Waste Prevention, Production Subject to Royalties, and Resource Conservation

<RULE> DEPARTMENT OF THE INTERIOR <SUBAGY>Bureau of Land Management</SUBAGY> <CFR>43 CFR Part 3170</CFR> <DEPDOC>[BLM_HQ_FRN_MO4500181705]</DEPDOC> <RIN>RIN 1004-AF01</RIN> <SUBJECT>Waste Prevention, Production Subject to Royalties, and Resource Conservation</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Bureau of Land Management, Interior. <HD SOURCE="HED">ACTION:</HD> Direct final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> On April 10, 2024, the Bureau of Land Management (BLM) published a final rule that aims to reduce the waste of natural gas from venting, flaring, and leaks during oil and gas production activities on Federal and Indian leases. This direct final rule corrects technical errors in that final rule, including revisions to equations for consistency with, or to better reflect, the regulatory text. It separately lists definitions of the variables for those equations for increased clarity. It also corrects typographical errors and makes minor re-arrangements of provisions for better clarity. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This direct final rule is effective on December 23, 2024, without further notice, unless the BLM receives significant adverse comment by December 23, 2024. If the BLM receives a significant adverse comment that leads it to conclude that the rule is controversial, the BLM will publish a timely withdrawal of this direct final rule in the <E T="04">Federal Register</E> and the technical corrections described in this direct final rule will not go into effect. The incorporation by reference of certain material listed in the rule was approved by the Director of the Federal Register as of June 10, 2024. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> <E T="03">Mail, personal, or messenger delivery:</E> U.S. Department of the Interior, Director (630), Bureau of Land Management, 1849 C St. NW, Room 5646, Washington, DC 20240, Attention: 1004-AF01. <E T="03">Federal eRulemaking Portal: https://www.regulations.gov.</E> In the Searchbox, enter “RIN 1004-AF01” and click the “Search” button. Follow the instructions at this website. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> John Ajak, Acting Division Chief, Division of Fluid Minerals at 505-549-9654 or <E T="03">jajak@blm.gov</E> for information about the final rule. Please use “RIN 1004-AF01” in the subject line. Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States. For a short, plain language summary of the direct final rule, please see the direct final rule summary document in docket BLM-2024-0001 on <E T="03">www.regulations.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> This direct final rule corrects technical errors in 43 CFR subpart 3179 of the final rule that published in the <E T="04">Federal Register</E> on April 10, 2024 (89 FR 25378), entitled, “Waste Prevention, Production Subject to Royalties, and Resource Conservation” (Waste Prevention rule). The Waste Prevention rule established various measures to reduce waste of natural gas from onshore Federal and Indian oil and gas leases, including measures that are intended to ensure that, when such gas is wasted, the public or Indian mineral owners are compensated for that gas through royalty payments. To assist in meeting these objectives, § 3179.71(b) requires operators to measure flared gas for high-pressure flares for volumes greater than 1,050 Mcf per month above the averaging period (as defined in 43 CFR 3170.3). The Waste Prevention rule also sets out, in § 3179.71(g) and (h), three equations intended to be used by operators when reporting or allocating flared gas. In addition, the Waste Prevention rule established a Leak Detection and Repair (LDAR) program for production facilities located on Federal or Indian surface estates. API 22.3 is referenced in the amendatory text of this document and was previously approved for § 3179.71. <HD SOURCE="HD1">II. Direct Final Rulemaking</HD> The BLM is publishing corrections to the Waste Prevention rule as a direct final rule. This rule merely corrects inadvertent errors that would otherwise cause unnecessary confusion for the operators attempting to comply with the reporting requirements of the Waste Prevention rule, but does not impose new requirements. None of the changes are inconsistent with the BLM's explanation of the Waste Prevention rule in its preamble. Therefore, the Department of the Interior has determined that it is appropriate for this rule to go into effect at the close of a 30-day comment period unless BLM receives a significant adverse comment. A significant adverse comment is one that explains: (1) why the rule is inappropriate, including challenges to the rule's underlying premise or approach; or (2) why the direct final rule will be ineffective or unacceptable without additional changes. After the 30-day comment period closes, the BLM will assess whether any of the comments received qualify as a significant adverse comment. If the BLM finds that there is a significant adverse comment, then it will withdraw this direct final rule. If no such comment is received, this direct final rule will become effective on December 23, 2024, without further BLM action. The BLM will not consider a comment recommending an addition to the rule to be significant or adverse unless the comment explains how this direct final rule would be ineffective without additional change. Aside from the technical corrections described in this direct final rule, this rule does not affect the Waste Prevention rule. <HD SOURCE="HD1">III. Discussion</HD> The BLM is making technical corrections to Equations 2 and 3 in § 3179.71, as further discussed below. In addition, the BLM is restyling Equation 1 by moving the value to be determined from the right side of the equal sign to the left, in keeping with mathematical convention. In addition, for clarity, the rule as now corrected separately lists the variable definitions for each equation (in the final rule, the variable definitions for Equations 1 and 2 were combined in a single list). This rule also adds clarifying language in § 3179.71(b) and (g) and removes unintended and unworkable references to low-pressure flare volumes, discussed below, and corrects typographical errors, such as in § 3179.2(a) (removing a second unintended instance of the word “provide”) and in § 3179.71(b) (correcting the reference to paragraph (h) so that it refers instead to the intended paragraph (g)). In response to public comment on the proposed rule and based on further consideration, the BLM included equations in § 3179.71(g) and (h) of the final Waste Prevention rule to guide operators in reporting estimated volumes of flared gas. The BLM included Equations 1 and 2 in paragraph (g) for operators to use in estimating the flared volumes for high-pressure flares measuring less than 1,050 Mcf per month. The BLM included Equation 3 in paragraph (h) to assist operators in allocating flared volumes when gas from multiple leases, unit participating areas (unit PAs), or communitization areas (CAs) is commingled and then measured at a single flare, as authorized in § 3179.71(a). Following publication of the final rule, the BLM received questions from several industry groups. One group observed that Equation 2 does not account for the on-lease use of gas when accounting for the disposition of the total gas produced, contrary to the Waste Prevention rule preamble acknowledgment that “[t]he BLM authorizes royalty-free use of lease production for operations and production purposes, <E T="03">including placing oil or gas in marketable condition.</E> ” 89 FR 25420 (emphasis added). Equation 2 calculates total gas produced by multiplying total oil produced by the gas-to-oil ratio, which is derived from operator-submitted Oil and Gas Operations Reports (OGORs) over a 6-month period (Equation 1). The equation in the April 10 rule would calculate the total volume of gas produced and then subtract the volume of gas sold to arrive at the total flared volume. The BLM agrees that Equation 2 in the Waste Prevention rule inadvertently omitted a variable for straightforward recognition of deductions for gas used on-lease (V <E T="52">LU</E> ) that is necessary to put the product in marketable condition. This rule corrects that inadvertent omission. Equation 3 allocates total flared volume from a commingled high-pressure flare to individual leases, unit PAs, or CAs that send gas to a common flare. The Waste Prevention rule provided in § 3179(h) that the allocation is to be “based on the oil production while flaring.” Because of an error in Equation 3, however, that equation uses the volume of oil <E T="03">sold,</E> commonly referred to as net standard volume (NSV). The BLM is correcting that typographical error in this final rule. As corrected, Equation 3 allocates the flared volume based on the total volume of oil produced (V <E T="52">opi</E> ), which is consistent with the text of paragraph (h). In the Waste Prevention rule, § 3179.71(g) would apply when, “the flared volume for a high-pressure flare is less than or equal to 1,050 Mcf per month,” instead of simply “less than,” as the BLM intended and as reflected in Table 1 to § 3179.71(f). The BLM is correcting this typographical error by removing the reference to “or equal to” in § 3179.71(g). In § 3179.71(g) of the Waste Prevention rule, the BLM required estimation of low-pressure flare volumes based on Equations 1 and 2. Industry representatives, however, correctly pointed o ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 33k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━