[Federal Register Volume 62, Number 191 (Thursday, October 2, 1997)]
[Proposed Rules]
[Pages 51614-51618]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26073]
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DEPARTMENT OF THE INTERIOR
Minerals Management Service
30 CFR Part 250
RIN 1010-AC39
Oil and Gas and Sulphur Operations in the Outer Continental Shelf
AGENCY: Minerals Management Service (MMS), Interior.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement a provision of the December
10, 1996, Memorandum of Understanding (MOU) between the Department of
the Interior (DOI) and the Department of Transportation (DOT) Regarding
Outer Continental Shelf (OCS) Pipelines. Under this MOU, the two
departments jointly regulate OCS pipelines. As specified in the MOU,
MMS regulations would pertain to all OCS oil or gas pipelines located
upstream of the points at which operating responsibility for the
pipelines transfer from a producing operator to a transporting
operator.
DATES: MMS will consider all comments we receive by December 1, 1997.
We will begin reviewing comments then and may not fully consider
comments we receive after December 1, 1997.
ADDRESSES: Mail or hand-carry comments to the Department of the
Interior; Minerals Management Service; Mail Stop 4020; 381 Elden
Street; Herndon, Virginia 20170-4817; Attention: Rules Processing Team.
FOR FURTHER INFORMATION CONTACT: Carl W. Anderson, Operations Analysis
Branch, at (703) 787-1608; e-mail Carl__Anderson@mms.gov.
[[Page 51615]]
SUPPLEMENTARY INFORMATION:
Background
MMS, through delegations from the Secretary of the Interior, has
authority to promulgate and enforce regulations for the promotion of
safe operations, protection of the environment, and conservation of the
natural resources of the OCS, as that area is defined in the OCS Lands
Act (43 U.S.C. 1331 et seq.). The scope of this authority includes the
pipeline transportation of mineral production and the approval and
granting of rights-of-way for the construction of pipelines and
associated facilities on the OCS. MMS also administers the following
laws as they relate to OCS pipelines: (1) the Federal Oil and Gas
Royalty Management Act of 1982 (FOGRMA) for oil and gas production
measurement, and (2) the Federal Water Pollution Control Act, as
amended by the Oil Pollution Act of 1990 (OPA) and implemented under
Executive Order 12777. (Under a February 3, 1994, MOU to implement OPA,
DOI, DOT, and the U.S. Environmental Protection Agency divided their
respective responsibilities for oil spill prevention and response
according to the definition of ``coast line'' contained in the
Submerged Lands Act, 43 U.S.C. 1301(c) (59 FR 9494-9495).) Nothing in
this proposed regulation will affect MMS' authority under either FOGRMA
or OPA.
Under an MOU between DOI and DOT dated May 6, 1976, MMS regulated
oil and gas pipelines located upstream of the outlet flange of each
facility where hydrocarbons were first produced or where produced
hydrocarbons were first separated, dehydrated or otherwise processed,
whichever facility was farther upstream. The Departments agreed to
change this regulatory boundary with the signing of the December 10,
1996, MOU. The 1996 MOU was the result of negotiations that began in
the summer of 1993 and included a high degree of participation from the
regulated industry. MMS and DOT's Research and Special Programs
Administration (RSPA) solicited public comments on a draft MOU through
a joint MMS and DOT Federal Register Notice of May 24, 1995 (60 FR
27546-27549). The Notice announced a public meeting at the MMS Gulf of
Mexico OCS regional office in New Orleans, Louisiana, on August 1,
1995, to discuss the proposal. Over 70 people attended the meeting
which generated over 100 pages of transcribed comments from natural gas
and petroleum trade organizations, natural gas and oil exploration and
production companies, transmission companies, offshore construction
companies, and industry consultants. A transcript of this meeting is
available through the agency representative listed in the For Further
Information section of this notice. Twenty-three individuals and
organizations submitted written comments on the Federal Register
notice.
In May 1996, MMS and RSPA met with a joint industry workgroup
representing OCS oil and natural gas producers and transmission
pipeline operators led by the American Petroleum Institute. (The
Interstate Natural Gas Association of America also participated on the
workgroup.) The industry workgroup proposed that the agencies rely upon
individual operators of production and transportation facilities to
identify the boundaries of their respective facilities, since producers
and transporters can best make such decisions based on the operating
characteristics peculiar to each facility. The two agencies agreed with
the industry proposal. Under the proposal, MMS would have primary
regulatory responsibility for producer-operated facilities and
pipelines on the OCS, while RSPA would have primary regulatory
responsibility for transporter-operated pipelines and associated
pumping or compressor facilities. Producing operators are companies
which are engaged in the extraction and processing of hydrocarbons on
the OCS. Transporting operators are companies which are engaged in the
transportation of those hydrocarbons.
The Purpose of This Proposed Rule
The purpose of this proposed rule is to require OCS producing and
transporting operators to designate the specific points on their
pipelines where operating responsibility transfers from a producing
operator to an adjoining transporting operator. The rule would amend 30
CFR Part 250, Subpart J--Pipelines and Pipeline Rights-of-Way, section
250.150, ``General Requirements,'' Sec. 250.151, ``Definitions,'' and
Sec. 250.157, ``Applications.'' Operators would have until 60 days
after the date the rule becomes final to identify the specific points
at which operating responsibility transfers. In most cases, the
specific transfer points would be easily identifiable either because of
specific valves or flanges where the adjoining operations connect, or
because of differences in paint colors that adjoining operators use to
protect and maintain pipeline coatings or surfaces. For those instances
in which the transfer points would not be identifiable by a durable
marking, each operator would have until 180 days after the final rule
becomes effective to mark the transfer points. (The 180-day period
would give operators time to mark the transfer points during customary
maintenance routines.) The operator would be required to durably mark
each transfer point directly on the pipeline (usually at a valve or
flange). If it were not practicable to durably mark a transfer point,
and the transfer point were located above water, then the operator
would be required to depict the transfer point on a schematic located
on the facility. Some transfer points could be located subsea. In such
cases, the operators also would be required to identify the transfer
points on schematics which would be provided to MMS upon request.
For those instances in which adjoining operators could not agree on
a transfer point, MMS and RSPA's Office of Pipeline Safety (OPS) would
make a joint determination of the boundary.
MMS and OPS could, through their enforcement agencies and in
consultation with the affected parties, agree to exceptions to the
general boundary description (operations transfer point) on a facility-
by-facility or area-by-area basis. Operators also could petition, by
letter, MMS and OPS for exceptions to the general boundary description.
For existing lease term pipelines, the current designated operator
of the associated lease(s) would have the operating responsibility for
the pipeline(s). For right-of-way pipelines, MMS would assume that the
current right-of-way grant holder had the operating responsibility,
unless the right-of-way grant holder informed MMS otherwise within 60
days after the effective date of this rule. (There are up to 160
designated operators of leases and 70 operators of transportation
pipelines on the OCS.)
Applications for new right-of-way pipelines would be required to
include an identification of the operator and a boundary demarcation
point on the flow schematic submitted in accordance with 30 CFR
250.157(a)(2).
A pipeline segment originally operated under DOT regulations but
later transferred under MMS regulatory responsibility as a result of
this proposed rulemaking could continue to be operated under DOT
requirements, unless the MMS Regional Supervisor determined, based on
an MMS safety assessment, that a pipeline segment or component is
unsafe. The Regional Supervisor would then notify the operator that MMS
regulations apply to that segment or component.
[[Page 51616]]
Under 30 CFR 250.3, the MMS Supervisor for Field Operations may
approve alternative techniques, procedures, equipment, or activities an
operator proposed if such techniques, procedures, equipment, or
activities afford a degree of protection, safety, or performance equal
to or better than that intended to be achieved by MMS regulations.
Various laws enacted since 1976 have contributed to ambiguity
concerning MMS' and OPS' respective responsibilities concerning the
approximately 20,000 miles of active OCS oil and gas pipelines and
production facilities that were regulated under the May 6, 1976, MOU.
The most notable legislative changes included the 1978 OCS Lands Act
Amendments; the Hazardous Liquid Pipeline Safety Act of 1979; the OPA
of 1990; and the Pipeline Safety Act amendments of 1990, 1992, 1995,
and 1996.
The December 1996 MOU would re-define MMS-OPS regulatory boundary
from the OCS facility where hydrocarbons are first produced, separated,
dehydrated, or otherwise processed to the point at which operating
responsibility for the pipeline transfers from a producing operator to
a transporting operator. The MOU would place, to the greatest extent
practicable, producer-operated pipelines under DOI regulation and
transporter-operated pipelines under DOT regulation.
In its 1994 report ``Improving the Safety of Marine Pipelines,''
the National Academy of Sciences Marine Board recommended: ``To make
better use of inspection resources and help integrate enforcement of
MMS and OPS marine pipeline safety regulations, the committee
recommends that enforcement of OPS regulations offshore be performed by
MMS, through an interagency agreement or redefinition of the memorandum
of understanding that defines the jurisdictional division between OPS
and MMS * * *.'' In response to this recommendation, the 1996 MOU
provides for DOI to act as an agent for the DOT in identifying and
reporting potential violations of DOT regulations at platforms on the
OCS. As an agent, DOI may inspect all DOT-regulated pipeline facilities
on production platforms during DOI inspections. DOI may also perform
coordinated DOI/DOT inspections of pipeline facilities on DOT-regulated
platforms. The inspections may include reviewing any operating or
maintenance records or reports that are located at the inspected OCS
platform facility.
Executive Order (E.O.) 12866
This is not a significant rule under E.O. 12866 and does not
require review by the Office of Management and Budget (OMB). An
analysis of the proposed rule indicates that the direct costs to
industry for the entire proposed rule total approximately $360,000 for
the first year, and that in succeeding years, the cost of the rule to
industry would not likely exceed $255,000.
Regulatory Flexibility Act
DOI has determined that this rule will not have a significant
economic effect on a substantial number of small entities. While this
rule would affect a substantial number of ``small entities,'' the
economic effects of the rule would not be significant. There are many
companies on the OCS that are ``small businesses'' as defined by the
Small Business Administration. However, the technology necessary for
conducting offshore oil and gas exploration and development activities
is very complex and costly, and most entities that engage in offshore
activities have considerable financial resources disproportionate to
their numbers of employees and well beyond what would normally be
considered ``small business.''
DOI's analysis of the economic impacts indicates that direct costs
to industry for the entire proposed rule total approximately $360,000
for the first year, and in succeeding years, the cost of the rule to
industry would not likely exceed $255,000 annually. These annual costs
would not persist for long, because all pipelines converted to MMS
regulation eventually would come into compliance with MMS safety valve
requirements. There are up to 160 designated operators of leases and 70
operators of transportation pipelines on the OCS (both large and small
operators), and the economic impacts on the oil and gas production and
transportation companies directly affected would be minor. Not all
operators affected would be small businesses, but much of their
modification costs may be paid to offshore service contractors who may
be classified as small businesses. Operators having to install new
automatic shutdown valves as a result of transferring under MMS
regulations would sustain the greatest economic impact from this rule.
It is impractical, however, to determine in advance which operators
would be affected, because the operators themselves will determine the
transfer points between producers and transporters.
To the extent that this rule might eventually cause some of the
relatively larger OCS operators to make modifications to their
pipelines, it may have a minor beneficial effect of increasing demand
for the services and equipment of smaller service companies and
manufacturers. This rule would not impose any new restrictions on small
pipeline service companies or manufacturers, nor will it cause their
business practices to change.
Paperwork Reduction Act
This proposed rule contains a collection of information which we
have submitted to the OMB for review and approval under section 3507(d)
of the Paperwork Reduction Act of 1995. As part of our continuing
effort to reduce paperwork and respondent burdens, MMS invites the
public and other Federal agencies to comment on any aspect of the
reporting burden imposed by this proposed rule. Submit your comments to
the Office of Information and Regulatory Affairs, OMB; Attention: Desk
Officer for the Department of the Interior (OMB control number 1010-
XXXX); Washington, DC 20503. Send a copy of your comments to the Rules
Processing Team; Mail Stop 4020; 381 Elden Street; Herndon, Virginia
20170-4817. You may obtain a copy of the supporting statement for the
collection of information by contacting the Bureau's Information
Collection Clearance Officer at (202) 208-7744.
The Paperwork Reduction Act of 1995 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 OMB
control number. OMB has up to 60 days to approve or disapprove this
collection of information but may respond after 30 days from receipt of
our request. Therefore, your comments are best assured of being
considered by OMB if OMB receives them within 30 days of publication of
this notice. However, MMS will consider all comments received during
the comment period for this notice of proposed rulemaking.
The title of this collection of information is ``Implementation of
Memorandum of Understanding Between the Departments of the Interior and
Transportation.''
The collection of information in the proposed rule consists of (1)
reviewing existing pipeline maps, conferring and agreeing with
operators of adjoining transportation pipeline segments concerning the
locations of specific transfer points, and either marking directly on
each pipeline or depicting on a schematic the specific point on each
pipeline where operating responsibility transfers from the
[[Page 51617]]
producing operator to a transporting operator; (2) identifying the
operator of right-of-way pipelines if different from the grant holder;
and (3) allowing for petitions for exceptions to general operations
transfer points. As stated above under the ``Intent of the Proposed
Rule'' section, specific transfer points will be easily identifiable in
most cases, either because of specific valves or flanges where the
adjoining operations connect, or because of differences in paint that
adjoining operators use to protect and maintain pipeline coatings or
surfaces.
The requirement to respond is mandatory. MMS uses the information
to determine the demarcation where pipelines are subject to MMS design,
construction, operation, and maintenance requirements, as distinguished
from similar OPS requirements.
The regulated community consists of up to 160 Federal OCS oil and
gas lease designated operators and 70 transportation pipeline
operators. There are approximately 3,000 points where operating
responsibility for pipelines transfers from a producer to a
transporter. MMS assumes that about 2,400 (representing 80 percent) of
these transfer points are already marked. Therefore, this rulemaking
would require a one-time identification and marking of about 600 points
where operating responsibility for pipelines transfers from a producer
to a transporter. For the 2,400 transfer points that are clearly
marked, there would be no information burden. The 600 unmarked transfer
points, on the other hand, would require widely-varying times for
marking depending on whether a painted line or a schematic was used to
mark the transfer point.
The public reporting burden for this proposed information
collection requirement is estimated to average 5 hours per response.
This includes the time for reviewing instructions, searching existing
data sources, gathering and maintaining the data needed, and completing
the required marking. The average annualized burden over a 3-year
period would be 1,051 hours.
MMS will summarize written responses to this notice and address
them in the final rule. All comments will become a matter of public
record.
1. MMS specifically solicits comments on the following questions:
(a) Is the proposed collection of information necessary for the
proper performance of MMS's functions, and will it be useful?
(b) Are the estimates of the burden hours of the proposed
collection reasonable?
(c) Do you have any suggestions that would enhance the quality,
clarity, or usefulness of the information to be collected?
(d) Is there a way to minimize the information collection burden on
those who are to respond, including through the use of appropriate
automated electronic, mechanical, or other forms of information
technology?
2. In addition, the Paperwork Reduction Act of 1995 requires
agencies to estimate the total annual cost burden to respondents or
record keepers resulting from the collection of information. MMS needs
your comments on this item. Your response should split the cost
estimate into two components: (a) Total capital and startup cost, and
(b) annual operation, maintenance, and purchase of services. Your
estimates should consider the costs to generate, maintain, and disclose
or provide the information. You should describe the methods you use to
estimate major cost factors, including system and technology
acquisition, expected useful life of capital equipment, discount
rate(s), and the period over which you incur costs. Capital and startup
costs include, among other items, computers and software you purchase
to prepare for collecting information; monitoring, sampling, drilling,
and testing equipment; and record storage facilities. Generally, your
estimates should not include equipment or services purchased: before
October 1, 1995; to comply with requirements not associated with the
information collection; for reasons other than to provide information
or keep records for the Government; or as part of customary and usual
business or private practices.
Takings Implication Assessment
DOI certifies that the proposed rule does not represent a
governmental action capable of interference with constitutionally
protected property rights. Thus, a Takings Implication Assessment need
not be prepared pursuant to E.O. 12630, Governmental Actions and
Interference with Constitutionally Protected Property Rights.
Unfunded Mandates Reform Act of 1995
This rule does not contain any unfunded mandates to State, local,
or tribal governments, nor would it impose significant regulatory costs
on the private sector. Anticipated costs to the private sector will be
far below the $100 million threshold for any year that was established
by the Unfunded Mandates Reform Act.
E.O. 12988
DOI has certified to OMB that this proposed regulation meets the
applicable civil justice reform standards provided in sections 3(a) and
3(b)(2) of E.O. 12988.
National Environmental Policy Act
Under 516 DM 6, Appendix 10.4, ``issuance and/or modification of
regulations'' is considered a categorically excluded action causing no
significant effects on the environment and, therefore, does not require
preparation of an environmental assessment or impact statement. DOI
completed a Categorical Exclusion Review for this action on April 22,
1997, and concluded: ``The proposed rulemaking does not represent an
exception to the established criteria for categorical exclusion.''
List of Subjects in 30 CFR Part 250
Continental shelf, Environmental impact statements, Environmental
protection, Government contracts, Incorporation by reference,
Investigations, Mineral royalties, Oil and gas development and
production, Oil and gas exploration, Oil and gas reserves, Penalties,
Pipelines, Public lands--mineral resources, Public lands--rights-of-
way, Reporting and recordkeeping requirements, Sulphur development and
production, Sulphur exploration, Surety bonds.
Dated: September 22, 1997.
Sylvia V. Baca,
Assistant Secretary, Land and Minerals Management.
For the reasons stated in the preamble, Minerals Management Service
proposes to amend 30 CFR part 250 as follows:
PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER
CONTINENTAL SHELF
1. The authority citation for part 250 continues to read as
follows:
Authority: 43 U.S.C. 1331, et seq.
2. In Sec. 250.150, paragraph (c) is revised to read as follows:
Sec. 250.150 General requirements.
* * * * *
(c)(1) Department of the Interior (DOI) pipelines, as defined in
Sec. 250.151 of this subpart, must meet the requirements for design,
construction, operation, maintenance, and abandonment contained in
Secs. 250.150 through 250.158 of this subpart.
[[Page 51618]]
(2) A pipeline right-of-way grant holder must identify in writing
to the Regional Supervisor the operator of any pipeline located on its
right-of-way if the operator is different from the right-of-way grant
holder.
(3) A producing operator must identify on all existing pipelines
located on its lease or right-of-way the specific points at which
operating responsibility transfers to a transporting operator.
(i) If the transfer points are not identifiable by a durable
marking, each producing operator must mark all above-water transfer
points by (insert date 180 days after the final rule is published). The
operators of new pipelines also must durably mark all above-water
transfer points directly on each pipeline.
(ii) If it is not practical to durably mark a transfer point, and
the transfer point is located above water, then the operator must
depict the transfer point on a schematic located on the facility.
(iii) If a transfer point is located subsea, then the operator also
must identify the transfer point on a schematic. The operator must
provide the schematic to MMS upon request.
(iv) If a producing and an adjoining transporting operator cannot
agree on a transfer point by the date specified in paragraph (c)(3)(i)
of this section, the MMS Regional Supervisor and the Department of
Transportation (DOT) Office of Pipeline Safety (OPS) Regional Director
may jointly determine the transfer point.
(4) Operators may petition, by letter, the MMS Regional Supervisor
for exceptions to the general operations transfer point description on
a facility-by-facility or an area-by-area basis. The Regional
Supervisor, in consultation with the OPS Regional Director and affected
parties, may grant such exceptions.
(5) Pipeline segments designed and constructed under DOT
regulations before (INSERT THE EFFECTIVE DATE OF THE FINAL RULE), may
continue to operate under DOT design and construction requirements
until significant modifications or repairs are made to those segments.
After (INSERT THE EFFECTIVE DATE OF THE FINAL RULE), MMS operational
and maintenance requirements will apply to those segments.
* * * * *
3. In Sec. 250.151, a definition for the term ``DOI pipelines'' is
added in alphabetical order as follows:
Sec. 250.151 Definitions.
* * * * *
DOI pipelines are those pipelines extending upstream from each
point on the OCS at which operating responsibility transfers from a
producing operator to a transporting operator.
* * * * *
4. Section 250.157 is amended by revising the title, revising
paragraph (a) introductory text, and adding a new sentence at the end
of paragraph (a)(2) to read as follows:
Sec. 250.157 What to include in applications.
(a) Applications to install a lease term pipeline or for a pipeline
right-of-way grant must be submitted in quadruplicate to the Regional
Supervisor. Right-of-way grant applications must include an
identification of the operator of the pipeline. Each application must
include the following:
* * * * *
(2) * * * The schematic must indicate the point on the OCS at which
operating responsibility transfers from a producing operator to a
transporting operator.
* * * * *
[FR Doc. 97-26073 Filed 10-1-97; 8:45 am]
BILLING CODE 4310-MR-P
