03-17422. Oil and Gas and Sulphur Operations in the Outer Continental Shelf-Procedures for Dealing With Sustained Casing Pressure

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Delay of final rulemaking.

SUMMARY:

The Minerals Management Service (MMS) published a Notice of Proposed Rulemaking (NPR) in the Federal Register titled “Procedures for Dealing With Sustained Casing Pressure” on November 9, 2001. Based on comments received, the MMS is delaying development of a final rule until after publication of a “Recommended Practice” document now being developed by the American Petroleum Institute (API). The document will provide procedures for dealing safely with sustained casing pressure in wells. MMS believes that incorporation of this “Recommended Practice” document into MMS regulations will help ensure environmentally and operationally safe operations on the Outer Continental Shelf (OCS).

FOR FURTHER INFORMATION CONTACT:

For regulatory information concerning this announcement: Larry Ake, Engineering and Operations Division, at [phone]. For technical information concerning the current MMS sustained casing pressure program: Gulf of Mexico OCS Region: Jim Grant, Technical Assessment and Operations Support Section, at [phone]. Pacific OCS Region: Nabil Masri, Chief, Office of Facilities, Safety and Enforcement, at [phone].

SUPPLEMENTARY INFORMATION:

Sustained casing pressure (SCP) is pressure between the casing and the well's tubing, or between strings of casing, that rebuilds after being bled down. If left uncontrolled, this SCP can represent an ongoing safety hazard and can cause harm or damage to human life, the marine and coastal environment, and property.

The MMS received 18 letters commenting on the NPR. Among these letters were comments from industry organizations that proposed a different method of regulating sustained casing pressure on the OCS.

In their comments, the offshore oil and gas industry, through the Offshore Operator's Committee and the API, proposed working with MMS on the development of a “Recommended Practice” (RP) document for dealing with sustained casing pressure. During the development of this document, MMS and industry would jointly contract and administer a risk assessment of SCP. This risk assessment would help determine when SCP represents a significant risk and help ensure that regulatory requirements are applied when necessary. This is a goal that will help both industry and the MMS while ensuring protection of life, property, and the environment.

These industry comments made a persuasive argument that an independent risk assessment, coupled with the development of the industry RP, would achieve the goals of safe and environmentally sound operations, while not being unduly burdensome on industry or government regulators. Consequently, MMS has decided to delay the development of a final rule and wait until the RP is developed and adopted by industry. MMS may then incorporate all, or portions of the RP, into the regulations.

A revised notice of proposed rulemaking will be published when the RP is available for public review. MMS will re-open the comment period at that time prior to development of a final rule that incorporates the RP into MMS regulations.

The RP is scheduled to be published in late 2004. Until the RP is incorporated into regulations, MMS will maintain its current SCP program.

List of Subjects in 30 CFR 250

• Continental shelf
• Environmental impact statements
• Environmental protection
• Government contracts
• 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

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

Dated: July 2, 2003.

E.P. Danenberger,

Chief, Engineering and Operations Division.