05-16854. Oil, Gas, and Sulphur Operations and Leasing in the Outer Continental Shelf (OCS)-Cost Recovery

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Final rule.

SUMMARY:

MMS is changing some existing fees and implementing several new fees to offset MMS's costs of performing certain services relating to its minerals programs.

EFFECTIVE DATE:

This regulation is effective as of September 26, 2005.

FOR FURTHER INFORMATION CONTACT:

Angela Mazzullo, Offshore Minerals Management (OMM) Budget Office at [phone].

SUPPLEMENTARY INFORMATION:

Background

Legal Authority and Policy Guidance: The Independent Offices Appropriation Act of 1952 (IOAA), 31 U.S.C. 9701, is a general law applicable Government-wide, that provides authority to MMS to recover the costs of providing services to the non-federal sector. It requires implementation through rulemaking. There are several policy documents that provide guidance on the process of charging applicants for service costs.

These policy documents are found in the Office of Management and Budget (OMB) Circular A-25, “User Charges,” and the Department of the Interior (DOI) Departmental Manual (DM), 330 DM 1.3A and 6.4, “Cost Recovery” and “User Charges.” The general policy that governs charges for services provided states that a charge “will be assessed against each identifiable recipient for special benefits derived from federal activities beyond those received by the general public” (OMB Circular A-25). The DOI Manual mirrors this policy (330 DM 1.3 A.). Certain activities may be exempted from these fees under certain conditions set out at 330 DM 1.3A and 6.4.4.

Cost Recovery Definition: In this rulemaking, cost recovery means reimbursement to MMS for its costs of performing a service by charging a fee to the identifiable applicant/beneficiary of the service. Further guidance is provided by Solicitor's Opinion M-36987, “BLM's Authority to Recover Costs of Mineral Document Processing” (December 5, 1996). The DOI Office of Inspector General issued reports in 1988 and 1995 addressing BLM's cost recovery responsibilities.

Discussion of Comments Received

MMS published a proposed rule to revise some existing fees and implement several new fees in the Federal Register on March 15, 2005. The comment period for the proposed rule closed on April 14, 2005. MMS received 23 sets of comments on the proposed rulemaking on 14 different issues. Respondents included: Anadarko, BP, Beacon Exploration & Production, Chevron Texaco, the Domestic Petroleum Council (DPC), EOG Resources, Exxon Mobil, the Independent Petroleum Association of America (IPAA), the International Association of Drilling Contractors (IADC), the International Association of Geophysical Contractors (IAGC), Marathon Oil, NCX Company, the National Ocean Industries Association (NOIA), the Natural Gas Supply Association (NGSA), Newfield Exploration Company, the Offshore Operators Committee (OOC), Shell Exploration & Production Company (Shell), Spinnaker Exploration, Success Energy, the U.S. Oil & Gas Association (USOGA), Waring & Associates, and WJP. These respondents raised a number of important issues that are addressed immediately below.

Issue No. 1: The comment period should be extended.

MMS received seven requests to extend the comment period beyond 30 days on the proposed rule. MMS considers this rule to be fairly straightforward and not exceptionally complex, and the fees are not significant in terms of potential economic impact. Therefore, MMS considers thirty days to be sufficient time for comment.

Issue No. 2: The implementation of the fees in this rule will discourage exploration activity on the OCS, particularly by small businesses.

MMS received five comments on this issue. MMS disagrees with the comments. The current classification of a small business by the Small Business Administration (SBA) is a company with fewer than 500 employees. Over 70 percent of companies operating on the OCS meet that criterion. Most of these companies are financially sound and payment of cost recovery fees will not affect plans for exploratory drilling. In addition, the proposed fees represent a small percentage increase in operating costs when compared to the cost of drilling a well. For example, the proposed fees range from $150-$10,700 while well drilling costs range from $5 million-$23 million.

Issue No. 3: The fees being implemented are too high. Can more information be provided as to how the fees were calculated?

MMS received seven comments on this issue. Because this rule is implementing cost recovery authority, the fees were set at what it currently costs MMS to perform these services. The following example provides greater detail of how the costs were calculated.

The Suspension of Operations/Suspension of Production (SOO/SOP) request was broken down into five sub-processes, also shown in the table below with the associated employee's grade, time, and labor dollars.

Sub-process	Employee's grade/step	Hours spent on task	Labor dollars
Review application.	13/3	2	$74
Perform necessary engineering, geological and/or geophysical assessment	13/3, 13/6	13	490
Attend meetings and discussions (internal and with industry)	14/5, 13/6, 13/3	6	242
Draft/review/discuss/final decision letter distribution	14/5, 13/3, 5/8	6	200
Follow-up monitoring of activity schedule deadlines	13/3	4	149
Subtotal			1,155

The labor dollars for the SOO/SOP request total $1,155. Given that this example was for the Gulf of Mexico Region (GOMR) only, the actual average benefit rate of 23.26 percent for that Region was applied, bringing the cost to $1,424. The benefit rate includes the Federal Government's share of health insurance, life insurance, retirement, and social security and Medicare. To arrive at the final fee, the bureau-wide indirect cost rate of 21.5 percent is applied, for a new total of $1,730. As explained in the preamble of the proposed rule, the indirect cost rate includes costs such as rent, equipment, telephone service, etc. This same breakdown into sub-processes was done for the other two MMS Regions with a weighted average applied to establish the fee at $1,800.

Since the same process was used to calculate all fees in this rule, and inclusion of all calculations would prove too voluminous and unwieldy, they are not included in this final rule. The preamble to the proposed rule provides greater detail on the process used to calculate all fees.

Issue No. 4: MMS is already compensated for these services from the collection of bonus bids, rentals, and royalties.

MMS received seven comments on this issue. When a lease is issued, the working interest is conveyed to the lessee(s) to whom it is issued. The government reserves a royalty interest, which is a cost free share of the production or the value of the production. Under the bidding system that is characteristic of most of the leases, the lessee pays a bonus to obtain the lease that is the result of competitive bidding. During the primary term of a lease and before the lease goes into production (in other words, during the time the lessor is not receiving any benefit from its retained royalty interest), the lessee must pay annual rentals. All of these obligations (royalties, bonus bids, and rentals) reflect the value of the lessor's (i.e., the public's) property interest in the leased minerals. None of these obligations were ever intended to compensate the government for administrative costs.

Nor was the relevant mineral leasing law (the Outer Continental Shelf Lands Act (OCSLA)), which granted the Secretary the authority to issue leases, enacted as a cost recovery mechanism. The government's authority to recover certain administrative costs of the type involved in this rulemaking is granted by a statute (the provision of IOAA) that predated the OCSLA and predated every lease issued under the OCSLA. The IOAA is not related to royalty, bonus, or rental obligations.

Issue No. 5: The non-required document filing fee is too high, given that a single document can index to multiple leases, therefore multiplying the cost of a single submission.

MMS agrees. The calculation of this fee was reexamined and an inconsistency was found in the cost data collected for this service. The commenter is correct and MMS has deleted the upward fee adjustment from the rule. The non-required document filing fee will remain at $25 per lease affected. MMS also reviewed all remaining cost calculations affecting fees in this rule.

Issue No 6: MMS states that a “Statement of Energy Effects” is not needed, because it does not consider the rule to be a significant energy action; commenter challenges this statement.

This rule meets none of the criteria for a significant energy action. Executive Order (E.O.) 13211 defines a significant energy action:

Section 4(b): “Significant energy action” means any action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advanced notices of proposed rulemaking, and notices of proposed rulemaking:

(1)(i) that is a significant regulatory action under E.O.12866 or any successor order; and

(ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or

(2) that is designated by the Administrator of the Office of Information and Regulatory Affairs (OIRA) as a significant energy action.

(c) “Agency” means any authority of the United States (U.S.) that is an “agency” under 44 U.S.C. 3502(1), other than those considered to be independent regulatory agencies, as defined in 44 U.S.C. 3502(5). Moreover, E.O. 12866 defines a significant regulatory action:

(f) “Significant regulatory action” means any regulatory action that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way; the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this E.O.

Of the above-quoted thresholds, the only one that could potentially be at issue is section (f)(3), and MMS does not believe that this rule meets that threshold. We note again that compared to the costs of drilling a well, the fees established in this rule are not significant.

Issue No. 7: The proposed rulemaking may violate the Administrative Procedure Act, because it does not disclose the basis of MMS's assessment of the costs to be recovered, other than to give description of certain generic factors purportedly considered.

See Issue No. 3 above for a more in-depth description of how the fees were calculated.

Issue No. 8: The proposed rule does not compare the proposed fees to the costs of similar services in the private sector.

To the knowledge of MMS, none of these services is offered by the private sector. Even if some of these services were offered by the private sector, the fees are calculated based on the costs incurred by the Federal Government to provide the service. The costs of what other entities may charge for similar services are not relevant for purposes of this rule.

Issue No. 9: It is only fair that MMS not accept a processing fee for requests that are not processed through the system, but are rejected early in the evaluation due to submittal of an incomplete request. How will MMS handle the payment for these denied requests, as well as verbal approvals? Will there be any refunds? Will credit card payment be accepted?

All fees imposed by this rule are non-refundable; however, if a request is deemed not complete, an additional fee will not be charged for its resubmission. Any verbal approvals that might occur must be preceded by payment for the service. MMS is currently considering the different payment options available, and will notify lessees of the available payment options via a Notice to Lessees. The Notice will be issued before the effective date of the fees in this rule.

Issue No. 10: Commenter recommends that “Should there be multiple lessees, all designation of operator forms shall be collected by one lessee and submitted to MMS in a single submittal subject to only one filing fee.”

MMS agrees with commenter, and that was the original intent. Section § 250.143(d) will be changed to incorporate this recommendation.

Issue No. 11: Commenter does not agree that the agency's legal authority and policy guidance require new fees or that the fees are required to fund the agency's activities.

The Solicitor's Office has determined that the Department of the Interior Manual and OMB Circular A-25 require that cost recovery action be taken whenever possible. While the structure of MMS' appropriation does not mandate collection of fees, the President's Budget assumes that MMS will collect these fees and has offset its appropriated funds accordingly.

Issue No. 12: A $10,000 fee is excessive for processing revisions, modifications or amendments to unit agreements once the original analysis conducted by MMS for the original unit application has been completed.

The commenter has misinterpreted the fee table. The proposed fee for a revision to a unit agreement is $760, while the $10,700 fee is for the original voluntary unitization proposal or the expansion of a previously approved voluntary unit to include additional acreage. To prevent further confusion the term, “Unitization Revision and Modification” has been changed to just “Unitization Revision.”

Issue No. 13: Eight commenters (one consolidated letter from eight trade groups) argue that because neither existing lease terms nor regulations in effect at the time of lease issuance contain provisions allowing the new cost recovery fees, regulations imposing such fees that are promulgated after lease issuance “are not within the scope of the contract.” The commenter cites Mobil Exploration and Producing Southeast, Inc. v. United States, 530 U.S. 604 (2000), as standing for the proposition that offshore leases are subject only to regulations in existence at the time of lease issuance and those promulgated thereafter that concern prevention of waste and conservation of resources.

The comment fails to acknowledge that the Independent Offices Appropriation Act, the statute under whose authority MMS is promulgating this rule, was enacted in 1952, and predates the OCS Lands Act and the leases issued under the authority of that act. The comment also misinterprets the Mobil decision. In Mobil, the Supreme Court addressed a statute enacted by Congress years after lease issuance (the Outer Banks Protection Act) whose substantive effect was to prohibit exploration of a certain class of existing leases. The Supreme Court held the statute to be a breach of contract on the part of the United States. The Supreme Court in Mobil did not address the validity of regulations at all, including regulations implementing express statutory authority already in existence. Further, contrary to the commenters' assertion, Solicitor's Opinion M-36987 is not inconsistent with the Mobil decision.

The commenters are arguing essentially that they should not be obligated to pay any costs that are not specified in the lease instrument itself. That is a policy argument that the lessees should direct to Congress, not to MMS. The commenters' policy preference does not nullify the Government's authority (or the lessee's obligations) under the IOAA when the IOAA applies to the particular administrative function involved.

Issue No. 14: Industry will be forced to pass along these new costs of doing business to consumers.

MMS is fulfilling its obligation to recover the costs. As previously discussed, the fees are insignificant in relation to the overall costs of industry to explore for and produce crude oil. It would be inappropriate for MMS to anticipate or speculate on how the industry or the market will respond to the requirement to pay for fees.

Summary of Changes to Proposed Rule

In this final rule, MMS is removing two existing fee adjustments that were proposed. Due to the inconsistency that was found in the cost data collected in relation to the non-required document filing fee adjustment, the adjustment is being removed from this rule. The current fee amount of $25 per lease affected will remain in effect.

MMS is also removing the adjustment of the Pipeline Right-of-Way (ROW) Grant Application. This fee was proposed to be lowered; however, further analysis proved that the current fee of $2,350 accurately reflects the cost to MMS to provide that service.

Further, MMS is adding language to 30 CFR 250.171 to clarify what has always been implied; to obtain a suspension, “Your request must include:” the four factors currently listed in § 250.171(a)-(d).

Finally, since the proposed rule was published, the bureau has updated its indirect cost rate from 15 to 21.5 percent. As required by OMB and Departmental guidance, indirect cost rates are to be included in the calculation of cost recovery fees. No specific comments addressing the indirect cost rate calculation were received. Shown below is the revised fee table.

Service	Fee amount	30 CFR citation
Change in Designation of Operator	$150	§ 250.143
Suspensions of Operations/Suspensions of Production (SOO/SOP) Request	1,800	§ 250.171
*Pipeline Right-of-Way (ROW) Grant Application	2,350	§ 250.1015
Pipeline Conversion of Lease Term to ROW	200	§ 250.1015
Pipeline ROW Assignment	170	§ 250.1018
500 feet from Lease/Unit Line Production Request	3,300	§ 250.1101
Gas Cap Production Request	4,200	§ 250.1101
Downhole Commingling Request	4,900	§ 250.1106
Voluntary Unitization Proposal or Unit Expansion	10,700	§ 250.1303
Unitization Revision	760	§ 250.1303
Record Title/Operating Rights (Transfer)	170	§ 256.64
*Non-required Document Filing	25	§ 256.64
* Indicates no change to current amount.

Procedural Matters

Regulatory Planning and Review (E.O. 12866)

This document is not a significant rule as determined by the Office of Management and Budget (OMB) and is not subject to review under E.O. 12866.

(1) This rule will not have an annual 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. This rule establishes fees based on cost recovery principles. Based on historical filings, MMS projects the fees will raise revenue by approximately $1.65 million annually.

(2) This rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency because the costs incurred are for specific MMS services and other agencies are not involved in these aspects of the OCS program.

(3) This rule will not alter the budgetary effects of entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients. This change will have no effect on the rights of the recipients of entitlements, grants, user fees, or loan programs. The fees established by this rule are service fees based on cost recovery, and not user fees.

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

Regulatory Flexibility Act (RFA)

MMS certifies that this rule will not have a significant economic effect on a substantial number of small entities under the RFA (5 U.S.C. 601 et seq.).

This change will affect lessees and operators of leases in the OCS. This includes about 130 Federal oil and gas lessees and 115 holders of pipeline rights-of-way. Small lessees that operate under this rule will fall under the Small Business Administration's (SBA) North American Industry Classification System Codes (NAICS) 211111, Crude Petroleum and Natural Gas Extraction and 213111, Drilling Oil and Gas Wells. For these NAICS code classifications, a small company is one with fewer than 500 employees. Based on these criteria, an estimated 70 percent of these companies are considered small. This rule, therefore, affects a substantial number of small entities.

The fees established in the rule will not have a significant economic effect on a substantial number of small entities because the fees are very small compared to normal costs of doing business on the OCS. For example, the fees range from $150 to $10,700 while the cost of drilling a well ranges from $5 million to $23 million.

Additionally, the fees established in the rule will apply to both large and small firms in the same way. Applying for MMS services provides a benefit to the applicant (both large and small) if the applicant decides to operate in the OCS.

Comments are important. The SBA 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 actions of MMS, call 1-888-734-3247. You may comment to the SBA without fear of retaliation. Disciplinary action for retaliation by an MMS employee may include suspension or termination from employment with the DOI.

Small Business Regulatory Enforcement Fairness Act (SBREFA)

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

(a) Does not have an annual effect on the economy of $100 million or more.

(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) Will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. Leasing on the U.S. OCS is limited to residents of the U.S. or companies incorporated in the U.S. This rule does not change that requirement.

Unfunded Mandate Reform Act (UMRA) of 1995 (E.O. 12866)

This rule will not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule will 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. This is because the rule will not affect State, local, or tribal governments, and the effect on the private sector is small.

Takings Implication Assessment (E.O. 12630)

With respect to E.O. 12630, the rule will not have significant takings implications. A Takings Implication Assessment is not required. The rulemaking is not a governmental action capable of interfering with constitutionally protected property rights.

Federalism (E.O. 13132)

With respect to E.O.13132, the rule will not have federalism implications. It will not substantially and directly affect the relationship between the Federal and State Governments. To the extent that State and local governments have a role in OCS activities, this change will not affect that role.

Civil Justice Reform (E.O. 12988)

With respect to E.O. 12988, the Office of the Solicitor has determined that this rule will not unduly burden the judicial system, and meets the requirements of Sections 3(a) and 3(b)(2) of the E.O.

Paperwork Reduction Act (PRA) of 1995

This rulemaking relates to 30 CFR part 250, subparts A, J, K, and M, and to 30 CFR part 256, subpart J. The rulemaking affects the information collections for these regulations but will not change the approved burden hours, just the associated fees. Therefore, OMB has determined that there is no change in the information collection and that MMS does not need to make a formal submission by Form OMB 83-I for this rulemaking. When this rule becomes effective, MMS will submit Form OMB 83-C to modify the fees in each collection.

OMB has approved the information collections for the affected regulations as 30 CFR part 250, subpart A, OMB Control Number 1010-0114 (expiration 10/31/07); subpart J, 1010-0050 (expiration 1/31/06); subpart K, 1010-0041 (expiration 7/31/06); and subpart M, 1010-0068 (expiration 8/31/05, currently in renewal); and as 30 CFR part 256, subpart J, 1010-0006, (expiration 3/31/07). 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.

National Environmental Policy Act (NEPA) of 1969

The MMS has determined that this rule is administrative and involves changes addressing fee requirements. Therefore, it is categorically excluded from environmental review under section 102(2)(C) of the NEPA, pursuant to 516 DM 2.3A and 516 DM 2, Appendix 1, Item 1.10.

In addition, the rule does not meet any of the 10 criteria for exceptions to categorical exclusions listed in 516 DM 2, Appendix 2. Pursuant to Council on Environmental Quality regulations (40 CFR 1508.4) and the environmental policies and procedures of the Department of the Interior, the term “categorical exclusions” means categories of actions which do not individually or cumulatively have a significant effect on the human environment and which have no such effect in procedures adopted by a Federal agency and therefore require neither an environmental assessment nor an environmental impact statement.

Effects on the Nation's Energy Supply (E.O. 13211)

E.O. 13211 requires the agency to prepare a Statement of Energy Effects when it takes a regulatory action that is identified as a significant energy action. This rule is not a significant energy action, and therefore does not require a Statement of Energy Effects, because it:

(1) Is not a significant regulatory action under E.O. 12866,

(2) Is not likely to have a significant adverse effect on the supply, distribution, or use of energy, and

(3) Has not been designated by the Administrator of the OIRA, OMB, as a significant energy action.

Consultation and Coordination with Indian Tribal Governments (E.O. 13175)

In accordance with E.O. 13175, this rule will not have tribal implications that impose substantial direct compliance costs on Indian tribal governments.

Clarity of This Regulation

E.O. 12866 requires each agency to write regulations that are easy to understand. We invite your comments on how to make this proposed rule easier to understand, including answers to questions such as the following:

(1) Are the requirements in the rule clearly stated?

(2) Does the rule contain technical language or jargon that interferes with its clarity?

(3) Does the format of the rule (grouping and order of sections, use of headings, paragraphing, etc.) aid or reduce its clarity?

(4) Is the description of the rule in the SUPPLEMENTARY INFORMATION section of this preamble helpful in understanding the rule? What else can we do to make the rule easier to understand?

Send a copy of any comments that concern how we could make this rule easier to understand to: Office of Regulatory Affairs, Department of the Interior, Room 7229, 1849 C Street, NW., Washington, DC 20240. You may also e-mail the comments to this address: [e-mail].

List of Subjects

30 CFR Part 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

30 CFR Part 256

• Administrative practice and procedure
• Continental shelf
• Environmental protection
• Government contracts
• Intergovernmental relations
• Minerals Management Service
• Oil and gas exploration
• Public lands-mineral resources
• Public lands-rights-of-way
• Reporting and recordkeeping requirements
• Surety bonds

Dated: August 5, 2005.

Chad Calvert,

Acting Assistant Secretary, Land and Minerals Management.

For the reasons stated in the preamble, the Minerals Management Service (MMS) amends 30 CFR parts 250 and 256 as follows:

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

1. Revise the authority citation for part 250 to read as follows:

Authority: 43 U.S.C. 1331 et seq., 31 U.S.C. 9701.

2. In 30 CFR part 250, subpart A, add a new § 250.125 and add a new undesignated center heading preceding the new § 250.125 to read as follows:

Subpart A—General

* * * * *

Fees

§ 250.125

Service fees.

(a) The table in this paragraph (a) shows the fees that you must pay to MMS for the services listed. The fees will be adjusted periodically according to the Implicit Price Deflator for Gross Domestic Product by publication of a document in the Federal Register. If a significant adjustment is needed to arrive at the new actual cost for any reason other than inflation, then a proposed rule containing the new fees will be published in the Federal Register for comment.

Service Fee Table

[Effective September 26, 2005]

Service	Fee amount	30 CFR citation
(1) Change In Designation of Operator	$150	§ 250.143
(2) Suspension of Operations/Suspension of Production (SOO/SOP) Request	1,800	§ 250.171
(3) Pipeline Right-of-Way (ROW) Grant Application	2,350	§ 250.1015
(4) Pipeline Conversion of Lease Term to ROW	200	§ 250.1015
(5) Pipeline ROW Assignment	170	§ 250.1018
(6) 500 feet from Lease/Unit Line Production Request	3,300	§ 250.1101
(7) Gas Cap Production Request	4,200	§ 250.1101
(8) Downhole Commingling Request	4,900	§ 250.1106
(9) Voluntary Unitization Proposal or Unit Expansion	10,700	§ 250.1303
(10) Unitization Revision	760	§ 250.1303

(b) Once a fee is paid, it is nonrefundable, even if an application or other request is withdrawn. If your application is returned to you as incomplete, you are not required to submit a new fee with the amended application.

3. In § 250.143, add a new paragraph (d) to read as follows:

§ 250.143

How do I designate an operator?

* * * * *

(d) If you change the designated operator on your lease, you must pay the service fee listed in § 250.125 of this subpart with your request for a change in designation of operator. Should there be multiple lessees, all designation of operator forms must be collected by one lessee and submitted to MMS in a single submittal, which is subject to only one filing fee.

4. Revise § 250.171 to read as follows:

§ 250.171

How do I request a suspension?

You must submit your request for a suspension to the Regional Supervisor, and MMS must receive the request before the end of the lease term (i.e., end of primary term, end of the 180-day period following the last leaseholding operation, and end of a current suspension). Your request must include:

(a) The justification for the suspension including the length of suspension requested;

(b) A reasonable schedule of work leading to the commencement or restoration of the suspended activity;

(c) A statement that a well has been drilled on the lease and determined to be producible according to §§ 250.115, 250.116, or 250.1603 (SOP only);

(d) A commitment to production (SOP only); and

(e) The service fee listed in § 250.125 of this subpart.

5. In § 250.1015, revise paragraph (a) to read as follows:

§ 250.1015

Applications for pipeline right-of-way grants.

(a) You must submit an original and three copies of an application for a new or modified pipeline ROW grant to the Regional Supervisor. The application must address those items required by § 250.1007(a) or (b) of this subpart, as applicable. It must also state the primary purpose for which you will use the ROW grant. If the ROW has been used before the application is made, the application must state the date such use began, by whom, and the date the applicant obtained control of the improvement. When you file your application, you must pay the rental required under § 250.1012 of this subpart, as well as the service fees listed in § 250.125 of this part for a pipeline ROW grant to install a new pipeline, or to convert an existing lease term pipeline into a ROW pipeline. An application to modify an approved ROW grant must be accompanied by the additional rental required under § 250.1012 if applicable. You must file a separate application for each ROW.

* * * * *

6. In § 250.1018, revise paragraph (b) to read as follows:

§ 250.1018

Assignment of pipeline right-of-way grants.

* * * * *

(b) Any application for approval for an assignment, in whole or in part, of any right, title, or interest in a right-of-way grant must be accompanied by the same showing of qualifications of the assignees as is required of an applicant for a ROW in § 250.1015 of this subpart and must be supported by a statement that the assignee agrees to comply with and to be bound by the terms and conditions of the ROW grant. The assignee must satisfy the bonding requirements in § 250.1011 of this subpart. No transfer will be recognized unless and until it is first approved, in writing, by the Regional Supervisor. The assignee must pay the service fee listed in § 250.125 of this part for a pipeline ROW assignment request.

7. In § 250.1101, add a new paragraph (f) to read as follows:

§ 250.1101

General requirements and classification of reservoirs.

* * * * *

(f) The lessee must pay the service fee listed in § 250.125 of this part with its request for either a 500 feet from lease/unit line production interval or to produce from a completion in an associated gas cap of a sensitive reservoir under this section.

8. In § 250.1106, add a new paragraph (d) to read as follows:

§ 250.1106

Downhole commingling.

* * * * *

(d) The applicant must pay the service fee listed in § 250.125 of this part with its request for downhole commingling.

9. In § 250.1303, add a new paragraph (d) to read as follows:

§ 250.1303

How do I apply for voluntary unitization?

* * * * *

(d) You must pay the service fee listed in § 250.125 of this part with your request for a voluntary unitization proposal or the expansion of a previously approved voluntary unit to include additional acreage. Additionally, you must pay the service fee listed in § 250.125 with your request for unitization revision.

PART 256—LEASING OF SULPHUR OR OIL AND GAS IN THE OUTER CONTINENTAL SHELF

10. Revise the authority citation for part 256 to read as follows:

Authority: 43 U.S.C. 1331 et seq., 42 U.S.C. 6213, 31 U.S.C. 9701.

11. Add a new § 256.63 to read as follows:

§ 256. 63

Service fees.

(a) The table in this paragraph (a) shows the fees that you must pay to MMS for the services listed. The fees will be adjusted periodically according to the Implicit Price Deflator for Gross Domestic Product by publication of a document in the Federal Register. If a significant adjustment is needed to arrive at the new actual cost for any reason other than inflation, then a proposed rule containing the new fees will be published in the Federal Register for comment.

Service Fee Table

[Effective September 26, 2005]

Service	Fee amount	30 CFR citation
(1) Record Title/Operating Rights (Transfer)	$170	§ 256.64
(2) Non-required Document Filing	25	§ 256.64

(b) Once a fee is paid, it is nonrefundable, even if an application or other request is withdrawn. If your application is returned to you as incomplete, you are not required to submit a new fee with the amended application.

12. In § 256.64, revise paragraph (a)(8) to read as follows:

§ 256.64

How to file transfers.

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(a) * * *

(8) You must pay the service fee listed in § 256.63 of this subpart with your application for approval of any instrument of transfer you are required to file (Record Title/Operating Rights (Transfer) Fee). Where multiple transfers of interest are included in a single instrument, a separate fee applies to each individual transfer of interest. For any document you are not required to file by these regulations but which you submit for record purposes per lease affected, you must also pay the service fee listed in § 256.63 (Non-required Document Filing Fee). Such documents may be rejected at the discretion of the authorized officer.

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