00-30694. Oil and Gas and Sulphur Operations in the Outer Continental Shelf-Update of Documents Incorporated by Reference-API Specification 14A, Tenth Edition

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Final rule.

SUMMARY:

MMS is updating one document incorporated by reference in regulations governing oil and gas and sulphur operations in the Outer Continental Shelf (OCS). The new edition of this document incorporated by reference will ensure that lessees use the best available and safest technologies while operating in the OCS. The updated document, issued by the American Petroleum Institute (API), is API Specification 14A, Tenth Edition, November 2000, ISO 10432:1999, Petroleum and natural gas industries—Downhole equipment—Subsurface safety valve equipment, Stock No. G14A09.

DATES:

This rule is effective January 8, 2001. The incorporation by reference of publications listed in the regulation is approved by the Director of the Federal Register as of January 8, 2001.

FOR FURTHER INFORMATION CONTACT:

Fred Gray, Operations Analysis Branch, at [phone].

SUPPLEMENTARY INFORMATION:

We use standards, specifications, and recommended practices developed by standard-setting organizations and the oil and gas industry for establishing requirements for activities in the OCS. This practice, known as incorporation by reference, allows us to incorporate the provisions of technical standards into the regulations without increasing the volume of the Code of Federal Regulations (CFR). The legal effect of incorporation by reference is that the material is treated as if it was published in the Federal Register. This material, like any other properly issued regulation, then has the force and effect of law. We hold operators/lessees accountable for complying with the documents incorporated by reference in our regulations. The regulations found at 1 CFR part 51 govern how MMS and other Federal agencies incorporate various documents by reference. Agencies can only incorporate by reference through publication in the Federal Register. Agencies must also gain approval from the Director of the Federal Register for each publication incorporated by reference. Incorporation by reference of a document or publication is limited to the specific edition or specific edition and supplement or addendum cited in the regulations.

The International Organization for Standardization (ISO) is a worldwide federation of national standards bodies (ISO member bodies). Founded in the mid-1940's, ISO is a non-profit agency based in Geneva, Switzerland, whose purpose is to promote the development of international standards and related activities to facilitate the global exchange of goods and services. The American National Standards Institute (ANSI) is the official United States member body to ISO.

The work of preparing international standards is normally carried out through an ISO technical committee (TC). Each member body interested in a subject for which a TC has been established has the right to be represented on that committee. ANSI relies on various United States trade and industry associations, such as the API, for support on industry-specific standards. This standard was developed by ISO/TC 67, “Materials, equipment and offshore structures for petroleum and natural gas industries.” API has been appointed by ANSI to administer the US ISO/TC 67 delegation, known as the US Technical Advisory Group (US TAG). MMS has been an active participant in the US TAG since August 1998.

This second edition of the international standard cancels and replaces the first edition (ISO 10432:1993) and includes the changes in the similar API standard, API specification 14A, Ninth Edition, 1994, and its supplement dated December 15, 1997. ISO 10432:1999 was released as a Final Draft International Standard (FDIS) on June 3, 1999. Voting to advance the FDIS to a full international standard occurred on August 3, 1999, and the standard was published as an international standard in November 1999.

ISO permits a national adoption of its international standards with or without the inclusion of regional-specific annexes to account for regional or local conditions. The API procedures to effect the adoption of this international standard with a regional annex included a balloting and comment period to ensure consensus among users, manufacturers, regulatory agencies, and other interested parties. API balloting of the international standard with U.S. annexes, including an annex addressing the API quality specification and an independent test agency, occurred on June 9, 2000, and the API version of the international standard was published in October 2000.

This standard was formulated to provide the minimum acceptable requirements for subsurface safety valve (SSSV) equipment—the SSSV is a downhole safety device used to shut off flow of oil and gas in the event of an emergency. MMS views this important piece of equipment as the last opportunity to secure the well and/or prevent pollution of the environment. The standard covers SSSVs, safety valve locks, safety valve landing nipples, and all components that establish tolerances and/or clearances that may affect performance or interchangeability of the SSSV equipment.

We currently incorporate by reference the ninth edition (July 1994) of API specification 14A, without Supplement 1. Until now, we have not included API Specification 14A, Supplement 1, in the documents incorporated by reference in our regulations. Among other things, API Specification 14A, Supplement 1, deleted a 3-year requalification test requirement for SSSVs.

We have been involved in a series of meetings and discussions with oil and gas operating companies, representatives of oil and gas associations, equipment manufacturers, quality assurance auditors, independent third-party testing and research facilities, and MMS offshore inspectors to consider the relative merits of the 3-year requalification test requirement. We specifically requested public comment on the potential impacts of deleting the 3-year requalification testing requirement for SSSVs in the Notice of Proposed Rulemaking (65 FR 9232) published in the Federal Register on February 24, 2000. Comments were also sought on the suitability of including an international standard among the documents incorporated by reference in our regulations.

In response to our request for public comment on the 3-year requalification test requirement, we received five comments supportive of deleting the 3-year requalification test requirement and two comments that did not support deletion of the 3-year requalification test requirement. Comments were received from three oil and gas associations, three equipment manufacturers, and one test agency. We have considered all the comments received in our analysis, and have determined that the newly issued API version of the international standard, which does not include a 3-year requalification test requirement, should be incorporated into the MMS regulations. Comments were also generally in favor of using the API standard in lieu of the international standard since the API standard contained the regionally specific annexes appropriate for OCS use.

Procedural Matters

This is a very simple rule to update one document previously incorporated by reference. The addition of the new document, API Specification 14A, Tenth Edition, ISO 10432:1999, Petroleum and natural gas industries—Downhole equipment—Subsurface safety valve equipment, will not have a significant effect on any offshore lessee/operator (small or large). One entity, which serves as the only independent test agency for initial design verification testing and 3-year requalification testing, will be negatively affected by the deletion of the 3-year requalification test requirement. Four U.S. manufacturers, with six U.S. facilities manufacturing SSSVs, will benefit from the elimination of costs associated with the 3-year requalification test requirement.

Regulatory Planning and Review (Executive Order 12866)

This document is not a significant rule and is not subject to review by the Office of Management and Budget under Executive Order 12866.

(1) This rule will not have an effect of $100 million or more on the economy. It will not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.

The rule would have no significant economic impact because the document does not contain any significant revisions that will cause lessees or operators to change their business practices. The document will not require the retrofitting of any facilities.

(2) This rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency.

(3) This rule does not alter the budgetary effects or entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients.

(4) This rule does not raise novel legal or policy issues.

Regulatory Flexibility Act (RF Act)

The Department certifies that this document will not have a significant economic effect on a substantial number of small entities under the RF Act (5 U.S.C. 601 et seq.). The Small Business Administration (SBA) defines a small business as having:

• Annual revenues of $5 million or less for exploration service and field service companies.
• Fewer than 500 employees for drilling companies and for companies that extract oil, gas, or natural gas liquids.

Incorporating the new document into MMS regulations would allow SSSVs with design verification approval to be manufactured and placed into service without the need for a requalification test every 3 years. Thus, incorporating the new document will not impose new costs on the offshore oil and gas industry but rather may reduce costs to the industry in that manufacturers of SSSVs will not incur the costs of a requalification test every 3 years.

Incorporating the new document will also not impose new costs on the manufacturers of the offshore equipment, as previously stated. There are four U.S. companies that manufacture SSSVs for service on the OCS, none of whom could be classified as a small entity, who will benefit from cost savings attributable to the deletion of the 3-year requalification test requirement.

The test agency that will be negatively affected by the deletion of the 3-year requalification test requirement is an independent, nonprofit, applied research and development organization. The test agency has recently reported annual revenues in excess of $300 million and employment of over 2500 staff. The test agency does not qualify as a small entity.

The Department also determined that the indirect effects of this rule on small entities that provide other support functions for offshore activities are insignificant (in effect zero).

Your comments are important. The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established to receive comments from small business about Federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities and rate each agency's responsiveness to small business. If you wish to comment on the enforcement actions of MMS, call toll-free [phone].

Small Business Regulatory Enforcement Fairness Act (SBREFA)

This rule is not a major rule under 5 U.S.C. 804(2), SBREFA. This rule:

(a) Does not have an annual effect on the economy of $100 million or more. The proposed rule will not cause any significant costs to lessees or operators. The only costs will be the purchase of the new document and revisions to some operating procedures. The revisions to operating procedures will actually result in significant costs savings, in that manufacturers of SSSVs will not incur the costs of a requalification test every 3 years.

(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.

(c) Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises.

Federalism (Executive Order 13132)

According to Executive Order 13132, this rule does not have Federalism implications. The rule does not substantially and directly affect the relationship between the Federal and State governments because it concerns the manufacturing requirements for specific equipment used in offshore oil and gas wells. The rule only affects manufacturers and users of such equipment. This rule does not impose costs on States or localities, as it only affects manufacturers and users of specific equipment used in offshore oil and gas wells.

Takings Implication Assessment (Executive Order 12630)

According to Executive Order 12630, this rule does not have significant Takings Implications. MMS determined this rule does not represent a governmental action capable of interference with constitutionally protected property rights. Thus, a Takings Implications Assessment is not required under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

Civil Justice Reform (Executive Order 12988)

According to Executive Order 12988, the Office of the Solicitor has determined that this rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order.

National Environmental Policy Act (NEPA) of 1969

This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the NEPA is not required.

Paperwork Reduction Act of 1995

There are no information collection requirements associated with this rule.

Unfunded Mandates Reform Act (UMRA) of 1995

This rule does not impose an unfunded mandate on State, local, and tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by the UMRA (2 U.S.C. 1531 et seq.) is not required.

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: November 14, 2000.

Sylvia Baca,

Assistant Secretary, Land and Minerals Management.,

For the reasons stated in the preamble, the Minerals Management Service amends 30 CFR part 250 as follows:

PART 250—OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER CONTINENTAL SHELF

1. The authority citation for 30 CFR part 250 continues to read as follows:

Authority: 43 U.S.C. 1331, et seq.

2. In § 250.198, in the table in paragraph (e), the entry for “API Spec 14A” is revised to read as follows:

§ 250.198

Documents incorporated by reference.

* * * * *

(e) * * *

Title of documents	Incorporated by reference at
*         *         *         *         *         *         *
API Spec 14A, Tenth Edition, November 2000, ISO10432:1999, Petroleum and Natural Gas Industries—Downhole Equipment—Subsurface Safety Valve Equipment, API Stock No. G14A09	§ 250.806(a)(3).
*         *         *         *         *          *          *

3. In § 250.806, the last sentence in paragraph (a)(3) is revised and new paragraph (a)(4) is added to read as follows:

§ 250.806

Safety and pollution prevention equipment quality assurance requirements.

(a) * * *

(3) * * * All SSSVs must meet the technical specifications of API Specification 14A.

(4) For information on all standards mentioned in this section, see § 250.198.

* * * * *