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November 18, 2016 / Rules and Regulations 83008 Federal Register / Vol. 81, No. 223 / Friday, November 18, 2016 / Rules and Regulations DEPARTMENT OF THE INTERIOR 6. Interaction With EPA and State Section 3178.10 Facility and Equipment Regulations Ownership Bureau of Land Management 7. Other Provisions Subpart 3179—Waste Prevention and 8. Summary of Costs and Benefits Resource Conservation 43 CFR Parts 3100, 3160 and 3170 III. Background Section 3179.1 Purpose A. Impacts of Waste and Loss of Gas Section 3179.2 Scope [17X.LLWO310000.L13100000.PP0000] B. Purpose of the Rule Section 3179.3 Definitions and Acronyms 1. Overview Section 3179.4 Determining When the RIN 1004–AE14 2. Issues Addressed by Rule Loss of Oil or Gas is Avoidable or 3. Relationship to Other Federal, State, and Waste Prevention, Production Subject Unavoidable Industry Activities Section 3179.5 When Lost Production is to Royalties, and Resource C. Legal Authority Subject to Royalty Conservation D. Stakeholder Outreach Section 3179.6 Venting and Flaring From IV. Summary of Final Rule Gas Wells and Venting Prohibition AGENCY: Bureau of Land Management, V. Major Changes From Proposed Rule Section 3179.7 Gas Capture Requirement Interior. A. Venting Prohibition and Capture Targets Section 3179.8 Alternative Capture 1. Venting Prohibition ACTION: Final rule. Requirement 2. Capture Targets Section 3179.9 Measuring and Reporting SUMMARY: The Bureau of Land B. Leak Detection and Repair 1. Requirements of Final Rule Volumes of Gas Vented and Flared Management (BLM) is promulgating Section 3179.10 Determinations new regulations to reduce waste of 2. Changes From Proposed Rule 3. Significant Comments Regarding Royalty-Free Flaring natural gas from venting, flaring, and C. Liquids Unloading at New Wells Section 3179.11 Other Waste Prevention leaks during oil and natural gas 1. Requirements of Final Rule and Changes Measures production activities on onshore Federal From Proposed Rule Section 3179.12 Coordination With State and Indian (other than Osage Tribe) 2. Significant Comments Regulatory Authority leases. The regulations also clarify when D. Variances Related to State and Tribal Section 3179.101 Well Drilling produced gas lost through venting, Regulations Section 3179.102 Well Completion and flaring, or leaks is subject to royalties, 1. Requirements of Final Rule Related Operations Section 3179.103 Initial Production and when oil and gas production may 2. Changes From Proposed Rule 3. Significant Comments Testing be used royalty-free on-site. These VI. Additional Significant Comments and Section 3179.104 Subsequent Well Tests regulations replace the existing Responses Section 3179.105 Emergencies provisions related to venting, flaring, A. Interaction With EPA Regulations Section 3179.201 Equipment and royalty-free use of gas contained in B. Authority to Require Flaring of Gas Requirements for Pneumatic Controllers the 1979 Notice to Lessees and C. ‘‘Avoidably Lost’’ Oil or Gas Section 3179.202 Requirements for Operators of Onshore Federal and D. Application to Units and Communitized Pneumatic Diaphragm Pumps Indian Oil and Gas Leases, Royalty or Areas Section 3179.203 Storage Vessels E. ROW Permitting Section 3179.204 Downhole Well Compensation for Oil and Gas Lost F. Planning (NTL–4A), which are over 3 decades Maintenance and Liquids Unloading VII. Section by Section Section 3179.301 Operator Responsibility old. Part 3100 Section 3179.302 Approved Instruments DATES: The final rule is effective on Section 3103.3–1 Royalty on production and Methods January 17, 2017. Section 3160.0–5 Definitions Section 3179.303 Leak Detection Section 3162.3–1 Drilling applications Inspection Requirements for Natural Gas FOR FURTHER INFORMATION CONTACT: and plans Timothy Spisak at the BLM Washington Wellhead Equipment and Other Subpart 3178—Royalty-Free Use of Lease Equipment Office, 20 M Street SE., Room 2134LM, Production Section 3179.304 Repairing Leaks Washington, DC 20003, or by telephone Section 3178.1 Purpose Section 3179.305 Leak Detection at 202–912–7311. For questions relating Section 3178.2 Scope of This Subpart Inspection, Recordkeeping and Reporting to regulatory process issues, contact Section 3178.3 Production on Which Section 3179.401 State or Tribal Requests Royalty is not due Faith Bremner at 202–912–7441. for Variances From the Requirements of Section 3178.4 Uses of Oil or Gas on a Persons who use a This Subpart Lease, Unit, or Communitized Area That VIII. Analysis of Impacts telecommunications device for the deaf do not Require Prior Written BLM A. Description of the Regulated Entities (TDD) may call the Federal Relay Approval for Royalty-Free Treatment of Service (FRS) at 1–800–877–8339 to Volumes Used 1. Potentially Affected Entities contact these individuals during normal Section 3178.5 Uses of Oil or Gas on a 2. Affected Small Entities business hours. FRS is available 24 Lease, Unit, or Communitized Area That B. Impacts of the Requirements 1. Overall Costs of the Rule hours a day, 7 days a week to leave a Require Prior Written BLM Approval for Royalty-Free Treatment of Volumes Used 2. Overall Benefits of the Rule message or question with these 3. Net Benefits of the Rule individuals. You will receive a reply Section 3178.6 Uses of Oil or Gas Moved off the Lease, Unit, or Communitized 4. Distributional Impacts during normal business hours. Area That do not Require Prior Written IX. Procedural Matters SUPPLEMENTARY INFORMATION: Approval for Royalty-Free Treatment of A. Executive Order 12866, Regulatory I. Table of Contents Volumes Used Planning and Review II. Executive Summary Section 3178.7 Uses of Oil or Gas Moved B. Regulatory Flexibility Act and Small A. Background off the Lease, Unit, or Communitized Business Regulatory Enforcement B. Summary of Rule Area That Require Prior Written Fairness Act of 1996 1. Venting and Flaring Approval for Royalty-Free Treatment of C. Unfunded Mandates Reform Act of 1995 2. Leaks Volumes Used D. Executive Order 12630, Governmental 3. Reducing Venting from Equipment and Section 3178.8 Measurement or Actions and Interference with Practices Estimation of Volumes of Oil or Gas That Constitutionally Protected Property 4. Royalty Provisions Governing New are Used Royalty-Free Rights (Takings) Competitive Leases Section 3178.9 Requesting Approval of E. Executive Order 13132, Federalism 5. Unavoidable Versus Avoidable Losses of Royalty-Free Treatment When Approval F. Executive Order 12988, Civil Justice Gas is Required Reform VerDate Sep<11>2014 23:58 Nov 17, 2016 Jkt 241001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\18NOR8.SGM 18NOR8 mstockstill on DSK3G9T082PROD with RULES6 Federal Register / Vol. 81, No. 223 / Friday, November 18, 2016 / Rules and Regulations 83009 G. Executive Order 13175, Consultation allottee owners, and States.1 Over the Royalty Management Act (FOGRMA), and Coordination with Indian Tribal past decade, the United States has the Federal Land Policy and Governments experienced a dramatic increase in oil Management Act of 1976 (FLPMA), the H. Paperwork Reduction Act and natural gas production due to Indian Mineral Leasing Act of 1938 I. National Environmental Policy Act technological advances, such as (IMLA), the Indian Mineral J. Executive Order 13211, Actions hydraulic fracturing combined with Development Act of 1982 (IMDA), and Concerning Regulations That directional drilling. Yet the American the Act of March 3, 1909.4 In particular, Significantly Affect Energy Supply, public has not benefited from the full the MLA requires the BLM to ensure Distribution, or Use potential of this increased production, that lessees ‘‘use all reasonable K. Executive Order 13563, Improving due to venting, flaring, and leaks of precautions to prevent waste of oil or Regulation and Regulatory Review significant quantities of gas during the gas developed in the land.’’ 5 Leases X. Authors production process. Federal and Indian issued by BLM must ensure that II. Executive Summary onshore lessees and operators reported operations are conducted with to the Office of Natural Resources ‘‘reasonable diligence, skill, and care’’ A. Background Revenue (ONRR) that they vented or and that lessees comply with rules ‘‘for flared 462 billion cubic feet (Bcf) of the prevention of undue waste.’’ 6 This final regulation aims to reduce natural gas between 2009 and 2015— Advancing those mandates, this rule the waste of natural gas from mineral enough gas to serve about 6.2 million replaces the BLM’s decades-old NTL– leases administered by the BLM. This households for a year, assuming 2009 4A requirements related to venting and gas is lost during oil and gas production usage levels.2 activities through venting or flaring of Venting, flaring, and leaks waste a flaring, and to royalty-free use of oil and the gas, and through equipment leaks. valuable resource that could be put to gas production; amends the BLM’s oil While oil and gas production productive use, and deprive American and gas regulations at 43 CFR part 3160 technology has advanced dramatically taxpayers, tribes, and States of royalty to include requirements for a waste in recent years, the BLM’s rules to revenues. In addition, the wasted gas minimization plan; and adds new minimize waste of gas have not been may harm local communities and subparts 3178 and 3179 to 43 CFR part updated in over 30 years. The Mineral surrounding areas through visual and 3170 that address royalty-free use of Leasing Act of 1920 (MLA) requires the noise impacts from flaring, and lease production (subpart 3178) and BLM to ensure that lessees ‘‘use all contribute to regional and global air waste prevention through reduction of reasonable precautions to prevent waste pollution problems of smog, particulate venting, flaring and leaks (subpart of oil or gas developed in the land,’’ 30 matter, and toxics (such as benzene, a 3179). This rule will apply to all Federal U.S.C. 225, and that leases include ‘‘a carcinogen). Finally, vented or leaked and Indian (other than Osage Tribe) provision that such rules .
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