[Federal Register Volume 62, Number 79 (Thursday, April 24, 1997)]
[Proposed Rules]
[Pages 19961-19966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10667]
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DEPARTMENT OF THE INTERIOR
Minerals Management Service
30 CFR Chapter II
Review of Existing Regulations
AGENCY: Minerals Management Service (MMS), Interior.
ACTION: Review of regulations; request for comment.
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SUMMARY: Since 1994, MMS has been performing annual reviews of its
significant regulations and asking the public to participate in these
reviews. The purpose of the reviews is to identify and eliminate
regulations that are obsolete, ineffective or burdensome. In addition,
the reviews are meant to identify essential regulations that should be
revised because they are either unclear, inefficient or interfere with
normal market conditions.
The purpose of this document is to: Provide the public an
opportunity to comment on MMS regulations that should be eliminated or
revised, and provide a status update of the actions MMS has taken on
comments previously received from the public in response to documents
published March 1, 1994 (59 FR 9718), March 28, 1995 (60 FR 15888), and
May 20, 1996 (61 FR 25160).
DATES: Written comments must be received by June 23, 1997.
[[Page 19962]]
ADDRESSES: Mail written comments to Department of the Interior;
Minerals Management Service; Mail Stop 4230; 1849 C Street NW.,
Washington, DC 20240; Attention: Bettine Montgomery, MMS Regulatory
Coordinator, Policy and Management Improvement.
FOR FURTHER INFORMATION CONTACT: Bettine Montgomery, Policy and
Management Improvement, telephone (202) 208-3976; Fax (202) 208-4891.
SUPPLEMENTARY INFORMATION: MMS began a review of its regulations in
early 1994 under the directives contained in the President's Executive
Order 12866. The Executive Order calls for periodic regulatory reviews
to ensure that all significant regulations are efficient and effective,
impose the least possible burden upon the public, and are tailored no
broader than necessary to meet the agency's objectives and Presidential
priorities.
We invited the public to participate in the regulatory review. The
invitation was sent out via different media, namely a Federal Register
document dated March 1, 1994 (59 FR 9718), MMS and independent
publications, and public speeches by MMS officials during that time.
MMS received approximately 40 public comments which were almost
equally divided between its Royalty Management and Offshore Minerals
Management Programs. We acknowledged the comments in a July 15, 1994,
document (59 FR 36108) and set forth our planned actions to address the
comments, along with an estimated timetable for these actions.
In the March 28, 1995, document (60 FR 15888) and May 20, 1996,
document (61 FR 25160), MMS: (a) asked for further public comments on
its regulations, and (b) provided a status update of actions it had
taken on the major public comments received to date. We received 10
responses from the March 28, 1995, document and 5 responses from the
May 20, 1996, document. A number of the commentators expressed
appreciation for our streamlining efforts and responsiveness to
suggestions from our regulated customers.
This document updates the MMS planned actions and related
timetables on the major comments received to date. It also solicits
additional comments from the public concerning regulations that should
be either eliminated or revised. Since some of the public responses
received in response to prior documents contained comments on very
specific and detailed parts of the regulations, this document does not
address every one received. For information on any comment submitted
which is not addressed in this document, please contact Mrs. Montgomery
at the number and location stated in the forward sections of this
document.
MMS regulations are found at Title 30 in the Code of Federal
Regulations. Parts 201 through 243 contain regulations applicable to
MMS' Royalty Management Program; Parts 250 through 282 are applicable
to MMS' Offshore Minerals Management; and Part 290 is applicable to
Administrative Appeals.
Status Report
The following is a status report by program area on the comments
MMS has received, to date, on its regulations.
A. Offshore Minerals Management (OMM) Program
OMM is currently reviewing the following 15 sections of OMM
regulations, and also revising a lease document.
1. Regulations Applicable to Production in Deepwater (30 CFR Part 250,
Subpart H, Production)
Comments Received--(a) ``Revise current regulations to provide for
approval of extended flaring periods under certain situations (e.g.,
deepwater prospects, well tests, etc.) and clarify criteria for flaring
or venting small amounts of gas,''
(b) ``Revise requirements associated with subsea installations * *
*,'' etc.
Action Taken or Planned--MMS' workgroup on deepwater development
issued a final report which was approved by management in May 1995. The
report recommended that MMS evaluate and regulate deepwater production
activities through a ``total systems'' approach. Under this
recommendation, MMS issued a Notice to Lessees on August 9, 1996,
requiring lessees to submit a Deepwater Operations Plan for all
deepwater development projects, and projects using subsea production
technology. This plan will provide information demonstrating that the
lessee will develop a deepwater project in an acceptable manner. The
guidelines for these plans were developed by MMS in conjunction with
industry. This requirement was effective August 19, 1996.
As a followup issue, MMS and industry also worked together on a
Notice to Lessees on resource conservation. This notice provided
guidance on the information that the lessee must submit regarding
resource conservation for deepwater or subsea development projects. The
effective date of the notice was October 1, 1996.
Timetable--Completed.
2. Regulations Applicable to Blowout Preventer (BOP) Testing and
Maintenance Requirements (30 CFR 250.56 and 57)
Comments Received--``Revise BOP testing regulations to allow for
less frequent and shorter tests. Allow 14 day BOP test interval vs.
current 7 day * * *.''
Action Taken or Planned--On January 31, 1997, MMS issued a Notice
to Lessees allowing lessees to begin testing BOP equipment on intervals
up to 14 days. This action revised the longstanding requirement for
weekly testing of BOP's. MMS made the decision to allow the extended
testing timeframe based on a recently completed study of BOP
performance by an engineering consulting firm. The study concluded that
no statistical difference in failure rates existed between BOP's tested
every 7 days and those tested between the 8- to 14-day interval. The
new testing timeframe applies to drilling, sidetrack, and completion
activities, but not to workover activities since they were not examined
in the performance study.
Timetable--MMS has already begun the rulemaking process to
promulgate the testing timeframe requirements into the regulations and
plans to publish a proposed rule by mid-1997.
3. Regulations Governing Safety and Pollution Prevention Equipment
(SPPE) (30 CFR Subpart H)
Comments Received--(a) ``Reduce associated administrative burden on
lessees and operators by eliminating unnecessary recordkeeping
requirements (i.e., inventory lists, paperwork notifications, etc.).''
(b) ``Revise regulations governing Safety Valves to increase time
between test and allowable leakage rates.''
Action Taken or Planned--(a) On December 18, 1996 (61 FR 66639), we
published a proposed rule to revise the regulations governing SPPE.
This proposed rule addressed the concerns raised regarding
recordkeeping. The rule establishes the requirement for all lessees to
install quality assurance certified SPPE in wells after April 1, 1998.
For wells that have noncertified SPPE, the lessee must replace it with
certified SPPE when the equipment: (1) Fails during normal operations
or testing; or (2) is removed from service for any other reason.
(b) We are planning a research study in cooperation with industry
on the surface safety valves and subsurface
[[Page 19963]]
safety valves. This study will address the comment regarding safety
valves.
Timetable--(a) MMS will publish the final rule in the Federal
Register by December 1997. (b) The research study on the safety valves
will begin in the summer of 1997.
4. Regulations Governing Conservation of Resources and Diligence (30
CFR 250 Subpart A, General, and Subpart K, Oil and Gas Production
Rates)
Comments Received--(a) ``Revise Suspension of Production approval/
lease holding criteria * * *,'' (b) ``Revise Determination of Well
Producibility to make wireline testing and/or mud logging analysis
optional * * *,'' (c) ``revise current regulations to provide for
approval of extended flaring periods * * *,'' (d) ``Relax restrictions
on commingling reservoirs in a common wellbore * * *,'' (e) ``Allow
flexibility in the methods of testing subsea wells. * * *,'' (f) ``MMS
[should] determine and specify allowable volumes of liquid hydrocarbons
that lessees could burn without requesting approval.'' (g) ``consider
comments from the 11/30/95 MMS sponsored workshop to formulate policy
for granting SOP (suspension of production) approvals based on host
capacity delays, non-contiguous unitization, and market conditions/
economic viability.'' (h) ``Expand definition of lease holding activity
to include 3D seismic work.''
Action Taken or Planned--For (a) above, MMS published a final rule
on October 30, 1996 (61 FR 55885), to extend the period for holding a
lease beyond its primary term from 90 to 180 days. For (b), and (g)
above, MMS is currently rewriting Subpart A and Subpart K in plain
English. This effort will also include any changes needed to the
regulations. We will take into consideration industry's ideas on
changes, including the comments from the 11/30/95 workshop. For (d)
above, we issued a Notice to Lessees on April 24, 1995, that allowed
greater flexibility in dealing with commingling issues. For (e) above,
MMS will not change the regulations. Current regulations allow
operators to request that different testing methods be allowed when
conventional testing is impractical. For (c) and (f) above, MMS
addressed the flaring of gas and burning of liquid hydrocarbons in a
final rule that was published on May 20, 1996 (61 FR 25147). For (h)
above, MMS sent a Letter to Lessees on July 25, 1996, which addressed
this comment.
Timetable--Proposed rules rewriting Subparts A and K will be
published by December 1997.
5. Regulations Regarding Construction and Removal of Platforms and
Structures (30 CFR 250 Subpart I, Platforms and Structures)
Comments Received--(a) ``Modify platform design wave return period
calculation by placing a cap of 100 years on the field life calculation
* * *,'' (b) ``Adopt API RP2A (20th edition) Section 14, Surveys, in
its entirety * * *,'' (c) ``Revise site clearance requirements * * *,''
(d) ``Revise requirements for placing protective domes over well stubs
* * *,'' etc.
Action Taken or Planned--For (a), (c), and (d) above, MMS is
reviewing the draft proceedings for the International Workshop on
Offshore Lease Abandonment and Platform Disposal: Technology,
Regulation, and Environmental Effects, held on April 14-17, 1996. There
is a varying amount of research in progress at present to be followed
by rulemaking. For (b) above, we have adopted API RP2A (19th edition)
and are working with industry and the American Petroleum Institute
(API) on changes to the 20th edition. After the document is revised, we
will decide whether to incorporate it into our rules.
Timetable--For (a), (c), and (d) above, the Proceedings will be
published by summer 1997. For (b) above, Ongoing.
6. Regulations Applicable to Directional Surveys (30 CFR 250.51)
Comments Received--``Revise directional survey requirements to
allow a composite measurement-while-drilling directional survey to be
acceptable * * *.''
Action Taken or Planned--MMS is rewriting the regulations governing
Oil and Gas Drilling Operations, found in Subpart D, in plain English.
The rule is also being rewritten to keep pace with current technology.
Timetable--We plan to publish a proposed rule by December 1997.
7. Regulations Applicable to Daily Pollution Inspection Requirements
(30 CFR 250.41)
Comments Received--``Revise current requirements for daily
pollution inspection of unmanned production facilities * * *.''
Action Taken or Planned--On February 15, 1996, MMS issued a Notice
to Lessees regarding the pollution inspection frequency for unmanned
facilities. The current regulations allow operators to request a waiver
from the daily inspection of unmanned facilities. The Notice to Lessees
reviewed the criteria MMS uses in determining whether or not to grant
the waiver.
Timetable--MMS has no plans to change the regulations in this area.
8. Regulations Applicable to Production Safety System Training (30 CFR
250.214)
Comments Received --(a) ``Revise training regulations to reduce the
associated burden on operators by modifying requirements (e.g.,
frequency, refresher requirements, structure, etc.) and allow expanded
training delivery modes.'' (b) ``* * * training regulations (well-
control) are not clearly stated and often not relevant * * *.''
Action Taken or Planned--MMS rewrote the entire section (subpart O)
of training regulations in a plain English format and published a final
rule in the Federal Register on February 5, 1997 (62 FR 5320). This
revised rule addresses the concerns in comments (a) and (b) above. In
addition, we are considering developing a performance based training
program which would rely on industry to design its training needs. We
would monitor the program through tests and audits.
Timetable--Completed. Performance based training program still in
discussion stage.
9. Regulations Applicable to Pipelines and Pipeline Rights-of-Way (30
CFR 250 Subpart J)
Comments Received--Revise regulations to avoid duplication of
requirements between the Department of the Interior and the Department
of Transportation.
Action Taken or Planned--MMS has worked with the Department of
Transportation and other interested parties to develop a new memorandum
of understanding between the Department of the Interior and Department
of Transportation. The memorandum of understanding became effective on
December 10, 1996, and was published on February 14, 1997 (62 FR 7037).
MMS will clarify rules and remove redundant requirements.
Timetable--The agencies will begin new rulemaking to devise
compatible regulations during 1997.
10. Safety System Design and Installation (30 CFR 250.122)
Comments Received--``Revise approval process associated with
production safety system installations and routine modifications to
allow periodic updates recognizing compliance with API RP 75 (1st
Edition) * * *.''
Action Taken or Planned--We believe this comment was made in
connection with the Safety and Environmental Program (SEMP) initiative.
On July 18, 1996 (61 FR 37493), MMS published a notice recognizing the
efforts of many
[[Page 19964]]
offshore operators to adopt the SEMP initiative, as embodied in API RP
75 (1st Edition). In this notice we noted, however, that a lack of
strong evidence showing implementation of the SEMP plans prevented us
from declaring the industry's voluntary efforts to be successful at
that point. We are continuing to promote widespread adoption of SEMP
and are cooperating in an industrywide survey on SEMP implementation.
Timetable--Ongoing. The survey results will be available by summer
1997.
11. Model Unit Agreement (30 CFR 250.194)
Comments Received--``In several instances within the Model Unit
Agreement language, the defined terms are not used when it seems
appropriate. We recommend that the defined terms be used to avoid
confusion when reviewing the agreements.''
Action Taken or Planned--On July 3, 1996 (61 FR 28525), MMS
published a final rule which removed the Model Unit Agreement from the
Code of Federal Regulations. We have no plans to revise the Agreement
at this time. If there are any problems with the Agreement, send
specific comments for us to consider.
Timetable--Will consider specific comments when received.
12. Revision of the Process for Incorporating Codes and Standards by
Reference (30 CFR 250.1)
Comments Received--``* * * review individual documents when changed
and recommend adoption or rejection to reduce confusion as to the
standard that should be used.''
Action Taken or Planned--We agree with the intent of this
suggestion. We will investigate it from a legal and administrative
standpoint to see if it can be done.
Timetable--Ongoing.
13. Shallow Hazards Requirements (NTL No. 83-3)
Comments Received--``* * * revise NTL No. 83-3 which relates to
shallow hazards requirements. Industry has requested that MMS allow use
of navigational positioning equipment in lieu of buoying pipelines.''
Action Taken or Planned--We are revising NTL No. 83-3 and are in
the process of developing guidance for navigational positioning
equipment technology. MMS realizes the problem that this Navigational
Positioning equipment is not accurate unless it is calibrated
frequently.
Timetable--Ongoing.
14. Allocation Meter Facility Requirements (30 CFR 250.180(e))
Comments Received--``We suggest that the regulations be revised to
recognize the use of liquid turbine meters and the inability to
physically make adjustments to these types of meters, and to clarify
that samples should be taken proportional to flow to reflect present
industry practice.''
Action Taken or Planned--MMS published a proposed rule, ``Oil and
Gas Production Measurement, Surface Commingling, and Security,'' on
February 26, 1997 (62 FR 8665), that addresses this comment.
Timetable--The comment period on this proposed rule closes May 27.
15. Approval and Reporting Processes for Well-Completion Operations (30
CFR 250.83)
Comments Received--``* * * a recompletion operation requires that a
Well Summary report MMS-125 be filed within 30 days. Much of this data
is repetitious of data previously submitted on the Sundry Notice MMS-
124. The process could be changed to provide only data that has
changed.''
Action Taken or Planned--We will study this process to decide
whether or not to change reporting requirements through rulemaking.
Timetable--Ongoing.
16. Other MMS/Offshore Minerals Management Actions
MMS plans to review its Offshore lease document (MMS-2005) which
has not been revised since 1986. In addition to revising the language
into ``plain English,'' we will consider changes to the lease
provisions to reflect current policies and to address any issues that
may arise during this review. We welcome any comments on specific
changes that we should consider.
B. Royalty Management Program (RMP)
RMP is reviewing regulations in the following 11 subject areas.
1. Statute of Limitations and Record Retention
Comments Received
--``Statute of limitations is unclear.''
--``Establish a reciprocal 5-year statute of limitations from the date
an obligation becomes due.''
--``Absence of a record retention program creates some confusion.
Regulations should require record retention to coincide with the 5-year
statute of limitations.''
Action Taken or Planned--The Federal Oil and Gas Royalty
Simplification and Fairness Act (Act) was signed into law on August 13,
1996. The Act contains language to implement a 7-year statute of
limitations for MMS processes. We are determining what changes to make
to current accounting, compliance, and enforcement processes to comply
with the new requirements. After our review, we will be changing
processes, developing implementation plans, and making regulatory
changes.
Timetable--Ongoing.
2. Interest on Overpayments
Comment Received--``Interest accrual should be equitable between
the Agency and industry.''
Action Taken or Planned--The Act provides for the payment of
interest on overpayments for oil and gas leases on Federal lands. MMS
is designing system changes to implement the requirements of the Act
and preparing regulations to be published as proposed rules.
Timetable--Ongoing.
3. Gas Valuation
Comments Received
--(a) ``Define gross proceeds more equitably and clearly in this ever
changing gas marketing environment.''
--(b) ``It is important that the Federal Gas Valuation Rule final rule
not discriminate against producers which are affiliated with marketing
companies and are party to non-arms-length contracts.''
--(c) ``Extend the elimination of processing and transportation
allowance forms to oil.''
--(d) ``* * * commends the MMS on their use of negotiated rulemaking
process to address the valuation of gas. Rule should result in
administrative cost savings for all parties.''
--(e) ``If the Takes vs. Entitlements policy stays in effect, MMS
should strictly enforce reporting on actual quantities taken for all
industry participants.''
--(f) ``Eliminate Transportation and Processing Allowance Forms for
Indians.''
Action Taken or Planned--For (c) above, Revisions of the Valuation
Regulations Governing Allowances was published in the Federal Register
as a final rule on February 12, 1996 (61 FR 5448). This rule eliminated
most allowance forms filing requirements for oil, gas, and coal
produced from Federal leases.
For (a) above, on July 31, 1996 (61 FR 39931), MMS published a
proposed rule clarifying what deductions may be taken from gross
proceeds for the costs of transportation under Federal Energy
Regulatory Commission (FERC) Order
[[Page 19965]]
No. 636. We plan to publish the final rule by fall 1997.
For (a), (b), (d), and (e) above, the Federal Gas Valuation
proposed rule was published in the Federal Register on November 6, 1995
(60 FR 56007), and the comment period closed on February 5, 1996. The
proposed rule represents the consensus of the Federal Gas Valuation
Negotiated Rulemaking Committee with representation from MMS, industry,
and the States. The proposed rule would provide alternatives to using
gross proceeds as a basis for gas valuation, such as published natural
gas index prices.
MMS decided to reopen the public comment period and announced this
in a document published on May 21, 1996 (61 FR 25421). In this
document, we requested comments on five options which were developed
after evaluating the comments received on the proposed rule. MMS is
presently reviewing the comments on the options and determining how to
proceed.
For (f) above, a proposed rule developed by the Indian Gas
Valuation Negotiated Rulemaking Committee was published on September
23, 1996 (61 FR 49894). This rule addressed the valuation for royalty
purposes of natural gas produced from Indian leases. The rule proposes
to eliminate the transportation and allowance reporting forms for gas
from Indian leases. The proposed rule would add a methodology to
calculate the major portion value and an alternative methodology for
dual accounting as required by Indian lease terms. The proposed
rulemaking would simplify and add certainty to the valuation of
production from Indian leases.
On March 6, 1997 (62 FR 10247), MMS published a document reopening
the public comment period until April 4, 1997, and reconvening the
Indian Gas Valuation Negotiated Rulemaking Committee on March 26, 1997.
Timetable--Ongoing.
4. Reporting Procedures and Threshold
Comments Received
--``Eliminate or streamline MMS Form 2014 reporting.''
--``Report prior period adjustments on a `net' basis.''
--``Change estimated payment from lease level to payor level.''
--``Assess interest at the payor level--for the Indian leases on the
basis of each Indian Tribe.''
--``Eliminate Payor Information Form (PIF) Filings. This is an
unnecessary and costly reporting requirement.''
--``MMS should modify the regulations and system tolerances/thresholds
so that only those exceptions that are cost beneficial for MMS to
pursue are generated.''
--``Set thresholds or tolerances for regulations to save costs to both
MMS and industry. (Example: Invoices are sent for less than $1.00.)''
--``MMS should not implement regulations until its systems are
programmed to handle the new regulations.''
--``* * * the prompt implementation of the recommendations of the
Royalty Policy Committee Audit and Royalty Reporting and Production
Accounting Subcommittees will achieve those simplification and
streamlining goals * * *.''
Action Taken or Planned--MMS has revised its billing thresholds and
assessments policy to reduce administrative costs, and we continue to
review these issues through the Royalty Policy Committee, an advisory
group to the Secretary of the Interior, which was formed in September
1995. The Committee's membership includes representatives from States,
tribes, allottee associations, industry trade groups, and other
agencies. At their initial meeting, a Royalty Reporting and Production
Accounting Subcommittee was established.
The Subcommittee had its first meeting in November 1995 and agreed
to review all royalty and production reporting forms and policies. To
assure all areas were addressed, four workgroups were formed to review
the Payor Information Form, royalty reporting, oil and gas production
reporting, and solids production reporting.
The preliminary recommendations from the workgroups cover
streamlining of all reporting forms; reducing or eliminating redundant
data collection; changing estimates; and reviewing thresholds for
allowance and interest billings.
Timetable--The Subcommittee recommendations were finalized and
forwarded to the full committee for their review and approval in June
1996. The recommendations are under review for possible implementation
by MMS. In particular, we will pursue recommendations that can be
implemented in the short term without significant cost.
5. Refunds Due to Industry Which Are Controlled by Section 10 of the
Outer Continental Shelf Lands Act
Comments Received--``Section 10 refund requirements should be
eliminated. The refund process used for onshore properties should be
established for offshore properties.''
--``* * * we would urge the MMS to facilitate elimination of the
Section 10 recoupment procedures in its entirety. The current practice
is administratively burdensome and not cost effective for the industry
or MMS.''
--``Eliminate documentation requirements for refund requests over $250
M and/or increase this threshold to $500 M; raise the refund request
limit to $5 M. Exempt pure accounting adjustments for items such as
production date adjustments and incorrect AID (Accounting
Identification) numbers; exempt unit revisions because these revisions
are often made more than 2 years after the date of production;
establish a time limit on MMS for review of a refund request to
expedite the process; and overpayments on OCS properties should be
allowed to be offset against any OCS underpayment.''
Action Taken or Planned--The Act repeals the Section 10 refund
procedures of the Outer Continental Shelf Lands Act. On November 25,
1996, we mailed a Dear Payor letter with guidelines on refund
procedures. We are presently developing a proposed rule implementing
the new refund procedures.
Timetable--We plan to publish a proposed rule by summer of 1997.
6. Interest Assessments
Comments Received--``A de minimis provision should be established
for the assessment of interest.''
--``* * * MMS should enhance their existing interest assessment system
to allow for the offsetting of prior period adjustments made on the MMS
Form 2014 before calculating applicable interest.''
Action Taken or Planned--The Act not only provides for the payment
of interest on overpayments for oil and gas leases on Federal lands,
but allows industry to calculate the correct interest assessment. Also,
the Act allows interest that has accrued on overpayments to be applied
to reduce underpayments. MMS is designing system changes to implement
the requirements of the Act and preparing regulations to be published
as proposed rules.
Timetable--Ongoing.
7. Electronic Data Exchange
Comments Received--``* * * MMS (should) continue their ongoing
effort to exchange data by electronic means rather than hard copy
thereby enabling the industry to adjust the data elements to integrate
with each company's systems.''
[[Page 19966]]
Action Taken or Planned--We continue to encourage the exchange of
data electronically. Our Reporter and Payor Training sessions stress
the benefits of electronic reporting and provide reporters and payors
with options for reporting by electronic data interchange, diskette, or
magnetic tape. We also publicize electronic reporting on the MMS/
Royalty Management Program internet website.
Timetable--Reporter and Payor Training sessions are planned for the
summer of 1997, and Royalty Management Program's redesigned website
went online in March 1997.
8. Parameters for Identifying Improper MMS Form 2014 Adjustments
Comments Received--``The MMS currently inquires as to any variances
between any Form 2014 adjustments and its original Form 2014 entry that
exceed $1.00, which is an insignificant amount. It is suggested that
the MMS's review should be relevant to the amount of the adjustment
such as a given percentage.''
Action Taken or Planned--At this time, MMS does not plan to make
changes in this procedure. We need to ensure accuracy and integrity in
the accounting systems, and retain precise records for the auditors.
9. Publish Final Rules Expeditiously
Comments Received--``* * * primary recommendation is the
expeditious completion and publication of pending final rules, for
example, the proposed rules on administrative offset and limitations on
credit adjustments, and the proposed rule on payor liability. * * *
Certainly, publication of the final federal (and Indian) gas valuation
rule should be facilitated to the maximum extent possible.''
--``* * * it would be extremely beneficial for MMS to publish its
proposed rule implementing the Federal Energy Regulatory Commission's
(FERC) Order 636 as soon as possible because of its impact on and
relationship to the federal gas valuation rule.''
Action Taken or Planned--We are in the process of reviewing the
comments and determining how to proceed on the two valuation rules--Gas
Valuation of Production from Federal Leases and Gas Valuation of
Production from Indian Leases.
We are also in the process of reviewing the comments and preparing
a final rule to implement FERC Order 636.
New language in the Act will cause a number of changes in the Payor
Liability rule and the Administrative Offset and Limitations on Credit
Adjustments rule. We are in the process of studying the effects of the
Act on these rules before we publish them as final rules.
Timetable--We plan to come to a decision on the two valuation rules
by the end of 1997. The FERC Order 636 rule will be published as a
final rule by fall of 1997. Work on the other two rules is ongoing.
10. The Appeals Process
Comments Received--``Current appeals process is too long.''
Action Taken or Planned--The Act imposed a 33-month time frame for
the Department of the Interior to decide appeals involving royalties on
Federal oil and gas leases. This deadline does not apply to appeals on
royalties involving Indian leases and Federal leases for minerals other
than oil and gas.
On October 28, 1996 (61 FR 55607), MMS published a proposed rule
establishing a 16-month deadline for MMS to decide all appeals to the
Director, including Indian leases and appeals for royalties on minerals
other than oil and gas. After MMS' decision, the appellants can further
appeal to the Interior Board of Land Appeals. The comment period for
this proposed rule ended on March 27.
The Royalty Policy Committee established a subcommittee to study
the appeals process. The report they presented to the Committee on
March 21 was accepted with only minor changes. This report proposes
even further changes to the appeals process. The Department and MMS
will be studying the proposals to determine what areas we will
incorporate in our final rulemaking.
Timetable--We plan to finalize the Administrative Appeals Process
rule by early 1998.
11. Other MMS/Royalty Management Program Regulatory Actions
The Act expanded the authorities and responsibilities that the
Secretary of the Interior may delegate to the States. To implement
this, we are planning to publish a proposed rule in April 1997 on
Delegation of Royalty Management Functions to the States.
We invite you to comment on our existing regulations and also the
actions we have taken in response to comments and recently enacted
legislation. And, we invite you stay further informed on many of the
topics discussed in this status report by visiting the MMS Internet
Website at www.mms.gov.
Dated: April 17, 1997.
Cynthia Quarterman,
Director.
[FR Doc. 97-10667 Filed 4-23-97; 8:45 am]
BILLING CODE 4310-MR-P
