02-18143. Oil and Gas and Sulphur Operations in the Outer Continental Shelf-Document Incorporated by Reference-API RP 14C

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Final rule.

SUMMARY:

MMS is updating one document incorporated by reference in regulations governing oil, gas, and sulphur operations in the Outer Continental Shelf (OCS). This final rule revises the American Petroleum Institute (API) Recommended Practice (RP) 14C (API RP 14C), Sixth Edition, March 1998, currently incorporated by reference into our regulations. We are updating the API RP 14C document to the Seventh Edition, March 2001. The new edition will allow lessees to use updated industry standard technologies while operating in the OCS.

EFFECTIVE DATE:

This rule is effective September 9, 2002. The incorporation by reference of publications listed in the regulations is approved by the Director of the Federal Register as of September 9, 2002.

FOR FURTHER INFORMATION CONTACT:

Wilbon A. Rhome at [phone].

SUPPLEMENTARY INFORMATION:

We use standards, specifications, and recommended practices developed by standard-setting organizations and the oil and gas industry as a means of establishing requirements for activities on the OCS. This practice, known as incorporation by reference, allows us to incorporate the provisions of technical standards into the regulations. The legal effect of incorporation by reference is that the material is treated as if it were 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. We currently incorporate by reference 85 private sector consensus standards into the offshore operating regulations.

The regulations at 1 CFR part 51 govern how we and other Federal agencies incorporate various documents by reference. Agencies may 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, supplement, or addendum cited in the regulations.

The regulations at 30 CFR 250.198(a)(2) allow MMS to update documents without opportunity to comment when we determine that the revisions to a document result in safety improvements or represent new industry standard technology and do not impose undue costs on the affected parties. MMS has made that determination in this instance. Consequently, under 5 U.S.C 553(b)(B), MMS finds that notice and comment procedures are unnecessary. Accordingly, this final rule revises the currently incorporated by reference API document RP 14C, for Analysis, Design, Installation and Testing of Basic Surface Safety Systems for Offshore Production Platforms, to incorporate the Seventh Edition, dated March 2001. The following is a summary of the background for this decision.

Background

Current MMS testing requirements specify that the above-mentioned safety devices be tested “at least once each calendar month, but at no time shall more than 6 weeks elapse between tests.” In mid-1997, a number of lessees operating on the OCS requested a departure from MMS safety system testing requirements as outlined in 30 CFR 250.804 (formerly 250.124(a)(3)(i)) for producing operations. See former 30 CFR 250.3 (1997). (Current provisions for alternative procedures and departures are found at 30 CFR 250.141 and 250.142 (2001).) Specifically, companies requested approval to test electronic pressure transmitters and level sensors (e.g., Pressure Safety High (PSH), Pressure Safety Low (PSL), Level Safety High (LSH), and Level Safety Low (LSL)) at a frequency less than required in the regulations.

This raised two concerns for MMS with regard to its regulatory program. First, we did not have guidelines in place to support our decisionmaking process for approving or denying alternative compliance requests, waivers, or departures related to the testing of electronic safety systems. Second, MMS could not be sure that testing at a lesser frequency would not compromise the safety of OCS workers. MMS believes that the burden of proof lies with industry to demonstrate that the requested testing frequency for these devices affords a degree of protection, safety, or performance equal to or better than what can be achieved by following the current regulatory requirements.

Consequently, in May 1999, MMS contacted API to discuss our concerns with the testing and maintenance of electronic pressure transmitters and level sensors. We requested API not wait until the next regularly scheduled revision of API RP 14C, Sixth Edition, to review and update the document. Specifically, MMS asked API to define what guidelines industry should follow to request approval of a departure from the electronic pressure transmitter and level sensor testing requirements in 30 CFR 250.804(a)(3)(i)(ii).

In June 1999, a workgroup comprised of representatives from the oil and gas industry, API, and MMS was assembled to develop guidelines to address concerns with the testing and maintenance of electronic pressure transmitters and level sensors. The workgroup reviewed 20 years of past maintenance and testing data, but because of technological improvements, only focused on the latest 5 to 10 years of data. These data supported industry's assumption that testing at a lesser frequency would not compromise the safety of OCS workers and would still afford a degree of protection at least equal to what could be achieved by following current MMS requirements. Thus, the workgroup recommended revisions to API RP 14C, Sixth Edition, specifically, Appendix C—Support Systems, and Appendix D—Reporting Procedures. API incorporated the revisions and issued the Seventh Edition of API RP 14C in March 2001. API made no changes to RP 14C other than the reduced testing frequency for electronic pressure transmitters and level sensors.

Conclusions

MMS reviewed the new Seventh Edition of API RP 14C and determined that:

• Incorporating into regulations the Seventh Edition that specifies a reduced testing frequency will not jeopardize the use of the best and safest technologies.
• The changes between the old and new editions represent new industry standard technology and will not impose undue cost on the offshore oil and gas industry.
• The changes to our regulations will eliminate the need for industry to request certain departures from the regulations.

Based on our determinations, we are incorporating the new Seventh Edition of API RP 14C and making the corresponding revisions to 30 CFR 250.804(a)(3)(i)(ii) and 250.1630(a)(2)(i)(ii).

Procedural Matters

The purpose of this rule is to update one document that is currently incorporated by reference in the regulations. The differences between the newer document and the older document are very minor. The minor differences between the newer and older documents will not cause a significant economic effect on any entity (small or large). Therefore, this regulation's impact on the entire industry is minor.

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 (OMB) 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. This rule does not have new requirements and does not prevent any lessee or operator from performing operations on the OCS. The updated standard (Seventh Edition of API RP 14C) allows companies operating on the OCS to test electronic pressure transmitters and level sensors at a frequency less than required in the regulations. It does not impose additional costs. A positive benefit to less testing is that costs should decrease for the oil and gas industry.

(2) This rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency. This rule does not affect how lessees or operators interact with other agencies, nor does it affect how MMS will interact with other agencies.

(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. The rule only affects businesses operating on the OCS with respect to a standard that provides new (reduced) testing criteria for electronic pressure transmitters and level sensors.

(4) This rule does not raise novel legal or policy issues. The requirements are based on the legal authority of the OCS Lands Act (43 U.S.C. 1331 et seq.).

Regulatory Flexibility (RF) Act

The Department certifies that this rule will not have a significant economic effect on a substantial number of small entities as defined under the RF Act (5 U.S.C. 601 et seq.). An RF Analysis is not required. Accordingly, a Small Entity Compliance Guide is not required.

The provisions of this rule will not have a significant economic effect on lessees and operators, including those that are classified as small businesses. 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.

Offshore lessees/operators are classified under SBA's North American Industry Classification System (NAICS) code 211111 (Crude Petroleum and Natural Gas Extraction) and NAICS 213111 code (Drilling Oil and Gas Wells). We estimate approximately 130 companies will be affected by this rulemaking. According to SBA criteria, 39 companies are large firms, leaving up to 91 companies (70 percent) that may qualify as small firms with fewer than 500 employees.

This rule imposes no new operational requirements, reporting burdens, or other measures that would increase costs to lessees/operators, large or small. Therefore, this rule has no significant economic impact on small entities.

Your comments are important. The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness boards were established to receive comments from small businesses about Federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities and rate each agency's responsiveness to small businesses. If you wish to comment on the enforcement actions of MMS, call toll-free 1-888-734-3247. You may comment to the Small Business Administration without fear of retaliation. Disciplinary action for retaliation by an MMS employee may include suspension or termination from employment with the Department of the Interior.

Small Business Regulatory Enforcement Fairness ACT (SBREFA)

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

(a) Does not have an annual effect on the economy of $100 million or more. The main purpose of this rule is to update an industry standard that will allow lessees to test electronic pressure transmitters and level sensors at a reduced frequency, thereby eliminating the need to request departures. The rule does not have new requirements.

(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. The cost to comply with the rule by the affected parties should be less than current requirements.

(c) Does not have a significant adverse effect on competition, employment, investment, productivity, innovation, or ability of United States-based enterprises to compete with foreign-based enterprises. The rule does not contain new requirements.

Paperwork Reduction Act (PRA) of 1995

The Department of the Interior (DOI) has determined that this regulation does not contain information collection requirements pursuant to PRA (44 U.S.C. 3501 et seq.). A form OMB 83-I information collection request to OMB is not required.

Federalism (Executive Order 13132)

According to Executive Order 13132, the rule does not have Federalism implications because it does not affect the relationship between the Federal and State governments, and will not impose costs on States or localities. The rule simply updates a standard incorporated by reference in MMS regulations to allow companies to test electronic pressure transmitters and level sensors at a reduced frequency.

Takings Implications Assessment (Executive Order 12630)

According to Executive Order 12630, the final rule does not represent a governmental action capable of interference with constitutionally protected property rights. The updated standard addresses reduced testing frequency for electronic pressure transmitters and level sensors. Thus, MMS did not prepare a Takings Implication Assessment according to Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

Energy Supply, Distribution, or Use (Executive Order 13211)

This rule is not a significant rule and is not subject to review by OMB under Executive Order 12866. The rule does not have a significant effect on energy supply, distribution, or use. The primary purpose of this rule is to update an incorporated standard to allow for reduced testing frequency of electronic pressure transmitters and level sensors.

Civil Justice Reform (Executive Order 12988)

In accordance with 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.

Unfunded Mandate Reform Act (UMRA) of 1995 (Executive Order 12866)

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

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 of 1969 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: August 2, 2002.

Rebecca W. Watson,

Assistant Secretary, Land and Minerals Management.

For the reasons stated in the preamble, MMS 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 part 250 continues to read as follows:

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

§ 250.198

[Amended]

2. In § 250.198, in the table in paragraph (d), the addresses for the entry for “ANSI/ASME Codes” are revised; and in the table in paragraph (e), the entry for “API RP 14C” is revised to read as follows:

§ 250.198

Documents incorporated by reference.

* * * * *

(d) * * *

For	Write to
*         *         *         *         *         *         *
ANSI/ASME Codes	American National Standards Institute, Attention Sales Department, 25 West 43rd Street, 4th Floor, New York, NY 10036; and/or American Society of Mechanical Engineers, 22 Law Drive, P.O. Box 2900, Fairfield, NJ 07007.
*         *         *         *         *         *         *

(e) * * *

Title of documents	Incorporated by reference at
*         *         *         *         *         *         *
API RP 14C, Recommended Practice for Analysis, Design, Installation, and Testing of Basic Surface Safety Systems for Offshore Production Platforms, Seventh Edition, March 2001, API Stock No. C14C07	§ 250.802(b), (e)(2); § 250.803(a), (b)(2)(i), (b)(4), (b)(5)(i), (b)(7), (b)(9)(v), (c)(2); § 250.804(a), (a)(5); § 250.1002(d); § 250.1004(b)(9); § 250.1628(c), (d)(2); § 250.1629(b)(2), (b)(4)(v); and § 250.1630(a).
*         *         *         *         *         *         *

3. In § 250.802, paragraphs (b) and (e)(2) are revised to read as follows.

§ 250.802

Design, installation, and operation of surface production-safety systems.

* * * * *

(b) Platforms. You must protect all platform production facilities with a basic and ancillary surface safety system designed, analyzed, installed, tested, and maintained in operating condition in accordance with API RP 14C (incorporated by reference as specified in § 250.198). If you use processing components other than those for which Safety Analysis Checklists are included in API RP 14C you must utilize the analysis technique and documentation specified therein to determine the effects and requirements of these components on the safety system. Safety device requirements for pipelines are under § 250.1004.

* * * * *

(e) * * *

(2) A schematic piping flow diagram (API RP 14C, Figure E, incorporated by reference as specified in § 250.198) and the related Safety analysis Function Evaluation chart (API RP 14C, subsection 4.3c, incorporated by reference as specified in § 250.198).

* * * * *

4. In § 250.803, the following changes are made:

A. Revise paragraph (a), the first sentence in paragraph (b)(2)(i), and paragraphs (b)(4) introductory text, (b)(5)(i), (b)(7), and (b)(9)(v) to read as set forth below.

B. In paragraph (b)(10), the citation “§ 250.403” is revised to read “§ 250.114”.

C. Revise Paragraph (c)(2) introductory text to read as set forth below.

D. In paragraph (d), the citation “§ 250.402” is revised to read “§§ 250.109 through 250.113”.

§ 250.803

Additional production system requirements.

(a) General. Lessees must comply with the following production safety system requirements (some of which are in addition to those contained in API RP 14C, incorporated by reference as specified in § 250.198).

(b) * * *

(2) Flowlines. (i) You must equip flowlines from wells with high- and low-pressure shut-in sensors located in accordance with section A.1 and Figure A1 of API RP 14C (incorporated by reference as specified in § 250.198). * * *

* * * * *

(4) ESD. The ESD must conform to the requirements of Appendix C, section C1, of API RP 14C (incorporated by reference as specified in § 250.198), and the following:

* * * * *

(5) Engines. (i) Engine exhaust. You must equip engine exhausts to comply with the insulation and personnel protection requirements of API RP 14C, section 4.2c(4) (incorporated by reference as specified in § 250.198). Exhaust piping from diesel engines must be equipped with spark arresters.

* * * * *

(7) Gas compressors. You must equip compressor installations with the following protective equipment as required in API RP 14C, sections A4 and A8 (incorporated by reference as specified in § 250.198).

* * * * *

(9) * * *

(v) Fire- and gas-detection systems must be an approved type, designed and installed in accordance with API RP 14C (incorporated by reference as specified in § 250.198), API RP 14G (incorporated by reference as specified in § 250.198), and API RP 14F, Design and Installation of Electrical System for Offshore Production Platforms (incorporated by reference as specified in § 250.198).

* * * * *

(c) * * *

(2) When wells are disconnected from producing facilities and blind flanged, equipped with a tubing plug, or the master valves have been locked closed, you are not required to comply with the provisions of API RP 14C (incorporated by reference as specified in § 250.198) or this regulation concerning the following:

* * * * *

5. In § 250.804, the following changes are made:

A. In paragraph (a) introductory text, revise the last sentence to read as set forth below.

B. In paragraph (a)(3), the introductory text is revised to read as set forth below.

C. Paragraphs (a)(4) through (a)(11) are redesignated (a)(5) through (a)(12).

D. A new paragraph (a)(4) is added to read as set forth below.

E. In newly redesignated paragraph (a)(5), the second sentence is revised to read as set forth below.

F. In newly redesignated paragraph (a)(10), the citation “(a)(6)” is revised to read “(a)(7)”.

§ 250.804

Production safety-system testing and records.

(a) * * * Testing must be in accordance with API RP 14C, Appendix D (incorporated by reference as specified in § 250.198), and the following:

* * * * *

(3) The following safety devices (excluding electronic pressure transmitters and level sensors) must be tested at least once each calendar month, but at no time will more than 6 weeks elapse between tests:

* * * * *

(4) The following electronic pressure transmitters and level sensors must be tested at least once every 3 months, but at no time may more than 120 days elapse between tests:

(i) All PSH and PSL, and

(ii) All LSH and LSL controls.

(5) * * * The FSV's must be tested for leakage in accordance with the test procedure specified in API RP 14C, Appendix D, section D4, table D2, subsection D (incorporated by reference as specified in § 250.198). * * *

* * * * *

6. In § 250.1002, the first sentence in paragraph (d) is revised to read as follows:

§ 250.1002

Design requirements for DOI pipelines.

* * * * *

(d) If the maximum source pressure (MSP) exceeds the pipeline's MAOP, you must install and maintain redundant safety devices meeting the requirements of section A9 of API RP 14C (incorporated by reference as specified in § 250.198). * * *

* * * * *

7. In § 250.1004, the first sentence in paragraph (b)(9) is revised to read as follows:

§ 250.1004

Safety equipment requirements for DOI pipelines.

* * * * *

(b) * * *

(9) Pipeline pumps must comply with section A7 of API RP 14C (incorporated by reference as specified in § 250.198). * * *

* * * * *

8. In § 250.1604 the following changes are made:

A. In paragraph (c), the citation “§ 250.402” is revised to read “§ 250.109 through § 250.113”.

B. In paragraph (d), the citation “ § 250.403” is revised to read “§ 250.114”.

9. In § 250.1628, paragraphs (c) and (d)(2) are revised to read as follows:

§ 250.1628

Design, installation and operation of production system.

* * * * *

(c) Hydrocarbon handling vessels associated with fuel gas system. You must protect hydrocarbon handling vessels associated with the fuel gas system with a basic and ancillary surface safety system. This system must be designed, analyzed, installed, tested, and maintained in operating condition in accordance with API RP 14C, Analysis, Design, Installation, and Testing of Basic Surface Safety Systems for Offshore Production Platforms (incorporated by reference as specified in § 250.198). If processing components are to be utilized, other than those for which Safety Analysis Checklists are included in API RP 14C, you must use the analysis technique and documentation specified therein to determine the effect and requirements of these components upon the safety system.

(d) * * *

(2) A schematic flow diagram (API RP 14C, Figure E1, incorporated by reference as specified in § 250.198) and the related Safety Analysis Function Evaluation chart (API RP 14C, subsection 4.3c, incorporated by reference as specified in § 250.198).

* * * * *

10. In § 250.1629, revise paragraphs (b)(2) and (b)(4)(v) to read as follows:

§ 250.1629

Additional production and fuel gas system requirements.

* * * * *

(b) * * *

(2) Engine exhaust. You must equip engine exhausts to comply with the insulation and personnel protection requirements of API RP 14C, section 4.2c(4) (incorporated by reference as specified in § 250.198). Exhaust piping from diesel engines must be equipped with spark arresters.

* * * * *

(4) * * *

(v) Fire- and gas-detection systems must be an approved type, designed and installed in accordance with API RP 14C (incorporated by reference as specified in § 250.198), API RP 14G (incorporated by reference as specified in § 250.198), and API RP 14F, Design and Installation of Electrical System for Offshore Production Platforms (incorporated by reference as specified in § 250.198).

* * * * *

11. In § 250.1630 the following changes are made:

A. Paragraphs (a) introductory text and (a)(2) introductory text are revised to read as set forth below.

B. Paragraphs (a)(3) through (a)(5) are redesignated (a)(4) through (a)(6).

C. New paragraph (a)(3) is added to read as set forth below.

§ 250.1630

Safety-system testing and records.

(a) Inspection and testing. You must inspect and successfully test safety system devices at the interval specified below or more frequently if operating conditions warant. Testing must be in accordance with API RP 14C, Appendix D (incorporated by reference as specified in § 250.198). For safety system devices other than those listed in API RP 14C, Appendix D, you must utilize the analysis technique and documentation specified therein for inspection and testing of these components, and the following:

* * * * *

(2) The following safety devices (excluding electronic pressure transmitters and level sensors) must be inspected and tested at least once each calendar month, but at no time may more than 6 weeks elapse between tests:

* * * * *

(3) The following electronic pressure transmitters and level sensors must be inspected and tested at least once every 3 months, but at no time may more than 120 days elapse between tests:

(i) All PSH or PSL, and

(ii) All LSH and LSL controls.

* * * * *