The Bureau of Land Management (BLM) has extended until Oct. 9 the public comment period for proposed updated regulations to ensure accurate measurement, accountability and royalty payments for oil and natural gas production from federal and Indian leases.
The proposal, issued by BLM in July, would replace Onshore Oil and Gas Order No. 3 (Order 3), which has not been updated since 1989 (see Daily GPI, July 13). It sets minimum standards for ensuring that oil and gas produced from leases overseen by the BLM are properly and securely handled. The BLM determined that updates were necessary based on its experience with oil and gas measurement in the field, as well as the changes in technology and industry operations that have occurred since Order 3 was issued.
The rule would:
Establish uniform procedures for designating official points for oil/gas measurement for royalty accounting purposes, known as facility measurement points, that are applicable to new and existing leases;
Codify existing guidance related to approving commingling, i.e., combining production from multiple leases, unit participating areas, communitized areas or fee or state properties before the point of royalty measurement;
Establish conditions to approve off-lease oil and gas measurement;
Update requirements related to the use of valve and drain seals, prohibitions on the use of meter by-passes, and reporting requirements;
Require operators of new and existing facilities to provide new site facility diagrams designed to help BLM meet its oversight responsibilities; and
Require purchasers and transporters to comply with the same standards as operators with respect to records.
The proposed rule does not impose an unreasonable financial or regulatory burden on industry or the BLM, officials said.
Public comment on the proposed rule had been scheduled to end Sept. 11 but was extended 28 days in response to requests from the public, BLM said.