82_FR_46650 82 FR 46458 - Waste Prevention, Production Subject to Royalties, and Resource Conservation; Delay and Suspension of Certain Requirements

82 FR 46458 - Waste Prevention, Production Subject to Royalties, and Resource Conservation; Delay and Suspension of Certain Requirements

DEPARTMENT OF THE INTERIOR
Bureau of Land Management

Federal Register Volume 82, Issue 192 (October 5, 2017)

Page Range46458-46475
FR Document2017-21294

On November 18, 2016, the Bureau of Land Management (BLM) published in the Federal Register a final rule entitled, ``Waste Prevention, Production Subject to Royalties, and Resource Conservation'' (2016 final rule). The BLM is now proposing to temporarily suspend or delay certain requirements contained in the 2016 final rule until January 17, 2019. The BLM is currently reviewing the 2016 final rule and wants to avoid imposing temporary or permanent compliance costs on operators for requirements that may be rescinded or significantly revised in the near future.

Federal Register, Volume 82 Issue 192 (Thursday, October 5, 2017)
[Federal Register Volume 82, Number 192 (Thursday, October 5, 2017)]
[Proposed Rules]
[Pages 46458-46475]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-21294]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 3160 and 3170

[17X.LLWO310000.L13100000.PP0000]
RIN 1004-AE54


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

AGENCY: Bureau of Land Management, Interior.

ACTION: Proposed rule.

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SUMMARY: On November 18, 2016, the Bureau of Land Management (BLM) 
published in the Federal Register a final rule entitled, ``Waste 
Prevention, Production Subject to Royalties, and Resource 
Conservation'' (2016 final rule). The BLM is now proposing to 
temporarily suspend or delay certain requirements contained in the 2016 
final rule until January 17, 2019. The BLM is currently reviewing the 
2016 final rule and wants to avoid imposing temporary or permanent 
compliance costs on operators for requirements that may be rescinded or 
significantly revised in the near future.

DATES: Send your comments on this proposed rule to the BLM on or before 
November 6, 2017. As explained later, the BLM is also requesting that 
the Office of Management and Budget (OMB) extend the control number 
(1004-0211) for the 24 information collection activities that would 
continue in this proposed rule. If you wish to comment on this request, 
please note that such comments should be sent directly to the OMB, and 
that the OMB is required to make a decision concerning the collection 
of information contained in this proposed rule between 30 and 60 days 
after publication of this document in the Federal Register. Therefore, 
a comment to the OMB on the proposed information collection revisions 
is best assured of being given full consideration if the OMB receives 
it by November 6, 2017.

ADDRESSES: 
    Mail: U.S. Department of the Interior, Director (630), Bureau of 
Land Management, Mail Stop 2134LM, 1849 C St. NW., Washington, DC 
20240, Attention: 1004-AE52.
    Personal or messenger delivery: U.S. Department of the Interior, 
Bureau of Land Management, 20 M Street SE., Room 2134 LM, Washington, 
DC 20003, Attention: Regulatory Affairs.
    Federal eRulemaking Portal: https://www.regulations.gov. In the 
Searchbox, enter ``RIN 1004-AE54'' and click the ``Search'' button. 
Follow the instructions at this Web site. Comments on the information 
collection burdens: Fax: Office of Management and Budget (OMB), Office 
of Information and Regulatory Affairs, Desk Officer for the Department 
of the Interior, fax 202-395-5806.
    Electronic mail: [email protected]. Please indicate 
``Attention: OMB Control Number 1004-0211,'' regardless of the method 
used to submit comments on the information collection burdens. If you 
submit comments on the information collection burdens, you should 
provide the BLM with a copy, at one of the addresses shown earlier in 
this section, so that we can summarize all written comments and address 
them in the final rule preamble.

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

SUPPLEMENTARY INFORMATION:

I. Public Comment Procedures
II. Background
III. Discussion of the Proposed Rule
IV. Procedural Matters

I. Public Comment Procedures

    If you wish to comment on this proposed rule, you may submit your 
comments by any of the methods described in the ADDRESSES section.
    Please make your comments on the proposed rule as specific as 
possible, confine them to issues pertinent to the proposed rule, and 
explain the reason for any changes you recommend. Where possible, your 
comments should reference the specific section or paragraph of the 
proposal that you are addressing. The BLM is not obligated to consider 
or include in the Administrative Record for the final rule comments 
that we receive after the close of the comment period (see DATES) or 
comments delivered to an address other than those listed above (see 
ADDRESSES).
    Comments, including names and street addresses of respondents, will 
be available for public review at the address listed under ``ADDRESSES: 
Personal or messenger delivery'' during regular hours (7:45 a.m. to 
4:15 p.m.), Monday through Friday, except holidays. Before including 
your address, telephone number, email address, or other personal 
identifying information in your comment, be advised that your entire 
comment--including your personal identifying information--may be made 
publicly available at any time. While you can ask us in your comment to 
withhold from public review your personal identifying information, we

[[Page 46459]]

cannot guarantee that we will be able to do so.

II. Background

    The BLM's onshore oil and gas management program is a major 
contributor to our nation's oil and gas production. The BLM manages 
more than 245 million acres of Federal land and 700 million acres of 
subsurface estate, making up nearly a third of the nation's mineral 
estate. In fiscal year (FY) 2016, sales volumes from Federal onshore 
production lands accounted for 9 percent of domestic natural gas 
production, and 5 percent of total U.S. oil production. Over $1.9 
billion in royalties were collected from all oil, natural gas, and 
natural gas liquids transactions in FY 2016 on Federal and Indian 
Lands. Royalties from Federal lands are shared with States. Royalties 
from Indian lands are collected for the benefit of the Indian owners.
    In response to oversight reviews and a recognition of increased 
flaring from Federal and Indian leases, the BLM developed a final rule 
entitled, ``Waste Prevention, Production Subject to Royalties, and 
Resource Conservation,'' which was published in the Federal Register on 
November 18, 2016. See 81 FR 83008 (Nov. 18, 2016). The rule replaced 
the BLM's existing policy at that time, Notice to Lessees and Operators 
of Onshore Federal and Indian Oil and Gas Leases, Royalty or 
Compensation for Oil and Gas Lost (NTL-4A). The 2016 final rule was 
intended to: Reduce waste of natural gas from venting, flaring, and 
leaks during oil and natural gas production activities on onshore 
Federal and Indian leases; clarify when produced gas lost through 
venting, flaring, or leaks is subject to royalties; and clarify when 
oil and gas production may be used royalty-free on-site. The 2016 final 
rule became effective on January 17, 2017. Many of the final rule's 
provisions are to be phased in over time, and are to become operative 
on January 17, 2018.
    Immediately after the 2016 final rule was issued, industry groups 
and States with significant BLM-managed Federal and Indian minerals 
filed petitions for judicial review. The petitioners in this litigation 
are the Western Energy Alliance (WEA), the Independent Petroleum 
Association of 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.); W. Energy All. v. Zinke, Case No. 16-cv-
280-SWS (D. Wyo.). Petitioners assert that the BLM was arbitrary and 
capricious in promulgating the 2016 final rule and that the rule 
exceeds the BLM's statutory authority. Shortly after filing petitions 
for judicial review, petitioners filed motions for a preliminary 
injunction, seeking a stay of the rule pending the outcome of the 
litigation. These motions were denied by the court on January 16, 2017, 
and the rule went into effect the following day. Although the court 
denied the motions for a preliminary injunction, it did express 
concerns that the BLM may have ``usurp[ed]'' the authority of the 
Environmental Protection Agency (EPA) and the States under the Clean 
Air Act, and questioned whether it was appropriate for the 2016 final 
rule to be justified based on its environmental and societal benefits, 
rather than on its resource conservation benefits alone. The next stage 
in the litigation will be the court's consideration of the merits of 
the petitioner's claims. It is possible that the court's decision on 
these claims could result in the 2016 final rule being overturned. On 
June 15, 2017, the Department of the Interior (Department) issued a 
Federal Register notice, pursuant to 5 U.S.C. 705, postponing the 
January 2018 compliance dates of the 2016 final rule pending judicial 
review. 82 FR 27430 (June 15, 2017).
    In the Regulatory Impact Analysis (RIA) for the 2016 final rule, 
the BLM estimated that the requirements of the 2016 final rule would 
impose compliance costs, not including potential cost savings for 
product recovery, of approximately $114 million to $279 million per 
year (2016 RIA at 4). The BLM had concluded that, while many of the 
requirements were consistent with EPA regulations for new sources, 
current industry practice, or similar to the requirements found in some 
existing State regulations, the 2016 final rule would be an 
economically significant rule with estimated costs and benefits 
exceeding $100 million per year (2016 RIA at 138). Comments received by 
many oil and gas companies and trade associations representing members 
of the oil and gas industry suggested that the BLM's proposed and final 
rules were unnecessary and would cause substantial harm to the 
industry. During the litigation following the issuance of the 2016 
final rule, the petitioners argued that the BLM underestimated the 
compliance costs of the final rule and that the costs would drive the 
industry away from Federal and Indian lands, thereby reducing royalties 
and harming State and tribal economies. The petitioners also argued 
that the final rule would cause marginal wells to be shut-in, thereby 
ceasing production and reducing economic benefits to local, State, 
tribal, and Federal governments. The BLM is concerned that the RIA for 
the 2016 final rule may have underestimated costs and overestimated 
benefits, and is therefore presently reviewing that analysis for 
potential inaccuracies. In any event, the RIA for the 2016 rule 
indicates that the rule poses a substantial burden on industry, 
particularly those requirements that are set to become effective on 
January 17, 2018.
    Since late January 2017, the President has issued several Executive 
Orders that necessitate a review of the 2016 final rule by the 
Department. On January 30, 2017, the President issued Executive Order 
13771, entitled, ``Reducing Regulation and Controlling Regulatory 
Costs,'' which requires Federal agencies to take proactive measures to 
reduce the costs associated with complying with Federal regulations. In 
addition, on March 28, 2017, the President issued Executive Order 
13783, entitled, ``Promoting Energy Independence and Economic Growth.'' 
Section 7(b) of Executive Order 13783 directs the Secretary of the 
Interior to review four specific rules, including the 2016 final rule, 
for consistency with the policy articulated in section 1 of the Order 
and, ``if appropriate,'' to publish proposed rules suspending, 
revising, or rescinding those rules. Among other things, section 1 of 
Executive Order 13783 states that ``[i]t is in the national interest to 
promote clean and safe development of our Nation's vast energy 
resources, while at the same time avoiding regulatory burdens that 
unnecessarily encumber energy production, constrain economic growth, 
and prevent job creation.''
    To implement Executive Order 13783, Secretary of the Interior Ryan 
Zinke issued Secretarial Order No. 3349, entitled, ``American Energy 
Independence'' on March 29, 2017, which, among other things, directs 
the BLM to review the 2016 final rule to determine whether it is fully 
consistent with the policy set forth in section 1 of Executive Order 
13783. The BLM conducted an initial review of the 2016 final rule and 
found that it appears to be inconsistent with the policy in section 1 
of Executive Order 13783. The BLM found that some provisions of the 
rule appear to add regulatory burdens that unnecessarily encumber 
energy production, constrain economic growth, and prevent job creation. 
Following up on its initial review, the BLM is currently reviewing the 
2016 final rule to develop an appropriate proposed

[[Page 46460]]

revision--to be promulgated through notice-and-comment rulemaking--that 
would propose to align the 2016 final rule with the policies set forth 
in section 1 of Executive Order 13783.

III. Discussion of the Proposed Rule

A. Summary and Request for Comment

    Today, the BLM is proposing to temporarily suspend or delay certain 
requirements contained in the 2016 final rule until January 17, 2019. 
The BLM is currently reviewing the 2016 final rule, as directed by the 
aforementioned Executive Orders and by Secretarial Order No. 3349. The 
BLM wants to avoid imposing temporary or permanent compliance costs on 
operators for requirements that might be rescinded or significantly 
revised in the near future. The BLM also wishes to avoid expending 
scarce agency resources on implementation activities (internal 
training, operator outreach/education, developing clarifying guidance, 
etc.) for such potentially transitory requirements.
    For certain requirements in the 2016 final rule that have yet to be 
implemented, this proposed rule would temporarily postpone the 
implementation dates until January 17, 2019, or for one year. For 
certain requirements in the 2016 final rule that are currently in 
effect, this proposed rule would temporarily suspend their 
effectiveness until January 17, 2019. A detailed discussion of the 
proposed suspensions and delays is provided below. The BLM has 
attempted to tailor the proposed rule so as to target the requirements 
of the 2016 final rule for which immediate regulatory relief appears to 
be particularly justified. Although the requirements of the 2016 final 
rule that would not be suspended under the proposed rule may ultimately 
be revised in the near future, the BLM is not proposing to suspend them 
because it does not, at this time, believe that suspension is 
necessary.
    The BLM promulgated the 2016 final rule, and now proposes to 
suspend and delay certain provisions of that rule, pursuant to its 
authority under the following statutes: The Mineral Leasing Act of 1920 
(30 U.S.C. 188-287), the Mineral Leasing Act for Acquired Lands (30 
U.S.C. 351-360), the Federal Oil and Gas Royalty Management Act (30 
U.S.C. 1701-1758), the Federal Land Policy and Management Act of 1976 
(43 U.S.C. 1701-1785), the Indian Mineral Leasing Act of 1938 (25 
U.S.C. 396a-g), the Indian Mineral Development Act of 1982 (25 U.S.C. 
2101-2108), and the Act of March 3, 1909 (25 U.S.C. 396). See 81 FR 
83008 and 83019-83021 (Nov. 18, 2016). These statutes authorize the 
Secretary of the Interior to promulgate such rules and regulations as 
may be necessary to carry out the statutes' various purposes.\1\ The 
Federal and Indian mineral leasing statutes share a common purpose of 
promoting the development of Federal and Indian oil and gas resources 
for the financial benefit of the public and Indian mineral owners.\2\ 
In order to ensure that the development of Federal and Indian oil and 
gas resources will not be unnecessarily hindered by regulatory burdens, 
the BLM is exercising its inherent authority \3\ to reconsider the 2016 
final rule. The suspension of requirements proposed today is a part of 
the BLM's reconsideration process.
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    \1\ 30 U.S.C. 189 (MLA); 30 U.S.C. 359 (MLAAL); 30 U.S.C. 
1751(a) (FOGRMA); 43 U.S.C. 1740 (FLPMA); 25 U.S.C. 396d (IMLA); 25 
U.S.C. 2107 (IMDA); 25 U.S.C. 396.
    \2\ See, e.g., California Co. v. Udall, 296 F.2d 384, 388 (D.C. 
Cir. 1961) (noting that the MLA was intended to promote wise 
development of . . . natural resources and to obtain for the public 
a reasonable financial return on assets that `belong' to the 
public.'').
    \3\ See Ivy Sports Med., LLC v. Burwell, 767 F.3d 81, 86 (D.C. 
Cir. 2014) (noting ``oft-repeated'' principle that the ``power to 
reconsider is inherent in the power to decide'').
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    The BLM seeks comment on this proposed rule. Issues of particular 
interest to the BLM include the necessity of the proposed suspensions 
and delays, the costs and benefits associated with the proposed 
suspensions and delays, and whether suspension of other requirements of 
the 2016 rule is warranted. The BLM is also interested in the 
appropriate length of the proposed suspension and delays and would like 
to know whether the period should be longer or shorter (e.g., six 
months, 18 months, or 2 years). The BLM has allowed a 30-day comment 
period for this proposed rule, which the BLM believes will afford the 
public a meaningful opportunity to comment. This proposed rule is a 
straightforward suspension and delay of regulatory provisions that were 
(in a proposed form) themselves recently the object of public comment 
procedures. Because this proposal is a narrow one, involving a simple 
and temporary suspension and delay of regulatory provisions with which 
interested parties are likely already familiar, the BLM believes that 
the 30-day comment period is appropriate.

B. Section-by-Section Discussion

43 CFR 3162.3-1(j)--Drilling Applications and Plans
    In the 2016 final rule, the BLM added a paragraph (j) to 43 CFR 
3162.3-1, which presently requires that when submitting an Application 
for Permit to Drill (APD) for an oil well, an operator must also submit 
a waste-minimization plan. Submission of the plan is required for 
approval of the APD, but the plan is not itself part of the APD, and 
the terms of the plan are not enforceable against the operator. The 
purpose of the waste-minimization plan is for the operator to set forth 
a strategy for how the operator will comply with the requirements of 43 
CFR subpart 3179 regarding the control of waste from venting and 
flaring from oil wells.
    The waste-minimization plan must include information regarding: The 
anticipated completion date(s) of the proposed oil well(s); a 
description of anticipated production from the well(s); certification 
that the operator has provided one or more midstream processing 
companies with information about the operator's production plans, 
including the anticipated completion dates and gas production rates of 
the proposed well or wells; and identification of a gas pipeline to 
which the operator plans to connect. Additional information is required 
when an operator cannot identify a gas pipeline with sufficient 
capacity to accommodate the anticipated production from the proposed 
well, including: A gas pipeline system location map showing the 
proposed well(s); the name and location of the gas processing plant(s) 
closest to the proposed well(s); all existing gas trunklines within 20 
miles of the well, and proposed routes for connection to a trunkline; 
the total volume of produced gas, and percentage of total produced gas, 
that the operator is currently venting or flaring from wells in the 
same field and any wells within a 20-mile radius of that field; and a 
detailed evaluation, including estimates of costs and returns, of 
potential on-site capture approaches.
    In the RIA for the 2016 final rule, the BLM estimated that the 
administrative burden of the waste-minimization plan requirements would 
be roughly $1 million per year for the industry and $180,000 per year 
for the BLM (2016 RIA at 96 and 100). The BLM is currently reviewing 
the requirements of Sec.  3162.3-1(j) in order to determine whether the 
burden it imposes on operators is necessary and whether this burden can 
be reduced. The BLM is also evaluating whether there are circumstances 
in which compliance with Sec.  3162.3-1(j) is infeasible because some 
of the required information is in the possession of a midstream company 
that is not in a position to share it with the operator. The BLM is 
considering narrowing the required information and

[[Page 46461]]

is also considering whether submission of a State waste-minimization 
plan, such as those required by New Mexico and North Dakota, would 
serve the purpose of Sec.  3162.3-1(j). While the BLM conducts this 
review and considers revising Sec.  3162.3-1, the BLM does not believe 
that generating and reviewing lengthy, unenforceable waste-minimization 
plans is a prudent use of operator or BLM resources. The BLM is 
therefore proposing to suspend the waste minimization plan requirement 
of Sec.  3162.3-1(j) until January 17, 2019.
    This proposed rule would revise Sec.  3162.3-1 by adding 
``Beginning January 17, 2019'' to the beginning of paragraph (j). The 
rest of this paragraph would remain the same as in the 2016 final rule 
and the introductory paragraph is repeated in the proposed rule text 
only for context.
43 CFR 3179.7--Gas Capture Requirement
    In the 2016 final rule, the BLM sought to constrain routine flaring 
through the imposition of a ``capture percentage'' requirement, 
requiring operators to capture a certain percentage of the gas they 
produce, after allowing for a certain volume of flaring per well. The 
capture-percentage requirement would become more stringent over a 
period of years, beginning with an 85 percent capture requirement 
(5,400 Mcf per well flaring allowable) in January 2018, and eventually 
reaching a 98 percent capture requirement (750 Mcf per well flaring 
allowable) in January 2026. An operator would choose whether to comply 
with the capture targets on each of the operator's leases, units or 
communitized areas, or on a county-wide or state-wide basis.
    In the RIA for the 2016 final rule, the BLM estimated that this 
requirement would impose costs of up to $162 million per year and 
generate cost savings from product recovery of up to $124 million per 
year, with both costs and cost savings increasing as the requirements 
increased in stringency (2016 RIA at 49).
    The BLM is currently considering whether the capture-percentage 
requirement of Sec.  3179.7 is unnecessarily complex and whether it 
will, in fact, be a significant improvement on the requirements of NTL-
4A. The BLM is considering whether the NTL-4A framework can be applied 
in a manner that addresses any inappropriate levels of flaring, and 
whether market-based incentives (i.e., royalty obligations) could 
improve capture in a more straightforward and efficient manner. 
Finally, the BLM is considering whether the need for a complex capture-
percentage requirement could be obviated through other BLM efforts to 
facilitate pipeline development. Rather than require operators to 
institute new processes and adjust their plans for development to meet 
a capture-percentage requirement that may be rescinded or revised as a 
result of the BLM's review, the BLM is proposing to delay for one year 
the compliance dates for Sec.  3179.7's capture requirements. This 
delay would allow the BLM sufficient time to conduct notice-and-comment 
rulemaking to determine whether the capture percentage requirements 
should be rescinded or revised and would prevent operators from being 
unnecessarily burdened by regulatory requirements that are subject to 
change.
    This proposed rule would revise the compliance dates in paragraphs 
(b), (b)(1) through (b)(4), and (c)(2)(i) through (vii) of Sec.  3179.7 
to begin January 17, 2019. Paragraphs (c), (c)(1), and the introductory 
text of (c)(2) would remain the same as in the 2016 final rule and are 
repeated in the proposed rule text only for context.
43 CFR 3179.9--Measuring and Reporting Volumes of Gas Vented and Flared 
From Wells
    Section 3179.9 requires operators to estimate (using estimation 
protocols) or measure (using a metering device) all flared and vented 
gas, whether royalty-bearing or royalty-free. This section further 
provides that specific requirements apply when the operator is flaring 
50 Mcf or more of gas per day from a high-pressure flare stack or 
manifold, based on estimated volumes from the previous 12 months, or 
based on estimated volumes over the life of the flare, whichever is 
shorter. Beginning on January 17, 2018, if this volume threshold is 
met, Sec.  3179.9(b) would require the operator to measure the volume 
of the flared gas, or calculate the volume of the flared gas based on 
the results of a regularly performed gas-to-oil ratio test, so as to 
allow the BLM to independently verify the volume, rate, and heating 
value of the flared gas.
    In the RIA for the 2016 final rule, the BLM estimated that this 
requirement would impose costs of about $4 million to $7 million per 
year (2016 RIA at 52).
    The BLM is presently reviewing Sec.  3179.9 to determine whether 
the additional accuracy associated with the measurement and estimation 
required by Sec.  3179.9(b) justifies the burden it would place on 
operators. The BLM is considering whether it would make more sense to 
allow the BLM to require measurement or estimation on a case-by-case 
basis, rather than imposing a blanket requirement on all operators. In 
order to avoid unnecessary compliance costs on the part of operators, 
the BLM is proposing to delay the compliance date in Sec.  3179.9 until 
January 17, 2019.
    This proposed rule would revise the compliance date in Sec.  
3179.9(b)(1). The rest of paragraph (b)(1) would remain the same as in 
the 2016 final rule and is repeated in the proposed rule text only for 
context.
43 CFR 3179.10--Determinations Regarding Royalty-Free Flaring
    Section 3179.10(a) provides that approvals to flare royalty free 
that were in effect as of January 17, 2017, will continue in effect 
until January 17, 2018. The purpose of this provision was to provide a 
transition period for operators who were operating under existing 
approvals for royalty-free flaring. Because the BLM's review of the 
2016 final rule could result in rescission or substantial revision of 
the rule, the BLM believes that terminating pre-existing flaring 
approvals in January 2018 would be premature and disruptive and would 
introduce needless regulatory uncertainty for operators with existing 
flaring approvals. The BLM is therefore proposing to extend the end of 
the transition period provided for in Sec.  3179.10(a) to January 17, 
2019.
    This proposed rule would revise the date in paragraph (a) and 
replace ``as of the effective date of this rule'' with ``as of January 
17, 2017,'' which is the effective date of the 2016 final rule, for 
clarity. This proposed rule would not otherwise revise paragraph (a), 
but the rest of the paragraph would remain the same as in the 2016 
final rule and is repeated in the proposed rule text only for context.
43 CFR 3179.101--Well Drilling
    Section 3179.101(a) requires that gas reaching the surface as a 
normal part of drilling operations be used or disposed of in one of 
four ways: (1) Captured and sold; (2) Directed to a flare pit or flare 
stack; (3) Used in the operations on the lease, unit, or communitized 
area; or (4) Injected. Section 3179.101(a) also specifies that gas may 
not be vented, except under the circumstances specified in Sec.  
3179.6(b) or when it is technically infeasible to use or dispose of the 
gas in one of the ways specified above. Section 3179.101(b) states that 
gas lost as a result of a loss of well control will be classified as 
avoidably lost if the BLM determines that the loss of well control was 
due to operator negligence.
    The BLM is currently reviewing Sec.  3179.101 to determine whether 
it is

[[Page 46462]]

necessary in light of current operator practices. The experience of BLM 
field office personnel indicates that operators would typically dispose 
of gas during well drilling consistent with Sec.  3179.101(a). The 
primary effect of Sec.  3179.101, therefore, may be to impose a 
regulatory constraint on operators in exceptional circumstances where 
the operator must make a case-specific judgment about how to safely and 
effectively dispose of the gas. The BLM is therefore proposing to 
suspend the effectiveness of Sec.  3179.101 until January 17, 2019, 
while the BLM completes its review of Sec.  3179.101 and decides 
whether to propose permanently revising or rescinding it through 
notice-and-comment rulemaking.
    This proposed rule would add a new paragraph (c) making it clear 
that the operator must comply with Sec.  3179.101 beginning January 17, 
2019.
43 CFR 3179.102--Well Completion and Related Operations
    Section 3179.102 addresses gas that reaches the surface during 
well-completion, post-completion, and fluid-recovery operations after a 
well has been hydraulically fractured or refractured. It requires the 
gas to be used or disposed of in one of four ways: (1) Captured and 
sold; (2) Directed to a flare pit or stack, subject to a volumetric 
limitation in Sec.  3179.103; (3) Used in the lease operations; or (4) 
Injected. Section 3179.102 specifies that gas may not be vented, except 
under the narrow circumstances specified in Sec.  3179.6(b) or when it 
is technically infeasible to use or dispose of the gas in one of the 
four ways specified above. Section 3179.102(b) provides that an 
operator will be deemed to be in compliance with its gas capture and 
disposition requirements if the operator is in compliance with the 
requirements for control of gas from well completions established under 
Environmental Protection Agency (EPA) regulations 40 CFR part 60, 
subparts OOOO or OOOOa regulations, or if the well is not a ``well 
affected facility'' under those regulations.
    The BLM is currently reviewing Sec.  3179.102 to determine whether 
it is necessary in light of current operator practices and the 
analogous EPA regulations in 40 CFR part 60, subparts OOOO and OOOOa. 
The experience of BLM field office personnel indicates that operators 
would typically dispose of gas during well completions and related 
operations consistent with Sec.  3179.102(a). The BLM also suspects 
that most of the well completions and related operations that would 
otherwise be covered by Sec.  3179.102 are actually exempted under 
Sec.  3179.102(b). Considering current industry practice and the 
overlap with EPA regulations, the primary effect of Sec.  3179.102 may 
be to generate confusion about regulatory compliance during well-
drilling and related operations. The BLM is therefore proposing to 
suspend the effectiveness of Sec.  3179.102 until January 17, 2019, 
while the BLM completes its review of Sec.  3179.102 and decides 
whether to permanently revise or rescind it through notice-and-comment 
rulemaking.
    This proposed rule would add a new paragraph (e) making it clear 
that operators must comply with Sec.  3179.102 beginning January 17, 
2019.
43 CFR 3179.201--Equipment Requirements for Pneumatic Controllers
    Section 3179.201 addresses pneumatic controllers that use natural 
gas produced from a Federal or Indian lease, or from a unit or 
communitized area that includes a Federal or Indian lease. Section 
3179.201 applies to such controllers if the controllers: (1) Have a 
continuous bleed rate greater than 6 standard cubic feet per hour (scf/
hour) (``high-bleed'' controllers); and (2) Are not covered by EPA 
regulations that prohibit the new use of high-bleed pneumatic 
controllers (40 CFR part 60, subparts OOOO or OOOOa), but would be 
subject to those regulations if the controllers were new, modified, or 
reconstructed sources. Section 3179.201(b) requires the applicable 
pneumatic controllers to be replaced with controllers (including, but 
not limited to, continuous or intermittent pneumatic controllers) 
having a bleed rate of no more than 6 scf/hour, subject to certain 
exceptions. Section 3179.201(d) requires that this replacement occur no 
later than January 17, 2018, or within 3 years from the effective date 
of the rule if the well or facility served by the controller has an 
estimated remaining productive life of 3 years or less.
    In the RIA for the 2016 final rule, the BLM estimated that this 
requirement would impose costs of about $2 million per year and 
generate cost savings from product recovery of $3 million to $4 million 
per year (2016 RIA at 56).
    The BLM is currently reviewing Sec.  3179.201 to determine whether 
it should be revised or rescinded. The BLM is considering whether Sec.  
3179.201 is necessary in light of the analogous EPA regulations and the 
fact that operators are likely to adopt more efficient equipment in 
cases where it makes economic sense for them to do so. The BLM does not 
believe that operators should be required to make equipment upgrades to 
comply with Sec.  3179.201 until the BLM has had an opportunity to 
review its requirements and revise them through notice-and-comment 
rulemaking. The BLM is therefore proposing to delay the compliance date 
stated in Sec.  3179.201 until January 17, 2019.
    This proposed rule would revise the first sentence of paragraph (d) 
by replacing ``no later than 1 year after the effective date of this 
section'' with ``by January 17, 2019.'' This proposed rule would also 
replace ``the effective date of this section'' with ``January 17, 
2017'' the two times that it appears in the second sentence of 
paragraph (d). This proposed rule would not otherwise revise paragraph 
(d), but the rest of the paragraph would remain the same as in the 2016 
final rule and is repeated in the proposed rule text only for context.
43 CFR 3179.202--Requirements for Pneumatic Diaphragm Pumps
    Section 3179.202 establishes requirements for operators with 
pneumatic diaphragm pumps that use natural gas produced from a Federal 
or Indian lease, or from a unit or communitized area that includes a 
Federal or Indian lease. It applies to such pumps if they are not 
covered under EPA regulations at 40 CFR part 60, subpart OOOOa, but 
would be subject to that subpart if they were a new, modified, or 
reconstructed source. For covered pneumatic pumps, Sec.  3179.202 
requires that the operator either replace the pump with a zero-
emissions pump or route the pump exhaust to processing equipment for 
capture and sale. Alternatively, an operator may route the exhaust to a 
flare or low-pressure combustion device if the operator makes a 
determination (and notifies the BLM through a Sundry Notice) that 
replacing the pneumatic diaphragm pump with a zero-emissions pump or 
capturing the pump exhaust is not viable because: (1) A pneumatic pump 
is necessary to perform the function required; and (2) Capturing the 
exhaust is technically infeasible or unduly costly. If an operator 
makes this determination and has no flare or low-pressure combustor on-
site, or routing to such a device would be technically infeasible, the 
operator is not required to route the exhaust to a flare or low-
pressure combustion device. Under Sec.  3179.202(h), an operator must 
replace its covered pneumatic diaphragm pump or route the exhaust gas 
to capture or flare beginning no later than January 17, 2018.
    In the RIA for the 2016 final rule, the BLM estimated that this 
requirement would impose costs of about $4 million per year and 
generate cost savings from

[[Page 46463]]

product recovery of $2 million to $3 million per year (2016 RIA at 61).
    The BLM is currently reviewing Sec.  3179.202 to determine whether 
it should be rescinded or revised. Analogous EPA regulations apply to 
new, modified, and reconstructed sources, therefore limiting the 
applicability of Sec.  3179.202. In addition, the BLM is concerned that 
requiring zero-emissions pumps may not conserve gas in some cases. The 
volume of royalty-free gas used to generate electricity to provide the 
power necessary to operate a zero-emission pump could exceed the volume 
of gas necessary to operate the pneumatic pump that the zero-emission 
pump would replace. The BLM does not believe that operators should be 
required to make equipment upgrades to comply with Sec.  3179.202 until 
the BLM has had an opportunity to review its requirements and revise 
them through notice-and-comment rulemaking. The BLM is therefore 
proposing to delay the compliance date stated in Sec.  3179.202 until 
January 17, 2019.
    This proposed rule would revise paragraph (h) by replacing ``no 
later than 1 year after the effective date of this section'' in the 
first sentence with ``by January 17, 2019'' and would also replace 
``the effective date of this section'' with ``January 17, 2017'' the 
two times that it appears later in the same sentence. This proposed 
rule would not otherwise revise paragraph (h); the rest of the 
paragraph would remain the same as in the 2016 final rule and is 
repeated in the proposed rule text only for context.
43 CFR 3179.203--Storage Vessels
    Section 3179.203 applies to crude oil, condensate, intermediate 
hydrocarbon liquid, or produced-water storage vessels that contain 
production from a Federal or Indian lease, or from a unit or 
communitized area that includes a Federal or Indian lease, and that are 
not subject to 40 CFR part 60, subparts OOOO or OOOOa, but would be if 
they were new, modified, or reconstructed sources. If such storage 
vessels have the potential for volatile organic compound (VOC) 
emissions equal to or greater than 6 tons per year (tpy), Sec.  
3179.203 requires operators to route all gas vapor from the vessels to 
a sales line. Alternatively, the operator may route the vapor to a 
combustion device if it determines that routing the vapor to a sales 
line is technically infeasible or unduly costly. The operator also may 
submit a Sundry Notice to the BLM that demonstrates that compliance 
with the above options would cause the operator to cease production and 
abandon significant recoverable oil reserves under the lease due to the 
cost of compliance. Pursuant to Sec.  3179.203(c), operators must meet 
these requirements for covered storage vessels by January 17, 2018 
(unless the operator will replace the storage vessel in order to 
comply, in which case it has a longer time to comply).
    In the RIA for the 2016 final rule, the BLM estimated that this 
requirement would impose costs of about $7 million to $8 million per 
year and generate cost savings from product recovery of up to $200,000 
per year (2016 RIA at 74).
    The BLM is currently reviewing Sec.  3179.203 to determine whether 
it should be rescinded or revised. The BLM is considering whether Sec.  
3179.203 is necessary in light of analogous EPA regulations and whether 
the costs associated with compliance are justified. The BLM does not 
believe that operators should be required to make upgrades to their 
storage vessels in order to comply with Sec.  3179.203 until the BLM 
has had an opportunity to review its requirements and revise them 
through notice-and-comment rulemaking. The BLM is therefore proposing 
to delay the January 17, 2018, compliance date in Sec.  3179.203 until 
January 17, 2019.
    This proposed rule would revise the first sentence of paragraph (b) 
by replacing ``Within 60 days after the effective date of this 
section'' with ``Beginning January 17, 2019'' and by adding ``after 
January 17, 201'' between the words ``vessel'' and ``the operator.'' 
This proposed rule would also revise the introductory text of paragraph 
(c) by replacing ``no later than one year after the effective date of 
this section'' with ``by January 17, 2019'' and by changing ``or three 
years if'' to ``or by January 17, 2020, if '' to account for removing 
the reference to ``the effective date of this section.'' This proposed 
rule would not otherwise revise paragraphs (b) and (c), and the rest of 
these paragraphs would remain the same as in the 2016 final rule and 
are repeated in the proposed rule text only for context.
43 CFR 3179.204--Downhole Well Maintenance and Liquids Unloading
    Section 3179.204 establishes requirements for venting and flaring 
during downhole well maintenance and liquids unloading. It requires the 
operator to use practices for such operations that minimize vented gas 
and the need for well venting, unless the practices are necessary for 
safety. Section 3179.204 also requires that for wells equipped with a 
plunger lift system or an automated well-control system, the operator 
must optimize the operation of the system to minimize gas losses. Under 
Sec.  3179.204, before an operator manually purges a well for the first 
time, the operator must document in a Sundry Notice that other methods 
for liquids unloading are technically infeasible or unduly costly. In 
addition, during any liquids unloading by manual well purging, the 
person conducting the well purging is required to be present on-site to 
minimize to the maximum extent practicable any venting to the 
atmosphere. This section also requires the operator to maintain records 
of the cause, date, time, duration and estimated volume of each venting 
event associated with manual well purging, and to make those records 
available to the BLM upon request. Additionally, operators are required 
to notify the BLM by Sundry Notice within 30 days after the following 
conditions are met: (1) The cumulative duration of manual well-purging 
events for a well exceeds 24 hours during any production month; or (2) 
The estimated volume of gas vented in the process of conducting liquids 
unloading by manual well purging for a well exceeds 75 Mcf during any 
production month. In the RIA for the 2016 final rule, the BLM estimated 
that these requirements would impose costs of about $6 million per year 
and generate cost savings from product recovery of about $5 million to 
$9 million per year (2016 RIA at 66). In addition, there would be 
estimated administrative burdens associated with these requirements of 
$323,000 per year for the industry and $37,000 per year for the BLM 
(2016 RIA at 98 and 101).
    The BLM is currently reviewing Sec.  3179.204 to determine whether 
it should be rescinded or revised. The BLM does not believe that 
operators should be burdened with the operational and reporting 
requirements imposed by Sec.  3179.204 until the BLM has had an 
opportunity to review them and, if appropriate, revise them through 
notice-and-comment rulemaking. In addition, as part of this review, the 
BLM would want to review how these data could be reported in a 
consistent manner among operators. The BLM is therefore proposing to 
suspend the effectiveness of Sec.  3179.204 until January 17, 2019.
    This proposed rule would add a new paragraph (i), making it clear 
that operators must comply with Sec.  3179.204 beginning January 17, 
2019.
43 CFR 3179.301--Operator Responsibility
    Sections 3179.301 through 3179.305 establish leak detection, 
repair, and reporting requirements for: (1) Sites and equipment used to 
produce, process, treat, store, or measure natural gas from

[[Page 46464]]

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

C. Summary of Estimated Impacts

    The BLM reviewed the proposed rule and conducted an RIA and 
Environmental Assessment (EA) that examine the impacts of the proposed 
requirements. The following discussion is a summary of the proposed 
rule's economic impacts. The RIA and draft EA that we prepared have 
been posted in the docket for the proposed rule on the Federal 
eRulemaking Portal: https://www.regulations.gov. In the Searchbox, 
enter ``RIN 1004-AE54'' and click the ``Search'' button. Follow the 
instructions at this Web site.
    The suspension or delay in the implementation of certain 
requirements in the 2016 final rule would postpone the impacts 
estimated previously to the near-term future. That is to say, impacts 
that we previously estimated would occur in 2017 are now estimated to 
occur in 2018, impacts that we previously estimated would occur in 2018 
are now estimated to occur in 2019, and so on. In the RIA for this 
proposed rule, we track this shift in impacts over the 10-year period 
following the delay. A 10-year period of analysis was also used in the 
RIA prepared for the 2016 final rule. Except for some notable changes, 
the 2017 RIA uses the impacts estimated and underlying assumptions used 
by the BLM for the RIA prepared for the 2016 final rule, published in 
November 2016. The BLM's proposed rule would temporarily suspend or 
delay almost all of the requirements in the 2016 final rule that we 
estimated would pose a compliance burden to operators and generate 
benefits of gas savings or reductions in methane emissions.
Estimated Reductions in Compliance Costs (Excluding Cost Savings)
    First, we examine the reductions in compliance costs excluding the 
savings that would have been realized from product recovery. The BLM's 
proposed rule would temporarily suspend or delay almost all of the 
requirements in the 2016 final rule that we estimated would pose a 
compliance burden to operators. We estimate that suspending or delaying 
the targeted requirements of the 2016 final rule until January 17, 
2019, would substantially reduce compliance costs during the period of 
the suspension or delay (2017 RIA at 29).
    Impacts in year 1:
     A reduction in compliance costs of $114 million (using a 7 
percent discount rate to annualize capital costs) or $110 million 
(using a 3 percent discount rate to annualize capital costs).
    Impacts from 2017-2027:
     Total reduction in compliance costs ranging from $73 
million to $91 million (net present value (NPV) using a 7 percent 
discount rate) or $40 million to $50 million (NPV using a 3 percent 
discount rate).
Estimated Reduction in Benefits
    The BLM's proposed rule would temporarily suspend or delay almost 
all of the requirements in the 2016 final rule that we estimated would 
generate benefits of gas savings or reductions in methane emissions. We 
estimate that the proposed rule would result in forgone benefits, since 
estimated cost savings that would have come from product recovery would 
be deferred and the emissions reductions would also be deferred (2017 
RIA at 32).
    Impacts in year 1:
     A reduction in cost savings of $19 million.
    Impacts from 2017-2027:
     Total reduction in cost savings of $36 million (NPV using 
a 7 percent discount rate) or $21 million (NPV using a 3 percent 
discount rate).
    We estimate that the proposed rule would also result in additional 
methane and VOC emissions of 175,000 and 250,000 tons, respectively, in 
year 1 (2017 RIA at 32).
    These estimated emissions are measured as the change from the 
baseline environment, which is the 2016 final rule's requirements being 
implemented per the 2016 final rule schedule. Since the proposed rule 
would delay the implementation of those requirements, the estimated 
benefits of the 2016 final rule would be forgone during the temporary 
suspension or delay.
    The BLM used interim domestic values of the carbon dioxide and 
methane to value the forgone emissions reductions resulting from the 
delay (see the discussion of social cost of greenhouse gases in the 
2017 RIA at Section 3.2 and Appendix).

[[Page 46465]]

    Impact in Year 1:
     Forgone methane emissions reductions valued at $8 million 
(using interim domestic SC-CH4 based on a 7 percent discount 
rate) or $26 million (using interim domestic SC-CH4 based on 
a 3 percent discount rate).
    Impacts from 2017-2027:
     Forgone methane emissions reductions valued at $1.9 
million (NPV and interim domestic SC-CH4 using a 7 percent 
discount rate); or
     Forgone methane emissions reductions valued at $300,000 
(NPV and interim domestic SC-CH4 using a 3 percent discount 
rate).
Estimated Net Benefits
    The proposed rule is estimated to result in positive net benefits, 
meaning that the reduction of compliance costs would exceed the 
reduction in cost savings and the cost of emissions additions (2017 RIA 
at 36).
    Impact in year 1:
     Net benefits of $83-86 million (using interim domestic SC-
CH4 based on a 7 percent discount rate) or $64-68 million 
(using interim domestic SC-CH4 based on a 3 percent discount 
rate).
    Impacts from 2017-2027:
     Total net benefits ranging from $35-52 million (NPV and 
interim domestic SC-CH4 using a 7 percent discount rate); or
     Total net benefits ranging from $19-29 million (NPV and 
interim domestic SC-CH4 using a 3 percent discount rate).
Energy Systems
    The proposed rule is expected to influence the production of 
natural gas, natural gas liquids, and crude oil from onshore Federal 
and Indian oil and gas leases, particularly in the short-term. However, 
since the relative changes in production are expected to be small, we 
do not expect that the proposed rule would significantly impact the 
price, supply, or distribution of energy.
    We estimate the following incremental changes in production, noting 
the representative share of the total U.S. production in 2015 for 
context (2017 RIA at 41).
    Annual Impacts:
     A decrease in natural gas production of 9.0 billion cubic 
feet (Bcf) in year 1 (0.03 percent of the total U.S. production).
     An increase in crude oil production of 91,000 barrels in 
year 2 (0.003 percent of the total U.S. production). There is no 
estimated change in crude oil production in year 1.
Royalty Impacts
    In the short-term, the rule is expected to decrease natural gas 
production from Federal and Indian leases, and likewise, is expected to 
reduce annual royalties to the Federal Government, tribal governments, 
States, and private landowners. From 2017-2027, however, we expect a 
small increase in total royalties, likely due to production slightly 
shifting into the future where commodity prices are expected to be 
higher.
    Royalty payments are recurring income to Federal or tribal 
governments and costs to the operator or lessee. As such, they are 
transfer payments that do not affect the total resources available to 
society. An important but sometimes difficult problem in cost 
estimation is to distinguish between real costs and transfer payments. 
While transfers should not be included in the economic analysis 
estimates of the benefits and costs of a regulation, they may be 
important for describing the distributional effects of a regulation.
    We estimate a reduction in royalties of $2.6 million in year 1 
(2017 RIA at 43). This amount represents about 0.2 percent of the total 
royalties received from oil and gas production on Federal lands in FY 
2016. However, from 2017-2027, we estimate an increase in total 
royalties of $1.26 million (NPV using a 7 percent discount rate) or 
$380,000 (NPV using a 3 percent discount rate).
Consideration of Alternative Approaches
    In developing this proposed rule, the BLM considered alternative 
timeframes for which it could suspend or delay the requirements (e.g., 
6 months and 2 years). Ultimately, the BLM decided to propose a 
suspension or delay for one year, which it believes to be the minimum 
length of time practicable within which to review the 2016 final rule 
and complete a notice-and-comment rulemaking to revise that regulation. 
We note that, based on the progress of the review during this 
rulemaking process, the BLM may revise the length of the suspension or 
delay for the final rule.
    A shorter suspension of delay of the same 2016 final rule 
requirements would result in a smaller reduction in compliance costs, 
smaller reduction in cost savings, and a smaller amount of forgone 
emissions reductions, relative to the proposal (2017 RIA at 49-50). 
Meanwhile, a longer suspension or delay of the same 2016 final rule 
requirements would result in a larger reduction in compliance costs, 
larger reduction in cost savings, and larger amount of forgone 
emissions reductions, relative to the proposal (2017 RIA at 50).
Employment Impacts
    The proposed rule would temporarily suspend or delay certain 
requirements of the BLM's 2016 final rule on waste prevention and is a 
temporary deregulatory action. As such, we estimate that it would 
result in a reduction of compliance costs for operators of oil and gas 
leases on Federal and Indian lands. Therefore, it is likely that the 
impact, if any, on the employment would be positive.
    In the RIA for the 2016 final rule, the BLM concluded that the 
requirements were not expected to impact the employment within the oil 
and gas extraction, drilling oil and gas wells, and support activities 
industries, in any material way. This determination was based on 
several reasons. First, the estimated incremental gas production 
represented only a small fraction of the U.S. natural gas production 
volumes. Second, the estimated compliance costs represented only a 
small fraction of the annual net incomes of companies likely to be 
impacted. Third, for those operations that would have been impacted to 
the extent that the compliance costs would force the operator to shut 
in production, the 2016 final rule had provisions that would exempt 
these operations from compliance. Based on these factors, the BLM 
determined that the 2016 final rule would not alter the investment or 
employment decisions of firms or significantly adversely impact 
employment. The RIA also noted that the requirements would require the 
one-time installation or replacement of equipment and the ongoing 
implementation of a leak detection and repair program, both of which 
would require labor to comply.
    We do not believe that the proposed rule would substantially alter 
the investment or employment decisions of firms for two reasons. First, 
the RIA for the 2016 final rule determined that that rule would not 
substantially alter the investment or employment decisions of firms, 
and so therefore delaying the 2016 final rule would likewise not be 
expected to impact those decisions. We also recognize that while there 
might be a small positive impact on investment and employment due to 
the reduction in compliance burdens, the magnitude of the reductions 
are relatively small.
Small Business Impacts
    The BLM reviewed the Small Business Administration (SBA) size 
standards for small businesses and the number of entities fitting those 
size standards as reported by the U.S. Census Bureau. We conclude that 
small

[[Page 46466]]

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

IV. Procedural Matters

Regulatory Planning and Review (Executive Orders 12866 and 13563)

    Executive Order 12866 provides that the Office of Information and 
Regulatory Affairs within the Office of Management and Budget (OMB) 
will review all significant rules.
    Executive Order 13563 reaffirms the principles of Executive Order 
12866 while calling for improvements in the Nation's regulatory system 
to promote predictability, to reduce uncertainty, and to use the best, 
most innovative, and least burdensome tools for achieving regulatory 
ends. The Executive Order directs agencies to consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public where these approaches are relevant, feasible, 
and consistent with regulatory objectives. Executive Order 13563 
emphasizes further that regulations must be based on the best available 
science and that the rulemaking process must allow for public 
participation and an open exchange of ideas.
    This proposed rule would temporarily suspend or delay portions of 
the BLM's 2016 final rule while the BLM reviews those requirements. We 
have developed this proposed rule in a manner consistent with the 
requirements in Executive Order 12866 and Executive Order 13563.
    After reviewing the requirements of the proposed rule, the OMB has 
determined that it is an economically significant action according to 
the criteria of Executive Order 12866. The BLM reviewed the 
requirements of the proposed rule and determined that it will not 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities. For more detailed information, see the RIA prepared for 
this proposed rule. The RIA has been posted in the docket for the 
proposed rule on the Federal eRulemaking Portal: https://www.regulations.gov. In the Searchbox, enter ``RIN 1004-AE54'' and 
click the ``Search'' button. Follow the instructions at this Web site.

Regulatory Flexibility Act

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

Small Business Regulatory Enforcement Fairness Act

    This proposed rule is a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This proposed rule:
    (a) Would have an annual effect on the economy of $100 million or 
more.
    (b) Would not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    (c) Would not have a significant adverse effects on competition,

[[Page 46467]]

employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises.

Unfunded Mandates Reform Act (UMRA)

    This proposed rule would not impose an unfunded mandate on State, 
local, or tribal governments, or the private sector of $100 million or 
more per year. The proposed rule would not have a significant or unique 
effect on State, local, or tribal governments or the private sector. 
The proposed rule contains no requirements that would apply to State, 
local, or tribal governments. It would temporarily suspend or delay 
requirements that would otherwise apply to the private sector. A 
statement containing the information required by the Unfunded Mandates 
Reform Act (UMRA) (2 U.S.C. 1531 et seq.) is not required for the 
proposed rule. This proposed rule is also not subject to the 
requirements of section 203 of UMRA because it contains no regulatory 
requirements that might significantly or uniquely affect small 
governments, because it contains no requirements that apply to such 
governments, nor does it impose obligations upon them.

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

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

Federalism (Executive Order 13132)

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

Civil Justice Reform (Executive Order 12988)

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

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

    The Department strives to strengthen its government-to-government 
relationship with Indian tribes through a commitment to consultation 
with Indian tribes and recognition of their right to self-governance 
and tribal sovereignty. We have evaluated this proposed rule under the 
Department's consultation policy and under the criteria in Executive 
Order 13175 and have identified substantial direct effects on federally 
recognized Indian tribes that would result from this proposed rule. 
Under this proposed rule, oil and gas operations on tribal and allotted 
lands would not be subject to many of the requirements placed on 
operators by the 2016 final rule until January 17, 2019.
    The BLM believes that temporarily suspending or delaying these 
requirements would assist in preventing Indian lands from being viewed 
by oil and gas operators as less attractive than non-Indian lands due 
to unnecessary and burdensome compliance costs, thereby preventing 
economic harm to tribes and allottees.
    The BLM is conducting tribal outreach which it believes is 
appropriate given that the proposed rule would extend the compliance 
dates of the 2016 final rule, but would not change the policies of that 
rule. The BLM notified tribes of the action and requested feedback and 
comment through the respective BLM State Office Directors. Future 
tribal consultation may occur on an ongoing basis.

Paperwork Reduction Act

1. Overview
    The Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3521) provides 
that an agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information, unless it displays a 
currently valid control number. 44 U.S.C. 3512. Collections of 
information include requests and requirements that an individual, 
partnership, or corporation obtain information, and report it to a 
Federal agency. 44 U.S.C. 3502(3); 5 CFR 1320.3(c) and (k).
    OMB has approved the 24 information collection activities in the 
2016 final rule and has assigned control number 1004-0211 to those 
activities. In the Notice of Action approving the 24 information 
collection activities in the 2016 final rule, OMB announced that the 
control number will expire on January 31, 2018. The Notice of Action 
also included terms of clearance.
    The BLM requests the extension of control number 1004-0021 until 
January 31, 2019. The BLM requests no other changes to the control 
number.
    In accordance with the PRA, the BLM is inviting public comment on 
the proposed extension of control no. 1004-0211. Descriptions of the 
information collection activities in this proposed rule, along with 
estimates of the annual burdens, are shown below. Included in the 
burden estimates are the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing each component of the proposed information 
collection requirements.
    The BLM has submitted the information collection request for this 
proposed rule to OMB for review in accordance with the PRA. You may 
obtain a copy of the request from the BLM by electronic mail request to 
James Tichenor at [email protected] or by telephone request to 202-573-
0536.

[[Page 46468]]

You may also review the information collection request online at: 
http://www.reginfo.gov/public/do/.
    The BLM requests comments on the following subjects:
     Whether the collection of information is necessary for the 
proper functioning of the BLM, including whether the information will 
have practical utility;
     The accuracy of the BLM's estimate of the burden of 
collecting the information, including the validity of the methodology 
and assumptions used;
     The quality, utility, and clarity of the information to be 
collected; and
     How to minimize the information collection burden on those 
who are to respond, including the use of appropriate automated, 
electronic, mechanical, or other forms of information technology.
    If you want to comment on the information collection requirements 
of this proposed rule, please send your comments directly to OMB, with 
a copy to the BLM, as directed in the ADDRESSES section of this 
preamble. Please identify your comments with ``OMB Control Number 1004-
0211.'' OMB is required to make a decision concerning the collection of 
information contained in this proposed rule between 30 to 60 days after 
publication of this document in the Federal Register. Therefore, a 
comment to OMB is best assured of having its full effect if OMB 
receives it by November 6, 2017.
2. Summary of Information Collection Activities
    Title: Waste Prevention, Production Subject to Royalties, and 
Resource Conservation (43 CFR parts 3160 and 3170). Form 3160-5, Sundry 
Notices and Reports on Wells.
    OMB Control Number: 1004-0211.
    Forms: Form 3160-3, Application for Permit to Drill or Re-enter; 
and Form 3160-5, Sundry Notices and Reports on Wells.
    Description of Respondents: Holders of Federal and Indian (except 
Osage Tribe) oil and gas leases, those who belong to Federally approved 
units or communitized areas, and those who are parties to oil and gas 
agreements under the Indian Mineral Development Act, 25 U.S.C. 2101-
2108.
    Respondents' Obligation: Required to obtain or retain a benefit.
    Frequency of Collection: On occasion.
    Abstract: The BLM requests the extension of control number 1004-
0021 until January 31, 2019. The BLM requests no changes to the control 
number except this extension.
    Estimated Number of Responses: 63,200.
    Estimated Total Annual Burden Hours: 82,170.
    Estimated Total Non-Hour Cost: None.
3. Information Collection Request
    The BLM requests extension of OMB control number 1004-0211 until 
January 31, 2019. This extension would continue OMB's approval of the 
following information collection activities.
Plan To Minimize Waste of Natural Gas (43 CFR 3162.3-1)
    The 2016 final rule added a new provision to 43 CFR 3162.3-1 that 
requires a plan to minimize waste of natural gas when submitting an 
Application for Permit to Drill or Re-enter (APD) for a development oil 
well. This information is in addition to the APD information that the 
BLM already collects under OMB Control Number 1004-0137. The required 
elements of the waste minimization plan are listed at paragraphs (j)(1) 
through (j)(7).
Request for Approval for Royalty-Free Uses On-Lease or Off-Lease (43 
CFR 3178.5, 3178.7, 3178.8, and 3178.9)
    Section 3178.5 requires submission of a Sundry Notice (Form 3160-5) 
to request prior written BLM approval for use of gas royalty-free for 
the following operations and production purposes on the lease, unit or 
communitized area:
     Using oil or gas that an operator removes from the 
pipeline at a location downstream of the facility measurement point 
(FMP);
     Removal of gas initially from a lease, unit PA, or 
communitized area for treatment or processing because of particular 
physical characteristics of the gas, prior to use on the lease, unit PA 
or communitized area; and
     Any other type of use of produced oil or gas for 
operations and production purposes pursuant to Sec.  3178.3 that is not 
identified in Sec.  3178.4.
    Section 3178.7 requires submission of a Sundry Notice (Form 3160-5) 
to request prior written BLM approval for off-lease royalty-free uses 
in the following circumstances:
     The equipment or facility in which the operation is 
conducted is located off the lease, unit, or communitized area for 
engineering, economic, resource-protection, or physical-accessibility 
reasons; and
     The operations are conducted upstream of the FMP.
    Section 3178.8 requires that an operator measure or estimate the 
volume of royalty-free gas used in operations upstream of the FMP. In 
general, the operator is free to choose whether to measure or estimate, 
with the exception that the operator must in all cases measure the 
following volumes:
     Royalty-free gas removed downstream of the FMP and used 
pursuant to Sec. Sec.  3178.4 through 3178.7; and
     Royalty-free oil used pursuant to Sec. Sec.  3178.4 
through 3178.7.
    If oil is used on the lease, unit or communitized area, it is most 
likely to be removed from a storage tank on the lease, unit or 
communitized area. Thus, this regulation also requires the operator to 
document the removal of the oil from the tank or pipeline.
    Section 3178.8(e) requires that operators use best available 
information to estimate gas volumes, where estimation is allowed. For 
both oil and gas, the operator must report the volumes measured or 
estimated, as applicable, under ONRR reporting requirements. As 
revisions to Onshore Oil and Gas Orders No. 4 and 5 have now been 
finalized as 43 CFR subparts 3174 and 3175, respectively, the final 
rule text now references Sec.  3173.12, as well as Sec.  3178.4 through 
Sec.  3178.7 to clarify that royalty-free use must adhere to the 
provisions in those sections.
    Section 3178.9 requires the following additional information in a 
request for prior approval of royalty-free use under Sec.  3178.5, or 
for prior approval of off-lease royalty-free use under Sec.  3178.7:
     A complete description of the operation to be conducted, 
including the location of all facilities and equipment involved in the 
operation and the location of the FMP;
     The volume of oil or gas that the operator expects will be 
used in the operation and the method of measuring or estimating that 
volume;
     If the volume expected to be used will be estimated, the 
basis for the estimate (e.g., equipment manufacturer's published 
consumption or usage rates); and
     The proposed disposition of the oil or gas used (e.g., 
whether gas used would be consumed as fuel, vented through use of a 
gas-activated pneumatic controller, returned to the reservoir, or 
disposed by some other method).
Request for Approval of Alternative Capture Requirement (43 CFR 3179.8)
    Section 3179.8 applies only to leases issued before the effective 
date of the 2016 final rule and to operators choosing to comply with 
the capture requirement in Sec.  3179.7 on a lease-by-lease, unit-by-
unit, or communitized area-by-communitized area basis. The regulation 
provides that operators who

[[Page 46469]]

meet those parameters may seek BLM approval of a capture percentage 
other than that which is applicable under 43 CFR 3179.7. The operator 
must submit a Sundry Notice (Form 3160-5) that includes the following 
information:
     The name, number, and location of each of the operator's 
wells, and the number of the lease, unit, or communitized area with 
which it is associated; and
     The oil and gas production levels of each of the 
operator's wells on the lease, unit, or communitized area for the most 
recent production month for which information is available and the 
volumes being vented and flared from each well.
    In addition, the request must include map(s) showing:
     The entire lease, unit, or communitized area, and the 
surrounding lands to a distance and on a scale that shows the field in 
which the well is or will be located (if applicable), and all pipelines 
that could transport the gas from the well;
     All of the operator's producing oil and gas wells, which 
are producing from Federal or Indian leases, (both on Federal or Indian 
leases and on other properties) within the map area;
     Identification of all of the operator's wells within the 
lease from which gas is flared or vented, and the location and distance 
of the nearest gas pipeline(s) to each such well, with an 
identification of those pipelines that are or could be available for 
connection and use; and
     Identification of all of the operator's wells within the 
lease from which gas is captured;
    The following information is also required:
     Data that show pipeline capacity and the operator's 
projections of the cost associated with installation and operation of 
gas capture infrastructure, to the extent that the operator is able to 
obtain this information, as well as cost projections for alternative 
methods of transportation that do not require pipelines; and
     Projected costs of and the combined stream of revenues 
from both gas and oil production, including: (1) The operator's 
projections of gas prices, gas production volumes, gas quality (i.e., 
heating value and H2S content), revenues derived from gas 
production, and royalty payments on gas production over the next 15 
years or the life of the operator's lease, unit, or communitized area, 
whichever is less; and (2) The operator's projections of oil prices, 
oil production volumes, costs, revenues, and royalty payments from the 
operator's oil and gas operations within the lease over the next 15 
years or the life of the operator's lease, unit, or communitized area, 
whichever is less.
Notification of Choice To Comply on County- or State-Wide Basis (43 CFR 
3179.7(c)(3)(ii))
    Section 3179.7 requires operators flaring gas from development oil 
wells to capture a specified percentage of the operator's adjusted 
volume of gas produced over the relevant area. The ``relevant area'' is 
each of the operator's leases, units, or communitized areas, unless the 
operator chooses to comply on a county- or State-wide basis and the 
operator notifies the BLM of its choice by Sundry Notice (Form 3160-5) 
by January 1 of the relevant year.
Request for Exemption From Well Completion Requirements (43 CFR 
3179.102(c) and (d))
    Section 3179.102 lists several requirements pertaining to gas that 
reaches the surface during well completion and related operations. An 
operator may seek an exemption from these requirements by submitting a 
Sundry Notice (Form 3160-5) that includes the following information:
    (1) The name, number, and location of each of the operator's wells, 
and the number of the lease, unit, or communitized area with which it 
is associated;
    (2) The oil and gas production levels of each of the operator's 
wells on the lease, unit or communitized area for the most recent 
production month for which information is available;
    (3) Data that show the costs of compliance; and
    (4) Projected costs of and the combined stream of revenues from 
both gas and oil production, including: the operator's projections of 
oil and gas prices, production volumes, quality (i.e., heating value 
and H2S content), revenues derived from production, and 
royalty payments on production over the next 15 years or the life of 
the operator's lease, unit, or communitized area, whichever is less.
    The rule also provides that an operator that is in compliance with 
the EPA regulations for well completions under 40 CFR part 60, subpart 
OOOO or subpart OOOOa is deemed in compliance with the requirements of 
this section. As a practical matter, all new, reconstructed, and 
modified hydraulically fracturing or refracturing events are now 
subject to the EPA requirements, so the BLM does not believe that the 
requirements of this section would have any independent effect, or that 
any operator would request an exemption from the requirements of this 
section, as long as the EPA requirements remain in effect. For this 
reason, the BLM is not estimating any PRA burdens for Sec.  
3179.102.\4\
---------------------------------------------------------------------------

    \4\ The EPA has convened a proceeding for reconsidering the 
final OOOOa rule, see 82 FR 25730 (June 5, 2017). If EPA's 
requirements are altered in any way in the future, then PRA burdens 
estimated for BLM's rule could increase by up to $130/event if the 
operator files for an exemption.
---------------------------------------------------------------------------

Request for Extension of Royalty-Free Flaring During Initial Production 
Testing (43 CFR 3179.103)
    Section 3179.103 allows gas to be flared royalty-free during 
initial production testing. The regulation lists specific volume and 
time limits for such testing. An operator may seek an extension of 
those limits on royalty-free flaring by submitting a Sundry Notice 
(Form 3160-5) to the BLM.
Request for Extension of Royalty-Free Flaring During Subsequent Well 
Testing (43 CFR 3179.104)
    Section 3179.104 allows gas to be flared royalty-free for no more 
than 24 hours during well tests subsequent to the initial production 
test. The operator may seek authorization to flare royalty-free for a 
longer period by submitting a Sundry Notice (Form 3160-5) to the BLM.
Reporting of Venting or Flaring (43 CFR 3179.105)
    Section 3179.105 allows an operator to flare gas royalty-free 
during a temporary, short-term, infrequent, and unavoidable emergency. 
Venting gas is permissible if flaring is not feasible during an 
emergency. The regulation defines limited circumstances that constitute 
an emergency, and other circumstances that do not constitute an 
emergency.
    The operator must estimate and report to the BLM on a Sundry Notice 
(Form 3160-5) volumes flared or vented in circumstances that, as 
provided by 43 CFR 3179.105, do not constitute emergencies for the 
purposes of royalty assessment:
    (1) More than 3 failures of the same component within a single 
piece of equipment within any 365-day period;
    (2) The operator's failure to install appropriate equipment of a 
sufficient capacity to accommodate the production conditions;
    (3) Failure to limit production when the production rate exceeds 
the capacity of the related equipment, pipeline, or gas plant, or 
exceeds sales contract volumes of oil or gas;
    (4) Scheduled maintenance;
    (5) A situation caused by operator negligence; or

[[Page 46470]]

    (6) A situation on a lease, unit, or communitized area that has 
already experienced 3 or more emergencies within the past 30 days, 
unless the BLM determines that the occurrence of more than 3 
emergencies within the 30 day period could not have been anticipated 
and was beyond the operator's control.
Pneumatic Controllers--Introduction
    Section 3179.201 pertains to any pneumatic controller that: (1) Is 
not subject to EPA regulations at 40 CFR 60.5360a through 60.5390a, but 
would be subject to those regulations if it were a new or modified 
source; and (2) has a continuous bleed rate greater than 6 standard 
cubic feet (scf) per hour. Section 3179.201(b) requires operators to 
replace each high-bleed pneumatic controller with a controller with a 
bleed rate lower than 6 scf per hour, with the following exceptions: 
(1) The pneumatic controller exhaust is routed to processing equipment; 
(2) the pneumatic controller exhaust was and continues to be routed to 
a flare device or low pressure combustor; (3) The pneumatic controller 
exhaust is routed to processing equipment; or (4) The operator notifies 
the BLM through a Sundry Notice and demonstrates, and the BLM agrees, 
that such would impose such costs as to cause the operator to cease 
production and abandon significant recoverable oil reserves under the 
lease.
Notification of Functional Needs for a Pneumatic Controller (43 CFR 
3179.201(b)(1)-(3))
    An operator may invoke one of the first three exceptions described 
above by notifying the BLM through a Sundry Notice (Form 3160-5) that 
use of the pneumatic controller is required based on functional needs 
that may include, but are not limited to, response time, safety, and 
positive actuation, and the Sundry Notice (Form 3160-5) describes those 
functional needs.
Showing That Cost of Compliance Would Cause Cessation of Production and 
Abandonment of Oil Reserves (43 CFR 3175.201(b)(4) and 3175.201(c))
    An operator may invoke the fourth exception described above by 
demonstrating to the BLM through a Sundry Notice (Form 3160-5), and by 
obtaining the BLM's agreement, that replacement of a pneumatic 
controller would impose such costs as to cause the operator to cease 
production and abandon significant recoverable oil reserves under the 
lease. The Sundry Notice (Form 3160-5) must include the following 
information:
    (1) The name, number, and location of each of the operator's wells, 
and the number of the lease, unit, or communitized area with which it 
is associated;
    (2) The oil and gas production levels of each of the operator's 
wells on the lease, unit or communitized area for the most recent 
production month for which information is available;
    (3) Data that show the costs of compliance;
    (4) Projected costs of and the combined stream of revenues from 
both gas and oil production, including: the operator's projections of 
gas prices, gas production volumes, gas quality (i.e., heating value 
and H2S content), revenues derived from gas production, and 
royalty payments on gas production over the next 15 years or the life 
of the operator's lease, unit, or communitized area, whichever is less; 
and the operator's projections of oil prices, oil production volumes, 
costs, revenues, and royalty payments from the operator's oil and gas 
operations within the lease over the next 15 years or the life of the 
operator's lease, unit, or communitized area, whichever is less.
Showing in Support of Replacement of Pneumatic Controller Within 3 
Years (43 CFR 3179.201(d))
    The operator may replace a high-bleed pneumatic controller if the 
operator notifies the BLM through a Sundry Notice (Form 3160-5) that 
the well or facility that the pneumatic controller serves has an 
estimated remaining productive life of 3 years or less.
Pneumatic Diaphragm Pumps--Introduction
    With some exceptions, Sec.  3179.202 pertains to any pneumatic 
diaphragm pump that: (1) Uses natural gas produced from a Federal or 
Indian lease, or from a unit or communitized area that includes a 
Federal or Indian lease; and (2) Is not subject to EPA regulations at 
40 CFR 60.5360a through 60.5390a, but would be subject to those 
regulations if it were a new, reconstructed, or modified source as 
defined in 40 CFR part 60 subpart OOOOa. This regulation generally 
requires replacement of such a pump with a zero-emissions pump or 
routing of the pump's exhaust gas to processing equipment for capture 
and sale.
    This requirement does not apply to pneumatic diaphragm pumps that 
do not vent exhaust gas to the atmosphere. In addition, this 
requirement does not apply if the operator submits a Sundry Notice to 
the BLM documenting that the pump(s) operated on less than 90 
individual days in the prior calendar year.
Showing That a Pneumatic Diaphragm Pump Was Operated on Fewer Than 90 
Individual Days in the Prior Calendar Year (43 CFR 3179.202(b)(2))
    A pneumatic diaphragm pump is not subject to Sec.  3179.202 if the 
operator documents in a Sundry Notice (Form 3160-5) that the pump was 
operated fewer than 90 days in the prior calendar year.
Notification of Functional Needs for a Pneumatic Diaphragm Pump (43 CFR 
3179.202(d))
    In lieu of replacing a pneumatic diaphragm pump or routing the pump 
exhaust gas to processing equipment, an operator may submit a Sundry 
Notice (Form 3160-5) to the BLM showing that replacing the pump with a 
zero emissions pump is not viable because a pneumatic pump is necessary 
to perform the function required, and that routing the pump exhaust gas 
to processing equipment for capture and sale is technically infeasible 
or unduly costly.
Showing That Cost of Compliance Would Cause Cessation of Production and 
Abandonment of Oil Reserves (43 CFR 3175.202(f) and (g))
    An operator may seek an exemption from the replacement requirement 
by submitting a Sundry Notice (Form 3160-5) to the BLM that provides an 
economic analysis that demonstrates that compliance with these 
requirements would impose such costs as to cause the operator to cease 
production and abandon significant recoverable oil reserves under the 
lease. The Sundry Notice (Form 3160-5) must include the following 
information:
    (1) Well information that must include: (i) The name, number, and 
location of each well, and the number of the lease, unit, or 
communitized area with which it is associated; and (ii) The oil and gas 
production levels of each of the operator's wells on the lease, unit or 
communitized area for the most recent production month for which 
information is available;
    (2) Data that show the costs of compliance with Sec.  3179.202(c) 
through (e); and
    (3) The operator's estimate of the costs and revenues of the 
combined stream of revenues from both the gas and oil components, 
including: (i) The operator's projections of gas prices, gas production 
volumes, gas quality (i.e., heating value and H2S content), 
revenues derived from gas production, and royalty payments on gas 
production

[[Page 46471]]

over the next 15 years or the life of the operator's lease, unit, or 
communitized area, whichever is less; and (ii) The operator's 
projections of oil prices, oil production volumes, costs, revenues, and 
royalty payments from the operator's oil and gas operations within the 
lease over the next 15 years or the life of the operator's lease, unit, 
or communitized area, whichever is less.
Showing in Support of Replacement of Pneumatic Diaphragm Pump Within 3 
Years (43 CFR 3179.202(h))
    The operator may replace a pneumatic diaphragm pump if the operator 
notifies the BLM through a Sundry Notice (Form 3160-5) that the well or 
facility that the pneumatic controller serves has an estimated 
remaining productive life of 3 years or less.
Storage Vessels (43 CFR 3179.203(c) and (d))
    A storage vessel is subject to 43 CFR 3179.203(c) if the vessel: 
(1) Contains production from a Federal or Indian lease, or from a unit 
or communitized area that includes a Federal or Indian lease; and (2) 
Is not subject to any of the requirements of EPA regulations at 40 CFR 
part 60, subpart OOOO, but would be subject to that subpart if it were 
a new, reconstructed, or modified source.
    The operator must determine, record, and make available to the BLM 
upon request, whether the storage vessel has the potential for VOC 
emissions equal to or greater than 6 tpy based on the maximum average 
daily throughput for a 30-day period of production. The determination 
may take into account requirements under a legally and practically 
enforceable limit in an operating permit or other requirement 
established under a Federal, State, local or tribal authority that 
limit the VOC emissions to less than 6 tpy.
    If a storage vessel has the potential for VOC emissions equal to or 
greater than 6 tpy, the operator must replace the storage vessel at 
issue in order to comply with the requirements of this section, and the 
operator must
    (1) Route all tank vapor gas from the storage vessel to a sales 
line;
    (2) If the operator determines that compliance with the requirement 
to route all tank vapor gas from the storage vessel to a sales line is 
technically infeasible or unduly costly, route all tank vapor gas from 
the storage vessel to a device or method that ensures continuous 
combustion of the tank vapor gas; or
    (3) Submit an economic analysis to the BLM through a Sundry Notice 
(Form 3160-5) that demonstrates, and the BLM agrees, that compliance 
with Sec.  3179.203(c)(2) would impose such costs as to cause the 
operator to cease production and abandon significant recoverable oil 
reserves under the lease.
    To support the demonstration described above, the operator must 
submit a Sundry Notice (Form 3160-5) that includes the following 
information:
    (1) The name, number, and location of each well, and the number of 
the lease, unit, or communitized area with which it is associated;
    (2) The oil and gas production levels of each of the operator's 
wells on the lease, unit or communitized area for the most recent 
production month for which information is available;
    (3) Data that show the costs of compliance with Sec.  
3179.203(c)(1) or (2) on the lease; and
    (4) The operator must consider the costs and revenues of the 
combined stream of revenues from both the gas and oil components, 
including: The operator's projections of oil and gas prices, production 
volumes, quality (i.e., heating value and H2S content), 
revenues derived from production, and royalty payments on production 
over the next 15 years or the life of the operator's lease, unit, or 
communitized area, whichever is less.
Downhole Well Maintenance and Liquids Unloading--Documentation and 
Reporting (43 CFR 3179.204(c) and (e))
    The operator must minimize vented gas and the need for well venting 
associated with downhole well maintenance and liquids unloading, 
consistent with safe operations. Before the operator manually purges a 
well for liquids unloading for the first time after the effective date 
of this section, the operator must consider other methods for liquids 
unloading and determine that they are technically infeasible or unduly 
costly. The operator must provide information supporting that 
determination as part of a Sundry Notice (Form 3160-5). This 
requirement applies to each well the operator operates.
    For any liquids unloading by manual well purging, the operator 
must:
    (1) Ensure that the person conducting the well purging remains 
present on-site throughout the event to minimize to the maximum extent 
practicable any venting to the atmosphere;
    (2) Record the cause, date, time, duration, and estimated volume of 
each venting event; and
    (3) Maintain the records for the period required under Sec.  
3162.4-1 and make them available to the BLM, upon request.
Downhole Well Maintenance and Liquids Unloading--Notification of 
Excessive Duration or Volume (43 CFR 3179.204(f))
    The operator must notify the BLM by Sundry Notice (Form 3160-5), 
within 30 calendar days, if:
    (1) The cumulative duration of manual well purging events for a 
well exceeds 24 hours during any production month; or
    (2) The estimated volume of gas vented in liquids unloading by 
manual well purging operations for a well exceeds 75 Mcf during any 
production month.
Leak Detection--Compliance With EPA Regulations (43 CFR 3179.301(j))
    Sections 3179.301 through 3179.305 include information collection 
activities pertaining to the detection and repair of gas leaks during 
production operations. These regulations require operators to inspect 
all equipment covered under Sec.  3179.301(a) for gas leaks.
    Section 3179.301(j) allows an operator to satisfy the requirements 
of Sec. Sec.  3179.301 through 3179.305 for some or all of the 
equipment or facilities on a given lease by notifying the BLM in a 
Sundry Notice (Form 3160-5) that the operator is complying with EPA 
requirements established pursuant to 40 CFR part 60 with respect to 
such equipment or facilities.
Leak Detection--Request To Use an Alternative Monitoring Device and 
Protocol (43 CFR 3179.302(c))
    Section 3175.302 specifies the instruments and methods that an 
operator may use to detect leaks. Section 3175.302(d) allows the BLM to 
approve an alternative monitoring device and associated inspection 
protocol if the BLM finds that the alternative would achieve equal or 
greater reduction of gas lost through leaks compared with the approach 
specified in Sec.  3179.302(a)(1) when used according to Sec.  
3179.303(a).
    Any person may request approval of an alternative monitoring device 
and protocol by submitting a Sundry Notice (Form 3160-5) to BLM that 
includes the following information: (1) Specifications of the proposed 
monitoring device, including a detection limit capable of supporting 
the desired function; (2) The proposed monitoring protocol using the 
proposed monitoring device, including how results will be recorded; (3) 
Records and data from laboratory and field testing, including but not 
limited to performance testing; (4) A demonstration that the proposed 
monitoring device and protocol will

[[Page 46472]]

achieve equal or greater reduction of gas lost through leaks compared 
with the approach specified in the regulations; (5) Tracking and 
documentation procedures; and (6) Proposed limitations on the types of 
sites or other conditions on deploying the device and the protocol to 
achieve the demonstrated results.
Leak Detection--Operator Request To Use an Alternative Leak Detection 
Program (43 CFR 3179.303(b))
    Section 3179.303(b) allows an operator to submit a Sundry Notice 
(Form 3160-5) requesting authorization to detect gas leaks using an 
alternative instrument-based leak detection program, different from the 
specified requirement to inspect each site semi-annually using an 
approved monitoring device.
    To obtain approval for an alternative leak detection program, the 
operator must submit a Sundry Notice (Form 3160-5) that includes the 
following information:
    (1) A detailed description of the alternative leak detection 
program, including how it will use one or more of the instruments 
specified in or approved under Sec.  3179.302(a) and an identification 
of the specific instruments, methods and/or practices that would 
substitute for specific elements of the approach specified in 
Sec. Sec.  3179.302(a) and 3179.303(a);
    (2) The proposed monitoring protocol;
    (3) Records and data from laboratory and field testing, including, 
but not limited to, performance testing, to the extent relevant;
    (4) A demonstration that the proposed alternative leak detection 
program will achieve equal or greater reduction of gas lost through 
leaks compared to compliance with the requirements specified in 
Sec. Sec.  3179.302(a) and 3179.303(a);
    (5) A detailed description of how the operator will track and 
document its procedures, leaks found, and leaks repaired; and
    (6) Proposed limitations on types of sites or other conditions on 
deployment of the alternative leak detection program.
Leak Detection--Operator Request for Exemption Allowing Use of an 
Alternative Leak-Detection Program That Does Not Meet Specified 
Criteria (43 CFR 3179.303(d))
    An operator may seek authorization for an alternative leak 
detection program that does not achieve equal or greater reduction of 
gas lost through leaks compared to the required approach, if the 
operator demonstrates that compliance with the leak-detection 
regulations (including the option for an alternative program under 43 
CFR 3179.303(b)) would impose such costs as to cause the operator to 
cease production and abandon significant recoverable oil or gas 
reserves under the lease. The BLM may approve an alternative leak 
detection program that does not achieve equal or greater reduction of 
gas lost through leaks, but is as effective as possible consistent with 
not causing the operator to cease production and abandon significant 
recoverable oil or gas reserves under the lease.
    To obtain approval for an alternative program under this provision, 
the operator must submit a Sundry Notice (Form 3160-5) that includes 
the following information:
    (1) The name, number, and location of each well, and the number of 
the lease, unit, or communitized area with which it is associated;
    (2) The oil and gas production levels of each of the operator's 
wells on the lease, unit or communitized area for the most recent 
production month for which information is available;
    (3) Data that show the costs of compliance on the lease with the 
requirements of Sec. Sec.  3179.301-305 and with an alternative leak 
detection program that meets the requirements of Sec.  3179.303(b);
    (4) The operator must consider the costs and revenues of the 
combined stream of revenues from both the gas and oil components and 
provide the operator's projections of oil and gas prices, production 
volumes, quality (i.e., heating value and H2S content), 
revenues derived from production, and royalty payments on production 
over the next 15 years or the life of the operator's lease, unit, or 
communitized area, whichever is less;
    (5) The information required to obtain approval of an alternative 
program under Sec.  3179.303(b), except that the estimated volume of 
gas that will be lost through leaks under the alternative program must 
be compared to the volume of gas lost under the required program, but 
does not have to be shown to be at least equivalent.
Leak Detection--Notification of Delay in Repairing Leaks (43 CFR 
3179.304(b))
    Section 3179.304(a) requires an operator to repair any leak no 
later than 30 calendar days after discovery of the leak, unless there 
is good cause for delay in repair. If there is good cause for a delay 
beyond 30 calendar days, Sec.  3179.304(b) requires the operator to 
submit a Sundry Notice (Form 3160-5) notifying the BLM of the cause.
Leak Detection--Inspection Recordkeeping and Reporting (43 CFR 
3179.305)
    Section 3179.305 requires operators to maintain the following 
records and make them available to the BLM upon request: (1) For each 
inspection required under Sec.  3179.303, documentation of the date of 
the inspection and the site where the inspection was conducted; (2) The 
monitoring method(s) used to determine the presence of leaks; (3) A 
list of leak components on which leaks were found; (4) The date each 
leak was repaired; and (5) The date and result of the follow-up 
inspection(s) required under Sec.  3179.304. By March 31 each calendar 
year, the operator must provide to the BLM an annual summary report on 
the previous year's inspection activities that includes: (1) The number 
of sites inspected; (2) The total number of leaks identified, 
categorized by the type of component; (3) The total number of leaks 
repaired; (4) The total number of leaks that were not repaired as of 
December 31 of the previous calendar year due to good cause and an 
estimated date of repair for each leak; and (5) A certification by a 
responsible officer that the information in the report is true and 
accurate.
Leak Detection--Annual Reporting of Inspections (43 CFR 3179.305(b))
    By March 31 of each calendar year, the operator must provide to the 
BLM an annual summary report on the previous year's inspection 
activities that includes:
    (1) The number of sites inspected;
    (2) The total number of leaks identified, categorized by the type 
of component;
    (3) The total number of leaks repaired;
    (4) The total number leaks that were not repaired as of December 31 
of the previous calendar year due to good cause and an estimated date 
of repair for each leak.
    (5) A certification by a responsible officer that the information 
in the report is true and accurate to the best of the officer's 
knowledge.
4. Burden Estimates
    The following table details the annual estimated hour burdens for 
the information activities described above.

[[Page 46473]]



----------------------------------------------------------------------------------------------------------------
                                                                                                    Total hours
                        Type of response                             Number of       Hours per      (Column B x
                                                                     responses       response        Column C)
A                                                                              B               C               D
----------------------------------------------------------------------------------------------------------------
Plan to Minimize Waste of Natural Gas, 43 CFR 3162.3-1, Form               2,000               8          16,000
 3160-3.........................................................
Request for Approval for Royalty-Free Uses On-Lease or Off-                   50               4             200
 Lease, 43 CFR 3178.5, 3178.7, 3178.8, and 3178.9, Form 3160-5..
Notification of Choice to Comply on County- or State-wide Basis,             200               1             200
 43 CFR 3179.7(c)(3)(iii).......................................
Request for Approval of Alternative Capture Requirement, 43 CFR               50              16             800
 3179.8(b), Form 3160-5.........................................
Request for Exemption from Well Completion Requirements, 43 CFR                0               0               0
 3179.102(c) and (d), Form 3160-5...............................
Request for Extension of Royalty-Free Flaring During Initial                 500               2           1,000
 Production Testing, 43 CFR 3179.103, Form 3160-5...............
Request for Extension of Royalty-Free Flaring During Subsequent                5               2              10
 Well Testing, 43 CFR 3179.104, Form 3160-5.....................
Reporting of Venting or Flaring, 43 CFR 3179.105, Form 3160-5...             250               2             500
Notification of Functional Needs for a Pneumatic Controller, 43               10               2              20
 CFR 3179.201(b)(1)-(3), Form 3160-5............................
Showing that Cost of Compliance Would Cause Cessation of                      50               4             200
 Production and Abandonment of Oil Reserves, 43 CFR
 3175.201(b)(4) and 3175.201(c), Form 3160-5....................
Showing in Support of Replacement of Pneumatic Controller within             100               1             100
 3 Years, 43 CFR 3179.201(d), Form 3160-5.......................
Showing that a Pneumatic Diaphragm Pump was Operated on Fewer                100               1             100
 than 90 Individual Days in the Prior Calendar Year, 43 CFR
 3179.202(b)(2), Form 3160-5....................................
Notification of Functional Needs for a Pneumatic Diaphragm Pump,             150               1             150
 43 CFR 3179.202(d), Form 3160-5................................
Showing that Cost of Compliance Would Cause Cessation of                      10               4              40
 Production and Abandonment of Oil Reserves, 43 CFR 3175.202(f)
 and (g), Form 3160-5...........................................
Showing in Support of Replacement of Pneumatic Diaphragm Pump                100               1             100
 within 3 Years, 43 CFR 3179.202(h), Form 3160-5................
Storage Vessels, 43 CFR 3179.203(c), Form 3160-5................              50               4             200
Downhole Well Maintenance and Liquids Unloading--Documentation             5,000               1           5,000
 and Reporting, 43 CFR 3179.204(c) and (e), Form 3160-5.........
Downhole Well Maintenance and Liquids Unloading--Notification of             250               1             250
 Excessive Duration or Volume, 43 CFR 3179.204(f), Form 3160-5..
Leak Detection--Compliance with EPA Regulations, 43 CFR                       50               4             200
 3179.301(j), Form 3160-5.......................................
Leak Detection--Request to Use an Alternative Monitoring Device                5              40             200
 and Protocol, 43 CFR 3179.302(c), Form 3160-5..................
Leak Detection--Operator Request to Use an Alternative Leak                   20              40             800
 Detection Program, 43 CFR 3179.303(b), Form 3160-5.............
Leak Detection--Operator Request for Exemption Allowing Use of               150              20           3,000
 an Alternative Leak-Detection Program that Does Not Meet
 Specified 43 CFR 3179.303(d), Form 3160-5......................
Leak Detection--Notification of Delay in Repairing Leaks, 43 CFR             100               1             100
 3179.304(a), Form 3160-5.......................................
Leak Detection--Inspection Recordkeeping and Reporting, 43 CFR            52,000             .25          13,000
 3179.305.......................................................
Leak Detection--Annual Reporting of Inspections, 43 CFR                    2,000              20          40,000
 3179.305(b), Form 3160-5.......................................
                                                                 -----------------------------------------------
    Totals......................................................          63,200  ..............          82,170
----------------------------------------------------------------------------------------------------------------

National Environmental Policy Act

    The BLM has prepared a draft environmental assessment (EA) to 
determine whether this proposed rule would have a significant impact on 
the quality of the human environment under the National Environmental 
Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.). If the final EA 
supports the issuance of a Finding of No Significant Impact (FONSI) for 
the rule, the preparation of an environmental impact statement pursuant 
to the NEPA would not be required.
    The draft EA and FONSI have been placed in the file for the BLM's 
Administrative Record for the rule at the address specified in the 
ADDRESSES section. The EA and FONSI have also been posted in the docket 
for the rule on the Federal eRulemaking Portal: https://www.regulations.gov. In the Searchbox, enter ``RIN 1004-AE54'' and 
click the ``Search'' button. Follow the instructions at this Web site. 
The BLM invites the public to review these documents and suggests that 
anyone wishing to submit comments on the EA and FONSI should do so in 
accordance with the instructions contained in the ``Public Comment 
Procedures'' section above.

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

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

[[Page 46474]]

17, 2019, will likewise not have an impact on the supply, distribution, 
or use of energy. As such, we do not consider the proposed rule to be a 
``significant energy action'' as defined in Executive Order 13211.

Clarity of This Regulation (Executive Orders 12866)

    We are required by Executive Orders 12866 (section 1(b)(12)), 12988 
(section 3(b)(1)(B)), and 13563 (section 1(a)), and by the Presidential 
Memorandum of June 1, 1988, to write all rules in plain language. This 
means that each rule must:
    (a) Be logically organized;
    (b) Use the active voice to address readers directly;
    (c) Use common, everyday words and clear language rather than 
jargon;
    (d) Be divided into short sections and sentences; and
    (e) Use lists and tables wherever possible.
    If you feel that we have not met these requirements, send us 
comments by one of the methods listed in the ADDRESSES section. To 
better help the BLM revise the rule, your comments should be as 
specific as possible. For example, you should tell us the numbers of 
the sections or paragraphs that you find unclear, which sections or 
sentences are too long, the sections where you feel lists or tables 
would be useful, etc.

Authors

    The principal authors of this proposed rule are: James Tichenor and 
Michael Riches of the BLM Washington Office; Sheila Mallory of the BLM 
New Mexico State Office, Eric Jones of the BLM Moab, Utah Field Office; 
David Mankiewicz of the BLM Farmington, New Mexico Field Office; and 
Beth Poindexter of the BLM Dickinson, North Dakota Field Office; 
assisted by Faith Bremner of the BLM's Division of Regulatory Affairs 
and by the Department of the Interior's Office of the Solicitor.

List of Subjects

43 CFR Part 3160

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

43 CFR Part 3170

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

     Dated: September 28, 2017.
Katharine S. MacGregor,
Acting Assistant Secretary for Land and Minerals Management.

43 CFR Chapter II

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

PART 3160--ONSHORE OIL AND GAS OPERATIONS

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

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

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


Sec.  3162.3-1  Drilling applications and plans.

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

PART 3170--ONSHORE OIL AND GAS PRODUCTION

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

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

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


Sec.  3179.7  Gas capture requirement.

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

[[Page 46475]]

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


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

* * * * *
    (b) * * *
    (1) If the operator estimates that the volume of gas flared from a 
high pressure flare stack or manifold equals or exceeds an average of 
50 Mcf per day for the life of the flare, or the previous 12 months, 
whichever is shorter, then, beginning January 17, 2019, the operator 
must either:
* * * * *
0
6. Amend Sec.  3179.10 by revising paragraph (a) to read as follows:


Sec.  3179.10   Determinations regarding royalty-free flaring.

    (a) Approvals to flare royalty free, which are in effect as of 
January 17, 2017, will continue in effect until January 17, 2019.
* * * * *
0
7. Amend Sec.  3179.101 by adding paragraph (c) to read as follows:


Sec.  3179.101  Well drilling.

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

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


Sec.  3179.102  Well completion and related operations.

* * * * *
    (e) The operator must comply with this section beginning January 
17, 2019.
0
9. Amend Sec.  3179.201 by revising paragraph (d) to read as follows:


Sec.  3179.201  Equipment requirements for pneumatic controllers.

* * * * *
    (d) The operator must replace the pneumatic controller(s) by 
January 17, 2019, as required under paragraph (b) of this section. If, 
however, the well or facility that the pneumatic controller serves has 
an estimated remaining productive life of 3 years or less from January 
17, 2017, then the operator may notify the BLM through a Sundry Notice 
and replace the pneumatic controller no later than 3 years from January 
17, 2017.
* * * * *
0
10. Amend Sec.  3179.202 by revising paragraph (h) to read as follows:


Sec.  3179.202  Requirements for pneumatic diaphragm pumps.

* * * * *
    (h) The operator must replace the pneumatic diaphragm pump(s) or 
route the exhaust gas to capture or to a flare or combustion device by 
January 17, 2019, except that if the operator will comply with 
paragraph (c) of this section by replacing the pneumatic diaphragm pump 
with a zero-emission pump and the well or facility that the pneumatic 
diaphragm pump serves has an estimated remaining productive life of 3 
years or less from January 17, 2017, the operator must notify the BLM 
through a Sundry Notice and replace the pneumatic diaphragm pump no 
later than 3 years from January 17, 2017.
* * * * *
0
11. Amend Sec.  3179.203 by revising paragraph (b) and paragraph (c) 
introductory text to read as follows:


Sec.  3179.203  Storage vessels.

* * * * *
    (b) Beginning January 17, 2019, and within 30 days after any new 
source of production is added to the storage vessel after January 17, 
2019, the operator must determine, record, and make available to the 
BLM upon request, whether the storage vessel has the potential for VOC 
emissions equal to or greater than 6 tpy based on the maximum average 
daily throughput for a 30-day period of production. The determination 
may take into account requirements under a legally and practically 
enforceable limit in an operating permit or other requirement 
established under a Federal, State, local or tribal authority that 
limit the VOC emissions to less than 6 tpy.
    (c) If a storage vessel has the potential for VOC emissions equal 
to or greater than 6 tpy under paragraph (b) of this section, by 
January 17, 2019, or by January 17, 2020, if the operator must and will 
replace the storage vessel at issue in order to comply with the 
requirements of this section, the operator must:
* * * * *
0
12. Amend Sec.  3179.204 by adding paragraph (i) to read as follows:


Sec.  3179.204  Downhole well maintenance and liquids unloading.

* * * * *
    (i) The operator must comply with this section beginning January 
17, 2019.
0
13. Amend Sec.  3179.301 by revising paragraph (f) to read as follows:


Sec.  3179.301  Operator responsibility.

* * * * *
    (f) The operator must make the first inspection of each site:
    (1) By January 17, 2019, for all existing sites;
    (2) Within 60 days of beginning production for new sites that begin 
production after January 17, 2019; and
    (3) Within 60 days of the date when an existing site that was out 
of service is brought back into service and re-pressurized after 
January 17, 2019.
* * * * *
[FR Doc. 2017-21294 Filed 10-4-17; 8:45 am]
 BILLING CODE 4310-84-P



                                                 46458                 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules

                                                 federal requirements, and impose no                     ACTION:   Proposed rule.                              burdens, you should provide the BLM
                                                 additional requirements beyond those                                                                          with a copy, at one of the addresses
                                                 imposed by State law, and there are no                  SUMMARY:   On November 18, 2016, the                  shown earlier in this section, so that we
                                                 anticipated significant adverse human                   Bureau of Land Management (BLM)                       can summarize all written comments
                                                 health or environmental effects, the rule               published in the Federal Register a final             and address them in the final rule
                                                 is not subject to Executive Order 12898.                rule entitled, ‘‘Waste Prevention,                    preamble.
                                                 The Congressional Review Act, 5 U.S.C.                  Production Subject to Royalties, and
                                                                                                         Resource Conservation’’ (2016 final                   FOR FURTHER INFORMATION CONTACT:
                                                 801 et seq., as added by the Small
                                                                                                         rule). The BLM is now proposing to                    Catherine Cook, Acting Division Chief,
                                                 Business Regulatory Enforcement
                                                                                                         temporarily suspend or delay certain                  Fluid Minerals Division, 202–912–7145,
                                                 Fairness Act of 1996, generally provides
                                                                                                         requirements contained in the 2016                    or ccook@blm.gov, for information
                                                 that before a rule may take effect, the
                                                                                                         final rule until January 17, 2019. The                regarding the substance of this proposed
                                                 agency promulgating the rule must
                                                                                                         BLM is currently reviewing the 2016                   rule or information about the BLM’s
                                                 submit a rule report, which includes a
                                                                                                         final rule and wants to avoid imposing                Fluid Minerals program. For questions
                                                 copy of the rule to each House of the
                                                                                                         temporary or permanent compliance                     relating to regulatory process issues,
                                                 Congress and to the Comptroller General
                                                                                                         costs on operators for requirements that              contact Faith Bremner, Regulatory
                                                 of the United States. The EPA will
                                                                                                         may be rescinded or significantly                     Analyst, at 202–912–7441, or fbremner@
                                                 submit a report containing this
                                                                                                         revised in the near future.                           blm.gov. Persons who use a
                                                 document and other required
                                                                                                         DATES: Send your comments on this                     telecommunications device for the deaf
                                                 information to the U.S. Senate, the U.S.
                                                                                                         proposed rule to the BLM on or before                 (TDD) may call the Federal Relay
                                                 House of Representatives, and the
                                                                                                         November 6, 2017. As explained later,                 Service (FRS) at 1–800–877–8339, 24
                                                 Comptroller General of the United
                                                                                                         the BLM is also requesting that the                   hours a day, 7 days a week, to leave a
                                                 States prior to publication in the
                                                                                                         Office of Management and Budget                       message or question with the above
                                                 Federal Register. A major rule cannot
                                                                                                         (OMB) extend the control number                       individuals. You will receive a reply
                                                 take effect until 60 days after it is
                                                                                                         (1004–0211) for the 24 information                    during normal business hours.
                                                 published in the Federal Register. This
                                                                                                         collection activities that would continue             SUPPLEMENTARY INFORMATION:
                                                 action is not a ‘‘major rule’’ as defined
                                                                                                         in this proposed rule. If you wish to
                                                 by 5 U.S.C. 804(2). This action                                                                               I. Public Comment Procedures
                                                                                                         comment on this request, please note                  II. Background
                                                 nevertheless will be effective 60 days
                                                                                                         that such comments should be sent                     III. Discussion of the Proposed Rule
                                                 after the final approval is published in
                                                                                                         directly to the OMB, and that the OMB                 IV. Procedural Matters
                                                 the Federal Register.
                                                                                                         is required to make a decision
                                                 List of Subjects in 40 CFR Part 271                     concerning the collection of information              I. Public Comment Procedures
                                                    Environmental protection,                            contained in this proposed rule between
                                                                                                         30 and 60 days after publication of this                 If you wish to comment on this
                                                 Administrative practice and procedure,                                                                        proposed rule, you may submit your
                                                                                                         document in the Federal Register.
                                                 Confidential business information,                                                                            comments by any of the methods
                                                                                                         Therefore, a comment to the OMB on
                                                 Hazardous waste, Hazardous waste                                                                              described in the ADDRESSES section.
                                                                                                         the proposed information collection
                                                 transportation, Indian lands,                                                                                    Please make your comments on the
                                                                                                         revisions is best assured of being given
                                                 Intergovernmental relations, Penalties,                                                                       proposed rule as specific as possible,
                                                                                                         full consideration if the OMB receives it
                                                 Reporting and recordkeeping                                                                                   confine them to issues pertinent to the
                                                                                                         by November 6, 2017.
                                                 requirements.                                                                                                 proposed rule, and explain the reason
                                                                                                         ADDRESSES:
                                                   Authority: This action is issued under the               Mail: U.S. Department of the Interior,             for any changes you recommend. Where
                                                 authority of sections 2002(a), 3006, and                Director (630), Bureau of Land                        possible, your comments should
                                                 7004(b) of the Solid Waste Disposal Act as                                                                    reference the specific section or
                                                                                                         Management, Mail Stop 2134LM, 1849
                                                 amended, 42 U.S.C. 6912(a), 6926, and                                                                         paragraph of the proposal that you are
                                                 6974(b).                                                C St. NW., Washington, DC 20240,
                                                                                                         Attention: 1004–AE52.                                 addressing. The BLM is not obligated to
                                                   Dated: September 26, 2017.                               Personal or messenger delivery: U.S.               consider or include in the
                                                 Alexis Strauss,                                         Department of the Interior, Bureau of                 Administrative Record for the final rule
                                                 Acting Regional Administrator, Region 9.                Land Management, 20 M Street SE.,                     comments that we receive after the close
                                                 [FR Doc. 2017–21522 Filed 10–4–17; 8:45 am]             Room 2134 LM, Washington, DC 20003,                   of the comment period (see DATES) or
                                                 BILLING CODE 6560–50–P                                  Attention: Regulatory Affairs.                        comments delivered to an address other
                                                                                                            Federal eRulemaking Portal: https://               than those listed above (see ADDRESSES).
                                                                                                         www.regulations.gov. In the Searchbox,                   Comments, including names and
                                                                                                         enter ‘‘RIN 1004–AE54’’ and click the                 street addresses of respondents, will be
                                                 DEPARTMENT OF THE INTERIOR                                                                                    available for public review at the
                                                                                                         ‘‘Search’’ button. Follow the
                                                 Bureau of Land Management                               instructions at this Web site. Comments               address listed under ‘‘ADDRESSES:
                                                                                                         on the information collection burdens:                Personal or messenger delivery’’ during
                                                 43 CFR Parts 3160 and 3170                              Fax: Office of Management and Budget                  regular hours (7:45 a.m. to 4:15 p.m.),
                                                                                                         (OMB), Office of Information and                      Monday through Friday, except
                                                 [17X.LLWO310000.L13100000.PP0000]                       Regulatory Affairs, Desk Officer for the              holidays. Before including your address,
                                                                                                         Department of the Interior, fax 202–395–              telephone number, email address, or
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                                                 RIN 1004–AE54                                                                                                 other personal identifying information
                                                                                                         5806.
                                                 Waste Prevention, Production Subject                       Electronic mail: OIRA_Submission@                  in your comment, be advised that your
                                                 to Royalties, and Resource                              omb.eop.gov. Please indicate                          entire comment—including your
                                                 Conservation; Delay and Suspension                      ‘‘Attention: OMB Control Number 1004–                 personal identifying information—may
                                                 of Certain Requirements                                 0211,’’ regardless of the method used to              be made publicly available at any time.
                                                                                                         submit comments on the information                    While you can ask us in your comment
                                                 AGENCY:     Bureau of Land Management,                  collection burdens. If you submit                     to withhold from public review your
                                                 Interior.                                               comments on the information collection                personal identifying information, we


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                                                                       Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules                                          46459

                                                 cannot guarantee that we will be able to                Petitioners assert that the BLM was                   rule would cause marginal wells to be
                                                 do so.                                                  arbitrary and capricious in promulgating              shut-in, thereby ceasing production and
                                                                                                         the 2016 final rule and that the rule                 reducing economic benefits to local,
                                                 II. Background
                                                                                                         exceeds the BLM’s statutory authority.                State, tribal, and Federal governments.
                                                    The BLM’s onshore oil and gas                        Shortly after filing petitions for judicial           The BLM is concerned that the RIA for
                                                 management program is a major                           review, petitioners filed motions for a               the 2016 final rule may have
                                                 contributor to our nation’s oil and gas                 preliminary injunction, seeking a stay of             underestimated costs and overestimated
                                                 production. The BLM manages more                        the rule pending the outcome of the                   benefits, and is therefore presently
                                                 than 245 million acres of Federal land                  litigation. These motions were denied                 reviewing that analysis for potential
                                                 and 700 million acres of subsurface                     by the court on January 16, 2017, and                 inaccuracies. In any event, the RIA for
                                                 estate, making up nearly a third of the                 the rule went into effect the following               the 2016 rule indicates that the rule
                                                 nation’s mineral estate. In fiscal year                 day. Although the court denied the                    poses a substantial burden on industry,
                                                 (FY) 2016, sales volumes from Federal                   motions for a preliminary injunction, it              particularly those requirements that are
                                                 onshore production lands accounted for                  did express concerns that the BLM may                 set to become effective on January 17,
                                                 9 percent of domestic natural gas                       have ‘‘usurp[ed]’’ the authority of the               2018.
                                                 production, and 5 percent of total U.S.                 Environmental Protection Agency (EPA)                    Since late January 2017, the President
                                                 oil production. Over $1.9 billion in                    and the States under the Clean Air Act,               has issued several Executive Orders that
                                                 royalties were collected from all oil,                  and questioned whether it was                         necessitate a review of the 2016 final
                                                 natural gas, and natural gas liquids                    appropriate for the 2016 final rule to be             rule by the Department. On January 30,
                                                 transactions in FY 2016 on Federal and                  justified based on its environmental and              2017, the President issued Executive
                                                 Indian Lands. Royalties from Federal                    societal benefits, rather than on its                 Order 13771, entitled, ‘‘Reducing
                                                 lands are shared with States. Royalties                 resource conservation benefits alone.                 Regulation and Controlling Regulatory
                                                 from Indian lands are collected for the                 The next stage in the litigation will be              Costs,’’ which requires Federal agencies
                                                 benefit of the Indian owners.                           the court’s consideration of the merits of            to take proactive measures to reduce the
                                                    In response to oversight reviews and                                                                       costs associated with complying with
                                                                                                         the petitioner’s claims. It is possible that
                                                 a recognition of increased flaring from                                                                       Federal regulations. In addition, on
                                                                                                         the court’s decision on these claims
                                                 Federal and Indian leases, the BLM                                                                            March 28, 2017, the President issued
                                                                                                         could result in the 2016 final rule being
                                                 developed a final rule entitled, ‘‘Waste                                                                      Executive Order 13783, entitled,
                                                                                                         overturned. On June 15, 2017, the
                                                 Prevention, Production Subject to                                                                             ‘‘Promoting Energy Independence and
                                                                                                         Department of the Interior (Department)
                                                 Royalties, and Resource Conservation,’’                                                                       Economic Growth.’’ Section 7(b) of
                                                                                                         issued a Federal Register notice,
                                                 which was published in the Federal                                                                            Executive Order 13783 directs the
                                                                                                         pursuant to 5 U.S.C. 705, postponing the
                                                 Register on November 18, 2016. See 81                                                                         Secretary of the Interior to review four
                                                 FR 83008 (Nov. 18, 2016). The rule                      January 2018 compliance dates of the
                                                                                                         2016 final rule pending judicial review.              specific rules, including the 2016 final
                                                 replaced the BLM’s existing policy at                                                                         rule, for consistency with the policy
                                                 that time, Notice to Lessees and                        82 FR 27430 (June 15, 2017).
                                                                                                                                                               articulated in section 1 of the Order and,
                                                 Operators of Onshore Federal and                           In the Regulatory Impact Analysis                  ‘‘if appropriate,’’ to publish proposed
                                                 Indian Oil and Gas Leases, Royalty or                   (RIA) for the 2016 final rule, the BLM                rules suspending, revising, or rescinding
                                                 Compensation for Oil and Gas Lost                       estimated that the requirements of the                those rules. Among other things, section
                                                 (NTL–4A). The 2016 final rule was                       2016 final rule would impose                          1 of Executive Order 13783 states that
                                                 intended to: Reduce waste of natural gas                compliance costs, not including                       ‘‘[i]t is in the national interest to
                                                 from venting, flaring, and leaks during                 potential cost savings for product                    promote clean and safe development of
                                                 oil and natural gas production activities               recovery, of approximately $114 million               our Nation’s vast energy resources,
                                                 on onshore Federal and Indian leases;                   to $279 million per year (2016 RIA at 4).             while at the same time avoiding
                                                 clarify when produced gas lost through                  The BLM had concluded that, while                     regulatory burdens that unnecessarily
                                                 venting, flaring, or leaks is subject to                many of the requirements were                         encumber energy production, constrain
                                                 royalties; and clarify when oil and gas                 consistent with EPA regulations for new               economic growth, and prevent job
                                                 production may be used royalty-free on-                 sources, current industry practice, or                creation.’’
                                                 site. The 2016 final rule became                        similar to the requirements found in                     To implement Executive Order 13783,
                                                 effective on January 17, 2017. Many of                  some existing State regulations, the                  Secretary of the Interior Ryan Zinke
                                                 the final rule’s provisions are to be                   2016 final rule would be an                           issued Secretarial Order No. 3349,
                                                 phased in over time, and are to become                  economically significant rule with                    entitled, ‘‘American Energy
                                                 operative on January 17, 2018.                          estimated costs and benefits exceeding                Independence’’ on March 29, 2017,
                                                    Immediately after the 2016 final rule                $100 million per year (2016 RIA at 138).              which, among other things, directs the
                                                 was issued, industry groups and States                  Comments received by many oil and gas                 BLM to review the 2016 final rule to
                                                 with significant BLM-managed Federal                    companies and trade associations                      determine whether it is fully consistent
                                                 and Indian minerals filed petitions for                 representing members of the oil and gas               with the policy set forth in section 1 of
                                                 judicial review. The petitioners in this                industry suggested that the BLM’s                     Executive Order 13783. The BLM
                                                 litigation are the Western Energy                       proposed and final rules were                         conducted an initial review of the 2016
                                                 Alliance (WEA), the Independent                         unnecessary and would cause                           final rule and found that it appears to
                                                 Petroleum Association of America, the                   substantial harm to the industry. During              be inconsistent with the policy in
                                                 State of Wyoming, the State of Montana,                 the litigation following the issuance of              section 1 of Executive Order 13783. The
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                                                 the State of North Dakota, and the State                the 2016 final rule, the petitioners                  BLM found that some provisions of the
                                                 of Texas. This litigation has been                      argued that the BLM underestimated the                rule appear to add regulatory burdens
                                                 consolidated and is now pending in the                  compliance costs of the final rule and                that unnecessarily encumber energy
                                                 U.S. District Court for the District of                 that the costs would drive the industry               production, constrain economic growth,
                                                 Wyoming. Wyoming v. U.S. Dep’t of the                   away from Federal and Indian lands,                   and prevent job creation. Following up
                                                 Interior, Case No. 2:16–cv–00285–SWS                    thereby reducing royalties and harming                on its initial review, the BLM is
                                                 (D. Wyo.); W. Energy All. v. Zinke, Case                State and tribal economies. The                       currently reviewing the 2016 final rule
                                                 No. 16–cv–280–SWS (D. Wyo.).                            petitioners also argued that the final                to develop an appropriate proposed


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                                                 46460                 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules

                                                 revision—to be promulgated through                      2016). These statutes authorize the                      submitting an Application for Permit to
                                                 notice-and-comment rulemaking—that                      Secretary of the Interior to promulgate                  Drill (APD) for an oil well, an operator
                                                 would propose to align the 2016 final                   such rules and regulations as may be                     must also submit a waste-minimization
                                                 rule with the policies set forth in section             necessary to carry out the statutes’                     plan. Submission of the plan is required
                                                 1 of Executive Order 13783.                             various purposes.1 The Federal and                       for approval of the APD, but the plan is
                                                                                                         Indian mineral leasing statutes share a                  not itself part of the APD, and the terms
                                                 III. Discussion of the Proposed Rule                    common purpose of promoting the                          of the plan are not enforceable against
                                                 A. Summary and Request for Comment                      development of Federal and Indian oil                    the operator. The purpose of the waste-
                                                    Today, the BLM is proposing to                       and gas resources for the financial                      minimization plan is for the operator to
                                                 temporarily suspend or delay certain                    benefit of the public and Indian mineral                 set forth a strategy for how the operator
                                                 requirements contained in the 2016                      owners.2 In order to ensure that the                     will comply with the requirements of 43
                                                 final rule until January 17, 2019. The                  development of Federal and Indian oil                    CFR subpart 3179 regarding the control
                                                                                                         and gas resources will not be                            of waste from venting and flaring from
                                                 BLM is currently reviewing the 2016
                                                                                                         unnecessarily hindered by regulatory                     oil wells.
                                                 final rule, as directed by the
                                                                                                         burdens, the BLM is exercising its                          The waste-minimization plan must
                                                 aforementioned Executive Orders and                                                                              include information regarding: The
                                                                                                         inherent authority 3 to reconsider the
                                                 by Secretarial Order No. 3349. The BLM                                                                           anticipated completion date(s) of the
                                                                                                         2016 final rule. The suspension of
                                                 wants to avoid imposing temporary or                                                                             proposed oil well(s); a description of
                                                                                                         requirements proposed today is a part of
                                                 permanent compliance costs on                                                                                    anticipated production from the well(s);
                                                                                                         the BLM’s reconsideration process.
                                                 operators for requirements that might be                   The BLM seeks comment on this                         certification that the operator has
                                                 rescinded or significantly revised in the               proposed rule. Issues of particular                      provided one or more midstream
                                                 near future. The BLM also wishes to                     interest to the BLM include the                          processing companies with information
                                                 avoid expending scarce agency                           necessity of the proposed suspensions                    about the operator’s production plans,
                                                 resources on implementation activities                  and delays, the costs and benefits                       including the anticipated completion
                                                 (internal training, operator outreach/                  associated with the proposed                             dates and gas production rates of the
                                                 education, developing clarifying                        suspensions and delays, and whether                      proposed well or wells; and
                                                 guidance, etc.) for such potentially                    suspension of other requirements of the                  identification of a gas pipeline to which
                                                 transitory requirements.                                2016 rule is warranted. The BLM is also                  the operator plans to connect.
                                                    For certain requirements in the 2016                 interested in the appropriate length of                  Additional information is required
                                                 final rule that have yet to be                          the proposed suspension and delays and                   when an operator cannot identify a gas
                                                 implemented, this proposed rule would                   would like to know whether the period                    pipeline with sufficient capacity to
                                                 temporarily postpone the                                should be longer or shorter (e.g., six                   accommodate the anticipated
                                                 implementation dates until January 17,                  months, 18 months, or 2 years). The                      production from the proposed well,
                                                 2019, or for one year. For certain                      BLM has allowed a 30-day comment                         including: A gas pipeline system
                                                 requirements in the 2016 final rule that                period for this proposed rule, which the                 location map showing the proposed
                                                 are currently in effect, this proposed                  BLM believes will afford the public a                    well(s); the name and location of the gas
                                                 rule would temporarily suspend their                    meaningful opportunity to comment.                       processing plant(s) closest to the
                                                 effectiveness until January 17, 2019. A                 This proposed rule is a straightforward                  proposed well(s); all existing gas
                                                 detailed discussion of the proposed                     suspension and delay of regulatory                       trunklines within 20 miles of the well,
                                                 suspensions and delays is provided                      provisions that were (in a proposed                      and proposed routes for connection to a
                                                 below. The BLM has attempted to tailor                  form) themselves recently the object of                  trunkline; the total volume of produced
                                                 the proposed rule so as to target the                   public comment procedures. Because                       gas, and percentage of total produced
                                                 requirements of the 2016 final rule for                 this proposal is a narrow one, involving                 gas, that the operator is currently
                                                 which immediate regulatory relief                       a simple and temporary suspension and                    venting or flaring from wells in the same
                                                 appears to be particularly justified.                   delay of regulatory provisions with                      field and any wells within a 20-mile
                                                 Although the requirements of the 2016                   which interested parties are likely                      radius of that field; and a detailed
                                                 final rule that would not be suspended                  already familiar, the BLM believes that                  evaluation, including estimates of costs
                                                 under the proposed rule may ultimately                  the 30-day comment period is                             and returns, of potential on-site capture
                                                 be revised in the near future, the BLM                  appropriate.                                             approaches.
                                                 is not proposing to suspend them                                                                                    In the RIA for the 2016 final rule, the
                                                 because it does not, at this time, believe              B. Section-by-Section Discussion                         BLM estimated that the administrative
                                                 that suspension is necessary.                           43 CFR 3162.3–1(j)—Drilling                              burden of the waste-minimization plan
                                                    The BLM promulgated the 2016 final                   Applications and Plans                                   requirements would be roughly $1
                                                 rule, and now proposes to suspend and                                                                            million per year for the industry and
                                                                                                           In the 2016 final rule, the BLM added
                                                 delay certain provisions of that rule,                                                                           $180,000 per year for the BLM (2016
                                                                                                         a paragraph (j) to 43 CFR 3162.3–1,
                                                 pursuant to its authority under the                                                                              RIA at 96 and 100). The BLM is
                                                                                                         which presently requires that when
                                                 following statutes: The Mineral Leasing                                                                          currently reviewing the requirements of
                                                 Act of 1920 (30 U.S.C. 188–287), the                      1 30 U.S.C. 189 (MLA); 30 U.S.C. 359 (MLAAL);          § 3162.3–1(j) in order to determine
                                                 Mineral Leasing Act for Acquired Lands                  30 U.S.C. 1751(a) (FOGRMA); 43 U.S.C. 1740               whether the burden it imposes on
                                                 (30 U.S.C. 351–360), the Federal Oil and                (FLPMA); 25 U.S.C. 396d (IMLA); 25 U.S.C. 2107           operators is necessary and whether this
                                                 Gas Royalty Management Act (30 U.S.C.                   (IMDA); 25 U.S.C. 396.                                   burden can be reduced. The BLM is also
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                                                                                                           2 See, e.g., California Co. v. Udall, 296 F.2d 384,
                                                 1701–1758), the Federal Land Policy                                                                              evaluating whether there are
                                                                                                         388 (D.C. Cir. 1961) (noting that the MLA was
                                                 and Management Act of 1976 (43 U.S.C.                   intended to promote wise development of . . .            circumstances in which compliance
                                                 1701–1785), the Indian Mineral Leasing                  natural resources and to obtain for the public a         with § 3162.3–1(j) is infeasible because
                                                 Act of 1938 (25 U.S.C. 396a–g), the                     reasonable financial return on assets that ‘belong’ to   some of the required information is in
                                                 Indian Mineral Development Act of                       the public.’’).                                          the possession of a midstream company
                                                                                                           3 See Ivy Sports Med., LLC v. Burwell, 767 F.3d
                                                 1982 (25 U.S.C. 2101–2108), and the Act                 81, 86 (D.C. Cir. 2014) (noting ‘‘oft-repeated’’
                                                                                                                                                                  that is not in a position to share it with
                                                 of March 3, 1909 (25 U.S.C. 396). See 81                principle that the ‘‘power to reconsider is inherent     the operator. The BLM is considering
                                                 FR 83008 and 83019–83021 (Nov. 18,                      in the power to decide’’).                               narrowing the required information and


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                                                                       Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules                                           46461

                                                 is also considering whether submission                  percentage requirement could be                       blanket requirement on all operators. In
                                                 of a State waste-minimization plan,                     obviated through other BLM efforts to                 order to avoid unnecessary compliance
                                                 such as those required by New Mexico                    facilitate pipeline development. Rather               costs on the part of operators, the BLM
                                                 and North Dakota, would serve the                       than require operators to institute new               is proposing to delay the compliance
                                                 purpose of § 3162.3–1(j). While the BLM                 processes and adjust their plans for                  date in § 3179.9 until January 17, 2019.
                                                 conducts this review and considers                      development to meet a capture-                           This proposed rule would revise the
                                                 revising § 3162.3–1, the BLM does not                   percentage requirement that may be                    compliance date in § 3179.9(b)(1). The
                                                 believe that generating and reviewing                   rescinded or revised as a result of the               rest of paragraph (b)(1) would remain
                                                 lengthy, unenforceable waste-                           BLM’s review, the BLM is proposing to                 the same as in the 2016 final rule and
                                                 minimization plans is a prudent use of                  delay for one year the compliance dates               is repeated in the proposed rule text
                                                 operator or BLM resources. The BLM is                   for § 3179.7’s capture requirements.                  only for context.
                                                 therefore proposing to suspend the                      This delay would allow the BLM                        43 CFR 3179.10—Determinations
                                                 waste minimization plan requirement of                  sufficient time to conduct notice-and-                Regarding Royalty-Free Flaring
                                                 § 3162.3–1(j) until January 17, 2019.                   comment rulemaking to determine
                                                    This proposed rule would revise                      whether the capture percentage                           Section 3179.10(a) provides that
                                                 § 3162.3–1 by adding ‘‘Beginning                        requirements should be rescinded or                   approvals to flare royalty free that were
                                                 January 17, 2019’’ to the beginning of                  revised and would prevent operators                   in effect as of January 17, 2017, will
                                                 paragraph (j). The rest of this paragraph               from being unnecessarily burdened by                  continue in effect until January 17,
                                                 would remain the same as in the 2016                    regulatory requirements that are subject              2018. The purpose of this provision was
                                                 final rule and the introductory                         to change.                                            to provide a transition period for
                                                 paragraph is repeated in the proposed                     This proposed rule would revise the                 operators who were operating under
                                                 rule text only for context.                             compliance dates in paragraphs (b),                   existing approvals for royalty-free
                                                                                                         (b)(1) through (b)(4), and (c)(2)(i)                  flaring. Because the BLM’s review of the
                                                 43 CFR 3179.7—Gas Capture                                                                                     2016 final rule could result in rescission
                                                                                                         through (vii) of § 3179.7 to begin
                                                 Requirement                                                                                                   or substantial revision of the rule, the
                                                                                                         January 17, 2019. Paragraphs (c), (c)(1),
                                                    In the 2016 final rule, the BLM sought               and the introductory text of (c)(2) would             BLM believes that terminating pre-
                                                 to constrain routine flaring through the                remain the same as in the 2016 final                  existing flaring approvals in January
                                                 imposition of a ‘‘capture percentage’’                  rule and are repeated in the proposed                 2018 would be premature and
                                                 requirement, requiring operators to                     rule text only for context.                           disruptive and would introduce
                                                 capture a certain percentage of the gas                                                                       needless regulatory uncertainty for
                                                 they produce, after allowing for a                      43 CFR 3179.9—Measuring and                           operators with existing flaring
                                                 certain volume of flaring per well. The                 Reporting Volumes of Gas Vented and                   approvals. The BLM is therefore
                                                 capture-percentage requirement would                    Flared From Wells                                     proposing to extend the end of the
                                                 become more stringent over a period of                     Section 3179.9 requires operators to               transition period provided for in
                                                 years, beginning with an 85 percent                     estimate (using estimation protocols) or              § 3179.10(a) to January 17, 2019.
                                                 capture requirement (5,400 Mcf per well                 measure (using a metering device) all                    This proposed rule would revise the
                                                 flaring allowable) in January 2018, and                 flared and vented gas, whether royalty-               date in paragraph (a) and replace ‘‘as of
                                                 eventually reaching a 98 percent capture                bearing or royalty-free. This section                 the effective date of this rule’’ with ‘‘as
                                                 requirement (750 Mcf per well flaring                   further provides that specific                        of January 17, 2017,’’ which is the
                                                 allowable) in January 2026. An operator                 requirements apply when the operator is               effective date of the 2016 final rule, for
                                                 would choose whether to comply with                     flaring 50 Mcf or more of gas per day                 clarity. This proposed rule would not
                                                 the capture targets on each of the                      from a high-pressure flare stack or                   otherwise revise paragraph (a), but the
                                                 operator’s leases, units or communitized                manifold, based on estimated volumes                  rest of the paragraph would remain the
                                                 areas, or on a county-wide or state-wide                from the previous 12 months, or based                 same as in the 2016 final rule and is
                                                 basis.                                                  on estimated volumes over the life of                 repeated in the proposed rule text only
                                                    In the RIA for the 2016 final rule, the              the flare, whichever is shorter.                      for context.
                                                 BLM estimated that this requirement                     Beginning on January 17, 2018, if this
                                                 would impose costs of up to $162                        volume threshold is met, § 3179.9(b)                  43 CFR 3179.101—Well Drilling
                                                 million per year and generate cost                      would require the operator to measure                   Section 3179.101(a) requires that gas
                                                 savings from product recovery of up to                  the volume of the flared gas, or calculate            reaching the surface as a normal part of
                                                 $124 million per year, with both costs                  the volume of the flared gas based on                 drilling operations be used or disposed
                                                 and cost savings increasing as the                      the results of a regularly performed gas-             of in one of four ways: (1) Captured and
                                                 requirements increased in stringency                    to-oil ratio test, so as to allow the BLM             sold; (2) Directed to a flare pit or flare
                                                 (2016 RIA at 49).                                       to independently verify the volume,                   stack; (3) Used in the operations on the
                                                    The BLM is currently considering                     rate, and heating value of the flared gas.            lease, unit, or communitized area; or (4)
                                                 whether the capture-percentage                             In the RIA for the 2016 final rule, the            Injected. Section 3179.101(a) also
                                                 requirement of § 3179.7 is unnecessarily                BLM estimated that this requirement                   specifies that gas may not be vented,
                                                 complex and whether it will, in fact, be                would impose costs of about $4 million                except under the circumstances
                                                 a significant improvement on the                        to $7 million per year (2016 RIA at 52).              specified in § 3179.6(b) or when it is
                                                 requirements of NTL–4A. The BLM is                         The BLM is presently reviewing                     technically infeasible to use or dispose
                                                 considering whether the NTL–4A                          § 3179.9 to determine whether the                     of the gas in one of the ways specified
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                                                 framework can be applied in a manner                    additional accuracy associated with the               above. Section 3179.101(b) states that
                                                 that addresses any inappropriate levels                 measurement and estimation required                   gas lost as a result of a loss of well
                                                 of flaring, and whether market-based                    by § 3179.9(b) justifies the burden it                control will be classified as avoidably
                                                 incentives (i.e., royalty obligations)                  would place on operators. The BLM is                  lost if the BLM determines that the loss
                                                 could improve capture in a more                         considering whether it would make                     of well control was due to operator
                                                 straightforward and efficient manner.                   more sense to allow the BLM to require                negligence.
                                                 Finally, the BLM is considering whether                 measurement or estimation on a case-                    The BLM is currently reviewing
                                                 the need for a complex capture-                         by-case basis, rather than imposing a                 § 3179.101 to determine whether it is


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                                                 46462                 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules

                                                 necessary in light of current operator                  exempted under § 3179.102(b).                         § 3179.201 until the BLM has had an
                                                 practices. The experience of BLM field                  Considering current industry practice                 opportunity to review its requirements
                                                 office personnel indicates that operators               and the overlap with EPA regulations,                 and revise them through notice-and-
                                                 would typically dispose of gas during                   the primary effect of § 3179.102 may be               comment rulemaking. The BLM is
                                                 well drilling consistent with                           to generate confusion about regulatory                therefore proposing to delay the
                                                 § 3179.101(a). The primary effect of                    compliance during well-drilling and                   compliance date stated in § 3179.201
                                                 § 3179.101, therefore, may be to impose                 related operations. The BLM is therefore              until January 17, 2019.
                                                 a regulatory constraint on operators in                 proposing to suspend the effectiveness                   This proposed rule would revise the
                                                 exceptional circumstances where the                     of § 3179.102 until January 17, 2019,                 first sentence of paragraph (d) by
                                                 operator must make a case-specific                      while the BLM completes its review of                 replacing ‘‘no later than 1 year after the
                                                 judgment about how to safely and                        § 3179.102 and decides whether to                     effective date of this section’’ with ‘‘by
                                                 effectively dispose of the gas. The BLM                 permanently revise or rescind it through              January 17, 2019.’’ This proposed rule
                                                 is therefore proposing to suspend the                   notice-and-comment rulemaking.                        would also replace ‘‘the effective date of
                                                 effectiveness of § 3179.101 until January                 This proposed rule would add a new                  this section’’ with ‘‘January 17, 2017’’
                                                 17, 2019, while the BLM completes its                   paragraph (e) making it clear that                    the two times that it appears in the
                                                 review of § 3179.101 and decides                        operators must comply with § 3179.102                 second sentence of paragraph (d). This
                                                 whether to propose permanently                          beginning January 17, 2019.                           proposed rule would not otherwise
                                                 revising or rescinding it through notice-                                                                     revise paragraph (d), but the rest of the
                                                                                                         43 CFR 3179.201—Equipment
                                                 and-comment rulemaking.                                                                                       paragraph would remain the same as in
                                                                                                         Requirements for Pneumatic Controllers
                                                    This proposed rule would add a new                                                                         the 2016 final rule and is repeated in the
                                                 paragraph (c) making it clear that the                     Section 3179.201 addresses                         proposed rule text only for context.
                                                 operator must comply with § 3179.101                    pneumatic controllers that use natural
                                                                                                         gas produced from a Federal or Indian                 43 CFR 3179.202—Requirements for
                                                 beginning January 17, 2019.
                                                                                                         lease, or from a unit or communitized                 Pneumatic Diaphragm Pumps
                                                 43 CFR 3179.102—Well Completion and                     area that includes a Federal or Indian                   Section 3179.202 establishes
                                                 Related Operations                                      lease. Section 3179.201 applies to such               requirements for operators with
                                                    Section 3179.102 addresses gas that                  controllers if the controllers: (1) Have a            pneumatic diaphragm pumps that use
                                                 reaches the surface during well-                        continuous bleed rate greater than 6                  natural gas produced from a Federal or
                                                 completion, post-completion, and fluid-                 standard cubic feet per hour (scf/hour)               Indian lease, or from a unit or
                                                 recovery operations after a well has                    (‘‘high-bleed’’ controllers); and (2) Are             communitized area that includes a
                                                 been hydraulically fractured or                         not covered by EPA regulations that                   Federal or Indian lease. It applies to
                                                 refractured. It requires the gas to be used             prohibit the new use of high-bleed                    such pumps if they are not covered
                                                 or disposed of in one of four ways: (1)                 pneumatic controllers (40 CFR part 60,                under EPA regulations at 40 CFR part
                                                 Captured and sold; (2) Directed to a flare              subparts OOOO or OOOOa), but would                    60, subpart OOOOa, but would be
                                                 pit or stack, subject to a volumetric                   be subject to those regulations if the                subject to that subpart if they were a
                                                 limitation in § 3179.103; (3) Used in the               controllers were new, modified, or                    new, modified, or reconstructed source.
                                                 lease operations; or (4) Injected. Section              reconstructed sources. Section                        For covered pneumatic pumps,
                                                 3179.102 specifies that gas may not be                  3179.201(b) requires the applicable                   § 3179.202 requires that the operator
                                                 vented, except under the narrow                         pneumatic controllers to be replaced                  either replace the pump with a zero-
                                                 circumstances specified in § 3179.6(b)                  with controllers (including, but not                  emissions pump or route the pump
                                                 or when it is technically infeasible to                 limited to, continuous or intermittent                exhaust to processing equipment for
                                                 use or dispose of the gas in one of the                 pneumatic controllers) having a bleed                 capture and sale. Alternatively, an
                                                 four ways specified above. Section                      rate of no more than 6 scf/hour, subject              operator may route the exhaust to a flare
                                                 3179.102(b) provides that an operator                   to certain exceptions. Section                        or low-pressure combustion device if
                                                 will be deemed to be in compliance                      3179.201(d) requires that this                        the operator makes a determination (and
                                                 with its gas capture and disposition                    replacement occur no later than January               notifies the BLM through a Sundry
                                                 requirements if the operator is in                      17, 2018, or within 3 years from the                  Notice) that replacing the pneumatic
                                                 compliance with the requirements for                    effective date of the rule if the well or             diaphragm pump with a zero-emissions
                                                 control of gas from well completions                    facility served by the controller has an              pump or capturing the pump exhaust is
                                                 established under Environmental                         estimated remaining productive life of 3              not viable because: (1) A pneumatic
                                                 Protection Agency (EPA) regulations 40                  years or less.                                        pump is necessary to perform the
                                                 CFR part 60, subparts OOOO or OOOOa                        In the RIA for the 2016 final rule, the            function required; and (2) Capturing the
                                                 regulations, or if the well is not a ‘‘well             BLM estimated that this requirement                   exhaust is technically infeasible or
                                                 affected facility’’ under those                         would impose costs of about $2 million                unduly costly. If an operator makes this
                                                 regulations.                                            per year and generate cost savings from               determination and has no flare or low-
                                                    The BLM is currently reviewing                       product recovery of $3 million to $4                  pressure combustor on-site, or routing to
                                                 § 3179.102 to determine whether it is                   million per year (2016 RIA at 56).                    such a device would be technically
                                                 necessary in light of current operator                     The BLM is currently reviewing                     infeasible, the operator is not required
                                                 practices and the analogous EPA                         § 3179.201 to determine whether it                    to route the exhaust to a flare or low-
                                                 regulations in 40 CFR part 60, subparts                 should be revised or rescinded. The                   pressure combustion device. Under
                                                 OOOO and OOOOa. The experience of                       BLM is considering whether § 3179.201                 § 3179.202(h), an operator must replace
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                                                 BLM field office personnel indicates                    is necessary in light of the analogous                its covered pneumatic diaphragm pump
                                                 that operators would typically dispose                  EPA regulations and the fact that                     or route the exhaust gas to capture or
                                                 of gas during well completions and                      operators are likely to adopt more                    flare beginning no later than January 17,
                                                 related operations consistent with                      efficient equipment in cases where it                 2018.
                                                 § 3179.102(a). The BLM also suspects                    makes economic sense for them to do                      In the RIA for the 2016 final rule, the
                                                 that most of the well completions and                   so. The BLM does not believe that                     BLM estimated that this requirement
                                                 related operations that would otherwise                 operators should be required to make                  would impose costs of about $4 million
                                                 be covered by § 3179.102 are actually                   equipment upgrades to comply with                     per year and generate cost savings from


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                                                                       Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules                                          46463

                                                 product recovery of $2 million to $3                    recoverable oil reserves under the lease              losses. Under § 3179.204, before an
                                                 million per year (2016 RIA at 61).                      due to the cost of compliance. Pursuant               operator manually purges a well for the
                                                    The BLM is currently reviewing                       to § 3179.203(c), operators must meet                 first time, the operator must document
                                                 § 3179.202 to determine whether it                      these requirements for covered storage                in a Sundry Notice that other methods
                                                 should be rescinded or revised.                         vessels by January 17, 2018 (unless the               for liquids unloading are technically
                                                 Analogous EPA regulations apply to                      operator will replace the storage vessel              infeasible or unduly costly. In addition,
                                                 new, modified, and reconstructed                        in order to comply, in which case it has              during any liquids unloading by manual
                                                 sources, therefore limiting the                         a longer time to comply).                             well purging, the person conducting the
                                                 applicability of § 3179.202. In addition,                  In the RIA for the 2016 final rule, the            well purging is required to be present
                                                 the BLM is concerned that requiring                     BLM estimated that this requirement                   on-site to minimize to the maximum
                                                 zero-emissions pumps may not conserve                   would impose costs of about $7 million                extent practicable any venting to the
                                                 gas in some cases. The volume of                        to $8 million per year and generate cost              atmosphere. This section also requires
                                                 royalty-free gas used to generate                       savings from product recovery of up to                the operator to maintain records of the
                                                 electricity to provide the power                        $200,000 per year (2016 RIA at 74).                   cause, date, time, duration and
                                                 necessary to operate a zero-emission                       The BLM is currently reviewing                     estimated volume of each venting event
                                                 pump could exceed the volume of gas                     § 3179.203 to determine whether it                    associated with manual well purging,
                                                 necessary to operate the pneumatic                      should be rescinded or revised. The                   and to make those records available to
                                                 pump that the zero-emission pump                        BLM is considering whether § 3179.203                 the BLM upon request. Additionally,
                                                 would replace. The BLM does not                         is necessary in light of analogous EPA                operators are required to notify the BLM
                                                 believe that operators should be                        regulations and whether the costs                     by Sundry Notice within 30 days after
                                                 required to make equipment upgrades to                  associated with compliance are                        the following conditions are met: (1)
                                                 comply with § 3179.202 until the BLM                    justified. The BLM does not believe that              The cumulative duration of manual
                                                 has had an opportunity to review its                    operators should be required to make                  well-purging events for a well exceeds
                                                 requirements and revise them through                    upgrades to their storage vessels in                  24 hours during any production month;
                                                 notice-and-comment rulemaking. The                      order to comply with § 3179.203 until                 or (2) The estimated volume of gas
                                                 BLM is therefore proposing to delay the                 the BLM has had an opportunity to                     vented in the process of conducting
                                                 compliance date stated in § 3179.202                    review its requirements and revise them               liquids unloading by manual well
                                                 until January 17, 2019.                                 through notice-and-comment                            purging for a well exceeds 75 Mcf
                                                    This proposed rule would revise                      rulemaking. The BLM is therefore                      during any production month. In the
                                                 paragraph (h) by replacing ‘‘no later                   proposing to delay the January 17, 2018,              RIA for the 2016 final rule, the BLM
                                                 than 1 year after the effective date of                 compliance date in § 3179.203 until                   estimated that these requirements
                                                 this section’’ in the first sentence with               January 17, 2019.                                     would impose costs of about $6 million
                                                 ‘‘by January 17, 2019’’ and would also                     This proposed rule would revise the                per year and generate cost savings from
                                                 replace ‘‘the effective date of this                    first sentence of paragraph (b) by                    product recovery of about $5 million to
                                                 section’’ with ‘‘January 17, 2017’’ the                 replacing ‘‘Within 60 days after the                  $9 million per year (2016 RIA at 66). In
                                                 two times that it appears later in the                  effective date of this section’’ with                 addition, there would be estimated
                                                 same sentence. This proposed rule                       ‘‘Beginning January 17, 2019’’ and by                 administrative burdens associated with
                                                 would not otherwise revise paragraph                    adding ‘‘after January 17, 201’’ between              these requirements of $323,000 per year
                                                 (h); the rest of the paragraph would                    the words ‘‘vessel’’ and ‘‘the operator.’’            for the industry and $37,000 per year for
                                                 remain the same as in the 2016 final                    This proposed rule would also revise                  the BLM (2016 RIA at 98 and 101).
                                                 rule and is repeated in the proposed                    the introductory text of paragraph (c) by                The BLM is currently reviewing
                                                 rule text only for context.                             replacing ‘‘no later than one year after              § 3179.204 to determine whether it
                                                                                                         the effective date of this section’’ with             should be rescinded or revised. The
                                                 43 CFR 3179.203—Storage Vessels
                                                                                                         ‘‘by January 17, 2019’’ and by changing               BLM does not believe that operators
                                                    Section 3179.203 applies to crude oil,               ‘‘or three years if’’ to ‘‘or by January 17,          should be burdened with the
                                                 condensate, intermediate hydrocarbon                    2020, if ’’ to account for removing the               operational and reporting requirements
                                                 liquid, or produced-water storage                       reference to ‘‘the effective date of this             imposed by § 3179.204 until the BLM
                                                 vessels that contain production from a                  section.’’ This proposed rule would not               has had an opportunity to review them
                                                 Federal or Indian lease, or from a unit                 otherwise revise paragraphs (b) and (c),              and, if appropriate, revise them through
                                                 or communitized area that includes a                    and the rest of these paragraphs would                notice-and-comment rulemaking. In
                                                 Federal or Indian lease, and that are not               remain the same as in the 2016 final                  addition, as part of this review, the BLM
                                                 subject to 40 CFR part 60, subparts                     rule and are repeated in the proposed                 would want to review how these data
                                                 OOOO or OOOOa, but would be if they                     rule text only for context.                           could be reported in a consistent
                                                 were new, modified, or reconstructed                                                                          manner among operators. The BLM is
                                                 sources. If such storage vessels have the               43 CFR 3179.204—Downhole Well
                                                                                                         Maintenance and Liquids Unloading                     therefore proposing to suspend the
                                                 potential for volatile organic compound                                                                       effectiveness of § 3179.204 until January
                                                 (VOC) emissions equal to or greater than                   Section 3179.204 establishes                       17, 2019.
                                                 6 tons per year (tpy), § 3179.203 requires              requirements for venting and flaring                     This proposed rule would add a new
                                                 operators to route all gas vapor from the               during downhole well maintenance and                  paragraph (i), making it clear that
                                                 vessels to a sales line. Alternatively, the             liquids unloading. It requires the                    operators must comply with § 3179.204
                                                 operator may route the vapor to a                       operator to use practices for such                    beginning January 17, 2019.
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                                                 combustion device if it determines that                 operations that minimize vented gas and
                                                 routing the vapor to a sales line is                    the need for well venting, unless the                 43 CFR 3179.301—Operator
                                                 technically infeasible or unduly costly.                practices are necessary for safety.                   Responsibility
                                                 The operator also may submit a Sundry                   Section 3179.204 also requires that for                  Sections 3179.301 through 3179.305
                                                 Notice to the BLM that demonstrates                     wells equipped with a plunger lift                    establish leak detection, repair, and
                                                 that compliance with the above options                  system or an automated well-control                   reporting requirements for: (1) Sites and
                                                 would cause the operator to cease                       system, the operator must optimize the                equipment used to produce, process,
                                                 production and abandon significant                      operation of the system to minimize gas               treat, store, or measure natural gas from


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                                                 46464                 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules

                                                 or allocable to a Federal or Indian lease,              that have begun production prior to                   rule would temporarily suspend or
                                                 unit, or communitization agreement;                     January 17, 2017;’’ with ‘‘By January 17,             delay almost all of the requirements in
                                                 and (2) Sites and equipment used to                     2019, for all existing sites.’’ This                  the 2016 final rule that we estimated
                                                 store, measure, or dispose of produced                  proposed rule would also revise                       would pose a compliance burden to
                                                 water on a Federal or Indian lease.                     paragraph (f)(2) by adding ‘‘new’’                    operators. We estimate that suspending
                                                 Section 3179.302 prescribes the                         between the words ‘‘for’’ and ‘‘sites’’               or delaying the targeted requirements of
                                                 instruments and methods that may be                     and by replacing the existing date with               the 2016 final rule until January 17,
                                                 used for leak detection. Section                        ‘‘January 17, 2019.’’ Finally, this                   2019, would substantially reduce
                                                 3179.303 prescribes the frequency for                   proposed rule would revise paragraph                  compliance costs during the period of
                                                 inspections and § 3179.304 prescribes                   (f)(3) by adding ‘‘an existing’’ between              the suspension or delay (2017 RIA at
                                                 the time frames for repairing leaks                     the words ‘‘when’’ and ‘‘site’’ and by                29).
                                                 found during inspections. Finally,                      adding ‘‘after January 17, 2019’’ to the                Impacts in year 1:
                                                 § 3179.305 requires operators to                        end of the sentence. This proposed rule                 • A reduction in compliance costs of
                                                 maintain records of their leak detection                would not otherwise revise paragraph                  $114 million (using a 7 percent discount
                                                 and repair activities and submit an                     (f), and the rest of the paragraph would              rate to annualize capital costs) or $110
                                                 annual report to the BLM. Pursuant to                   remain the same as in the 2016 final                  million (using a 3 percent discount rate
                                                 § 3179.301(f), operators must begin to                  rule and is repeated in the proposed                  to annualize capital costs).
                                                 comply with the leak detection and                      rule text only for context.                             Impacts from 2017–2027:
                                                 repair requirements of §§ 3179.301                                                                              • Total reduction in compliance costs
                                                                                                         C. Summary of Estimated Impacts                       ranging from $73 million to $91 million
                                                 through 3179.305 before: (1) January 17,
                                                 2018, for sites in production prior to                     The BLM reviewed the proposed rule                 (net present value (NPV) using a 7
                                                 January 17, 2017; (2) 60 days after                     and conducted an RIA and                              percent discount rate) or $40 million to
                                                 beginning production for sites that                     Environmental Assessment (EA) that                    $50 million (NPV using a 3 percent
                                                 began production after January 17, 2017;                examine the impacts of the proposed                   discount rate).
                                                 and (3) 60 days after a site that was out               requirements. The following discussion
                                                                                                         is a summary of the proposed rule’s                   Estimated Reduction in Benefits
                                                 of service is brought back into service
                                                 and re-pressurized.                                     economic impacts. The RIA and draft                      The BLM’s proposed rule would
                                                    In the RIA for the 2016 final rule, the              EA that we prepared have been posted                  temporarily suspend or delay almost all
                                                 BLM estimated that these requirements                   in the docket for the proposed rule on                of the requirements in the 2016 final
                                                 would impose costs of about $83                         the Federal eRulemaking Portal: https://              rule that we estimated would generate
                                                 million to $84 million per year and                     www.regulations.gov. In the Searchbox,                benefits of gas savings or reductions in
                                                 generate cost savings from product                      enter ‘‘RIN 1004–AE54’’ and click the                 methane emissions. We estimate that
                                                 recovery of about $12 million to $21                    ‘‘Search’’ button. Follow the                         the proposed rule would result in
                                                 million per year (2016 RIA at 91). In                   instructions at this Web site.                        forgone benefits, since estimated cost
                                                 addition, there would be estimated                         The suspension or delay in the                     savings that would have come from
                                                 administrative burdens associated with                  implementation of certain requirements                product recovery would be deferred and
                                                 these requirements of $3.9 million per                  in the 2016 final rule would postpone                 the emissions reductions would also be
                                                 year for the industry and over $1                       the impacts estimated previously to the               deferred (2017 RIA at 32).
                                                 million per year for the BLM (2016 RIA                  near-term future. That is to say, impacts                Impacts in year 1:
                                                 at 98 and 102).                                         that we previously estimated would                       • A reduction in cost savings of $19
                                                    The BLM is currently reviewing                       occur in 2017 are now estimated to                    million.
                                                 § 3179.301 through § 3179.305 to                        occur in 2018, impacts that we                           Impacts from 2017–2027:
                                                 determine whether they should be                        previously estimated would occur in                      • Total reduction in cost savings of
                                                 revised or rescinded. The BLM is                        2018 are now estimated to occur in                    $36 million (NPV using a 7 percent
                                                 considering whether these requirements                  2019, and so on. In the RIA for this                  discount rate) or $21 million (NPV using
                                                 are necessary in light of comparable                    proposed rule, we track this shift in                 a 3 percent discount rate).
                                                 EPA and State leak detection and repair                 impacts over the 10-year period                          We estimate that the proposed rule
                                                 regulations. The BLM is considering                     following the delay. A 10-year period of              would also result in additional methane
                                                 whether the reporting burdens imposed                   analysis was also used in the RIA                     and VOC emissions of 175,000 and
                                                 by these sections are justified and                     prepared for the 2016 final rule. Except              250,000 tons, respectively, in year 1
                                                 whether the substantial compliance                      for some notable changes, the 2017 RIA                (2017 RIA at 32).
                                                 costs could be mitigated by allowing for                uses the impacts estimated and                           These estimated emissions are
                                                 less frequent and/or non-instrument-                    underlying assumptions used by the                    measured as the change from the
                                                 based inspections or by exempting wells                 BLM for the RIA prepared for the 2016                 baseline environment, which is the 2016
                                                 that have low potential to leak natural                 final rule, published in November 2016.               final rule’s requirements being
                                                 gas. The BLM does not believe that                      The BLM’s proposed rule would                         implemented per the 2016 final rule
                                                 operators should be burdened with the                   temporarily suspend or delay almost all               schedule. Since the proposed rule
                                                 significant compliance costs imposed by                 of the requirements in the 2016 final                 would delay the implementation of
                                                 these sections until the BLM has had an                 rule that we estimated would pose a                   those requirements, the estimated
                                                 opportunity to review them and, if                      compliance burden to operators and                    benefits of the 2016 final rule would be
                                                 appropriate, revise them through notice-                generate benefits of gas savings or                   forgone during the temporary
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                                                 and-comment rulemaking. The BLM is                      reductions in methane emissions.                      suspension or delay.
                                                 therefore proposing to delay the                                                                                 The BLM used interim domestic
                                                 effective dates for these sections until                Estimated Reductions in Compliance                    values of the carbon dioxide and
                                                 January 17, 2019, by revising                           Costs (Excluding Cost Savings)                        methane to value the forgone emissions
                                                 § 3179.301(f).                                            First, we examine the reductions in                 reductions resulting from the delay (see
                                                    This proposed rule would revise                      compliance costs excluding the savings                the discussion of social cost of
                                                 paragraph (f)(1) by replacing ‘‘Within                  that would have been realized from                    greenhouse gases in the 2017 RIA at
                                                 one year of January 17, 2017 for sites                  product recovery. The BLM’s proposed                  Section 3.2 and Appendix).


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                                                                       Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules                                          46465

                                                   Impact in Year 1:                                     Federal and Indian leases, and likewise,              Employment Impacts
                                                   • Forgone methane emissions                           is expected to reduce annual royalties to                The proposed rule would temporarily
                                                 reductions valued at $8 million (using                  the Federal Government, tribal                        suspend or delay certain requirements
                                                 interim domestic SC–CH4 based on a 7                    governments, States, and private                      of the BLM’s 2016 final rule on waste
                                                 percent discount rate) or $26 million                   landowners. From 2017–2027, however,                  prevention and is a temporary
                                                 (using interim domestic SC–CH4 based                    we expect a small increase in total                   deregulatory action. As such, we
                                                 on a 3 percent discount rate).                          royalties, likely due to production                   estimate that it would result in a
                                                   Impacts from 2017–2027:                               slightly shifting into the future where               reduction of compliance costs for
                                                   • Forgone methane emissions                           commodity prices are expected to be                   operators of oil and gas leases on
                                                 reductions valued at $1.9 million (NPV                  higher.                                               Federal and Indian lands. Therefore, it
                                                 and interim domestic SC–CH4 using a 7                      Royalty payments are recurring                     is likely that the impact, if any, on the
                                                 percent discount rate); or                              income to Federal or tribal governments               employment would be positive.
                                                   • Forgone methane emissions
                                                                                                         and costs to the operator or lessee. As                  In the RIA for the 2016 final rule, the
                                                 reductions valued at $300,000 (NPV and
                                                                                                         such, they are transfer payments that do              BLM concluded that the requirements
                                                 interim domestic SC–CH4 using a 3
                                                                                                         not affect the total resources available to           were not expected to impact the
                                                 percent discount rate).
                                                                                                         society. An important but sometimes                   employment within the oil and gas
                                                 Estimated Net Benefits                                  difficult problem in cost estimation is to            extraction, drilling oil and gas wells,
                                                    The proposed rule is estimated to                    distinguish between real costs and                    and support activities industries, in any
                                                 result in positive net benefits, meaning                transfer payments. While transfers                    material way. This determination was
                                                 that the reduction of compliance costs                  should not be included in the economic                based on several reasons. First, the
                                                 would exceed the reduction in cost                      analysis estimates of the benefits and                estimated incremental gas production
                                                 savings and the cost of emissions                       costs of a regulation, they may be                    represented only a small fraction of the
                                                 additions (2017 RIA at 36).                             important for describing the                          U.S. natural gas production volumes.
                                                    Impact in year 1:                                    distributional effects of a regulation.               Second, the estimated compliance costs
                                                    • Net benefits of $83–86 million                        We estimate a reduction in royalties               represented only a small fraction of the
                                                 (using interim domestic SC–CH4 based                    of $2.6 million in year 1 (2017 RIA at                annual net incomes of companies likely
                                                 on a 7 percent discount rate) or $64–68                 43). This amount represents about 0.2                 to be impacted. Third, for those
                                                 million (using interim domestic SC–CH4                  percent of the total royalties received               operations that would have been
                                                 based on a 3 percent discount rate).                    from oil and gas production on Federal                impacted to the extent that the
                                                    Impacts from 2017–2027:                              lands in FY 2016. However, from 2017–                 compliance costs would force the
                                                    • Total net benefits ranging from $35–               2027, we estimate an increase in total                operator to shut in production, the 2016
                                                 52 million (NPV and interim domestic                    royalties of $1.26 million (NPV using a               final rule had provisions that would
                                                 SC–CH4 using a 7 percent discount rate);                7 percent discount rate) or $380,000                  exempt these operations from
                                                 or                                                      (NPV using a 3 percent discount rate).                compliance. Based on these factors, the
                                                    • Total net benefits ranging from $19–                                                                     BLM determined that the 2016 final rule
                                                 29 million (NPV and interim domestic                    Consideration of Alternative                          would not alter the investment or
                                                 SC–CH4 using a 3 percent discount rate).                Approaches                                            employment decisions of firms or
                                                                                                                                                               significantly adversely impact
                                                 Energy Systems                                            In developing this proposed rule, the
                                                                                                                                                               employment. The RIA also noted that
                                                                                                         BLM considered alternative timeframes
                                                   The proposed rule is expected to                                                                            the requirements would require the one-
                                                                                                         for which it could suspend or delay the
                                                 influence the production of natural gas,                                                                      time installation or replacement of
                                                                                                         requirements (e.g., 6 months and 2
                                                 natural gas liquids, and crude oil from                                                                       equipment and the ongoing
                                                                                                         years). Ultimately, the BLM decided to
                                                 onshore Federal and Indian oil and gas                                                                        implementation of a leak detection and
                                                                                                         propose a suspension or delay for one
                                                 leases, particularly in the short-term.                                                                       repair program, both of which would
                                                                                                         year, which it believes to be the
                                                 However, since the relative changes in                                                                        require labor to comply.
                                                                                                         minimum length of time practicable                       We do not believe that the proposed
                                                 production are expected to be small, we                 within which to review the 2016 final
                                                 do not expect that the proposed rule                                                                          rule would substantially alter the
                                                                                                         rule and complete a notice-and-                       investment or employment decisions of
                                                 would significantly impact the price,                   comment rulemaking to revise that
                                                 supply, or distribution of energy.                                                                            firms for two reasons. First, the RIA for
                                                                                                         regulation. We note that, based on the                the 2016 final rule determined that that
                                                   We estimate the following
                                                                                                         progress of the review during this                    rule would not substantially alter the
                                                 incremental changes in production,
                                                                                                         rulemaking process, the BLM may revise                investment or employment decisions of
                                                 noting the representative share of the
                                                                                                         the length of the suspension or delay for             firms, and so therefore delaying the
                                                 total U.S. production in 2015 for context
                                                                                                         the final rule.                                       2016 final rule would likewise not be
                                                 (2017 RIA at 41).
                                                   Annual Impacts:                                         A shorter suspension of delay of the                expected to impact those decisions. We
                                                   • A decrease in natural gas                           same 2016 final rule requirements                     also recognize that while there might be
                                                 production of 9.0 billion cubic feet (Bcf)              would result in a smaller reduction in                a small positive impact on investment
                                                 in year 1 (0.03 percent of the total U.S.               compliance costs, smaller reduction in                and employment due to the reduction in
                                                 production).                                            cost savings, and a smaller amount of                 compliance burdens, the magnitude of
                                                   • An increase in crude oil production                 forgone emissions reductions, relative to             the reductions are relatively small.
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                                                 of 91,000 barrels in year 2 (0.003                      the proposal (2017 RIA at 49–50).
                                                                                                         Meanwhile, a longer suspension or                     Small Business Impacts
                                                 percent of the total U.S. production).
                                                 There is no estimated change in crude                   delay of the same 2016 final rule                       The BLM reviewed the Small
                                                 oil production in year 1.                               requirements would result in a larger                 Business Administration (SBA) size
                                                                                                         reduction in compliance costs, larger                 standards for small businesses and the
                                                 Royalty Impacts                                         reduction in cost savings, and larger                 number of entities fitting those size
                                                   In the short-term, the rule is expected               amount of forgone emissions reductions,               standards as reported by the U.S.
                                                 to decrease natural gas production from                 relative to the proposal (2017 RIA at 50).            Census Bureau. We conclude that small


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                                                 46466                 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules

                                                 entities represent the overwhelming                     IV. Procedural Matters                                subject to the notice-and-comment
                                                 majority of entities operating in the                                                                         rulemaking requirements under the
                                                                                                         Regulatory Planning and Review
                                                 onshore crude oil and natural gas                                                                             Administrative Procedure Act (5 U.S.C.
                                                                                                         (Executive Orders 12866 and 13563)
                                                 extraction industry and, therefore, the                                                                       500 et seq.), if the rule would have a
                                                 proposed rule would impact a                               Executive Order 12866 provides that                significant economic impact, either
                                                 significant number of small entities.                   the Office of Information and Regulatory              detrimental or beneficial, on a
                                                    To examine the economic impact of                    Affairs within the Office of Management               substantial number of small entities. See
                                                 the rule on small entities, the BLM                     and Budget (OMB) will review all                      5 U.S.C. 601—612. Congress enacted the
                                                 performed a screening analysis on a                     significant rules.                                    RFA to ensure that government
                                                 sample of potentially affected small                       Executive Order 13563 reaffirms the                regulations do not unnecessarily or
                                                 entities, comparing the reduction of                    principles of Executive Order 12866                   disproportionately burden small
                                                 compliance costs to entity profit                       while calling for improvements in the                 entities. Small entities include small
                                                 margins.                                                Nation’s regulatory system to promote                 businesses, small governmental
                                                                                                         predictability, to reduce uncertainty,                jurisdictions, and small not-for-profit
                                                    The BLM identified up to 1,828
                                                                                                         and to use the best, most innovative,                 enterprises.
                                                 entities that operate on Federal and
                                                                                                         and least burdensome tools for                          The BLM reviewed the SBA size
                                                 Indian leases and recognizes that the
                                                                                                         achieving regulatory ends. The                        standards for small businesses and the
                                                 overwhelming majority of these entities
                                                                                                         Executive Order directs agencies to                   number of entities fitting those size
                                                 are small business, as defined by the
                                                                                                         consider regulatory approaches that                   standards as reported by the U.S.
                                                 SBA. We estimated the potential                         reduce burdens and maintain flexibility
                                                 reduction in compliance costs to be                                                                           Census Bureau in the Economic Census.
                                                                                                         and freedom of choice for the public                  The BLM concludes that the vast
                                                 about $60,000 per entity during the                     where these approaches are relevant,
                                                 initial year when the requirements                                                                            majority of entities operating in the
                                                                                                         feasible, and consistent with regulatory              relevant sectors are small businesses as
                                                 would be suspended or delayed. This                     objectives. Executive Order 13563
                                                 represents the average maximum                                                                                defined by the SBA. As such, the
                                                                                                         emphasizes further that regulations                   proposed rule would likely affect a
                                                 amount by which the operators would                     must be based on the best available
                                                 be positively impacted by the proposed                                                                        substantial number of small entities.
                                                                                                         science and that the rulemaking process                 However, the BLM believes that the
                                                 rule.                                                   must allow for public participation and               proposed rule would not have a
                                                    We used existing BLM information                     an open exchange of ideas.                            significant economic impact on a
                                                 and research concerning firms that have                    This proposed rule would temporarily               substantial number of small entities.
                                                 recently completed Federal and Indian                   suspend or delay portions of the BLM’s                Although the rule would affect a
                                                 wells and the financial and employment                  2016 final rule while the BLM reviews                 substantial number of small entities, the
                                                 information on a sample of these firms,                 those requirements. We have developed                 BLM does not believe that these effects
                                                 as available in company annual report                   this proposed rule in a manner                        would be economically significant. The
                                                 filings with the Securities and Exchange                consistent with the requirements in                   proposed rule would temporarily
                                                 Commission (SEC). From the original                     Executive Order 12866 and Executive                   suspend or delay certain requirements
                                                 list of companies, we identified 55                     Order 13563.                                          placed on operators by the 2016 final
                                                 company filings. Of those companies, 33                    After reviewing the requirements of                rule. Operators would not have to
                                                 were small businesses.                                  the proposed rule, the OMB has                        undertake the associated compliance
                                                    From data in the companies’ 10–K                     determined that it is an economically                 activities, either operational or
                                                 filings to the SEC, the BLM was able to                 significant action according to the                   administrative, that are outlined in the
                                                 calculate the companies’ profit margins                 criteria of Executive Order 12866. The                2016 final rule until January 17, 2019,
                                                 for the years 2012, 2013, and 2014. We                  BLM reviewed the requirements of the                  except to the extent the activities are
                                                 then calculated a profit margin figure for              proposed rule and determined that it                  required by State or tribal law, or by
                                                 each company when subject to the                        will not adversely affect in a material               other pre-existing BLM regulations. The
                                                 average annual reduction in compliance                  way the economy, a sector of the                      screening analysis conducted by the
                                                 costs associated with this proposed rule.               economy, productivity, competition,                   BLM estimates that the average
                                                 For these 26 small companies, the                       jobs, the environment, public health or               reduction in compliance costs
                                                 estimated per-entity reduction in                       safety, or State, local, or tribal                    associated with this proposed rule
                                                 compliance costs would result in an                     governments or communities. For more                  would be a small fraction of a percent
                                                 average increase in profit margin of 0.17               detailed information, see the RIA                     of the profit margin for small
                                                 percentage points (based on the 2014                    prepared for this proposed rule. The                  companies, which is not a large enough
                                                 company data) (2017 RIA at 46).                         RIA has been posted in the docket for                 impact to be considered significant.
                                                 Impacts Associated With Oil and Gas                     the proposed rule on the Federal
                                                                                                         eRulemaking Portal: https://                          Small Business Regulatory Enforcement
                                                 Operations on Tribal Lands                                                                                    Fairness Act
                                                                                                         www.regulations.gov. In the Searchbox,
                                                   The proposed rule would apply to oil                  enter ‘‘RIN 1004–AE54’’ and click the                   This proposed rule is a major rule
                                                 and gas operations on both Federal and                  ‘‘Search’’ button. Follow the                         under 5 U.S.C. 804(2), the Small
                                                 Indian leases. In the RIA, the BLM                      instructions at this Web site.                        Business Regulatory Enforcement
                                                 estimates the impacts associated with                                                                         Fairness Act. This proposed rule:
                                                 operations on Indian leases, as well as                 Regulatory Flexibility Act
                                                                                                                                                                 (a) Would have an annual effect on
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                                                 royalty implications for tribal                           This proposed rule would not have a                 the economy of $100 million or more.
                                                 governments. We estimate these impacts                  significant economic effect on a                        (b) Would not cause a major increase
                                                 by scaling down the total impacts by the                substantial number of small entities                  in costs or prices for consumers,
                                                 share of oil wells on Indian lands and                  under the Regulatory Flexibility Act (5               individual industries, Federal, State, or
                                                 the share of gas wells on Indian Lands.                 U.S.C. 601 et seq.) The Regulatory                    local government agencies, or
                                                 Please reference the RIA at section 4.4.5               Flexibility Act (RFA) generally requires              geographic regions.
                                                 for a full explanation about the estimate               that Federal agencies prepare a                         (c) Would not have a significant
                                                 impacts.                                                regulatory flexibility analysis for rules             adverse effects on competition,


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                                                                       Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules                                         46467

                                                 employment, investment, productivity,                   Federalism (Executive Order 13132)                    and gas operators as less attractive than
                                                 innovation, or the ability of U.S.-based                  Under the criteria in section 1 of                  non-Indian lands due to unnecessary
                                                 enterprises to compete with foreign-                    Executive Order 13132, this proposed                  and burdensome compliance costs,
                                                 based enterprises.                                      rule does not have sufficient federalism              thereby preventing economic harm to
                                                                                                         implications to warrant the preparation               tribes and allottees.
                                                 Unfunded Mandates Reform Act
                                                                                                         of a federalism summary impact                           The BLM is conducting tribal
                                                 (UMRA)
                                                                                                         statement. A federalism impact                        outreach which it believes is
                                                    This proposed rule would not impose                                                                        appropriate given that the proposed rule
                                                 an unfunded mandate on State, local, or                 statement is not required.
                                                                                                           The proposed rule would not have a                  would extend the compliance dates of
                                                 tribal governments, or the private sector                                                                     the 2016 final rule, but would not
                                                 of $100 million or more per year. The                   substantial direct effect on the States, on
                                                                                                         the relationship between the Federal                  change the policies of that rule. The
                                                 proposed rule would not have a                                                                                BLM notified tribes of the action and
                                                 significant or unique effect on State,                  Government and the States, or on the
                                                                                                         distribution of power and                             requested feedback and comment
                                                 local, or tribal governments or the                                                                           through the respective BLM State Office
                                                 private sector. The proposed rule                       responsibilities among the levels of
                                                                                                         government. It would not apply to                     Directors. Future tribal consultation
                                                 contains no requirements that would                                                                           may occur on an ongoing basis.
                                                 apply to State, local, or tribal                        States or local governments or State or
                                                 governments. It would temporarily                       local governmental entities. The rule                 Paperwork Reduction Act
                                                 suspend or delay requirements that                      would affect the relationship between
                                                                                                         operators, lessees, and the BLM, but it               1. Overview
                                                 would otherwise apply to the private
                                                 sector. A statement containing the                      does not directly impact the States.                     The Paperwork Reduction Act (PRA)
                                                 information required by the Unfunded                    Therefore, in accordance with Executive               (44 U.S.C. 3501–3521) provides that an
                                                 Mandates Reform Act (UMRA) (2 U.S.C.                    Order 13132, the BLM has determined                   agency may not conduct or sponsor, and
                                                 1531 et seq.) is not required for the                   that this proposed rule does not have                 a person is not required to respond to,
                                                 proposed rule. This proposed rule is                    sufficient federalism implications to                 a collection of information, unless it
                                                 also not subject to the requirements of                 warrant preparation of a Federalism                   displays a currently valid control
                                                 section 203 of UMRA because it                          Assessment.                                           number. 44 U.S.C. 3512. Collections of
                                                 contains no regulatory requirements that                                                                      information include requests and
                                                                                                         Civil Justice Reform (Executive Order                 requirements that an individual,
                                                 might significantly or uniquely affect                  12988)
                                                 small governments, because it contains                                                                        partnership, or corporation obtain
                                                 no requirements that apply to such                        This proposed rule complies with the                information, and report it to a Federal
                                                 governments, nor does it impose                         requirements of Executive Order 12988.                agency. 44 U.S.C. 3502(3); 5 CFR
                                                 obligations upon them.                                  More specifically, this proposed rule                 1320.3(c) and (k).
                                                                                                         meets the criteria of section 3(a), which                OMB has approved the 24 information
                                                 Governmental Actions and Interference                   requires agencies to review all                       collection activities in the 2016 final
                                                 With Constitutionally Protected Property                regulations to eliminate errors and                   rule and has assigned control number
                                                 Right—Takings (Executive Order 12630)                   ambiguity and to write all regulations to             1004–0211 to those activities. In the
                                                    This proposed rule would not affect a                minimize litigation. This proposed rule               Notice of Action approving the 24
                                                 taking of private property or otherwise                 also meets the criteria of section 3(b)(2),           information collection activities in the
                                                 have taking implications under                          which requires agencies to write all                  2016 final rule, OMB announced that
                                                 Executive Order 12630. A takings                        regulations in clear language with clear              the control number will expire on
                                                 implication assessment is not required.                 legal standards.                                      January 31, 2018. The Notice of Action
                                                 The proposed rule would temporarily                                                                           also included terms of clearance.
                                                 suspend or delay many of the                            Consultation and Coordination With
                                                                                                                                                                  The BLM requests the extension of
                                                 requirements placed on operators by the                 Indian Tribal Governments (Executive
                                                                                                                                                               control number 1004–0021 until January
                                                 2016 final rule. Operators would not                    Order 13175 and Departmental Policy)
                                                                                                                                                               31, 2019. The BLM requests no other
                                                 have to undertake the associated                           The Department strives to strengthen               changes to the control number.
                                                 compliance activities, either operational               its government-to-government                             In accordance with the PRA, the BLM
                                                 or administrative, that are outlined in                 relationship with Indian tribes through               is inviting public comment on the
                                                 the 2016 final rule until January 17,                   a commitment to consultation with                     proposed extension of control no. 1004–
                                                 2019, and therefore would impact some                   Indian tribes and recognition of their                0211. Descriptions of the information
                                                 operational and administrative                          right to self-governance and tribal                   collection activities in this proposed
                                                 requirements on Federal and Indian                      sovereignty. We have evaluated this                   rule, along with estimates of the annual
                                                 lands. All such operations are subject to               proposed rule under the Department’s                  burdens, are shown below. Included in
                                                 lease terms which expressly require that                consultation policy and under the                     the burden estimates are the time for
                                                 subsequent lease activities be conducted                criteria in Executive Order 13175 and                 reviewing instructions, searching
                                                 in compliance with subsequently                         have identified substantial direct effects            existing data sources, gathering and
                                                 adopted Federal laws and regulations.                   on federally recognized Indian tribes                 maintaining the data needed, and
                                                 This proposed rule conforms to the                      that would result from this proposed                  completing and reviewing each
                                                 terms of those leases and applicable                    rule. Under this proposed rule, oil and               component of the proposed information
                                                 statutes and, as such, the rule is not a                gas operations on tribal and allotted                 collection requirements.
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                                                 government action capable of interfering                lands would not be subject to many of                    The BLM has submitted the
                                                 with constitutionally protected property                the requirements placed on operators by               information collection request for this
                                                 rights. Therefore, the BLM has                          the 2016 final rule until January 17,                 proposed rule to OMB for review in
                                                 determined that the rule would not                      2019.                                                 accordance with the PRA. You may
                                                 cause a taking of private property or                      The BLM believes that temporarily                  obtain a copy of the request from the
                                                 require further discussion of takings                   suspending or delaying these                          BLM by electronic mail request to James
                                                 implications under Executive Order                      requirements would assist in preventing               Tichenor at jtichenor@blm.gov or by
                                                 12630.                                                  Indian lands from being viewed by oil                 telephone request to 202–573–0536.


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                                                 46468                 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules

                                                 You may also review the information                      Estimated Total Annual Burden                        whether to measure or estimate, with
                                                 collection request online at: http://                   Hours: 82,170.                                        the exception that the operator must in
                                                 www.reginfo.gov/public/do/.                              Estimated Total Non-Hour Cost:                       all cases measure the following
                                                    The BLM requests comments on the                     None.                                                 volumes:
                                                 following subjects:                                                                                              • Royalty-free gas removed
                                                                                                         3. Information Collection Request
                                                    • Whether the collection of                                                                                downstream of the FMP and used
                                                 information is necessary for the proper                    The BLM requests extension of OMB                  pursuant to §§ 3178.4 through 3178.7;
                                                 functioning of the BLM, including                       control number 1004–0211 until January                and
                                                 whether the information will have                       31, 2019. This extension would                           • Royalty-free oil used pursuant to
                                                 practical utility;                                      continue OMB’s approval of the                        §§ 3178.4 through 3178.7.
                                                    • The accuracy of the BLM’s estimate                 following information collection                         If oil is used on the lease, unit or
                                                 of the burden of collecting the                         activities.                                           communitized area, it is most likely to
                                                 information, including the validity of                                                                        be removed from a storage tank on the
                                                                                                         Plan To Minimize Waste of Natural Gas
                                                 the methodology and assumptions used;                                                                         lease, unit or communitized area. Thus,
                                                                                                         (43 CFR 3162.3–1)
                                                    • The quality, utility, and clarity of                                                                     this regulation also requires the operator
                                                 the information to be collected; and                       The 2016 final rule added a new                    to document the removal of the oil from
                                                    • How to minimize the information                    provision to 43 CFR 3162.3–1 that                     the tank or pipeline.
                                                 collection burden on those who are to                   requires a plan to minimize waste of                     Section 3178.8(e) requires that
                                                 respond, including the use of                           natural gas when submitting an                        operators use best available information
                                                 appropriate automated, electronic,                      Application for Permit to Drill or Re-                to estimate gas volumes, where
                                                 mechanical, or other forms of                           enter (APD) for a development oil well.               estimation is allowed. For both oil and
                                                 information technology.                                 This information is in addition to the                gas, the operator must report the
                                                    If you want to comment on the                        APD information that the BLM already                  volumes measured or estimated, as
                                                 information collection requirements of                  collects under OMB Control Number                     applicable, under ONRR reporting
                                                 this proposed rule, please send your                    1004–0137. The required elements of                   requirements. As revisions to Onshore
                                                 comments directly to OMB, with a copy                   the waste minimization plan are listed                Oil and Gas Orders No. 4 and 5 have
                                                 to the BLM, as directed in the                          at paragraphs (j)(1) through (j)(7).                  now been finalized as 43 CFR subparts
                                                 ADDRESSES section of this preamble.                                                                           3174 and 3175, respectively, the final
                                                                                                         Request for Approval for Royalty-Free
                                                 Please identify your comments with                      Uses On-Lease or Off-Lease (43 CFR                    rule text now references § 3173.12, as
                                                 ‘‘OMB Control Number 1004–0211.’’                       3178.5, 3178.7, 3178.8, and 3178.9)                   well as § 3178.4 through § 3178.7 to
                                                 OMB is required to make a decision                                                                            clarify that royalty-free use must adhere
                                                 concerning the collection of information                   Section 3178.5 requires submission of              to the provisions in those sections.
                                                 contained in this proposed rule between                 a Sundry Notice (Form 3160–5) to                         Section 3178.9 requires the following
                                                 30 to 60 days after publication of this                 request prior written BLM approval for                additional information in a request for
                                                 document in the Federal Register.                       use of gas royalty-free for the following             prior approval of royalty-free use under
                                                 Therefore, a comment to OMB is best                     operations and production purposes on                 § 3178.5, or for prior approval of off-
                                                 assured of having its full effect if OMB                the lease, unit or communitized area:                 lease royalty-free use under § 3178.7:
                                                 receives it by November 6, 2017.                           • Using oil or gas that an operator                   • A complete description of the
                                                                                                         removes from the pipeline at a location               operation to be conducted, including
                                                 2. Summary of Information Collection                    downstream of the facility measurement                the location of all facilities and
                                                 Activities                                              point (FMP);                                          equipment involved in the operation
                                                    Title: Waste Prevention, Production                     • Removal of gas initially from a                  and the location of the FMP;
                                                 Subject to Royalties, and Resource                      lease, unit PA, or communitized area for                 • The volume of oil or gas that the
                                                 Conservation (43 CFR parts 3160 and                     treatment or processing because of                    operator expects will be used in the
                                                 3170). Form 3160–5, Sundry Notices                      particular physical characteristics of the            operation and the method of measuring
                                                 and Reports on Wells.                                   gas, prior to use on the lease, unit PA               or estimating that volume;
                                                    OMB Control Number: 1004–0211.                       or communitized area; and                                • If the volume expected to be used
                                                    Forms: Form 3160–3, Application for                     • Any other type of use of produced                will be estimated, the basis for the
                                                 Permit to Drill or Re-enter; and Form                   oil or gas for operations and production              estimate (e.g., equipment manufacturer’s
                                                 3160–5, Sundry Notices and Reports on                   purposes pursuant to § 3178.3 that is not             published consumption or usage rates);
                                                 Wells.                                                  identified in § 3178.4.                               and
                                                    Description of Respondents: Holders                     Section 3178.7 requires submission of                 • The proposed disposition of the oil
                                                 of Federal and Indian (except Osage                     a Sundry Notice (Form 3160–5) to                      or gas used (e.g., whether gas used
                                                 Tribe) oil and gas leases, those who                    request prior written BLM approval for                would be consumed as fuel, vented
                                                 belong to Federally approved units or                   off-lease royalty-free uses in the                    through use of a gas-activated
                                                 communitized areas, and those who are                   following circumstances:                              pneumatic controller, returned to the
                                                 parties to oil and gas agreements under                    • The equipment or facility in which               reservoir, or disposed by some other
                                                 the Indian Mineral Development Act, 25                  the operation is conducted is located off             method).
                                                 U.S.C. 2101–2108.                                       the lease, unit, or communitized area for
                                                                                                         engineering, economic, resource-                      Request for Approval of Alternative
                                                    Respondents’ Obligation: Required to
                                                                                                         protection, or physical-accessibility                 Capture Requirement (43 CFR 3179.8)
                                                 obtain or retain a benefit.
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                                                    Frequency of Collection: On occasion.                reasons; and                                             Section 3179.8 applies only to leases
                                                    Abstract: The BLM requests the                          • The operations are conducted                     issued before the effective date of the
                                                 extension of control number 1004–0021                   upstream of the FMP.                                  2016 final rule and to operators
                                                 until January 31, 2019. The BLM                            Section 3178.8 requires that an                    choosing to comply with the capture
                                                 requests no changes to the control                      operator measure or estimate the                      requirement in § 3179.7 on a lease-by-
                                                 number except this extension.                           volume of royalty-free gas used in                    lease, unit-by-unit, or communitized
                                                    Estimated Number of Responses:                       operations upstream of the FMP. In                    area-by-communitized area basis. The
                                                 63,200.                                                 general, the operator is free to choose               regulation provides that operators who


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                                                                       Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules                                                 46469

                                                 meet those parameters may seek BLM                      life of the operator’s lease, unit, or                the EPA requirements remain in effect.
                                                 approval of a capture percentage other                  communitized area, whichever is less.                 For this reason, the BLM is not
                                                 than that which is applicable under 43                                                                        estimating any PRA burdens for
                                                                                                         Notification of Choice To Comply on
                                                 CFR 3179.7. The operator must submit                                                                          § 3179.102.4
                                                                                                         County- or State-Wide Basis (43 CFR
                                                 a Sundry Notice (Form 3160–5) that
                                                                                                         3179.7(c)(3)(ii))                                     Request for Extension of Royalty-Free
                                                 includes the following information:
                                                    • The name, number, and location of                     Section 3179.7 requires operators                  Flaring During Initial Production
                                                 each of the operator’s wells, and the                   flaring gas from development oil wells                Testing (43 CFR 3179.103)
                                                 number of the lease, unit, or                           to capture a specified percentage of the                 Section 3179.103 allows gas to be
                                                 communitized area with which it is                      operator’s adjusted volume of gas                     flared royalty-free during initial
                                                 associated; and                                         produced over the relevant area. The                  production testing. The regulation lists
                                                    • The oil and gas production levels of               ‘‘relevant area’’ is each of the operator’s           specific volume and time limits for such
                                                 each of the operator’s wells on the lease,              leases, units, or communitized areas,                 testing. An operator may seek an
                                                 unit, or communitized area for the most                 unless the operator chooses to comply                 extension of those limits on royalty-free
                                                 recent production month for which                       on a county- or State-wide basis and the              flaring by submitting a Sundry Notice
                                                 information is available and the                        operator notifies the BLM of its choice               (Form 3160–5) to the BLM.
                                                 volumes being vented and flared from                    by Sundry Notice (Form 3160–5) by
                                                                                                         January 1 of the relevant year.                       Request for Extension of Royalty-Free
                                                 each well.
                                                    In addition, the request must include                                                                      Flaring During Subsequent Well Testing
                                                                                                         Request for Exemption From Well                       (43 CFR 3179.104)
                                                 map(s) showing:
                                                    • The entire lease, unit, or                         Completion Requirements (43 CFR                          Section 3179.104 allows gas to be
                                                 communitized area, and the                              3179.102(c) and (d))                                  flared royalty-free for no more than 24
                                                 surrounding lands to a distance and on                     Section 3179.102 lists several                     hours during well tests subsequent to
                                                 a scale that shows the field in which the               requirements pertaining to gas that                   the initial production test. The operator
                                                 well is or will be located (if applicable),             reaches the surface during well                       may seek authorization to flare royalty-
                                                 and all pipelines that could transport                  completion and related operations. An                 free for a longer period by submitting a
                                                 the gas from the well;                                  operator may seek an exemption from                   Sundry Notice (Form 3160–5) to the
                                                    • All of the operator’s producing oil                these requirements by submitting a                    BLM.
                                                 and gas wells, which are producing                      Sundry Notice (Form 3160–5) that
                                                 from Federal or Indian leases, (both on                 includes the following information:                   Reporting of Venting or Flaring (43 CFR
                                                 Federal or Indian leases and on other                      (1) The name, number, and location of              3179.105)
                                                 properties) within the map area;                        each of the operator’s wells, and the                   Section 3179.105 allows an operator
                                                    • Identification of all of the operator’s            number of the lease, unit, or                         to flare gas royalty-free during a
                                                 wells within the lease from which gas                   communitized area with which it is                    temporary, short-term, infrequent, and
                                                 is flared or vented, and the location and               associated;                                           unavoidable emergency. Venting gas is
                                                 distance of the nearest gas pipeline(s) to                 (2) The oil and gas production levels              permissible if flaring is not feasible
                                                 each such well, with an identification of               of each of the operator’s wells on the                during an emergency. The regulation
                                                 those pipelines that are or could be                    lease, unit or communitized area for the              defines limited circumstances that
                                                 available for connection and use; and                   most recent production month for                      constitute an emergency, and other
                                                    • Identification of all of the operator’s            which information is available;                       circumstances that do not constitute an
                                                 wells within the lease from which gas                      (3) Data that show the costs of                    emergency.
                                                 is captured;                                            compliance; and                                         The operator must estimate and report
                                                    The following information is also                       (4) Projected costs of and the                     to the BLM on a Sundry Notice (Form
                                                 required:                                               combined stream of revenues from both                 3160–5) volumes flared or vented in
                                                    • Data that show pipeline capacity                   gas and oil production, including: the                circumstances that, as provided by 43
                                                 and the operator’s projections of the cost              operator’s projections of oil and gas                 CFR 3179.105, do not constitute
                                                 associated with installation and                        prices, production volumes, quality (i.e.,            emergencies for the purposes of royalty
                                                 operation of gas capture infrastructure,                heating value and H2S content),                       assessment:
                                                 to the extent that the operator is able to              revenues derived from production, and                   (1) More than 3 failures of the same
                                                 obtain this information, as well as cost                royalty payments on production over                   component within a single piece of
                                                 projections for alternative methods of                  the next 15 years or the life of the                  equipment within any 365-day period;
                                                 transportation that do not require                      operator’s lease, unit, or communitized                 (2) The operator’s failure to install
                                                 pipelines; and                                          area, whichever is less.                              appropriate equipment of a sufficient
                                                    • Projected costs of and the combined                   The rule also provides that an                     capacity to accommodate the
                                                 stream of revenues from both gas and oil                operator that is in compliance with the               production conditions;
                                                 production, including: (1) The                          EPA regulations for well completions                    (3) Failure to limit production when
                                                 operator’s projections of gas prices, gas               under 40 CFR part 60, subpart OOOO or                 the production rate exceeds the capacity
                                                 production volumes, gas quality (i.e.,                  subpart OOOOa is deemed in                            of the related equipment, pipeline, or
                                                 heating value and H2S content),                         compliance with the requirements of                   gas plant, or exceeds sales contract
                                                 revenues derived from gas production,                   this section. As a practical matter, all              volumes of oil or gas;
                                                 and royalty payments on gas production                  new, reconstructed, and modified                        (4) Scheduled maintenance;
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                                                 over the next 15 years or the life of the               hydraulically fracturing or refracturing                (5) A situation caused by operator
                                                 operator’s lease, unit, or communitized                 events are now subject to the EPA                     negligence; or
                                                 area, whichever is less; and (2) The                    requirements, so the BLM does not
                                                 operator’s projections of oil prices, oil               believe that the requirements of this                    4 The EPA has convened a proceeding for

                                                 production volumes, costs, revenues,                    section would have any independent                    reconsidering the final OOOOa rule, see 82 FR
                                                                                                                                                               25730 (June 5, 2017). If EPA’s requirements are
                                                 and royalty payments from the                           effect, or that any operator would                    altered in any way in the future, then PRA burdens
                                                 operator’s oil and gas operations within                request an exemption from the                         estimated for BLM’s rule could increase by up to
                                                 the lease over the next 15 years or the                 requirements of this section, as long as              $130/event if the operator files for an exemption.



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                                                 46470                 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules

                                                   (6) A situation on a lease, unit, or                     (1) The name, number, and location of              individual days in the prior calendar
                                                 communitized area that has already                      each of the operator’s wells, and the                 year.
                                                 experienced 3 or more emergencies                       number of the lease, unit, or
                                                                                                                                                               Showing That a Pneumatic Diaphragm
                                                 within the past 30 days, unless the BLM                 communitized area with which it is
                                                                                                                                                               Pump Was Operated on Fewer Than 90
                                                 determines that the occurrence of more                  associated;
                                                                                                                                                               Individual Days in the Prior Calendar
                                                 than 3 emergencies within the 30 day                       (2) The oil and gas production levels              Year (43 CFR 3179.202(b)(2))
                                                 period could not have been anticipated                  of each of the operator’s wells on the
                                                 and was beyond the operator’s control.                  lease, unit or communitized area for the                A pneumatic diaphragm pump is not
                                                                                                         most recent production month for                      subject to § 3179.202 if the operator
                                                 Pneumatic Controllers—Introduction                                                                            documents in a Sundry Notice (Form
                                                                                                         which information is available;
                                                   Section 3179.201 pertains to any                         (3) Data that show the costs of                    3160–5) that the pump was operated
                                                 pneumatic controller that: (1) Is not                   compliance;                                           fewer than 90 days in the prior calendar
                                                 subject to EPA regulations at 40 CFR                       (4) Projected costs of and the                     year.
                                                 60.5360a through 60.5390a, but would                    combined stream of revenues from both                 Notification of Functional Needs for a
                                                 be subject to those regulations if it were              gas and oil production, including: the                Pneumatic Diaphragm Pump (43 CFR
                                                 a new or modified source; and (2) has                   operator’s projections of gas prices, gas             3179.202(d))
                                                 a continuous bleed rate greater than 6                  production volumes, gas quality (i.e.,                  In lieu of replacing a pneumatic
                                                 standard cubic feet (scf) per hour.                     heating value and H2S content),                       diaphragm pump or routing the pump
                                                 Section 3179.201(b) requires operators                  revenues derived from gas production,                 exhaust gas to processing equipment, an
                                                 to replace each high-bleed pneumatic                    and royalty payments on gas production                operator may submit a Sundry Notice
                                                 controller with a controller with a bleed               over the next 15 years or the life of the             (Form 3160–5) to the BLM showing that
                                                 rate lower than 6 scf per hour, with the                operator’s lease, unit, or communitized               replacing the pump with a zero
                                                 following exceptions: (1) The pneumatic                 area, whichever is less; and the                      emissions pump is not viable because a
                                                 controller exhaust is routed to                         operator’s projections of oil prices, oil             pneumatic pump is necessary to
                                                 processing equipment; (2) the                           production volumes, costs, revenues,                  perform the function required, and that
                                                 pneumatic controller exhaust was and                    and royalty payments from the                         routing the pump exhaust gas to
                                                 continues to be routed to a flare device                operator’s oil and gas operations within              processing equipment for capture and
                                                 or low pressure combustor; (3) The                      the lease over the next 15 years or the               sale is technically infeasible or unduly
                                                 pneumatic controller exhaust is routed                  life of the operator’s lease, unit, or                costly.
                                                 to processing equipment; or (4) The                     communitized area, whichever is less.
                                                 operator notifies the BLM through a                                                                           Showing That Cost of Compliance
                                                 Sundry Notice and demonstrates, and                     Showing in Support of Replacement of                  Would Cause Cessation of Production
                                                 the BLM agrees, that such would impose                  Pneumatic Controller Within 3 Years                   and Abandonment of Oil Reserves (43
                                                 such costs as to cause the operator to                  (43 CFR 3179.201(d))                                  CFR 3175.202(f) and (g))
                                                 cease production and abandon                              The operator may replace a high-bleed                  An operator may seek an exemption
                                                 significant recoverable oil reserves                    pneumatic controller if the operator                  from the replacement requirement by
                                                 under the lease.                                        notifies the BLM through a Sundry                     submitting a Sundry Notice (Form
                                                 Notification of Functional Needs for a                  Notice (Form 3160–5) that the well or                 3160–5) to the BLM that provides an
                                                 Pneumatic Controller (43 CFR                            facility that the pneumatic controller                economic analysis that demonstrates
                                                 3179.201(b)(1)–(3))                                     serves has an estimated remaining                     that compliance with these
                                                                                                         productive life of 3 years or less.                   requirements would impose such costs
                                                    An operator may invoke one of the                                                                          as to cause the operator to cease
                                                                                                         Pneumatic Diaphragm Pumps—
                                                 first three exceptions described above                                                                        production and abandon significant
                                                                                                         Introduction
                                                 by notifying the BLM through a Sundry                                                                         recoverable oil reserves under the lease.
                                                 Notice (Form 3160–5) that use of the                       With some exceptions, § 3179.202                   The Sundry Notice (Form 3160–5) must
                                                 pneumatic controller is required based                  pertains to any pneumatic diaphragm                   include the following information:
                                                 on functional needs that may include,                   pump that: (1) Uses natural gas                          (1) Well information that must
                                                 but are not limited to, response time,                  produced from a Federal or Indian lease,              include: (i) The name, number, and
                                                 safety, and positive actuation, and the                 or from a unit or communitized area                   location of each well, and the number
                                                 Sundry Notice (Form 3160–5) describes                   that includes a Federal or Indian lease;              of the lease, unit, or communitized area
                                                 those functional needs.                                 and (2) Is not subject to EPA regulations             with which it is associated; and (ii) The
                                                                                                         at 40 CFR 60.5360a through 60.5390a,                  oil and gas production levels of each of
                                                 Showing That Cost of Compliance
                                                                                                         but would be subject to those                         the operator’s wells on the lease, unit or
                                                 Would Cause Cessation of Production
                                                                                                         regulations if it were a new,                         communitized area for the most recent
                                                 and Abandonment of Oil Reserves (43
                                                                                                         reconstructed, or modified source as                  production month for which
                                                 CFR 3175.201(b)(4) and 3175.201(c))
                                                                                                         defined in 40 CFR part 60 subpart                     information is available;
                                                   An operator may invoke the fourth                     OOOOa. This regulation generally                         (2) Data that show the costs of
                                                 exception described above by                            requires replacement of such a pump                   compliance with § 3179.202(c) through
                                                 demonstrating to the BLM through a                      with a zero-emissions pump or routing                 (e); and
                                                 Sundry Notice (Form 3160–5), and by                     of the pump’s exhaust gas to processing                  (3) The operator’s estimate of the costs
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                                                 obtaining the BLM’s agreement, that                     equipment for capture and sale.                       and revenues of the combined stream of
                                                 replacement of a pneumatic controller                      This requirement does not apply to                 revenues from both the gas and oil
                                                 would impose such costs as to cause the                 pneumatic diaphragm pumps that do                     components, including: (i) The
                                                 operator to cease production and                        not vent exhaust gas to the atmosphere.               operator’s projections of gas prices, gas
                                                 abandon significant recoverable oil                     In addition, this requirement does not                production volumes, gas quality (i.e.,
                                                 reserves under the lease. The Sundry                    apply if the operator submits a Sundry                heating value and H2S content),
                                                 Notice (Form 3160–5) must include the                   Notice to the BLM documenting that the                revenues derived from gas production,
                                                 following information:                                  pump(s) operated on less than 90                      and royalty payments on gas production


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                                                                       Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules                                         46471

                                                 over the next 15 years or the life of the               § 3179.203(c)(2) would impose such                    Downhole Well Maintenance and
                                                 operator’s lease, unit, or communitized                 costs as to cause the operator to cease               Liquids Unloading—Notification of
                                                 area, whichever is less; and (ii) The                   production and abandon significant                    Excessive Duration or Volume (43 CFR
                                                 operator’s projections of oil prices, oil               recoverable oil reserves under the lease.             3179.204(f))
                                                 production volumes, costs, revenues,                       To support the demonstration                         The operator must notify the BLM by
                                                 and royalty payments from the                           described above, the operator must                    Sundry Notice (Form 3160–5), within 30
                                                 operator’s oil and gas operations within                submit a Sundry Notice (Form 3160–5)                  calendar days, if:
                                                 the lease over the next 15 years or the                 that includes the following information:                (1) The cumulative duration of
                                                 life of the operator’s lease, unit, or                     (1) The name, number, and location of              manual well purging events for a well
                                                 communitized area, whichever is less.                   each well, and the number of the lease,               exceeds 24 hours during any production
                                                 Showing in Support of Replacement of                    unit, or communitized area with which                 month; or
                                                 Pneumatic Diaphragm Pump Within 3                       it is associated;                                       (2) The estimated volume of gas
                                                 Years (43 CFR 3179.202(h))                                 (2) The oil and gas production levels              vented in liquids unloading by manual
                                                   The operator may replace a pneumatic                  of each of the operator’s wells on the                well purging operations for a well
                                                 diaphragm pump if the operator notifies                 lease, unit or communitized area for the              exceeds 75 Mcf during any production
                                                 the BLM through a Sundry Notice (Form                   most recent production month for                      month.
                                                 3160–5) that the well or facility that the              which information is available;
                                                                                                                                                               Leak Detection—Compliance With EPA
                                                 pneumatic controller serves has an                         (3) Data that show the costs of                    Regulations (43 CFR 3179.301(j))
                                                 estimated remaining productive life of 3                compliance with § 3179.203(c)(1) or (2)
                                                                                                         on the lease; and                                       Sections 3179.301 through 3179.305
                                                 years or less.
                                                                                                            (4) The operator must consider the                 include information collection activities
                                                 Storage Vessels (43 CFR 3179.203(c) and                 costs and revenues of the combined                    pertaining to the detection and repair of
                                                 (d))                                                    stream of revenues from both the gas                  gas leaks during production operations.
                                                    A storage vessel is subject to 43 CFR                and oil components, including: The                    These regulations require operators to
                                                 3179.203(c) if the vessel: (1) Contains                 operator’s projections of oil and gas                 inspect all equipment covered under
                                                 production from a Federal or Indian                     prices, production volumes, quality (i.e.,            § 3179.301(a) for gas leaks.
                                                 lease, or from a unit or communitized                   heating value and H2S content),                         Section 3179.301(j) allows an operator
                                                 area that includes a Federal or Indian                  revenues derived from production, and                 to satisfy the requirements of
                                                 lease; and (2) Is not subject to any of the             royalty payments on production over                   §§ 3179.301 through 3179.305 for some
                                                 requirements of EPA regulations at 40                   the next 15 years or the life of the                  or all of the equipment or facilities on
                                                 CFR part 60, subpart OOOO, but would                    operator’s lease, unit, or communitized               a given lease by notifying the BLM in a
                                                 be subject to that subpart if it were a                 area, whichever is less.                              Sundry Notice (Form 3160–5) that the
                                                 new, reconstructed, or modified source.                                                                       operator is complying with EPA
                                                    The operator must determine, record,                 Downhole Well Maintenance and                         requirements established pursuant to 40
                                                 and make available to the BLM upon                      Liquids Unloading—Documentation and                   CFR part 60 with respect to such
                                                 request, whether the storage vessel has                 Reporting (43 CFR 3179.204(c) and (e))                equipment or facilities.
                                                 the potential for VOC emissions equal to                   The operator must minimize vented                  Leak Detection—Request To Use an
                                                 or greater than 6 tpy based on the                      gas and the need for well venting                     Alternative Monitoring Device and
                                                 maximum average daily throughput for                    associated with downhole well                         Protocol (43 CFR 3179.302(c))
                                                 a 30-day period of production. The                      maintenance and liquids unloading,
                                                 determination may take into account                                                                              Section 3175.302 specifies the
                                                                                                         consistent with safe operations. Before
                                                 requirements under a legally and                                                                              instruments and methods that an
                                                                                                         the operator manually purges a well for
                                                 practically enforceable limit in an                                                                           operator may use to detect leaks.
                                                                                                         liquids unloading for the first time after
                                                 operating permit or other requirement                                                                         Section 3175.302(d) allows the BLM to
                                                                                                         the effective date of this section, the
                                                 established under a Federal, State, local                                                                     approve an alternative monitoring
                                                                                                         operator must consider other methods
                                                 or tribal authority that limit the VOC                                                                        device and associated inspection
                                                                                                         for liquids unloading and determine
                                                 emissions to less than 6 tpy.                                                                                 protocol if the BLM finds that the
                                                                                                         that they are technically infeasible or
                                                    If a storage vessel has the potential for                                                                  alternative would achieve equal or
                                                                                                         unduly costly. The operator must
                                                 VOC emissions equal to or greater than                                                                        greater reduction of gas lost through
                                                                                                         provide information supporting that
                                                 6 tpy, the operator must replace the                                                                          leaks compared with the approach
                                                                                                         determination as part of a Sundry
                                                 storage vessel at issue in order to                                                                           specified in § 3179.302(a)(1) when used
                                                                                                         Notice (Form 3160–5). This requirement
                                                 comply with the requirements of this                                                                          according to § 3179.303(a).
                                                                                                         applies to each well the operator
                                                 section, and the operator must                                                                                   Any person may request approval of
                                                                                                         operates.
                                                    (1) Route all tank vapor gas from the                                                                      an alternative monitoring device and
                                                                                                            For any liquids unloading by manual                protocol by submitting a Sundry Notice
                                                 storage vessel to a sales line;
                                                                                                         well purging, the operator must:                      (Form 3160–5) to BLM that includes the
                                                    (2) If the operator determines that
                                                 compliance with the requirement to                         (1) Ensure that the person conducting              following information: (1) Specifications
                                                 route all tank vapor gas from the storage               the well purging remains present on-site              of the proposed monitoring device,
                                                 vessel to a sales line is technically                   throughout the event to minimize to the               including a detection limit capable of
                                                 infeasible or unduly costly, route all                  maximum extent practicable any                        supporting the desired function; (2) The
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                                                 tank vapor gas from the storage vessel to               venting to the atmosphere;                            proposed monitoring protocol using the
                                                 a device or method that ensures                            (2) Record the cause, date, time,                  proposed monitoring device, including
                                                 continuous combustion of the tank                       duration, and estimated volume of each                how results will be recorded; (3)
                                                 vapor gas; or                                           venting event; and                                    Records and data from laboratory and
                                                    (3) Submit an economic analysis to                      (3) Maintain the records for the period            field testing, including but not limited
                                                 the BLM through a Sundry Notice (Form                   required under § 3162.4–1 and make                    to performance testing; (4) A
                                                 3160–5) that demonstrates, and the BLM                  them available to the BLM, upon                       demonstration that the proposed
                                                 agrees, that compliance with                            request.                                              monitoring device and protocol will


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                                                 46472                 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules

                                                 achieve equal or greater reduction of gas               reduction of gas lost through leaks                   leak, unless there is good cause for
                                                 lost through leaks compared with the                    compared to the required approach, if                 delay in repair. If there is good cause for
                                                 approach specified in the regulations;                  the operator demonstrates that                        a delay beyond 30 calendar days,
                                                 (5) Tracking and documentation                          compliance with the leak-detection                    § 3179.304(b) requires the operator to
                                                 procedures; and (6) Proposed                            regulations (including the option for an              submit a Sundry Notice (Form 3160–5)
                                                 limitations on the types of sites or other              alternative program under 43 CFR                      notifying the BLM of the cause.
                                                 conditions on deploying the device and                  3179.303(b)) would impose such costs
                                                                                                                                                               Leak Detection—Inspection
                                                 the protocol to achieve the                             as to cause the operator to cease
                                                                                                                                                               Recordkeeping and Reporting (43 CFR
                                                 demonstrated results.                                   production and abandon significant
                                                                                                                                                               3179.305)
                                                                                                         recoverable oil or gas reserves under the
                                                 Leak Detection—Operator Request To                                                                              Section 3179.305 requires operators to
                                                                                                         lease. The BLM may approve an
                                                 Use an Alternative Leak Detection                                                                             maintain the following records and
                                                                                                         alternative leak detection program that
                                                 Program (43 CFR 3179.303(b))                                                                                  make them available to the BLM upon
                                                                                                         does not achieve equal or greater
                                                    Section 3179.303(b) allows an                        reduction of gas lost through leaks, but              request: (1) For each inspection required
                                                 operator to submit a Sundry Notice                      is as effective as possible consistent                under § 3179.303, documentation of the
                                                 (Form 3160–5) requesting authorization                  with not causing the operator to cease                date of the inspection and the site where
                                                 to detect gas leaks using an alternative                production and abandon significant                    the inspection was conducted; (2) The
                                                 instrument-based leak detection                         recoverable oil or gas reserves under the             monitoring method(s) used to determine
                                                 program, different from the specified                   lease.                                                the presence of leaks; (3) A list of leak
                                                 requirement to inspect each site semi-                     To obtain approval for an alternative              components on which leaks were found;
                                                 annually using an approved monitoring                   program under this provision, the                     (4) The date each leak was repaired; and
                                                 device.                                                 operator must submit a Sundry Notice                  (5) The date and result of the follow-up
                                                    To obtain approval for an alternative                (Form 3160–5) that includes the                       inspection(s) required under § 3179.304.
                                                 leak detection program, the operator                    following information:                                By March 31 each calendar year, the
                                                 must submit a Sundry Notice (Form                          (1) The name, number, and location of              operator must provide to the BLM an
                                                 3160–5) that includes the following                     each well, and the number of the lease,               annual summary report on the previous
                                                 information:                                            unit, or communitized area with which                 year’s inspection activities that
                                                    (1) A detailed description of the                    it is associated;                                     includes: (1) The number of sites
                                                 alternative leak detection program,                        (2) The oil and gas production levels              inspected; (2) The total number of leaks
                                                 including how it will use one or more                   of each of the operator’s wells on the                identified, categorized by the type of
                                                 of the instruments specified in or                      lease, unit or communitized area for the              component; (3) The total number of
                                                 approved under § 3179.302(a) and an                     most recent production month for                      leaks repaired; (4) The total number of
                                                 identification of the specific                          which information is available;                       leaks that were not repaired as of
                                                 instruments, methods and/or practices                      (3) Data that show the costs of                    December 31 of the previous calendar
                                                 that would substitute for specific                      compliance on the lease with the                      year due to good cause and an estimated
                                                 elements of the approach specified in                   requirements of §§ 3179.301–305 and                   date of repair for each leak; and (5) A
                                                 §§ 3179.302(a) and 3179.303(a);                         with an alternative leak detection                    certification by a responsible officer that
                                                    (2) The proposed monitoring protocol;                program that meets the requirements of                the information in the report is true and
                                                    (3) Records and data from laboratory                 § 3179.303(b);                                        accurate.
                                                 and field testing, including, but not                      (4) The operator must consider the
                                                 limited to, performance testing, to the                                                                       Leak Detection—Annual Reporting of
                                                                                                         costs and revenues of the combined
                                                 extent relevant;                                                                                              Inspections (43 CFR 3179.305(b))
                                                                                                         stream of revenues from both the gas
                                                    (4) A demonstration that the proposed                and oil components and provide the                       By March 31 of each calendar year,
                                                 alternative leak detection program will                 operator’s projections of oil and gas                 the operator must provide to the BLM
                                                 achieve equal or greater reduction of gas               prices, production volumes, quality (i.e.,            an annual summary report on the
                                                 lost through leaks compared to                          heating value and H2S content),                       previous year’s inspection activities that
                                                 compliance with the requirements                        revenues derived from production, and                 includes:
                                                 specified in §§ 3179.302(a) and                         royalty payments on production over                      (1) The number of sites inspected;
                                                 3179.303(a);                                            the next 15 years or the life of the                     (2) The total number of leaks
                                                    (5) A detailed description of how the                operator’s lease, unit, or communitized               identified, categorized by the type of
                                                 operator will track and document its                    area, whichever is less;                              component;
                                                 procedures, leaks found, and leaks                         (5) The information required to obtain                (3) The total number of leaks repaired;
                                                 repaired; and                                           approval of an alternative program                       (4) The total number leaks that were
                                                    (6) Proposed limitations on types of                 under § 3179.303(b), except that the                  not repaired as of December 31 of the
                                                 sites or other conditions on deployment                 estimated volume of gas that will be lost             previous calendar year due to good
                                                 of the alternative leak detection                       through leaks under the alternative                   cause and an estimated date of repair for
                                                 program.                                                program must be compared to the                       each leak.
                                                                                                         volume of gas lost under the required                    (5) A certification by a responsible
                                                 Leak Detection—Operator Request for
                                                                                                         program, but does not have to be shown                officer that the information in the report
                                                 Exemption Allowing Use of an
                                                                                                         to be at least equivalent.                            is true and accurate to the best of the
                                                 Alternative Leak-Detection Program
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                                                                                                                                                               officer’s knowledge.
                                                 That Does Not Meet Specified Criteria                   Leak Detection—Notification of Delay in
                                                 (43 CFR 3179.303(d))                                    Repairing Leaks (43 CFR 3179.304(b))                  4. Burden Estimates
                                                   An operator may seek authorization                      Section 3179.304(a) requires an                       The following table details the annual
                                                 for an alternative leak detection program               operator to repair any leak no later than             estimated hour burdens for the
                                                 that does not achieve equal or greater                  30 calendar days after discovery of the               information activities described above.




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                                                                               Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules                                                                                      46473

                                                                                                                                                                                                                                                 Total hours
                                                                                                                                                                                                     Number of          Hours per
                                                                                                           Type of response                                                                                                                     (Column B ×
                                                                                                                                                                                                     responses          response                 Column C)

                                                                                                                       A                                                                                B                      C                     D

                                                 Plan to Minimize Waste of Natural Gas, 43 CFR 3162.3–1, Form 3160–3 ...............................                                                        2,000                          8          16,000
                                                 Request for Approval for Royalty-Free Uses On-Lease or Off-Lease, 43 CFR 3178.5, 3178.7,
                                                   3178.8, and 3178.9, Form 3160–5 ..........................................................................................                                 50                          4               200
                                                 Notification of Choice to Comply on County- or State-wide Basis, 43 CFR 3179.7(c)(3)(iii) .....                                                             200                          1               200
                                                 Request for Approval of Alternative Capture Requirement, 43 CFR 3179.8(b), Form 3160–5 ..                                                                    50                         16               800
                                                 Request for Exemption from Well Completion Requirements, 43 CFR 3179.102(c) and (d),
                                                   Form 3160–5 ............................................................................................................................                      0                        0                 0
                                                 Request for Extension of Royalty-Free Flaring During Initial Production Testing, 43 CFR
                                                   3179.103, Form 3160–5 ...........................................................................................................                         500                          2              1,000
                                                 Request for Extension of Royalty-Free Flaring During Subsequent Well Testing, 43 CFR
                                                   3179.104, Form 3160–5 ...........................................................................................................                           5                          2                10
                                                 Reporting of Venting or Flaring, 43 CFR 3179.105, Form 3160–5 ............................................                                                  250                          2               500
                                                 Notification of Functional Needs for a Pneumatic Controller, 43 CFR 3179.201(b)(1)–(3),
                                                   Form 3160–5 ............................................................................................................................                   10                           2               20
                                                 Showing that Cost of Compliance Would Cause Cessation of Production and Abandonment
                                                   of Oil Reserves, 43 CFR 3175.201(b)(4) and 3175.201(c), Form 3160–5 .............................                                                          50                           4              200
                                                 Showing in Support of Replacement of Pneumatic Controller within 3 Years, 43 CFR
                                                   3179.201(d), Form 3160–5 ......................................................................................................                           100                           1              100
                                                 Showing that a Pneumatic Diaphragm Pump was Operated on Fewer than 90 Individual
                                                   Days in the Prior Calendar Year, 43 CFR 3179.202(b)(2), Form 3160–5 ..............................                                                        100                           1              100
                                                 Notification of Functional Needs for a Pneumatic Diaphragm Pump, 43 CFR 3179.202(d),
                                                   Form 3160–5 ............................................................................................................................                  150                           1              150
                                                 Showing that Cost of Compliance Would Cause Cessation of Production and Abandonment
                                                   of Oil Reserves, 43 CFR 3175.202(f) and (g), Form 3160–5 .................................................                                                 10                          4                40
                                                 Showing in Support of Replacement of Pneumatic Diaphragm Pump within 3 Years, 43 CFR
                                                   3179.202(h), Form 3160–5 ......................................................................................................                           100                           1              100
                                                 Storage Vessels, 43 CFR 3179.203(c), Form 3160–5 ................................................................                                            50                           4              200
                                                 Downhole Well Maintenance and Liquids Unloading—Documentation and Reporting, 43 CFR
                                                   3179.204(c) and (e), Form 3160–5 ..........................................................................................                              5,000                          1             5,000
                                                 Downhole Well Maintenance and Liquids Unloading—Notification of Excessive Duration or
                                                   Volume, 43 CFR 3179.204(f), Form 3160–5 ...........................................................................                                       250                          1               250
                                                 Leak Detection—Compliance with EPA Regulations, 43 CFR 3179.301(j), Form 3160–5 ........                                                                     50                          4               200
                                                 Leak Detection—Request to Use an Alternative Monitoring Device and Protocol, 43 CFR
                                                   3179.302(c), Form 3160–5 ......................................................................................................                               5                      40                200
                                                 Leak Detection—Operator Request to Use an Alternative Leak Detection Program, 43 CFR
                                                   3179.303(b), Form 3160–5 ......................................................................................................                            20                        40                800
                                                 Leak Detection—Operator Request for Exemption Allowing Use of an Alternative Leak-Detec-
                                                   tion Program that Does Not Meet Specified 43 CFR 3179.303(d), Form 3160–5 ..................                                                              150                         20            3,000
                                                 Leak Detection—Notification of Delay in Repairing Leaks, 43 CFR 3179.304(a), Form 3160–5                                                                    100                          1              100
                                                 Leak Detection—Inspection Recordkeeping and Reporting, 43 CFR 3179.305 ........................                                                          52,000                        .25           13,000
                                                 Leak Detection—Annual Reporting of Inspections, 43 CFR 3179.305(b), Form 3160–5 ..........                                                                2,000                         20           40,000

                                                       Totals ....................................................................................................................................        63,200     ........................         82,170



                                                 National Environmental Policy Act                                          enter ‘‘RIN 1004–AE54’’ and click the                                    published in the Federal Register) that
                                                   The BLM has prepared a draft                                             ‘‘Search’’ button. Follow the                                            promulgates or is expected to lead to the
                                                 environmental assessment (EA) to                                           instructions at this Web site. The BLM                                   promulgation of a final rule or
                                                 determine whether this proposed rule                                       invites the public to review these                                       regulation, including notices of inquiry,
                                                 would have a significant impact on the                                     documents and suggests that anyone                                       advance notices of rulemaking, and
                                                 quality of the human environment                                           wishing to submit comments on the EA                                     notices of rulemaking: (1)(i) That is a
                                                 under the National Environmental                                           and FONSI should do so in accordance                                     significant regulatory action under
                                                 Policy Act of 1969 (NEPA) (42 U.S.C.                                       with the instructions contained in the                                   Executive Order 12866 or any successor
                                                 4321 et seq.). If the final EA supports                                    ‘‘Public Comment Procedures’’ section                                    order, and (ii) Is likely to have a
                                                 the issuance of a Finding of No                                            above.                                                                   significant adverse effect on the supply,
                                                 Significant Impact (FONSI) for the rule,                                                                                                            distribution, or use of energy; or (2) That
                                                                                                                            Actions Concerning Regulations That
                                                 the preparation of an environmental                                                                                                                 is designated by the Administrator of
                                                                                                                            Significantly Affect Energy Supply,
                                                 impact statement pursuant to the NEPA                                                                                                               [OIRA] as a significant energy action.’’
                                                                                                                            Distribution, or Use (Executive Order
                                                 would not be required.                                                                                                                                 The rule temporarily suspends or
                                                                                                                            13211)
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                                                   The draft EA and FONSI have been                                                                                                                  delays certain requirements in the 2016
                                                 placed in the file for the BLM’s                                              This proposed rule is not a significant                               final rule and would reduce compliance
                                                 Administrative Record for the rule at the                                  energy action under the definition in                                    costs in the short-term. The BLM
                                                 address specified in the ADDRESSES                                         Executive Order 13211. A statement of                                    determined that the 2016 final rule
                                                 section. The EA and FONSI have also                                        Energy Effects is not required.                                          would not have impacted the supply,
                                                 been posted in the docket for the rule on                                     Section 4(b) of Executive Order 13211                                 distribution, or use of energy and so the
                                                 the Federal eRulemaking Portal: https://                                   defines a ‘‘significant energy action’’ as                               suspension or delay of many of the 2016
                                                 www.regulations.gov. In the Searchbox,                                     ‘‘any action by an agency (normally                                      final rule’s requirements until January


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                                                 46474                 Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules

                                                 17, 2019, will likewise not have an                     Public lands—mineral resources;                           (b) Beginning January 17, 2019, the
                                                 impact on the supply, distribution, or                  Reporting and record keeping                           operator’s capture percentage must
                                                 use of energy. As such, we do not                       requirements; Royalty-free use; Venting.               equal:
                                                 consider the proposed rule to be a                        Dated: September 28, 2017.                              (1) For each month during the period
                                                 ‘‘significant energy action’’ as defined in                                                                    from January 17, 2019, to December 31,
                                                                                                         Katharine S. MacGregor,
                                                 Executive Order 13211.                                                                                         2020: 85 percent;
                                                                                                         Acting Assistant Secretary for Land and                   (2) For each month during the period
                                                 Clarity of This Regulation (Executive                   Minerals Management.
                                                                                                                                                                from January 1, 2021, to December 31,
                                                 Orders 12866)                                           43 CFR Chapter II                                      2023: 90 percent;
                                                    We are required by Executive Orders                                                                            (3) For each month during the period
                                                                                                           For the reasons set out in the                       from January 1, 2024, to December 31,
                                                 12866 (section 1(b)(12)), 12988 (section
                                                                                                         preamble, the Bureau of Land                           2026: 95 percent; and
                                                 3(b)(1)(B)), and 13563 (section 1(a)), and
                                                                                                         Management proposes to amend 43 CFR                       (4) For each month beginning January
                                                 by the Presidential Memorandum of
                                                                                                         parts 3160 and 3170 as follows:                        1, 2027: 98 percent.
                                                 June 1, 1988, to write all rules in plain
                                                 language. This means that each rule                                                                               (c) The term ‘‘capture percentage’’ in
                                                                                                         PART 3160—ONSHORE OIL AND GAS
                                                 must:                                                                                                          this section means the ‘‘total volume of
                                                                                                         OPERATIONS
                                                    (a) Be logically organized;                                                                                 gas captured’’ over the ‘‘relevant area’’
                                                    (b) Use the active voice to address                  ■ 1. The authority citation for part 3160              divided by the ‘‘adjusted total volume of
                                                 readers directly;                                       continues to read as follows:                          gas produced’’ over the ‘‘relevant area.’’
                                                    (c) Use common, everyday words and                                                                             (1) The term ‘‘total volume of gas
                                                 clear language rather than jargon;                        Authority: 25 U.S.C. 396d and 2107; 30               captured’’ in this section means: For
                                                    (d) Be divided into short sections and               U.S.C. 189, 306, 359, and 1751; and 43 U.S.C.
                                                                                                                                                                each month, the volume of gas sold from
                                                                                                         1732(b), 1733, and 1740.
                                                 sentences; and                                                                                                 all of the operator’s development oil
                                                    (e) Use lists and tables wherever                    ■ 2. Amend § 3162.3–1 by revising                      wells in the relevant area plus the
                                                 possible.                                               paragraph (j) introductory text to read as             volume of gas from such wells used on
                                                    If you feel that we have not met these               follows:                                               lease, unit, or communitized area in the
                                                 requirements, send us comments by one                                                                          relevant area.
                                                 of the methods listed in the ADDRESSES                  § 3162.3–1        Drilling applications and plans.
                                                                                                                                                                   (2) The term ‘‘adjusted total volume of
                                                 section. To better help the BLM revise                  *     *     *     *     *                              gas produced’’ in this section means:
                                                 the rule, your comments should be as                      (j) Beginning January 17, 2019, when                 The total volume of gas captured over
                                                 specific as possible. For example, you                  submitting an Application for Permit to                the month plus the total volume of gas
                                                 should tell us the numbers of the                       Drill an oil well, the operator must also              flared over the month from high
                                                 sections or paragraphs that you find                    submit a plan to minimize waste of                     pressure flares from all of the operator’s
                                                 unclear, which sections or sentences are                natural gas from that well. The waste                  development oil wells that are in
                                                 too long, the sections where you feel                   minimization plan must accompany, but                  production in the relevant area, minus:
                                                 lists or tables would be useful, etc.                   would not be part of, the Application for                 (i) For each month from January 17,
                                                                                                         Permit to Drill. The waste minimization                2019, to December 31, 2019: 5,400 Mcf
                                                 Authors
                                                                                                         plan must set forth a strategy for how                 times the total number of development
                                                   The principal authors of this                         the operator will comply with the                      oil wells ‘‘in production’’ in the relevant
                                                 proposed rule are: James Tichenor and                   requirements of 43 CFR subpart 3179                    area;
                                                 Michael Riches of the BLM Washington                    regarding control of waste from venting                   (ii) For each month from January 1,
                                                 Office; Sheila Mallory of the BLM New                   and flaring, and must explain how the                  2020, to December 31, 2020: 3,600 Mcf
                                                 Mexico State Office, Eric Jones of the                  operator plans to capture associated gas               times the total number of development
                                                 BLM Moab, Utah Field Office; David                      upon the start of oil production, or as                oil wells in production in the relevant
                                                 Mankiewicz of the BLM Farmington,                       soon thereafter as reasonably possible,                area;
                                                 New Mexico Field Office; and Beth                       including an explanation of why any                       (iii) For each month from January 1,
                                                 Poindexter of the BLM Dickinson, North                  delay in capture of the associated gas                 2021, to December 31, 2021: 1,800 Mcf
                                                 Dakota Field Office; assisted by Faith                  would be required. Failure to submit a                 times the total number of development
                                                 Bremner of the BLM’s Division of                        complete and adequate waste                            oil wells in production in the relevant
                                                 Regulatory Affairs and by the                           minimization plan is grounds for                       area; and
                                                 Department of the Interior’s Office of the              denying or disapproving an Application                    (iv) For each month from January 1,
                                                 Solicitor.                                              for Permit to Drill. The waste                         2022, to December 31, 2022: 1,500 Mcf
                                                 List of Subjects                                        minimization plan must include the                     times the total number of development
                                                                                                         following information:                                 oil wells in production in the relevant
                                                 43 CFR Part 3160                                        *     *     *     *     *                              area;
                                                   Administrative practice and                                                                                     (v) For each month from January 1,
                                                 procedure; Government contracts;                        PART 3170—ONSHORE OIL AND GAS                          2023, to December 31, 2024: 1,200 Mcf
                                                 Indians—lands; Mineral royalties; Oil                   PRODUCTION                                             times the total number of development
                                                 and gas exploration; Penalties; Public                                                                         oil wells in production in the relevant
                                                                                                         ■ 3. The authority citation for part 3170              area;
                                                 lands—mineral resources; Reporting
                                                                                                         continues to read as follows:                             (vi) For each month from January 1,
                                                 and recordkeeping requirements.
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                                                                                                           Authority: 25 U.S.C. 396d and 2107; 30               2025, to December 31, 2025: 900 Mcf
                                                 43 CFR Part 3170                                        U.S.C. 189, 306, 359, and 1751; and 43 U.S.C.          times the total number of development
                                                   Administrative practice and                           1732(b), 1733, and 1740.                               oil wells in production in the relevant
                                                 procedure; Flaring; Government                          ■ 4. Amend § 3179.7 by revising                        area; and
                                                 contracts; Incorporation by reference;                  paragraphs (b) and (c) to read as follows:                (vii) For each month after January 1,
                                                 Indians—lands; Mineral royalties;                                                                              2026: 750 Mcf times the total number of
                                                 Immediate assessments; Oil and gas                      § 3179.7    Gas capture requirement.                   development.
                                                 exploration; Oil and gas measurement;                   *       *     *        *      *                        *       *     *    *     *


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                                                                         Federal Register / Vol. 82, No. 192 / Thursday, October 5, 2017 / Proposed Rules                                                  46475

                                                 ■ 5. Amend § 3179.9 by revising                              (d) The operator must replace the                   the potential for VOC emissions equal to
                                                 paragraph (b)(1) introductory text to                     pneumatic controller(s) by January 17,                 or greater than 6 tpy based on the
                                                 read as follows:                                          2019, as required under paragraph (b) of               maximum average daily throughput for
                                                                                                           this section. If, however, the well or                 a 30-day period of production. The
                                                 § 3179.9 Measuring and reporting volumes                  facility that the pneumatic controller                 determination may take into account
                                                 of gas vented and flared.
                                                                                                           serves has an estimated remaining                      requirements under a legally and
                                                 *     *      *     *      *                               productive life of 3 years or less from                practically enforceable limit in an
                                                   (b) * * *                                               January 17, 2017, then the operator may                operating permit or other requirement
                                                   (1) If the operator estimates that the                  notify the BLM through a Sundry Notice                 established under a Federal, State, local
                                                 volume of gas flared from a high                          and replace the pneumatic controller no                or tribal authority that limit the VOC
                                                 pressure flare stack or manifold equals                   later than 3 years from January 17, 2017.              emissions to less than 6 tpy.
                                                 or exceeds an average of 50 Mcf per day                   *      *    *      *   *                                  (c) If a storage vessel has the potential
                                                 for the life of the flare, or the previous                ■ 10. Amend § 3179.202 by revising                     for VOC emissions equal to or greater
                                                 12 months, whichever is shorter, then,                    paragraph (h) to read as follows:                      than 6 tpy under paragraph (b) of this
                                                 beginning January 17, 2019, the operator                                                                         section, by January 17, 2019, or by
                                                 must either:                                              § 3179.202 Requirements for pneumatic                  January 17, 2020, if the operator must
                                                 *     *      *     *      *                               diaphragm pumps.                                       and will replace the storage vessel at
                                                 ■ 6. Amend § 3179.10 by revising                          *     *     *     *    *                               issue in order to comply with the
                                                 paragraph (a) to read as follows:                           (h) The operator must replace the                    requirements of this section, the
                                                                                                           pneumatic diaphragm pump(s) or route                   operator must:
                                                 § 3179.10 Determinations regarding                        the exhaust gas to capture or to a flare
                                                 royalty-free flaring.
                                                                                                                                                                  *      *      *     *    *
                                                                                                           or combustion device by January 17,                    ■ 12. Amend § 3179.204 by adding
                                                   (a) Approvals to flare royalty free,                    2019, except that if the operator will                 paragraph (i) to read as follows:
                                                 which are in effect as of January 17,                     comply with paragraph (c) of this
                                                 2017, will continue in effect until                       section by replacing the pneumatic                     § 3179.204 Downhole well maintenance
                                                 January 17, 2019.                                         diaphragm pump with a zero-emission                    and liquids unloading.
                                                 *     *    *     *     *                                  pump and the well or facility that the                 *     *     *     *    *
                                                 ■ 7. Amend § 3179.101 by adding                           pneumatic diaphragm pump serves has                      (i) The operator must comply with
                                                 paragraph (c) to read as follows:                         an estimated remaining productive life                 this section beginning January 17, 2019.
                                                                                                           of 3 years or less from January 17, 2017,              ■ 13. Amend § 3179.301 by revising
                                                 § 3179.101       Well drilling.                           the operator must notify the BLM                       paragraph (f) to read as follows:
                                                 *     *     *    *     *                                  through a Sundry Notice and replace the
                                                                                                           pneumatic diaphragm pump no later                      § 3179.301    Operator responsibility.
                                                   (c) The operator must comply with
                                                 this section beginning January 17, 2019.                  than 3 years from January 17, 2017.                    *      *    *     *    *
                                                                                                           *     *     *     *    *                                  (f) The operator must make the first
                                                 ■ 8. Amend § 3179.102 by adding                                                                                  inspection of each site:
                                                 paragraph (e) to read as follows:                         ■ 11. Amend § 3179.203 by revising
                                                                                                           paragraph (b) and paragraph (c)                           (1) By January 17, 2019, for all
                                                 § 3179.102 Well completion and related                    introductory text to read as follows:                  existing sites;
                                                 operations.                                                                                                         (2) Within 60 days of beginning
                                                 *     *     *    *     *                                  § 3179.203        Storage vessels.                     production for new sites that begin
                                                   (e) The operator must comply with                       *     *     *    *     *                               production after January 17, 2019; and
                                                 this section beginning January 17, 2019.                    (b) Beginning January 17, 2019, and                     (3) Within 60 days of the date when
                                                                                                           within 30 days after any new source of                 an existing site that was out of service
                                                 ■ 9. Amend § 3179.201 by revising
                                                                                                           production is added to the storage                     is brought back into service and re-
                                                 paragraph (d) to read as follows:
                                                                                                           vessel after January 17, 2019, the                     pressurized after January 17, 2019.
                                                 § 3179.201 Equipment requirements for                     operator must determine, record, and                   *      *    *     *    *
                                                 pneumatic controllers.                                    make available to the BLM upon                         [FR Doc. 2017–21294 Filed 10–4–17; 8:45 am]
                                                 *      *     *         *      *                           request, whether the storage vessel has                BILLING CODE 4310–84–P
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Document Created: 2017-10-05 00:53:59
Document Modified: 2017-10-05 00:53:59
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesSend your comments on this proposed rule to the BLM on or before November 6, 2017. As explained later, the BLM is also requesting that the Office of Management and Budget (OMB) extend the control number (1004-0211) for the 24 information collection activities that would continue in this proposed rule. If you wish to comment on this request, please note that such comments should be sent directly to the OMB, and that the OMB is required to make a decision concerning the collection of information contained in this proposed rule between 30 and 60 days after publication of this document in the Federal Register. Therefore, a comment to the OMB on the proposed information collection revisions is best assured of being given full consideration if the OMB receives it by November 6, 2017.
ContactCatherine Cook, Acting Division Chief, Fluid Minerals Division, 202-912-7145, or [email protected], for information regarding the substance of this proposed rule or information about the BLM's Fluid Minerals program. For questions relating to regulatory process issues, contact Faith Bremner, Regulatory Analyst, at 202-912-7441, or [email protected] Persons who use a telecommunications device for the deaf (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339, 24 hours a day, 7 days a week, to leave a message or question with the above individuals. You will receive a reply during normal business hours.
FR Citation82 FR 46458 
RIN Number1004-AE54
CFR Citation43 CFR 3160
43 CFR 3170
CFR AssociatedAdministrative Practice and Procedure; Government Contracts; Indians-Lands; Mineral Royalties; Oil and Gas Exploration; Penalties; Public Lands-Mineral Resources; Reporting and Recordkeeping Requirements and Administrative Practice and Procedure; Flaring; Government Contracts; Incorporation by Reference; Indians-Lands; Mineral Royalties; Immediate Assessments; Oil and Gas Exploration; Oil and Gas Measurement; Public Lands-Mineral Resources; Reporting and Record Keeping Requirements; Royalty-Free Use; Venting

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