E7-21895. Notice of Public Workshop To Discuss the Possible Need for Suspension of Operations Specifically Related to High Pressure or High Temperature Equipment

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Notice of Public Workshop.

SUMMARY:

The MMS will hold a workshop to discuss the possible need to develop a new regulation allowing for a Suspension of Operations, specifically related to high pressure or high temperature equipment needed for safe drilling, completion, or production operations. This Suspension of Operations would allow for an extension of a lease when the modification of existing technology is considered necessary in order to operate in frontier areas due to unexpected high temperatures or high pressures encountered on your lease. This type of Suspension of Operations would not apply to the initial design, development, or manufacturing of new technology.

Workshop Date: January 23, 2008, beginning at 9 a.m.

Workshop Location: The workshop will be held at the Gulf of Mexico Regional Office, Minerals Management Service, Room 111, 1201 Elmwood Park Boulevard, New Orleans, Louisiana 70123-2394. All interested parties are invited to attend.

FOR FURTHER INFORMATION CONTACT:

Carole Danos, MMS, Gulf of Mexico Outer Continental Shelf Region, Office of Production and Development, 1201 Elmwood Park Blvd., MS 5300, New Orleans, Louisiana 70123-2394, e-mail: [e-mail], telephone [phone].

SUPPLEMENTARY INFORMATION:

The MMS received requests from industry to consider a procedure to grant lease extensions in order to develop new technology which may lead to the production of hydrocarbons. The MMS will hold a workshop to gain additional insight from industry to help determine whether such suspensions would be warranted. Also to be discussed are the accompanying data and information that would be submitted to validate a request for a lease extension.

Background: Regulations governing the granting of Suspensions of Production (SOP) and Suspensions of Operations (SOO) are found at 30 CFR 250.168-177. Our current regulations allow MMS to issue SOOs for the following reasons:

• When necessary to comply with judicial decrees (see § 250.172(a)).
• When activities pose a threat or harm to life, environment, or mineral deposits (see § 250.172(b)).
• For installation of safety or environmental equipment (see § 250.172(c)).
• When necessary to carry out NEPA requirements (see § 250.172(d)).
• When inordinate delays are encountered in obtaining required permits or consents (see § 250.172(e)).
• You fail to comply with a law, regulation, order, or lease provision (see § 250.173(a)).
• The suspension is in the interest of National security or defense (see § 250.173(b)).
• When you are prevented from drilling or other operations for reasons beyond your control (see § 250.175(a)).
• When additional time is needed for potentially drilling under salt sheets (see § 250.175(b)).
• When additional time is needed to potentially drill ultra-deep wells (see § 250.175(c)).

Suspensions have been limited because lease maintenance is a very critical issue to the operator and also to MMS. Leases expire at the end of their primary term unless operations (drilling, well re-working, or production in paying quantities) are being conducted. Under current regulations, only these operations or a suspension will extend the term of a lease. Unless the suspension program is properly designed, it could delay the overall development of Outer Continental Shelf (OCS) hydrocarbon resources. The existence of many deepwater units further complicates the issue because units are comprised of multiple leases. Lastly, this proposed type of suspension may be regarded as harmful by associated businesses as it may postpone drilling and associated operations.

Discussion

The MMS has modified regulations governing suspensions in the past to reflect technological challenges, i.e., complexities of geophysical imaging under salt sheets and at extreme depths. However, the regulations do not allow for the granting of a SOP or SOO based on time needed to develop technology. The MMS will consider proposing a rule that would allow a SOO to provide additional time for the technological improvement of existing surface and wellbore equipment to promote safety and protect the environment when High Pressure (HP) or High Temperature (HT) beyond the capability of existing equipment has been encountered on the lease.

Technology Suspension

The MMS has been approached by companies that have drilled wells, made discoveries, but have encountered HT/HP conditions that create technological challenges for drilling additional wells or forming a development plan. The concept would be to allow a suspension to address these challenges.

Questions industry presenters should address:

1. Is this concept warranted? Why?

2. How would MMS define “technological challenge” that would make one eligible for such a suspension?

3. What other eligibility criteria should be considered?

4. What would tangible/observable milestones be for technology development related to a lease?

5. How long should such a suspension last, and should it be renewable?

Presentations and Written Comments

The MMS has not decided whether technology suspensions are warranted. This workshop is being held to provide industry with an opportunity to provide the necessary facts (pros and cons) that MMS should consider in making a determination on whether or not to propose such a rule. Therefore, we expect industry to play a major role in this workshop. Requests by parties interested in making a formal presentation at the workshop should be accompanied by a summary of the material to be covered by the presentation and an estimate of the amount of time required. If time constraints dictate, a time limit may be placed on individual presentations. Please address requests to make a presentation to Carole Danos. Requests must be received by close of business on December 7, 2007. Approved presenters will be notified prior to the workshop. A final agenda will be posted by December 21, 2007, on the MMS Web site at http://www.gomr.mms.gov/​homepg/​new/​calendr.html. The MMS encourages written comments responding to this notice or the workshop discussions.

DATES:

You may submit written comments by February 22, 2008. The MMS may not fully consider comments received after this date.

ADDRESSES:

You may submit comments on this concept by any of the following methods. Please use “Technology Suspension” as the heading for your comments.

• Federal eRulemaking Portal: http://www.regulations.gov,, select “Minerals Management Service” from the agency drop-down menu, then click “submit.” In the Docket ID column, select MMS-2007-OMM-0062 to submit public comments and to view supporting and related materials available for this rulemaking. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. All comments submitted will be posted to the docket.
• Mail or hand-carry comments to the Department of the Interior; Minerals Management Service; Attention: Regulations and Standards Branch (RSB); 381 Elden Street, MS-4024, Herndon, Virginia 20170-4817. Please reference “Technology Suspension” in your comments and include your name and return address.

Registration: There is no registration fee for this workshop. However, to assess the number of participants, MMS requests participants to register with Carole Danos at [phone] or [e-mail] prior to the meeting. The deadline to register is January 11, 2008. Seating is limited and the number of attendees from each organization may have to be restricted.

Dated: November 2, 2007.

Chris C. Oynes,

Associate Director for Offshore Minerals Management.