01-18022. Oil and Gas and Sulphur Operations in the Outer Continental Shelf-Document Incorporated by Reference-American Petroleum Institute's Specification 2C for Offshore Cranes

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Proposed rule.

SUMMARY:

MMS is proposing to incorporate by reference the Fifth Edition of the American Petroleum Institute's Specification for Offshore Cranes (API Spec 2C) into its regulations. MMS is proposing this action to establish a minimum design standard for new cranes installed on fixed platforms on the Outer Continental Shelf (OCS) and to require all existing cranes installed on OCS fixed platforms to be equipped with anti-two block safety devices. This proposed rule would ensure that OCS lessees use the best available and safest technologies for the design and construction of cranes used on the OCS.

DATES:

We will consider all comments we receive by October 17, 2001. We will begin reviewing comments then and may not fully consider comments we receive after October 17, 2001.

ADDRESSES:

Mail or hand-carry comments (three copies) to the Department of the Interior; Minerals Management Service; Mail Stop 4024; 381 Elden Street; Herndon, Virginia 20170-4817; Attention: Rules Processing Team (RPT). If you wish to e-mail comments, the RPT's e-mail address is: [e-mail]. Reference API Spec 2C in your e-mail subject line. Include your name and return address in your e-mail message and mark your message for return receipt.

Mail or hand-carry comments with respect to the information collection burden of the proposed rule to the Office of Information and Regulatory Affairs; Office of Management and Budget; Attention: Desk Officer for the Department of the Interior (OMB control number 1010-NEW); 725 17th Street, NW., Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT:

Wilbon Rhome, Industrial Specialist, Operations Analysis Branch, at [phone] or Fax [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.

Crane Standards

The primary reason MMS is proposing to incorporate by reference API Spec 2C into its regulations is to establish detailed requirements for the design and construction of pedestal-mounted cranes for new and existing OCS fixed platforms.

API Spec 2C will:

a. Provide a uniform method of establishing rated loads for cranes.

b. Require lessees to equip all new and existing cranes installed on OCS fixed platforms with anti-two block safety devices.

c. Ensure that OCS lessees use the best available and safest technologies for design and construction of cranes for installation in the OCS.

We believe API Spec 2C will be an excellent companion document to API Recommended Practice 2D, a document incorporated into MMS regulations, which deals with the operation and maintenance of offshore cranes. API Spec 2C includes minimum requirements for equipment, materials, manufacturing procedures, and testing (both design and operational) that are not covered in API RP 2D. Incorporating API Spec 2C into the regulations would address a safety gap in our regulations and improve crane safety on the OCS.

The anti-two block safety device is installed on a crane to protect hoist ropes, structural components, and machinery from damage, that might occur when two sheave groups (e.g., load block and boom head) come into contact as the hoist cable is drawn in. This situation is dangerous because: (1) The load block can detach from the load line, falling and causing serious injury or possible loss of life or considerable property damage, or (2) the load block can be pulled through the boom head, putting the crane operator at risk. There are several forms of anti-two block protection that are available to the oil and gas industry. One such form of protection is the control override device used to stall the hoist drums where damage or loss of control would be the result. Other forms of protection are audible or visual proximity warning devices. These anti-two block safety devices may be used in addition to the control override device, or used independently of the control override device.

In the past, MMS has encouraged industry to equip all cranes operating on OCS fixed platforms with an anti-two block safety device regardless of age or specific use of the crane. MMS now believes that anti-two block safety devices must be used on all cranes installed on OCS fixed platforms. We are convinced that retrofitting existing cranes with the anti-two block safety devices will benefit the industry by increasing safety and reducing or eliminating crane incidents on the OCS. Industry shares our concern as evidenced by a recent safety alert issued by the International Association of Drilling Contractors, stating that anti-two block safety devices should be installed on all cranes because “Having a safety device like this ensures that everything is in place to prevent a problem. The anti-two block safety devices for the crane boom is a protection device as is the crown protection device on the rig's drawworks. Both are very important to working safely.”

It should be noted that the proposed regulation requiring the retrofitting of existing cranes would provide a 1-year transition period. This would allow the industry adequate time to implement this change without causing undue hardships.

Recordkeeping Requirements

With the incorporation of API Spec 2C, we would include additional recordkeeping requirements in § 250.108, consistent with the specification. Current regulations require you to keep at the OCS facility for at least 2 years the inspection, testing, and maintenance records of cranes and other material-handling equipment. The proposed regulations expand this to include maintaining records on the design and construction of cranes, including installation records for any anti-two block safety devices. We are also requiring that all records on cranes be retained for the life of the crane at the fixed offshore platform, rather than a minimum of 2 years.

This proposed rule also updates § 250.108 to specifically include retaining training records on rigger personnel, as well as those for crane operators. This is consistent with the API Recommended Practice 2D, Fourth Edition, which is already incorporated by reference in our regulations under § 250.198.

We specifically solicit comments on the following questions:

(a) Will the addition of API Spec 2C to MMS's documents incorporated by reference increase safety and safe operations on the OCS?

(b) Are there other standards for offshore cranes that may be appropriate for MMS to incorporate as part of MMS's regulations?

(c) When should MMS require all cranes on OCS fixed platforms to be fully compliant with API Spec 2C?

(d) Is a 1-year transition period enough time for industry to comply with the change proposed in § 250.108(c)?

(e) Should MMS establish a requirement similar to the U.S. Coast Guard (USCG), which requires cranes to be installed according to an approved crane plan and inspected and load tested by an Agency-approved third party when the crane is installed?

(f) Should MMS require all new cranes for installation on OCS fixed platforms to have an API monogram on the nameplate of the crane as evidence of certification of the anti-two block safety device?

(g) Should a rental crane that is installed on OCS fixed platforms be considered a new crane and, therefore, be required to be fully compliant with API Spec 2C?

(h) Should MMS limit the type of anti-two block devices that are acceptable? What are the known failure rates of the different types?

(i) Should MMS consider an additional cost factor for retrofitting existing cranes with the anti-two block safety device (e.g., an associated cost for the amount of time a crane is expected to be out-of-service while it is being retrofitted)?

Procedural Matters

The specifications in the API Spec 2C document we propose to incorporate by reference are currently widely accepted industry standards. The USCG has already incorporated API Spec 2C into its regulations. All cranes manufactured after 1983 came equipped with the anti-two block safety devices, and most earlier model cranes have been retrofitted with the anti-two block safety devices. Therefore, this regulation's impact on the entire oil and gas offshore industry is minor.

Public Comment Procedure

Our practice is to make comments, including names and home addresses of respondents, available for public review during regular business hours. Individual respondents may request that we withhold their home addresses from the rulemaking record, which we will honor to the extent allowable by law. There may be circumstances in which we would withhold from the rulemaking record a respondent's identity, as allowable by law. If you wish us to withhold your name and/or address, you must state this prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses available for public inspection in their entirety. We will summarize written responses to this notice and address them in the preamble of the final rule. All comments will become a matter of public record.

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 annual economic effect of $100 million or adversely affect an economic sector, productivity, jobs, the environment, or other units of government. A cost-benefit and economic analysis is not required. The major purpose for this proposed rule is to establish a minimum design standard for new cranes installed on fixed platforms on the OCS, and to address an increase in accidents for those cranes that are not equipped with anti-two block safety devices. This rule also proposes to require lessees to equip all existing cranes installed on OCS fixed platforms with anti-two block safety devices. Since API Spec 2C has already been accepted as an industry standard in most of the offshore community, including the USCG, the impact of this regulation on the entire industry is minor. Therefore, the associated costs to equip the remaining cranes, not previously retrofitted, with anti-two block safety devices will be minor. Based on our experience and information in MMS's Technical Information Management System, we estimate that about 5 percent (or a total of not more than 200) of the 4,000 cranes located on the OCS will need to be retrofitted with the anti-two block safety device. We estimate that this will cost approximately $4,000 per retrofit, for a total cost of $800,000.

(2) This proposed rule will not create inconsistencies with other agencies' actions. This rule will not affect how lessees or operators interact with other agencies.

(3) This proposed rule will not affect entitlements, grants, user fees, loan programs, or their recipients. The rule only deals with the proposed action to incorporate by reference the API Spec 2C into our regulations.

(4) This proposed rule will not raise novel legal or policy issues. The proposed rule does involve a new policy issue, to require the lessees to equip all new and existing cranes installed on fixed platforms with anti-two block safety devices, but this new policy decision is not “novel.” The proposed rule simply addresses recognized gaps in our safety regulations. These minimum requirements are generally accepted practices that are included in API documents.

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.

We estimate that about 5 percent of the 4,000 cranes (200) located on the OCS need to be retrofitted with anti-two block safety devices. Retrofitting an existing crane with an anti-two block system would cost approximately $4,000. As 70 percent of the businesses operating on the OCS are small business firms, a corresponding 70 percent of the 200 cranes to be retrofitted would most likely impact small entities. The cost to small entities to retrofit these 140 cranes with anti-two block safety devices to comply with this standard is estimated to be $560,000 (140 x $4,000 = $560,000.) This does not constitute a significant impact upon a substantial number of small entities, and the safety benefits should far outweigh the cost of retrofitting. It should be noted that this would be a one-time cost during the initial period of implementation and will not be a recurring expense.

This proposed rule applies to all lessees and operating companies that operate cranes on OCS fixed platforms. Incorporation of this new document into MMS regulations will:

(1) Increase safety.

(2) Provide the oil and gas industry with uniform guidelines and detailed requirements for design and construction of pedestal-mounted cranes for OCS fixed platforms.

(3) Provide for consistency with other regulatory agencies such as the USCG.

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 business. If you wish to comment on the enforcement actions of MMS, call toll-free [phone].

Small Business Regulatory Enforcement Fairness Act (SBREFA)

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

(a) Does not have an annual effect on the economy of $100 million or more. The proposed rule will not cause any significant costs to lessees or operators. The only costs will be the purchase of the API Spec 2C document, minor revisions to company operating procedures, and the installation of an anti-two block device on cranes installed on OCS fixed platforms that do not already have this safety device. These costs should be approximately $800,000 for the entire industry.

(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 a significant adverse effect on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This rule applies to lessees and contractors operating cranes on OCS fixed platforms.

Paperwork Reduction Act (PRA) of 1995

The proposed rule requires information collection, and an information collection request (form OMB 83-I) has been submitted to OMB for review and approval under section 3507(d) of the PRA.

The title of the collection of information for this proposed rule is “Proposed Rulemaking, 30 CFR 250, Subpart A—Crane Requirements.” Potential respondents are approximately 130 Federal OCS lessees and operators. Responses to this collection of information are mandatory. The frequency of response is on occasion. This collection does not include proprietary information or questions of a sensitive nature.

Current regulations at § 250.108 include recordkeeping requirements for the testing, inspection, and maintenance of cranes installed on fixed platforms on the OCS. They also include recordkeeping requirements to document training of crane operators. The proposed rule expands the current recordkeeping requirements to include records on crane design, construction, and retrofitting. Records on training of rigger personnel, as well as crane operators, will also be required. The type of recordkeeping addressed in the proposed rule is most likely a usual and customary business practice, and the burden to make the records available for MMS review would be minimal. We estimate an additional 2 hours per respondent each year for the expanded recordkeeping requirements, for a total of 260 annual burden hours. MMS uses the information to determine that crane operations are safe and that crane operators and rigger personnel meet the physical qualifications and have completed appropriate training.

As part of our continuing effort to reduce paperwork and respondent burdens, MMS invites the public and other Federal agencies to comment on any aspect of the reporting burden in the proposed rule. You may submit your comments directly to the Office of Information and Regulatory Affairs, OMB. Send a copy of your comments to MMS. Refer to the Addresses section for mailing instructions. MMS will summarize written comments and address them in the final rule preamble. The PRA provides that 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. OMB is required to make a decision concerning the collection of information contained in these proposed regulations between 30 to 60 days after publication of this document in the Federal Register. Therefore, a comment to OMB is best assured of having its full effect if OMB receives it by August 20, 2001. This does not affect the deadline for the public to comment to MMS on the proposed regulations.

a. We specifically solicit comments on the following questions:

(1) Is the proposed collection of information necessary for MMS to properly perform its functions, and will it be useful?

(2) Are the estimates of the burden hours of the proposed collection reasonable?

(3) Do you have any suggestions that would enhance the quality, clarity, or usefulness of the information to be collected?

(4) Is there a way to minimize the information collection burden on those who are to respond, including the use of appropriate automated electronic, mechanical, or other forms of information technology?

b. In addition, the PRA requires agencies to estimate the total annual reporting and recordkeeping non-hour cost burden resulting from the collection of information. We have not identified any and solicit your comments on this item. For reporting and recordkeeping only, your response should split the cost estimate into two components: (1) The total capital and startup cost component, and (2) annual operation, maintenance, and purchase of services component. Your estimates should consider the costs to generate, maintain, and disclose or provide the information. You should describe the methods you use to estimate major cost factors, including system and technology acquisition, expected useful life of capital equipment, discount rate(s), and the period over which you incur costs. Capital and startup costs include, among other items, computers and software you purchase to prepare for collecting information; well control simulators, and testing equipment; and record storage facilities. Generally, your estimates should not include equipment or services purchased: before October 1, 1995; to comply with requirements not associated with the information collection; for reasons other than to provide information or keep records for the Government; or as part of customary and usual business or private practice.

Federalism (Executive Order 13132)

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

Takings Implication Assessment (Executive Order 12630)

According to Executive Order 12630, this rule does not have significant Takings implications. A Takings Implication Assessment is not required.

Civil Justice Reform (Executive Order 12988)

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

National Environmental Policy Act (NEPA) of 1969

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

Unfunded Mandates Reform Act (UMRA) of 1995

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

Government-to-Government Relationship With Tribes

According to the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951) and 512 DM 2, we have determined that there are no effects from this action on federally recognized Indian tribes.

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: June 26, 2001.

Piet deWitt,

Acting Assistant Secretary, Land and Minerals Management.

For the reasons stated in the preamble, the Minerals Mangement Service proposes to amend 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.

2. In § 250.108, the following changes are made:

A. Revise paragraph (a) as set forth below.

B. Redesignate paragraph (b) as paragraph (e).

C. Add new paragraphs (b), (c), (d), and (f) as set forth below.

§ 250.108

What requirements must I follow for cranes and other material-handling equipment?

(a) If you operate a crane installed on a fixed offshore platform, you must follow the American Petroleum Institute's Recommended Practice for Operation and Maintenance of Offshore Cranes (API RP 2D).

(b) If you install a new crane on a fixed offshore platform, the new crane must meet the requirements detailed in the American Petroleum Institute's Specification for Offshore Cranes (API Spec 2C).

(c) You must equip a crane, installed on a fixed offshore platform before [Date 30 days after the date of publication of the final rule], with an anti-two block safety device by [Date 1 Year and 30 days after the date of publication of the final rule].

(d) You must maintain records specific to a crane or the operation of a crane installed on a fixed offshore platform, as follows:

(1) Keep the qualification records of the crane operator and all rigger personnel at the fixed offshore platform for at least 4 years; and

(2) Keep all design, construction, inspection, maintenance, and testing records, including installation records for any anti-two block safety devices, for the life of the crane at the fixed offshore platform.

* * * * *

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

3. In § 250.198, the following document incorporated by reference is added to the table in paragraph (e) in alphanumerical order.

§ 250.198

Documents incorporated by reference.

* * * * *

(e) * * *

Title of documents	Incorporated by reference at
*    *    *    *    *
API Spec 2C, Specification for Offshore Cranes, Fifth Edition, April 1, 1995, API Stock No. G02C05	§ 250.108(a), (b).
*    *    *    *    *