
issues, contact Faith Bremner at 202-912-7441.
    Persons who use a telecommunications device for the deaf (TDD) may 
call the Federal Relay Service (FRS) at 1-800-877-8339 to contact these 
individuals during normal business hours. FRS is available 24 hours a 
day, 7 days a week to leave a message or question with these 
individuals. You will receive a reply during normal business hours.

SUPPLEMENTARY INFORMATION:

I. Background

    On November 18, 2016, the BLM published the Waste Prevention Rule. 
(81 FR 83008) The Rule addresses, among other things, the loss of 
natural gas through venting, flaring, and leaks during the production 
of Federal and Indian oil and gas. The Rule replaced Notice to Lessees 
and Operators of Onshore Federal and Indian Oil and Gas Leases, Royalty 
or Compensation for Oil and Gas Lost (1980) (``NTL-4A''), which 
governed the venting and flaring of Federal and Indian gas for more 
than three decades. In addition to updating and revising the 
requirements of NTL-4A, the Rule contained new requirements that 
operators capture a certain percentage of the gas they produce (43 CFR 
3179.7), measure flared volumes (43 CFR 3179.9), upgrade or replace 
pneumatic equipment (43 CFR 3179.201-179.202), capture or combust 
storage tank vapors (43 CFR 3179.203), and implement leak detection and 
repair (LDAR) programs (43 CFR 3179.301-.305). The Rule did not 
obligate operators to comply with these new requirements until January 
17, 2018. Compliance with certain other provisions of the Rule is 
already mandatory, including the requirement that operators submit a 
``waste minimization plan'' with applications for permits to drill (43 
CFR 3162.3-1), new regulations for the royalty-free use of production 
(43 CFR subpart 3178), new regulatory definitions of ``unavoidably 
lost'' and ``avoidably lost'' oil and gas (43 CFR 3179.4), limits on 
venting and flaring during drilling and production operations (43 CFR 
3179.101-179.105), and requirements for downhole well maintenance and 
liquids unloading (43 CFR 3179.204).
    Immediately after the Rule was issued, petitions for judicial 
review of the Rule were filed by industry groups and States with 
significant BLM-managed Federal and Indian minerals. The petitioners in 
this litigation are the Western Energy Alliance (WEA), the Independent 
Petroleum Association of

[[Page 27431]]

America, the State of Wyoming, the State of Montana, the State of North 
Dakota, and the State of Texas. This litigation has been consolidated 
and is now pending in the U.S. District Court for the District of 
Wyoming. Wyoming v. U.S. Dep't of the Interior, Case No. 2:16-cv-00285-
SWS (D. Wyo.). Petitioners assert that the BLM was arbitrary and 
capricious in promulgating the Rule and that the Rule exceeds the BLM's 
statutory authority.
    On March 28, 2017, the President issued Executive Order No. 13783 
(E.O. 13783) entitled, ``Promoting Energy Independence and Economic 
Growth.'' E.O. 13783 directed the Secretary of the Interior (Secretary) 
to review the Rule for consistency with the policies set forth in 
Section 1 of E.O. 13783 and, if appropriate, publish for notice and 
comment a proposed rule suspending, revising, or rescinding the Rule. 
E.O. 13783 Sec. 7(b). On March 29, 2017, the Secretary issued 
Secretarial Order 3349 implementing E.O. 13783. The Department's review 
of the Rule is ongoing.
    The Secretary has received written requests from WEA and the 
American Petroleum Institute (API) that the BLM suspend the Rule or 
postpone its compliance dates in light of the regulatory uncertainty 
created by the pending litigation and the ongoing administrative review 
of the Rule. Letter from Kathleen M. Sgamma to Secretary Zinke (April 
4, 2017); letter from Jack N. Gerard to Secretary Zinke (May 16, 2017). 
Both API and WEA stated that operators face the prospect of significant 
expenditures to comply with provisions of the Rule that will become 
operative in January 2018. WEA specifically noted that the LDAR, 
storage tank, and pneumatic device provisions will require operators to 
begin purchasing and installing tens of thousands of replacement parts 
in the near future.
    Section 705 of the Administrative Procedure Act (APA), 5 U.S.C. 
705, provides that, ``[w]hen an agency finds that justice so requires, 
it may postpone the effective date of action taken by it, pending 
judicial review.'' The Rule obligates operators to comply with its 
``capture percentage,'' flaring measurement, pneumatic equipment, 
storage tank, and LDAR provisions beginning on January 17, 2018. This 
compliance date has not yet passed and is within the meaning of the 
term ``effective date'' as that term is used in Section 705 of the APA. 
Considering the substantial cost that complying with these requirements 
poses to operators (see U.S. Bureau of Land Management, Regulatory 
Impact Analysis for: Revisions to 43 CFR subpart 3100 (Onshore Oil and 
Gas Leasing) and 43 CFR subpart 3600 (sic) (Onshore Oil and Gas 
Operations), Additions of 43 CFR subpart 3178 (Royalty-Free Use of 
Lease Production) and 43 CFR subpart 3179 (Waste Prevention and 
Resource Conservation) (November 10, 2016)), and the uncertain future 
these requirements face in light of the pending litigation and 
administrative review of the Rule, the BLM finds that justice requires 
it to postpone the future compliance dates for the following sections 
of the Rule: 43 CFR 3179.7, 3179.9, 3179.201, 3179.202, 3179.203, and 
3179.301-3179.305.
    While the BLM believes the Waste Prevention Rule was properly 
promulgated, the petitioners have raised serious questions concerning 
the validity of certain provisions of the Rule. Given this legal 
uncertainty, operators should not be required to expend substantial 
time and resources to comply with regulatory requirements that may 
prove short-lived as a result of pending litigation or the 
administrative review that is already under way. Postponing these 
compliance dates will help preserve the regulatory status quo while the 
litigation is pending and the Department reviews and reconsiders the 
Rule.
    The provisions with compliance dates that have passed and are 
therefore unaffected by this document include: the requirement that 
operators submit a ``waste minimization plan'' with applications for 
permits to drill (43 CFR 3162.3-1), new regulations for the royalty-
free use of production (43 CFR subpart 3178), new regulatory 
definitions of ``unavoidably lost'' and ``avoidably lost'' oil and gas 
(43 CFR 3179.4), limits on venting and flaring during drilling and 
production operations (43 CFR 3179.101-179.105), and requirements for 
downhole well maintenance and liquids unloading (43 CFR 3179.204).
    Separately, the BLM intends to conduct notice-and-comment 
rulemaking to suspend or extend the compliance dates of those sections 
affected by the Rule.

II. Postponement of Compliance Dates

    Pursuant to Section 705 of the APA, the BLM hereby postpones the 
future compliance dates for the following sections affected by the 
final rule entitled, ``Waste Prevention, Production Subject to 
Royalties, and Resource Conservation'', pending judicial review: 43 CFR 
3179.7, 3179.9, 3179.201, 3179.202, 3179.203, and 3179.301-3179.305. 
BLM will publish a document announcing the outcome of that review.

    Dated: June 9, 2017.
Katharine S. MacGregor
Delegated the Authority of the Assistant Secretary for Land and 
Minerals Management.
[FR Doc. 2017-12325 Filed 6-14-17; 8:45 am]
BILLING CODE 4310-84-P