Revision of Valuation Regulations Governing Oil and Gas Transportation and Processing Allowances, and Coal Washing and Transportation Allowances

Background

The Minerals Management Service (MMS) is making corrections to a final rule published in the Federal Register on February 12, 1996 (61 FR 5447). This final rule, effective March 1, 1996, amended 30 CFR part 206-PRODUCT VALUATION regulations for oil and gas transportation and processing allowances for production from Federal leases. It also amended the regulations for coal washing and transportation allowances for production from Federal leases. The final rule did not change the existing regulations applicable to Indian leases.

Need for Correction

As published, the final regulations in 30 CFR part 206 contain errors which may prove to be misleading and need to be clarified.

List of Subjects in 30 CFR Part 206

Coal, Continental Shelf, Geothermal energy, Government contracts, Indian lands, Mineral royalties, Natural gas, Petroleum, Public lands-- mineral resources, Reporting and recordkeeping requirements.

Accordingly, 30 CFR part 206 is corrected by making the following correcting amendments:

PART 206--PRODUCT VALUATION

1. The authority citation for part 206 continues to read as follows:

Authority: 5 U.S.C. 301 et seq.; 25 U.S.C. 396 et seq., 396a et seq., 2101 et seq.; 30 U.S.C. 181 et seq., 351 et seq., 1001 et seq., 1701 et seq.; 31 U.S.C. 9701.; 43 U.S.C. 1301 et seq., 1331 et seq., and 1801 et seq.

Subpart B--Indian Oil

Sec. 206.51 Definitions [Corrected]

2. In Sec. 206.51, definition of gross proceeds, remove the word ``terminating'' in the third sentence and add, in its place, the word ``terminaling.'' 3. In Sec. 206.51, definition of tar sands, remove the word ``either,'' the comma after the word ``temperature,'' and the phrase ``or contains quarrying.'' End the sentence with a period.

Sec. 206.53 [Corrected]

4. In Sec. 206.53(c), remove the word ``proved'' in the second sentence and add, in its place, the word ``approved.''

Subpart D--Federal Gas

Sec. 206.151 [Corrected]

5. In Sec. 206.151, definition of gross proceeds, remove the next- to-last word in the first sentence, ``oil,'' and add, in its place, the words ``gas, residue gas, and gas plant products.'' Also, remove the third sentence.

Sec. 206.156 [Corrected]

6. In Sec. 206.156(d), remove the word ``oil'' in the last sentence, and add, in its place, the words ``unprocessed gas, residue gas, and gas plant products.''

Sec. 206.158 [Corrected]

7. In Sec. 206.158(e), remove the word ``transportation'' in the second sentence and add, in its place, the word ``processing.'' Also remove the word ``oil'' in the second sentence and add, in its place, the words ``gas plant products.'' 8. In Sec. 206.159 paragraph (a)(1)(i), remove the word ``transportation'' in the last sentence and add, in its place, the word ``processing.'' In paragraph (e)(2), remove the word ``transporting'' and add, in its place, the word ``processing.'' 9. In the last section in Subpart D, Sec. 206.106, correct the section number to read ``206.160.''

Subpart E--Indian Gas

Sec. 206.172 [Corrected]

10. In Sec. 206.172(h), remove both instances of the words ``pursuant to'' and add, in their place, the word ``under.''

Sec. 206.173 [Corrected]

11. In Sec. 206.173(a)(2), remove the word ``section'' immediately before the words ``of this part'' and add, in its place, ``Sec. 206.52.''

Sec. 206.174 [Corrected]

12. In Sec. 206.174(d)(2), remove the reference ``202.171(c)'' in the first sentence, and add, in its place, ``202.151(b) and (c).''

Sec. 206.176 [Corrected]

13. In Sec. 206.176(c)(3), remove the last sentence and add, in its place, the sentence ``Under no circumstances will the value for royalty purposes be reduced to zero.''

Sec. 206.177 [Corrected]

14. In Sec. 206.177 paragraph (b)(3)(ii), first sentence, remove the letter ``(i)'' after the word ``paragraph'' and add, in its place, the words ``(b)(3)(i) of this section.'' In paragraph (d)(1), first sentence, remove the word ``processing,'' and add, in its place, the word ``transportation.''

Subpart F--Federal Coal

Sec. 206.251 [Corrected]

15. In Sec. 206.251, definition of like-quality coal, add the word ``that'' before the word ``has.''

Sec. 206.258 [Corrected]

16. In Sec. 206.258(a), remove the second sentence and add, in its place, the sentence ``Under no circumstances will the authorized washing allowance and the transportation allowance reduce the value for royalty purposes to zero.''

Sec. 206.259 [Corrected]

17. In Sec. 206.259(c)(2)(ii), second sentence, remove the word ``processing'' and add, in its place, the word ``washing.'' 18. In Sec. 206.261, revise paragraph (b) to read as follows:

Sec. 206.261 Transportation allowances--general.

* * * * * (b) Under no circumstances will the authorized washing allowance and the transportation allowance reduce the value for royalty purposes to zero. * * * * * 19. In Sec. 206.262, remove reserved paragraph (c)(2)(iv), redesignate paragraph (c)(2)(v) as paragraph (c)(2)(iv), add paragraphs (d)(2) and

(d)(3), and revise paragraph (e)(2). The added and revised text reads as follows:

Sec. 206.262 Determination of transportation allowances.

* * * * * (d) * * * (2) If a lessee erroneously reports a transportation allowance which results in an underpayment of royalties, interest shall be paid on the amount of that underpayment. (3) Interest required to be paid by this section shall be determined in accordance with 30 CFR 218.202. (e) * * * (2) The lessee must submit a corrected Form MMS-2014 to reflect actual costs, together with any payments, in accordance with instructions provided by MMS. * * * * *

Sec. 206.263 [Corrected]

20. In Sec. 206.263(b), remove the words ``pursuant to'' and add, in its place, the word ``under.'' Also, remove the word ``in'' and add, in its place, the word ``is.''

Sec. 206.264 [Corrected]

21. In Sec. 206.264, remove the first word ``In'' and add, in its place the word ``If.''

Subpart J--Indian Coal

Sec. 206.451 [Corrected]

22. In Sec. 206.451, definition of like-quality coal, add the word ``that'' before the word ``has.'' 23. In Sec. 206.457, revise the last sentence of paragraph (a) to read as follows:

Sec. 206.457 Washing allowances--general.

(a) * * * Under no circumstances will the authorized washing allowance and the transportation allowance reduce the value for royalty purposes to zero. * * * * * 24. In Sec. 206.460 revise paragraph (b) to read as follows:

Sec. 206.460 Transportation allowances--general.

* * * * * (b) Under no circumstances will the authorized washing allowance and the transportation allowance reduce the value for royalty purposes to zero. * * * * *

Sec. 206.461 [Corrected]

25. In Sec. 206.461(e)(1), last sentence, add the word ``entitled'' before the word ``to.''

Sec. 206.462 [Corrected]

26. In Sec. 206.462 paragraph (b), remove the word ``in'' and add, in its place, the word ``is.'' In paragraph (c), remove the section number ``206.251'' and add, in its place, ``206.451.''

Sec. 206.463 [Corrected]

27. In Sec. 206.463, remove the first word ``In'' and add, in its place, the word ``If.''

Sec. 206.464 [Corrected]

28. In Sec. 206.464(a), remove the section number ``206.465'' in the sentence and add, in its place, ``206.456.''

Dated: August 3, 1999. Lucy Querques Denett, Associate Director for Royalty Management. [FR Doc. 99-20470 Filed 8-9-99; 8:45 am] BILLING CODE 4310-MR-P