Proposed Rule2026-01926
Requirements for Site Security and Production Handling; Applying for Commingling and Allocation Approval
Primary source
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Published
January 30, 2026
Issuing agencies
Interior DepartmentLand Management Bureau
Abstract
The Bureau of Land Management (BLM) proposes to revise its regulations governing site security and production handling and commingling applications to reflect Congress's direction in section 50101(d)(3) of the "One Big Beautiful Bill Act" (OBBB) and policy direction in Executive Orders (E.O.s) entitled, Unleashing American Energy and Ensuring Lawful Governance and Implementing the President's "Department of Government Efficiency" Deregulatory Initiative and policy guidance in Secretary's Order (S.O.) 3418, entitled, Unleashing American Energy. The BLM is proposing to revise the regulations to allow for commingling of production more broadly to promote oil and gas production on Federal, Indian, private and State lands. Commingling of production can reduce an operator's cost which could extend the economic life of a well, thereby allowing the operator to continue producing from a well that might otherwise be abandoned.
Full Text
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[Federal Register Volume 91, Number 20 (Friday, January 30, 2026)]
[Proposed Rules]
[Pages 4045-4054]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-01926]
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DEPARTMENT OF THE INTERIOR
Bureau of Land Management
43 CFR Part 3170
[A2407-014-004-065516, #O2509-014-004-125222]
RIN 1004-AF38
Requirements for Site Security and Production Handling; Applying
for Commingling and Allocation Approval
AGENCY: Bureau of Land Management, Interior.
ACTION: Proposed rule.
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SUMMARY: The Bureau of Land Management (BLM) proposes to revise its
regulations governing site security and production handling and
commingling applications to reflect Congress's direction in section
50101(d)(3) of the ``One Big Beautiful Bill Act'' (OBBB) and policy
direction in Executive Orders (E.O.s) entitled, Unleashing American
Energy and Ensuring Lawful Governance and Implementing the President's
``Department of Government Efficiency'' Deregulatory Initiative and
policy guidance in Secretary's Order (S.O.) 3418, entitled, Unleashing
American Energy. The BLM is proposing to revise the regulations to
allow for commingling of production more broadly to promote oil and gas
production on Federal, Indian, private and State lands. Commingling of
production can reduce an operator's cost which could extend the
economic life of a well, thereby allowing the operator to continue
producing from a well that might otherwise be abandoned.
DATES: Send your comments on this proposed rule to the BLM on or before
March 31, 2026. The BLM is not obligated to consider any comments
received after this date in making its decision on the final rule.
Information Collection Requirements: This proposed rule includes
revised information-collection requirements that must be approved by
the Office of Management and Budget (OMB). If you wish to comment on
the information collection requirements, please note that those
comments should be sent directly to OMB. OMB is required to make a
decision concerning the collection of information contained in this
proposed rule between 30 and 60 days after publication of this document
in the Federal Register. Therefore, a comment to the OMB on the
proposed information-collection revisions is best assured of being
given full consideration if the OMB receives it by March 2, 2026.
ADDRESSES: Mail, personal, or messenger delivery: U.S. Department of
the Interior, Director (630), Bureau of Land Management, 1849 C St. NW,
Room 5646, Washington, DC 20240, Attention: 1004-AF38. Federal
eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. In the Search-box,
enter ``BLM-2025-0070'' and click the ``Search'' button. Follow the
instructions at this website.
For Comments on Information-Collection Activities: Written comments
and suggestions on the information-collection requirements should be
submitted by the date specified in the DATES section to
<a href="http://www.reginfo.gov/public/do/PRAMain">www.reginfo.gov/public/do/PRAMain</a>. Find this specific information
collection by selecting ``Currently under Review--Open for Public
Comments'' or by using the search function. If you submit comments on
the information collection burdens, you should provide the BLM with a
copy at the addresses shown earlier in this section, so that we can
summarize all written comments and address them in the final rule.
Please indicate ``Attention: OMB Control Number 1004-0137 (RIN 1004-
AF38)'' regardless of the method used to submit comments on the
information collection burdens. Comments not pertaining to the proposed
rule's information collection burdens should not be submitted to OMB.
The BLM is not obligated to consider or include in the administrative
record for the final rule any comments that are improperly directed to
OMB.
FOR FURTHER INFORMATION CONTACT: Amanda Fox at telephone: 907-538-2300;
email: <a href="/cdn-cgi/l/email-protection#1574737a6d557779783b727a63"><span class="__cf_email__" data-cfemail="076661687f47656b6a29606871">[email protected]</span></a>. Individuals in the United States who are deaf,
blind, hard of hearing, or have a speech disability may dial 711 (TTY,
TDD, or TeleBraille) to access telecommunications relay services for
contacting Mr. Warren. 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 summary of the rule, please click on the Docket Details tab
in docket number BLM-2025-0070 on <a href="http://www.regulations.gov">www.regulations.gov</a>.
SUPPLEMENTARY INFORMATION:
Executive Summary
The Bureau of Land Management (BLM) proposes to revise its
regulations governing site security and production handling and
commingling applications to reflect Congress's direction in section
[[Page 4046]]
50101(d)(3) of the OBBB and policy direction in E.O. 14154, entitled,
Unleashing American Energy and Ensuring Lawful Governance and; E.O.
14219, entitled, Implementing the President's ``Department of
Government Efficiency'' Deregulatory Initiative; and policy guidance in
S.O. 3418 entitled, Unleashing American Energy. The BLM is proposing to
revise 43 Code of Federal Regulations (CFR) 3173.1, 3173.14, 3173.15,
and 3173.16 to allow for commingling of production more broadly in
order to promote oil and gas production on Federal, Indian, private,
and State lands.
The BLM is proposing the revisions to these regulations to address
barriers that limit the BLM's ability to approve commingling and
allocation agreements (CAAs) that involve multiple sources. Commingling
is the approved method for combining production from multiple leases,
unit participating areas (PAs), and communitization areas (CAs) at one
measurement point with an approved method to allocate production back
to each lease, unit PA, or CA. The Mineral Leasing Act of 1920 requires
all production leaving a lease to be measured before it leaves the
lease. Commingling allows production to leave a lease and be measured
at an approved point off the lease. These agreements can be used to
promote production in situations where either State spacing regulations
or mixed ownership patterns may otherwise inhibit an operator's ability
to develop our Nation's vital oil and natural gas resources. The
existing regulations have resulted in significant operational costs,
administrative burdens, and a backlog in the approval of these
agreements. The proposed revisions are also intended to promote
operational and business efficiency, foster responsible resource
development, reduce environmental impacts, prevent the orphaning of
wells from premature abandonment, and ensure that the public receives a
fair return from the use of public resources. Broader commingling
approvals allows more leases, unit PAs, and CAs to be combined at one
facility reducing the overall facility cost and the number of points
where production is transferred to buyers. Centralizing these
facilities reduces the environmental impacts by reducing the number of
sites where production processing occurs. Commingling can be used to
move equipment out of sensitive environments to reduce the potential
environmental impacts of the oil and gas development.
The Department undertakes this rulemaking pursuant to section
50101(d)(3) of the OBBB, which requires the BLM to approve applications
for commingling of production if the applicant agrees to one of three
standard practices to ensure accurate royalty allocation. In addition,
section 226(q) of the Mineral Leasing Act (MLA), 30 U.S.C. 226 et seq.,
which authorizes the Secretary of the Interior to enter into agreements
apportioning production or royalties among tracts of land when they
cannot be independently developed and the Federal Oil and Gas Royalty
Management Act (FOGRMA), 43 U.S.C. 1701 et seq., authorizes the
Secretary to enforce regulations governing inspection of production
activities on Federal and Indian lands.
In fiscal year (FY) 2024, onshore Federal oil and gas leases
produced about 675 million barrels of oil and 4.6 trillion cubic feet
of natural gas, with a market value of more than $70 billion and
generating royalties of almost $9.3 billion. Nearly half of these
revenues were distributed to the States in which the leases are
located.
Given the magnitude of this production and the BLM's statutory and
management obligations, it is critically important that the BLM ensure
that operators accurately measure, properly report, and account for
that production and, where appropriate, allow for the commingling of
production from Federal and Indian oil and gas leases with production
from other sources.
The BLM is proposing updates to existing commingling regulations
because: (1) the OBBB statutory direction to the Secretary states that
he ``shall approve applications allowing for commingling of production
from 2 or more sources'' if the applicant agrees to use one of three
methods for production measurement and allocation, and (2) the
regulatory updates are necessary to reflect changes in oil and gas
measurement practices and technology since the existing regulations
were first promulgated in 2016. Technology is more precise today than
it was in 2016. This leads to better measurement equipment, such as
Coriolis meters and ultrasonic meters. The OBBB modifies how BLM should
address commingling approvals and allocation methodologies to address
today's demands. Specifically, this proposed rule is designed to ensure
the proper and secure handling of production from Federal and Indian
oil and gas leases when commingled with production from other sources.
In the proposed rule, the BLM is proposing to update 43 CFR
3173.14, and codify the requirements for commingling, as explained
below, consistent with section 50101(d)(3) of the OBBB and the
authority granted under 30 U.S.C. 226(q). Specifically, the proposed
changes to the regulations would allow the Secretary of the Interior,
through the BLM, to consider proposed commingling applications based on
a variety of possible methodologies referred to in 30 U.S.C. 226(q).
These proposed changes are intended to account for advancements in
technology and industry practices that have occurred since the existing
regulations were first issued in 2016 are expected to:
1. Increase clarity and predictability for industry operators by
codifying uniform approval criteria;
2. Reduce administrative delays for commingling requests;
3. Maintain robust royalty accuracy and transparency through high-
precision metering or well testing; and
4. Support integrated reservoir development and reduce unnecessary
surface disturbance by encouraging centralized production
infrastructure.
The proposed changes to 43 CFR 3173.14, ``Conditions for
commingling and allocation approval (surface and downhole),'' are
intended to remove conditions in the existing regulations that can
limit the circumstances under which the BLM can approve a commingling
application. For example, under the existing regulations, in instances
when the production proposed for inclusion in the application includes
production from leases, unit participating areas (PAs), or CAs, where
the Federal interests are disproportionate to one another, the BLM
would not allow commingling. For example, under one CA the government
may own 100 percent of the minerals while only owning 50 percent on
another CA. Under the current regulations, the minerals produced from
these leases may not be commingled. However, under the proposed rule,
such production could be commingled if certain conditions outlined in
the statute are met. The BLM expects that more leases, unit PAs, and
CAs could be included in commingling agreements under the proposed
rule, thereby promoting additional production, particularly through the
combination of producing wells and marginal wells or stripper wells.
This supports the statutory directive that the BLM does not waste
Federal minerals and ensures that resources are developed efficiently.
Further, the changes made to 43 CFR 3173.15, ``Applying for a
Commingling and Allocation Approval,'' are intended to account for
certain uncertainties associated with measurement and ensuring that the
uncertainty percentage meets the requirements proposed in 43 CFR
3173.14. The changes made to 43
[[Page 4047]]
CFR 3173.16, ``Existing Commingling and Allocation Approvals,'' would
allow for all existing CAAs to remain in effect unless the operator
adds or removes wells or modifies the facility layout, in which case
the operator would need to submit a Sundry Notice Form 3160-5 to the
BLM. This is important, for example, because individual wells may
report to different leases, unit PAs, or CAs and can cause the
uncertainty in measurement to change, resulting in a change to the
allocation methodology for production reporting.
Costs and Benefits
This rule could benefit industry by improving economic efficiency
at the wellsite by allowing operators to share production facilities
across leases such that each lease can reduce operating costs needed to
produce Federal or Indian oil and gas.
The BLM estimates that it would spend $352,170 per year in
processing the additional commingling applications. The BLM has further
assumed that applicants would need an additional 10 hours per
application to provide a complete application to the BLM. This is
represented in the Administrative Burden column on the table below.
In the benefit cost analysis of this rule, royalty payments are not
considered a cost or a benefit but rather as recurring income to the
United States and Indian mineral owners and costs to the operator or
lessee. As such, they are transfer payments that do not affect the
total resources available to society. An important but sometimes
difficult problem in cost estimation is distinguishing between real
costs and transfer payments. While transfers should not be included in
the economic analysis estimates of the benefits and costs of a
regulation, they may be important for describing the distributional
effects of a regulation. This proposed rule would allow a variance or
error in measuring commingled production of up to <plus-minus>5
percent. At the extremes, if commingling happened at all Federal and
Indian oil and gas leases, this rule could increase or decrease
royalties from Federal onshore leases by $365 million relative to the
royalties based upon the true level of production and increase or
decrease (depending on whether the uncertainty is positive or negative)
royalties from Indian leases by $54 million per year relative to the
royalties based upon the true level of Indian production. These two
examples are extreme because it is highly unlikely that every Federal
and Indian lease would be commingled, and that the measurement
uncertainty would also vary by the maximum of <plus-minus>5 percent.
The change in royalties could, however, be within those two extreme
bounds.
I. Public Comment Procedures
If you wish to comment on this proposed rule, you may submit your
comments to the BLM by mail, personal or messenger delivery, or through
<a href="https://www.regulations.gov">https://www.regulations.gov</a> (see the ADDRESSES section). Please note
that comments on this proposed rule's information collection burdens
should be submitted to the Office of Management and Budget as described
in the ADDRESSES section.
Please make your comments on the proposed rule as specific as
possible, confine them to issues pertinent to the proposed rule, and
explain the reason for any changes you recommend. Where possible, your
comments should reference the specific section or paragraph of the
proposal that you are addressing. The BLM is not obligated to consider
or include in the administrative record for the final rule comments
that we receive after the close of the comment period (see DATES) or
comments delivered to an address other than those listed above (see
ADDRESSES).
Comments, including names and street addresses of respondents, will
be available for public review at the address listed under ADDRESSES:
Personal or messenger delivery'' during regular hours (7:45 a.m. to
4:15 p.m.), Monday through Friday, except holidays. Before including
your address, telephone number, email address, or other personal
identifying information in your comment, be advised that your entire
comment--including your personal identifying information--may be made
publicly available at any time. While you can ask us in your comment to
withhold from public review your personal identifying information, we
cannot guarantee that we will be able to do so.
II. Background
Because of the increasing reliance on directional drilling through
lands owned by varying entities, it has become more important for
operators to commingle production from leases, unit PAs, and CAs. The
BLM is proposing the revisions to these regulations to conform with the
statutory direction in section 50101(d)(3) of the ``One Big Beautiful
Bill Act'' (Pub. L. 119-21) (OBBB) and to address barriers in the
current regulations that limit the BLM's ability to approve these types
of CAAs. Because of the BLM's limitations, these agreements have been
underutilized by the regulated community as the application process is
burdensome under the current regulations. As revised, the process would
be streamlined and allow for more diverse mineral interests to be
commingled, especially in situations where either State spacing
regulations or mixed ownership patterns may otherwise inhibit an
operator's ability to develop our Nation's vital oil and natural gas
resources.
The Secretary of the Interior has the authority to undertake these
regulations pursuant to Congress's direction in section 50101(d)(3) of
the OBBB and his authority under section 226(q) of the MLA, which
authorizes the Secretary to enter into agreements apportioning
production or royalties among tracts of land when they cannot be
independently developed. In addition, the FOGRMA, 30 U.S.C. 29,
authorizes the Secretary to enforce regulations governing inspection of
production activities on Federal and Indian lands. The Secretary has
delegated this authority to the BLM. 235 DM 1.1.
III. Discussion of Proposed Rule
A. Summary
The BLM is undertaking this rulemaking for two primary reasons: (1)
To reflect Congress's direction provided in section 50101(d)(3) of the
OBBB and policy direction provided in recently issued E.O.s and S.O.;
and (2) To remove existing barriers to the commingling of oil and gas
production to promote the development of oil and gas to meet the energy
needs of the American public. As documented in S.O. 3418 released in
February 2025,\1\ the BLM aims to reduce barriers to the use of Federal
lands for energy development, consistent with the principle of multiple
use.
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\1\ DOI, S.O. 3418--Unleashing American Energy, <a href="http://www.doi.gov/document-library/secretary-order/so-3418-unleashing-american-energy">www.doi.gov/document-library/secretary-order/so-3418-unleashing-american-energy</a>.
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The Secretary of the Interior manages Federal oil and gas resources
pursuant to the MLA; FOGRMA; Federal Land Policy and Management Act
(FLPMA), 43 U.S.C. 1701 et seq.; and other statutes. The BLM is the
agency within DOI responsible for regulating onshore oil and gas
leasing activities for federally managed lands and the subsurface
mineral estate. The BLM also regulates oil and gas development on
Indian (except Osage Tribe) lands for the Secretary. The Department
regulations governing site security and production allocation for
onshore oil and gas are set out in 43 CFR subpart 3173. The BLM is
proposing to revise some of the definitions in Sec. 3173.1 to
[[Page 4048]]
align with the proposed changes to the regulations governing
commingling applications and is proposing to revise Sec. 3173.14,
Conditions for Commingling and Allocation Approval (Surface and
Downhole); Sec. 3173.15, Applying for a Commingling Approval and
Allocation to simplify the procedures to promote the development of
needed oil and gas resources: and Sec. 3173.16, Existing Commingling
and Allocation Approvals.
By revising these regulations, the BLM is removing barriers to oil
and gas development thereby providing greater flexibility to oil and
gas operators to coordinate their operations and reduce overall costs
of producing oil and gas. The existing regulations have resulted in
significant operational costs, administrative burdens, and a backlog in
the approval of these agreements. The proposed revisions are also
intended to promote operational and business efficiency, foster
responsible resource development, reduce environmental impacts, prevent
the stranding of oil and gas resources from premature abandonment, and
ensure that the public receives a fair return from the use of public
resources.
The proposed modifications to Sec. Sec. 3173.1, 3173.14, 3173.15
and 3173.16 are described in more detail in the section-by-section
analysis below.
B. Section-by-Section Discussion
The following discussion addresses proposed changes to the
regulations. If a provision is not presented in this section-by-section
analysis, then the provision remains unchanged from the current
regulatory language.
1. Section-by-section for changes to 43 CFR subpart 3173.
Section 3173.1 Definitions
The BLM has added a new definition for ``acceptable methodology''
to clarify the level of measurement uncertainty that would be allowed
when determining a method to allocate production from each source to be
included in the commingling approval. The proposed rule would require a
2 percent measurement uncertainty or up to 5 percent measurement
uncertainty if there are appropriate technical or economic
justifications provided by the applicant and approved by the BLM.
The BLM has revised the definition of ``access'' by including a new
paragraph that addresses the need for the BLM to have access to
facilities that may be located on State or private lands so it can
ensure the proper accounting of produced Federal and Indian oil and gas
resources. Any such access would be limited to ensuring that the
requirements of these regulations are met and would not provide the BLM
with any more general inspection authority as that is beyond the scope
of these regulations.
The BLM proposes to remove the definition of ``economically
marginal property'' as this concept is no longer a factor in the BLM's
analysis of a commingling application.
The BLM proposes to add a new definition for ``overriding
considerations'' to allow the BLM to consider approval of a commingling
application in situations that do not specifically meet the regulatory
requirements in 43 CFR 3173.14(a).
The BLM proposes to remove the definition of a ``payout period'' as
this definition is no longer needed based on the BLM's proposed changes
to 43 CFR 3173.14.
The BLM proposes to remove the definition of ``royalty net present
value'' as this concept is no longer needed based on the BLM's proposed
changes to 43 CFR 3173.14.
The BLM is soliciting feedback on whether any additional
definitions would be useful to implement Congress' direction to BLM to
allow for increased use of commingling.
Section 3173.14 Conditions for Commingling and Allocation Approval
(Surface and Downhole)
The BLM proposes to revise this section in its entirety to remove
conditions in the existing regulations that can limit the circumstances
under which the BLM can approve a commingling application. For example,
under the existing regulation at Sec. 3173.14(a)(3), the applicant for
a CAA must demonstrate that each lease, unit PA or communitization
agreement (CA) to be included in the commingling application is capable
of production in paying quantities. By removing this provision, the BLM
expects that more leases and CAs could be included thereby promoting
additional production. By allowing for the approval of more commingling
applications, the BLM expects that some leases and CAs that are not
currently capable of producing in paying quantities would become
capable of producing in paying quantities. This is due to the fact an
approved CAA would allow an operator to reduce the number of
measurement facilities thereby reducing the day-to-day operating
expenses of the lease or CA such that the lease or CA would become
capable of producing in paying quantities. BLM is seeking comments from
operators on this point, particularly the effect on the day-to-day
operating costs due to facility consolidation. The BLM has retained the
existing requirement that all facility measurement points (FMPs) for
the proposed CAA measure production originating only from the leases,
unit PAs, or CAs that are proposed for inclusion in the CAA. The BLM
has proposed a new provision to specifically address an application
that proposes to include Indian leases. In this instance, the BIA must
first approve the inclusion of that production in the CAA. Overall, the
BLM's proposed revisions to Sec. 3173.14 (a) would allow for
commingling, consistent with 30 U.S.C. 226(q), regardless of the nature
of the Federal, Indian, State or private mineral interests, royalty
rates or revenue distribution thereby promoting greater production
while also providing the opportunity for operators to reduce their
overall costs of production.
If the production proposed for inclusion in the application
includes production from leases, unit PAs or CAs where the Federal
interests are disproportionate to one another (for example, if there
are varying royalty rates), this production can still be commingled if
certain enumerated conditions are met. The production must be measured
by an FMP that meets the requirements of subparts 3174 (Measurement of
Oil) and 3175 (Measurement of Gas) and the allocation methodology must
demonstrate the inclusion of measurement devices that can meet
measurement uncertainties as set out in the regulations.
The BLM has also proposed revising this section to include
requiring the applicant to provide notice to all interest owners that
their production is proposed for inclusion in a commingling agreement
and to clarify what information is needed for the application to be
complete.
The BLM is proposing a new paragraph (b) that would allow the BLM
to approve a commingling application if it does not meet the
requirements of paragraph (a). The BLM is proposing four conditions,
under which, if an applicant meets at least one of the enumerated
conditions, the BLM would still approve the application. The first
condition would allow the BLM to approve the application if the
production to be included is 1,000 cubic feet (Mcf) per month or less
over the preceding 12-month period for gas or 100 barrels (bbls) per
month or less for oil. The second condition would allow the BLM to
approve the application if it includes Indian leases, unit PAs, or CAs,
and has been authorized under tribal law or otherwise approved by a
Tribe or the allottees of the allotted lease. The third condition would
allow the BLM to approve the application if it
[[Page 4049]]
covers the downhole commingling of production from multiple formations
that are covered by separate leases, unit PAs, or CAs, and the BLM has
determined that the proposed commingling from those formations is an
acceptable practice for the purpose of increasing ultimate economic
recovery and resource conservation. The fourth condition would allow
the BLM to approve the application if there are overriding
considerations that indicate the BLM should approve a commingling
application: (i) If it is in the public interest, notwithstanding
potential negative royalty impacts from the allocation method, unless
Indian leases or mineral interests are to be included, in which case
the CAA cannot be approved; (ii) If the operator reasonably
demonstrates that approval is necessary to prevent waste or increase
ultimate recovery, but only to the extent that such considerations
outweigh the possibility of incremental error in measurement of the
quantity or quality of production, unless Indian leases or mineral
interests are to be included, in which case the CAA cannot be approved;
and (iii) Under either (i) or (ii), the BLM may approve a CAA if the
Indian mineral owner consents to the CAA and has been made aware of the
potential negative royalty impact. The BLM is solicitating feedback on
whether these conditions are appropriate and whether there are any
other conditions that should be considered.
The BLM is also proposing to revise paragraph (c), addressing the
timing for the BLM's approval of an application. Under the proposed
regulation, the BLM would approve a complete application within 60 days
of receipt, unless additional time is needed to complete any required
environmental analysis. The BLM is soliciting feedback on whether
approving the application in 60 days from receipt is the appropriate
timeframe.
The BLM is soliciting feedback on whether there are additional
conditions for commingling and allocation approvals that should be
included in light of the broad mandate in the OBBBA to allow for
commingling.
Section 3173.15 Applying for a Commingling and Allocation Approval
The BLM is proposing changes to the process of applying for a
commingling allocation and approval. In Sec. 3173.15(c), the BLM is
proposing to add ``with a calculated uncertainty percentage'' to
demonstrate that the uncertainty percentage meets the proposed
requirements in Sec. 3173.14. The definition of acceptable methodology
places a bound of no more than 5 percent uncertainty in the reported
production. The operator would be required to demonstrate in their
application that the proposal is within 5 percent uncertainty or there
would be overriding considerations the BLM should account for in the
decision. In Sec. 3173.15(d), the BLM is proposing to add State or
private lease numbers to the list of leases, unit PAs and CAs as the
BLM is now proposing to allow inclusion of these types of leases in an
application under this section. The BLM proposes to revise Sec.
3173.15(f) which requires the submittal of a Sundry Notice in certain
situations by deleting ``BLM managed lands'' and adding instead
``Federal or Indian'' to address the proposed changes to the types of
leases that may now be included in an application.
The BLM is proposing to substantially revise Sec. 3173.15(k) while
still maintaining the BLM's ability to ensure that production streams
proposed for commingling are compatible. Instead of the current
requirement to provide all gas analyses or oil gravities, depending on
the type of production proposed for commingling, the BLM is revising
this provision to require only the most recent gas analysis or oil
gravity. The BLM is also proposing new language in this section to
provide more flexibility and to address those situations for which the
BTU or gravity is unknown. In this case, the applicant may provide the
BLM with BTU or gravity obtained from nearby wells, unit PAs or CAs.
The BLM is also proposing to add three new paragraphs to address
the expansion of the types of mineral interests that can be included in
an application. In Sec. 3173.15(l), the BLM would require the
submittal of documentation that the mineral interest owners have
consented to the CAA and to the BLM's inspection of any equipment
required for compliance with this subpart. In Sec. 3173.15(m), the BLM
proposes to require documentation that the operator has secured access
from the surface owners to allow BLM personnel to access the
measurement facilities to verify production and royalty. In many cases,
the surface owners and the mineral owners are different requiring
consent from multiple parties to carry out the requirements of this
part. Paragraph (n) addresses those situations in which the measurement
equipment is not located on a Federal or Indian lease. In this
instance, the operator would be required to provide documentation that
the measurement equipment will be maintained in accordance with
subparts 3174 and 3175.
The BLM is soliciting feedback on whether any additional changes to
this section should be made in light of the broad mandate in the OBBBA
to allow for commingling.
Section 3173.16 Existing Commingling and Allocation Approvals
The BLM is proposing to significantly revise this section as most
of it is no longer applicable. Under the BLM's proposal, all existing
CAAs would remain in effect unless the operator adds or removes wells
or modifies the facility layout. In this case, the operator would need
to submit a Sundry Notice Form 3160-5 to the BLM. Any changes to the
existing leases, unit PAs, or CAs included in an existing CAA would
require the operator to submit a new application meeting the
requirements of the new regulations.
The BLM is soliciting feedback on whether the requirements above
are those necessary to effectuate the purposes of the OBBBA.
IV. Procedural Matters
Unleashing Prosperity Through Deregulation (E.O. 14192)
DOI has examined this proposed rulemaking and has determined that
it is consistent with the policies and directives outlined in E.O.
14154 ``Unleashing American Energy,'' and E.O. 14192, ``Unleashing
Prosperity Through Deregulation.'' This proposed rule, if finalized as
proposed, is expected to be an E.O. 14192 deregulatory action.
Regulatory Planning and Review (E.O. 12866 and E.O 13563)
Executive Order 12866 provides that the Office of Information and
Regulatory Affairs in the Office of Management and Budget will review
all significant rules. The Office of Information and Regulatory Affairs
has determined that this rule is significant.
Executive Order 13563 reaffirms the principles of E.O. 12866 while
calling for improvements in the Nation's regulatory system to promote
predictability, to reduce uncertainty, and to use the best, most
innovative, and least burdensome tools for achieving regulatory ends.
The E.O. directs agencies to consider regulatory approaches that reduce
burdens and maintain flexibility and freedom of choice for the public
where these approaches are relevant, feasible, and consistent with
regulatory objectives. E.O. 13563 emphasizes further that regulations
must be based on the best available science and that the rulemaking
process must allow for public participation and an open exchange of
ideas. We have developed
[[Page 4050]]
this rule in a manner consistent with these requirements.
This proposed rule revises the BLM's regulations governing
applications for and approval of commingling application agreements
which are contained in 43 CFR subparts 3173, 3173.14, 3173.15 and
3173.16. The BLM developed this proposed rule in a manner consistent
with the requirements in E.O. 12866 and E.O. 13563.
Regulatory Flexibility Act
This rule would have a significant economic effect on a substantial
number of small entities under the Regulatory Flexibility Act (5 U.S.C.
601 et seq.). Many of the operators affected by this rule are
considered small businesses and the rule would have a significant
overall effect. The effect would be positive as it would reduce the
regulatory burden and overall expenses for small businesses. Please
refer to the Regulatory Impact Analysis attached to this rulemaking for
detailed information regarding the impacts and benefits to small
businesses.
Unfunded Mandates Reform Act
This rule does not impose an unfunded mandate on State, local, or
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, because it does not
impose any costs on these entities. Therefore, a statement containing
the information required by the Unfunded Mandates Reform Act (2 U.S.C.
1531 et seq.) is not required.
Takings (E.O. 12630)
This rule does not effect a taking of private property or otherwise
have taking implications under E.O. 12630. The proposed rule would
revise portions of the BLM's current rules governing measurement and
site security which are contained in 43 CFR subpart 3173 and more
specifically 3173.1, 3173.14, 3173.15 and 3173.16. These terms in the
regulations are not considered a taking of private property as such
operations are subject to the existing lease terms which expressly
require that subsequent lease activities be conducted in compliance
with subsequently adopted Federal laws and regulations. The proposed
rule is not a government action capable of interfering with
constitutionally protected property rights. Therefore, the BLM has
determined that the rule would not cause a taking of private property
or require further discussion of takings implications under E.O. 12630.
A takings implication assessment is therefore not required.
Federalism (E.O. 13132)
Under the criteria in section 1 of E.O. 13132, this proposed rule
does not have sufficient federalism implications to warrant the
preparation of a federalism summary impact statement; therefore, a
federalism impact statement is not required.
The proposed rule would not have a substantial direct effect on the
States, on the relationship between the Federal Government and the
States, or on the distribution of power and responsibilities among the
levels of government. It would not apply to States or local governments
or State or local governmental entities. The rule would affect the
relationship between operators, lessees, and the BLM, but it would not
directly impact the States. Therefore, in accordance with E.O. 13132,
the BLM has determined that this proposed rule would not have
sufficient federalism implications to warrant preparation of a
Federalism Assessment.
Civil Justice Reform (E.O. 12988)
This rule complies with the requirements of E.O. 12988.
Specifically, this rule meets the criteria of section 3(a) requiring
that all regulations be reviewed to eliminate errors and ambiguity and
be written to minimize litigation; and meets the criteria of section
3(b)(2) requiring that all regulations be written in clear language and
contain clear legal standards.
Consultation With Indian Tribes (E.O. 13175 and Departmental Policy)
The Department strives to strengthen its government-to-government
relationship with Indian tribes through a commitment to consultation
with Indian tribes and recognition of their right to self-governance
and tribal sovereignty. We have evaluated this rule under the
Department's consultation policy and under the criteria in E.O. 13175
and have identified the potential for substantial direct effects on
federally recognized Indian tribes from this proposed rule.
This proposed rule could have an effect on Indian tribes as it
would allow for production from Indian leases to be commingled with
production from Federal, State and private leases potentially
negatively impacting royalty payments to Indian Tribes or allottees.
Conversely, though, it could extend the productive life of tribal wells
and hence the royalties to Tribes by reducing some operating costs.
However, the proposed rule does require the consent of Indian tribes
prior to any production from Indian leases being included in a
commingling agreement and requires the approval of the BIA if
production from Indian leases is proposed for inclusion in a
commingling agreement. Accordingly, we will consult with the affected
tribe(s) on a government-to-government basis.
Paperwork Reduction Act (44 U.S.C. 3501 et seq.)
The Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3521) generally
provides that an agency may not conduct or sponsor and, not
withstanding any other provision of law, a person is not required to
respond to a collection of information, unless it displays a currently
valid OMB control number. Collections of information include any
request or requirement to obtain, maintain, retain, or report
information to an agency, or disclose information to a third party or
to the public (44 U.S.C. 3502(3) and 5 CFR 1320.3(c)).
This proposed rule contains revised information collection
requirements that are subject to review by OMB under the PRA. OMB has
approved the existing information collection requirements contained in
43 CFR parts 3170 and pertaining to CAAs, specifically 43 CFR 3173.15
and 3173.16, under OMB control number 1004-0137. Additionally, certain
information collection requirements contained in 43 CFR part 3170 make
use of the standard form, SF-299, Application for Transportation,
Utility System, Telecommunications and Facilities on Federal Lands and
Property. OMB has approved Form SF-299 under OMB Control Number 0596-
0249. The U.S. Forest Service administers OMB Control Number 0596-0249.
This proposed rule would not result in changes to Form SF-299.
Currently, there are 102,439 total annual responses and 278,904
total annual burden hours approved under OMB Control Number 1004-0137.
While the proposed revisions would introduce certain efficiencies and
potential cost savings for both operators and the BLM, we do not
anticipate that the burden would change because of the revisions
contained in this proposed rule. The proposed revisions to the
information collection requirements, along with the projected burden
changes, are discussed below.
Revised Information Collections
1. Request for Approval of a CAA--43 FR 3173.15.
[[Page 4051]]
In addition to the current information collection requirements
contained in Sec. 3173.15 for CAAs, the proposed rule would add the
following additional requirements:
<bullet> The most recent gas analysis performed, including BTU
content (if the CAA request includes gas), and the most recent oil
gravity data (if the CAA request includes oil) from each of the leases,
units, unit PAs, or CAs proposed for inclusion in the CAA. In lieu of
the requirements in paragraph, the operator or operators may instead
submit a CAA for BLM consideration using analogous BTU content and/or
oil gravity data from nearby wells for instances where BTU content and/
or oil gravity are not explicitly known for the given leases, unit PAs
or CAs.
<bullet> Documentation demonstrating that all other interest
owners, such as private, State, or Indian, consent to both the CAA and
the BLM's inspection of the equipment to ensure compliance with 43 CFR
3173, 3174 and 3175.
<bullet> Documentation demonstrating that the operator has secured
all necessary access rights from the surface owner(s), whether private,
State, or Indian, to ensure that BLM staff may access the measurement
facilities within the CAA for conducting and verifying production,
measurement and royalty.
<bullet> Documentation demonstrating that the operator maintains
and operates the measurement equipment in accordance with 43 CFR 3174
and 3175 for production equipment that is not on a federal lease.
The BLM believes that this revision would introduce efficiencies
for operators by revising the gas and oil analysis submission by
requiring only the most recent analysis instead of all analyses for the
last 6 years. The BLM is broadening the scope of operations that can be
included in a CAA to include lands that do not fall under the authority
of the existing regulations. This results in additional requirements
from the proponent of the CAA to ensure the BLM has the ability to
inspect and verify production from non-federal and non-Indian lands.
2. Additions, Removals, or Modifications of Facility Layout (Form
3160-5)--43 CFR 3173.16.
The proposed rule would replace the current information collection
requirements pertaining to the operator's requirements to address any
inconsistencies or deficiencies with the following information
collection requirements:
<bullet> If the operator adds or removes wells or modifies the
facility layout, a Sundry Notice Form 3160-5 notice would be required.
<bullet> Modifications to existing leases, unit PAs, or CAs within
the approved CAA would require the operator to reapply for commingling
approval in accordance with the existing regulations prior to
implementing the proposed changes.
The revised regulations would reduce additional efficiencies and
potential cost savings on both operators and the BLM by allowing
existing approvals to remain in effect unless modified. The current
regulations require a review and renewal of existing CAAs upon
implementation of the rule.
The resulting new estimated total burdens for OMB Control Number
1004-0137 are provided below.
Title of Collection: Onshore Oil and Gas Operations and Production
(43 CFR part 3170).
OMB Control Number: 1004-0137.
Form Numbers: BLM Form 3160-005 and SF-299 (OMB Control Number
0596-0249).
Type of Review: Extension with revision of a currently approved
collection.
Respondents/Affected Public: Oil and gas operators on public lands
and some Indian lands.
Total Estimated Number of Annual Respondents: 864.
Total Estimated Number of Annual Responses: 102,439.
Estimated Completion Time per Response: Varies depending on
activity.
Total Estimated Number of Annual Burden Hours: 278,904.
Respondent's Obligation: Required to obtain or retain a benefit.
Frequency of Collection: On occasion; One-time; and Monthly.
Total Estimated Annual Non-hour Burden Cost: None.
The complete information-collection request that has been submitted
to OMB for this proposed rule is available at <a href="http://www.reginfo.gov/public/do/PRAMain">www.reginfo.gov/public/do/PRAMain</a>. Find this information collection by selecting ``Currently
under Review--Open for Public Comments'' or by using the search
function. If you want to comment on the information-collection
requirements of this proposed rule, please send your comments and
suggestions on this information-collection by the date indicated in the
DATES and ADDRESSES sections as previously described.
National Environmental Policy Act (NEPA)
A detailed environmental analysis under NEPA is not required
because the proposed rule would be covered by a categorical exclusion
(see 43 CFR 46.205). This proposed rule meets the criteria set forth at
43 CFR 46.210(i) for a Departmental categorical exclusion in that this
proposed rule is ``of an administrative, financial, legal, technical,
or procedural nature.'' We have also determined that the proposed rule
does not involve any of the extraordinary circumstances listed in 43
CFR 46.215 that would require further analysis under NEPA.
Environmental analysis under NEPA is not required because the proposed
rule would be covered by a categorical exclusion (see 43 CFR 46.205).
Effects on the Energy Supply (E.O. 13211)
Under E.O. 13211, agencies are required to prepare and submit to
OMB a Statement of Energy Effects for significant energy actions. This
statement is to include a detailed statement of ``any adverse effects
on energy supply, distribution, or use (including a shortfall in
supply, price increases, and increase use of foreign supplies)'' for
the action and reasonable alternatives and their effects.
Section 4(b) of E.O. 13211 defines a ``significant energy action''
as ``any action by an agency (normally published in the Federal
Register) that promulgates or is expected to lead to the promulgation
of a final rule or regulation, including notices of inquiry, advance
notices of proposed rulemaking, and notices of proposed rulemaking:
(1)(i) that is a significant regulatory action under E.O. 12866 or any
successor order, and (ii) is likely to have a significant adverse
effect on the supply, distribution, or use of energy; or (2) that is
designated by OIRA as a significant energy action.''
We conclude that this proposed rule would not warrant preparation
of a Statement of Energy Effects.
Clarity of This Regulation
We are required by E.O. 12866 (section 1 (b)(12)), E.O. 12988
(section 3(b)(1)(B)), and E.O. 13563 (section 1(a)), and by the
Presidential Memorandum of June 1, 1998, to write all rules in plain
language. This means that each rule we publish must:
(a) Be logically organized;
(b) Use the active voice to address readers directly;
(c) Use common, everyday words and clear language rather than
jargon;
(d) Be divided into short sections and sentences; and
(e) Use lists and tables wherever possible.
If you believe that we have not met these requirements, send us
comments by one of the methods listed in the ADDRESSES section. To
better help us revise the rule, your comments should
[[Page 4052]]
be as specific as possible. For example, you should tell us the numbers
of the sections or paragraphs that you find unclear, which sections or
sentences are too long, the sections where you feel lists or tables
would be useful, etc.
Author
The principal author(s) of this rule are Matthew Warren, Senior
Petroleum Engineer and Natalie Eades, Attorney-advisor, Office of the
Solicitor; Technical support provided by Scott Rickard, Economist.
List of Subjects in 43 CFR Part 3170
Administrative practice and procedure, Immediate assessments,
Indians--lands, Mineral royalties, Oil and gas reserves, Public lands--
mineral resources.
Lanny E. Erdos,
Director, Office of Surface Mining, Reclamation, and Enforcement,
Exercising Authority of the Assistant Secretary--Land and Minerals
Management.
For the reasons set out in the preamble, the Bureau of Land
Management proposes to amend 43 CFR part 3170 as follows:
PART 3170--ONSHORE OIL AND GAS PRODUCTION: GENERAL
0
1. The authority citation for part 3170 continues to read as follows:
Authority: 25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and
1751; and 43 U.S.C. 1732(b), 1733, and 1740.
0
2. Revise 3173.1 to read as follows:
Sec. 3173.1 Definitions and acronyms.
(a) As used in this subpart, the term:
Acceptable methodology means, consistent with 30 U.S.C. 226(q), (1)
use of a measurement device for each commingled source, (2) a
description of how the applicant will use an allocation method that
achieves volume measurement uncertainty levels within 2 percent or up
to five percent if there are appropriate technical and economic
justifications, or (3) use of an approved periodic well testing
methodology.
Access means:
(i) The ability to add liquids to or remove liquids from any tank
or piping system, through a valve or combination of valves or by moving
liquids from one tank to another tank; or
(ii) The ability to enter any component in a measuring system
affecting the accuracy of the measurement of the quality or quantity of
the liquid being measured; or
(iii) A written agreement that BLM officials can enter onto private
or State lands for inspection and enforcement actions conducted by the
BLM.
Appropriate valves means those valves that must be sealed during
the production or sales phase (e.g., fill lines, equalizer, overflow
lines, sales lines, circulating lines, or drain lines).
Authorized representative (AR) has the same meaning as defined in
43 CFR 3160.0-5.
Business day means any day Monday through Friday, excluding Federal
holidays.
Commingling and allocation approval (CAA) means a formal allocation
agreement to combine production from two or more sources (leases, unit
PAs, CAs, or non-Federal or non-Indian properties) before that product
reaches an FMP.
Effectively sealed means the placement of a seal in such a manner
that the sealed component cannot be accessed, moved, or altered without
breaking the seal.
Free water means the measured volume of water that is present in a
container and that is not in suspension in the contained liquid at
observed temperature.
Land description means a location surveyed in accordance with the
U.S. Department of the Interior's Manual of Surveying Instructions
(2009), that includes the quarter-quarter section, section, township,
range, and principal meridian, or other authorized survey designation
acceptable to the AO, such as metes-and-bounds, or latitude and
longitude.
Maximum ultimate economic recovery has the same meaning as defined
in 43 CFR 3160.0-5.
Mishandling means failing to measure or account for removal of
production from a facility.
Overriding considerations means any condition that makes non-
commingled measurement physically impractical or that results in
unnecessary or undue impacts.
Permanent measurement facility means all equipment constructed or
installed and used on-site for 6 months or longer, for the purpose of
determining the quantity, quality, or storage of production, and which
meets the definition of FMP under Sec. 3170.3.
Piping means a tubular system (e.g., metallic, plastic, fiberglass,
or rubber) used to move fluids (liquids and gases).
Production phase means that event during which oil is delivered
directly to or through production equipment to the storage facilities
and includes all operations at the facility other than those defined by
the sales phase.
Sales phase means that event during which oil is removed from
storage facilities for sale at an FMP.
Seal means a uniquely numbered device that completely secures
either a valve or those components of a measuring system that affect
the quality or quantity of the oil being measured.
(b) As used in this subpart, the following additional acronyms
apply:
BIA means the Bureau of Indian Affairs.
BMP means Best Management Practice.
CA means Communitization Agreement.
PA means Participating Area.
AO means Authorized Officer.
0
3. Revise Sec. 3173.14 to read as follows:
Sec. 3173.14 Conditions for commingling and allocation approval
(surface and downhole).
(a) Subject to the exceptions provided in paragraph (b) of this
section, the BLM will grant a CAA for all leases, unit PAs, or CAs if
the following criteria are met:
(1) The operator or operators provides an acceptable methodology to
the BLM for accurate allocation of production among the properties from
which production is to be commingled (including a method for allocating
produced water), as provided in 30 U.S.C. 226(q), with an agreement
signed by all operators if there is more than one operator;
(2) The FMP(s) for the proposed CAA measure production originating
only from the leases, unit PAs, or CAs in the CAA, and
(3) If production from an Indian lease is to be included in the
CAA, the Bureau of Indian Affairs approves of the inclusion of that
production in the proposed CAA.
(4) Subject to paragraph (c), the BLM will approve a CAA in
instances where the proposed commingling of production involves
production from leases, unit PAs, or CAs, even if the Federal interests
at issue are disproportionate to one another, including Federal
interests that are subject to varying royalty rates, dissimilar fixed
royalty rates, or revenue distributions, but only if the following
conditions are met:
(i) Production from each lease, unit PA, or CA is measured by an
FMP that satisfies the requirements under subpart 3174 for oil
measurement or subpart 3175 for gas measurement; or
(ii) The proposed commingling allocation methodology demonstrates
the installation of measurement devices for oil and gas sources that:
(1) can reasonably achieve volume measurement uncertainty levels with
plus or minus (+2 percent), between the allocation point and FMP
(including off-lease measurement FMPs, where applicable), during the
production phase of the well or (2) uses the allocation methods and
reporting requirements provided in subpart 3174
[[Page 4053]]
and subpart 3175 as reported on a monthly basis using a twelve-month
average.
(5) The BLM will approve a CAA under this section only after:
(i) The applicant provides notice to all interest owners of the
production to be commingled or, in lieu of notice, the applicant
provides to the BLM a signed operator agreement that includes a
methodology that is acceptable to the BLM for accurate allocation of
production among the properties from which production is to be
commingled (including a method for allocating produced water); and
(ii) The BLM receives a complete CAA from the applicant pursuant to
43 CFR 3173.15 that includes a statement by the applicant attesting
that, on or before the date the applicant submitted the CAA, the
applicant notified each interest owner by sending a copy of the
application and the attachments to the CAA, by certified mail, return
receipt requested to each interest owner.
(b) The BLM may also approve a CAA in instances where the proposed
commingling of production involves production from leases, unit PAs, or
CAs that do not meet the criteria of paragraph (a) of this section. In
order to be approved under this paragraph, a CAA must meet at least one
of the following conditions:
(1) The average monthly production over the preceding 12 months for
each lease, unit PA, or CA proposed for the CAA on an individual basis
is less than 1,000 Mcf of gas per month, or 100 bbl of oil per month;
(2) The CAA, which includes Indian leases, unit PAs, or CAs, has
been authorized under tribal law or otherwise approved by a tribe or
the allottees of the allotted lease;
(3) The CAA covers the downhole commingling of production from
multiple formations that are covered by separate leases, unit PAs, or
CAs, where the BLM has determined that the proposed commingling from
those formations is an acceptable practice for the purpose of
increasing ultimate economic recovery and resource conservation; or
(4) There are overriding considerations that indicate the BLM
should approve a commingling application: (i) in the public interest
notwithstanding potential negative royalty impacts from the allocation
method, unless Indian leases or mineral interests are to be included,
in which case the CAA cannot be approved; (ii) if the operator
reasonably demonstrates that approval is necessary to prevent waste or
increase ultimate recovery, but only to the extent that such
considerations outweigh the possibility of incremental error in
measurement of the quantity or quality of production, unless Indian
leases or mineral interests are to be included, in which case the CAA
cannot be approved; (iii) under either (i) or (ii), the BLM may approve
a CAA if the Indian mineral owner consents to the CAA and has been made
aware of the potential negative royalty impact.
(c) If the applicant meets the requirements for a CAA in this
subpart, the BLM will issue the CAA within 60 days of submission of a
complete CAA, unless an additional 30 days is necessary to complete any
required environmental analysis. A complete CAA includes all applicable
requirements from (a) and (b) of this section and Sec. 3173.15.
0
4. Revise Sec. 3173.15 to read as follows:
Sec. 3173.15 Applying for a commingling and allocation approval.
To apply for a CAA, the operator(s) must submit the following, if
applicable, to the BLM office having jurisdiction over the leases, unit
PAs, or CAs from which production is proposed to be commingled:
(a) A completed Sundry Notice for approval of commingling and
allocation (if off-lease measurement is a feature of the commingling
and allocation proposal, then a separate Sundry Notice under 3173.23 is
not necessary as long as the information required under 3173.23(b)
through (e) and, where applicable, 3173.23(f) through (i) is included
as part of the request for approval of commingling and allocation);
(b) A completed Sundry Notice for approval of off-lease measurement
under 3173.23, if any of the proposed FMPs are outside the boundaries
of any of the leases, units, or CAs from which production would be
commingled (which may be included in the same Sundry Notice as the
request for approval of commingling and allocation), except as provided
in paragraph (a) of this section;
(c) A proposed allocation agreement with a calculated uncertainty
percentage, including an allocation methodology (including allocation
of produced water), with an example of how the methodology is applied,
signed by each operator of each of the leases, unit PAs, or CAs from
which production would be included in the CAA;
(d) A list of all Federal, Indian, State, or private leases, unit
PA, or CA numbers in the proposed CAA, specifying the type of
production (i.e., oil, gas, or both) for which commingling is
requested;
(e) A topographic map or maps of appropriate scale showing the
following:
(1) The boundaries of all the leases, units, unit PAs, or
communitized areas whose production is proposed to be commingled; and
(2) The location of existing or planned facilities and the relative
location of all wellheads (including the API number) and piping
included in the CAA, and existing FMPs or FMPs proposed to be installed
to the extent known or anticipated;
(f) A surface use plan of operations (which may be included in the
same Sundry Notice as the request for approval of commingling and
allocation) if new surface disturbance is proposed for the FMP and its
associated facilities are located within the boundaries of the Federal
or Indian lease, units, or CA from which production would be
commingled;
(g) A right-of-way grant application (Standard Form 299), filed
under 43 CFR part 2880, if the proposed FMP is on a pipeline, or under
43 CFR part 2800, if the proposed FMP is a meter or storage tank. This
requirement applies only when new surface disturbance is proposed for
the FMP, and its associated facilities are located on BLM-managed land
outside any of the leases, units, or communitized areas whose
production would be commingled;
(h) Written approval from the appropriate surface-management
agency, if new surface disturbance is proposed for the FMP and its
associated facilities are located on Federal land managed by an agency
other than the BLM;
(i) A right-of-way grant application for the proposed FMP, filed
under 25 CFR part 169, with the appropriate BIA office, if any of the
proposed surface facilities are on Indian land outside the lease, unit,
or communitized area from which the production would be commingled;
(j) Documentation demonstrating that each of the leases, unit PAs,
or CAs proposed for inclusion in the CAA is producing in paying
quantities (or, in the case of Federal leases, is capable of production
in paying quantities) pending approval of the CAA; and
(k) Documentation demonstrating that the production from each of
the leases, unit PAs, or CAs is compatible with each other by providing
the following:
(1) The most recent gas analysis performed, including BTU content
(if the CAA request includes gas), and the most recent oil gravity data
(if the CAA request includes oil) from each of the leases, units, unit
PAs, or CAs proposed for inclusion in the CAA. (2) In lieu of
[[Page 4054]]
the requirements in paragraph (1), the operator or operators may
instead submit a CAA for BLM consideration using analogous BTU content
and/or oil gravity data from nearby wells for instances where BTU
content and/or oil gravity are not explicitly known for the given
leases, unit PAs or CAs.
(l) Documentation demonstrating that all other interest owners,
such as private, State, or Indian, consent to both the CAA and the
BLM's inspection of the equipment to ensure compliance with Sec. Sec.
3173, 3174, and 3175.
(m) Documentation demonstrating that the operator has secured all
necessary access rights from the surface owner(s), whether private,
State, or Indian, to ensure that BLM staff may access the measurement
facilities within the CAA for conducting and verifying production,
measurement and royalty.
(n) Documentation demonstrating that the operator maintains and
operates the measurement equipment in accordance with Sec. Sec. 3174
and 3175 for production equipment that is not allocated within a
Federal or Indian lease, unit PA, or CA.
0
5. Revise Sec. 3173.16 to read as follows:
Sec. 3173.16 Existing commingling and allocation approvals.
All existing CAAs in effect on [EFFECTIVE DATE OF FINAL RULE] will
remain in effect, unless the operator adds or removes wells or modifies
the facility layout, in which case a Sundry Notice Form 3160-5 notice
will be required. Otherwise, modifications to existing leases, unit
PAs, or CAs within the approved CAA will require the operator to
reapply for commingling approval in accordance with the existing
regulations prior to implementing the proposed changes.
[FR Doc. 2026-01926 Filed 1-29-26; 8:45 am]
BILLING CODE 4331-29-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.