Rule2026-04135
Offshore Downhole Commingling Regulatory Updates
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 2, 2026
Effective
March 2, 2026
Issuing agencies
Interior DepartmentSafety and Environmental Enforcement Bureau
Abstract
The Department of the Interior (DOI or Department), through the Bureau of Safety and Environmental Enforcement (BSEE), is revising the Outer Continental Shelf (OCS) downhole commingling regulations consistent with the One Big Beautiful Bill Act (OBBB). These revisions update the regulations to ensure consistency with the OBBB when BSEE reviews a request for downhole commingling.
Full Text
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<title>Federal Register, Volume 91 Issue 40 (Monday, March 2, 2026)</title>
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[Federal Register Volume 91, Number 40 (Monday, March 2, 2026)]
[Rules and Regulations]
[Pages 9998-10001]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04135]
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DEPARTMENT OF THE INTERIOR
Bureau of Safety and Environmental Enforcement
30 CFR Part 250
[Docket ID: BSEE-2025-0134; EEEE500000--256E1700D2--ET1SF0000.EAQ000]
RIN 1014-AA68
Offshore Downhole Commingling Regulatory Updates
AGENCY: Bureau of Safety and Environmental Enforcement, Interior.
ACTION: Direct final rule; response to comments.
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SUMMARY: The Department of the Interior (DOI or Department), through
the Bureau of Safety and Environmental Enforcement (BSEE), is revising
the Outer Continental Shelf (OCS) downhole commingling regulations
consistent with the One Big Beautiful Bill Act (OBBB). These revisions
update the regulations to ensure consistency with the OBBB when BSEE
reviews a request for downhole commingling.
DATES: Effective March 2, 2026.
FOR FURTHER INFORMATION CONTACT: Kirk Malstrom, Regulations and
Standards Branch, (202) 258-1518, or by email: <a href="/cdn-cgi/l/email-protection#99ebfcfeead9fbeafcfcb7fef6ef"><span class="__cf_email__" data-cfemail="82f0e7e5f1c2e0f1e7e7ace5edf4">[email protected]</span></a>.
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.
SUPPLEMENTARY INFORMATION: The Department published a direct final rule
(DFR), ``Offshore Downhole Commingling Regulatory Updates,'' in the
Federal Register on August 13, 2025 (90 FR 38935). The final rule
became effective on October 14, 2025. In relevant part, the DFR stated
that, if significant adverse comments were received by September 12,
2025, the Department would publish notice in the Federal Register and
either withdraw the rule or issue a new rule that responded to the
comments. The Department is hereby providing notice that it received a
significant adverse comment regarding the DFR and is responding to that
comment in this DFR.
Executive Summary
This DFR revises the regulatory provisions in 30 CFR 250.1158 in
response to the applicable OBBB provisions, Public Law 119-21, which
the President signed into law on July 4, 2025. The Outer Continental
Shelf Lands Act (OCSLA) authorizes the Secretary of the Interior
(Secretary) to promulgate regulations that carry out the provisions in
OCSLA. Those regulations include provisions that require lessees to
safely produce any oil, gas, or both at rates consistent with
applicable law and orders to assure the maximum rate of production that
may be sustained without loss of ultimate recovery of oil, gas, or both
under sound engineering and economic principles. BSEE performs
technical analyses for downhole commingling to ensure that production
methods meet OCSLA's requirement for ultimate recovery and safety. This
rule revises BSEE regulations to reflect the offshore commingling
language in the OBBB regarding safety and ultimate recovery and to
clarify how BSEE will apply the OBBB's standards when reviewing
commingling requests.
Table of Contents:
I. Background
A. Statutory and Regulatory Authority and Responsibilities
B. Purpose and Summary of the Rulemaking
C. Response to Comments on Direct Final Rule
II. Procedural Matters
I. Background
A. Statutory and Regulatory Authority and Responsibilities
The Department's authority for this DFR is derived from OCSLA,
codified at 43 U.S.C. 1331-1356a. OCSLA, enacted in 1953 and
substantially revised in 1978, authorizes the Secretary to regulate and
administer mineral and oil and gas exploration, development, and
production operations on the OCS. The Secretary has delegated authority
to perform certain of these functions to BSEE under Secretary's Order
3299.\1\
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\1\ <a href="https://www.doi.gov/sites/doi.gov/files/elips/documents/3299a2-establishment_of_the_bureau_of_ocean_energy_management_the_bureau_of_safety_and_environmental_enforcement_and_the_office_of_natural_resources_revenue.pdf">https://www.doi.gov/sites/doi.gov/files/elips/documents/3299a2-establishment_of_the_bureau_of_ocean_energy_management_the_bureau_of_safety_and_environmental_enforcement_and_the_office_of_natural_resources_revenue.pdf</a>.
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To carry out its responsibilities, BSEE regulates offshore oil and
gas and mineral operations to enhance the safety of oil and gas and
mineral exploration, development, and production on the OCS, and to
implement advancements in technology. BSEE also conducts onsite
inspections to ensure compliance with regulations, lease terms, and
approved plans and permits. Detailed information concerning the BSEE-
administered regulations and guidance to the offshore oil and gas and
mineral industries may be found on BSEE's website at: <a href="https://www.bsee.gov/protection">https://www.bsee.gov/protection</a>.
BSEE administers a regulatory program that covers a wide range of
OCS facilities and activities that offshore operators \2\ perform
throughout the OCS. See 30 CFR part 250. This DFR is applicable to
requests for BSEE approval of downhole commingling operations.
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\2\ The regulations at 30 CFR part 250 generally apply to ``a
lessee, the owner or holder of operating rights, a designated
operator or agent of the lessee(s)'' (30 CFR 250.105 (definition of
``you'') and ``the person actually performing the activity to which
the requirement applies'' (30 CFR 250.146(c)). For convenience, this
preamble will refer to these regulated entities as ``operators''
unless otherwise indicated.
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B. Purpose and Summary of the Rulemaking
OCSLA authorizes the Secretary to promulgate regulations that carry
out the provisions in OCSLA. In part, OCSLA requires lessees to safely
produce any oil, gas, or both at rates consistent with applicable law
and orders to assure the maximum rate of production that may be
sustained without loss of ultimate recovery of oil, gas, or both under
sound engineering and economic principles. 43 U.S.C. 1344(a) and (g).
Under OBBB section 50102, the ``Secretary of the Interior shall
approve a request of an operator to commingle oil or gas production
from multiple reservoirs within a single wellbore completed on the
outer Continental Shelf in the Gulf of America Region unless the
Secretary of the Interior determines that conclusive evidence
establishes that the commingling--(1) could not be conducted by the
operator in a safe manner; or (2) would result in an ultimate recovery
from the applicable reservoirs to be reduced in comparison to the
expected recovery of those reservoirs if they had not been
commingled.''
BSEE performs technical analyses for downhole commingling to ensure
that production methods meet OCSLA's requirement for ultimate recovery.
This rule revises the BSEE regulations to align with the offshore
commingling language in the OBBB to ensure that commingling will be
conducted in a safe manner and the operation will not reduce ultimate
recovery.
C. Response to Comments on Direct Final Rule
Comment Summary
BSEE received a comment expressing concern with its decision to
issue a DFR rather than a notice of proposed
[[Page 9999]]
rulemaking, which provides for the traditional opportunity for public
notice and comment. The commenter expressed concern with the OBBB. The
comment specifically stated that OBBB section 50102 shifts or
eliminates the operator's responsibility to ensure proposed commingling
operations demonstrate that safety, environmental, and resource
conservation risks have been fully considered and effectively mitigated
by requiring BSEE approval unless BSEE proves conclusively that the
operation could not be conducted safely or that resource recovery would
be reduced.
The commenter asserted that an opportunity for notice and comment
is necessary to ensure that section 50102 is implemented in a manner
that minimizes safety, environmental, and resource conservation risks.
The commenter cited BSEE's commingling fact sheet that acknowledges
that crossflow risks may exist when there are large pressure
differences between commingled reservoirs or fluid compatibility risks
that may be present if fluids from different reservoirs are unsafely
mixed, causing well integrity and efficiency issues. The commenter
questioned whether an independent assessment of Gulf of America
downhole commingling safety and resource recovery risks should be
conducted before finalizing a rule that mandates approval of all
applications. The commenter also questioned what criteria BSEE will use
in determining that there is ``conclusive evidence'' that a commingling
request would be unsafe or would reduce ultimate resource recovery.
Aside from these risk concerns, the commenter also referenced an
April 2025 commingling policy whose development was informed by a
University of Texas (UT) study of the unique Paleogene fields in the
Gulf of America. The policy implemented new parameters for downhole
commingling in the Paleogene (Wilcox) reservoirs, expanding the
allowable pressure differential between commingled intervals from 200
psi to 1500 psi. The commenter posed certain questions in relation to
that study. For example, does BSEE have evidence that supports the
applicability of the study results to other fields? What are BSEE's
plans for such a study and other related research? What operational
boundaries does the rule impose, like the 1500 psi pressure
differential threshold in the April 2025 policy, for safe downhole
commingling and optimal reservoir management?
Finally, the commenter also posed general questions about BSEE's
commingling program. For example, how will BSEE ensure that production
from each interval is accurately measured and accounted for? How will
BSEE ensure that long term production benefits are not sacrificed in
the interest of accelerated downhole commingling payouts?
The commenter believed that the public should provide input on both
the technical issues and regulatory policy implications of the OBBB
mandate, including recommending implementation policies that would most
effectively mitigate operational risks.
Therefore, the commenter recommended that the downhole commingling
rule should be published in draft form with a comment period of at
least 90 days. The commenter also recommended that BSEE consider
hosting a public forum during the comment period to present research on
downhole commingling and to accept input on mitigations and
implementation policies.
BSEE Response
BSEE disagrees with the commenter's assertion about the overall
effect and impact this final rule will have on safety or resource
conservation. The rule does not eliminate operator responsibility.
Instead, it aligns existing regulations with the statutory mandate of
OBBB section 50102, which requires approval of commingling requests
unless conclusive evidence shows the operation would be unsafe or
reduce ultimate recovery.
Operators must still ensure proposed commingling operations
demonstrate that safety, environmental, and resource conservation risks
have been fully considered and effectively mitigated. More
specifically, this final rule does not change requirements in Sec.
250.1167 related to the technical data operators must submit to obtain
BSEE's approval for downhole commingling. The operator must submit
various types of information about its commingling proposal, including
maps (e.g., geologic and geographic), seismic data, well logs,
engineering data, and other types of information about the proposal
(e.g., economic analysis and explanation for how maximum recovery will
be achieved). Operators must also comply with all other applicable
regulations in 30 CFR part 250, including, but not limited to,
regulations that address drilling operations (subpart D), well-
completion operations (subpart E), and production safety systems
(subpart H), all of which address operational safety and environmental
protection.
In addition, this DFR does not relieve the operator from complying
with Sec. 250.107, ``What must I do to protect health, safety,
property, and the environment?,'' which addresses the need to protect
health, safety, property, and the environment by performing all
operations in a safe and workmanlike manner, maintaining all equipment
and work areas in a safe condition, and utilizing recognized
engineering practices that reduce risks to the lowest level
practicable. Operators also must still comply with Sec. 250.106.
``What standards will the Director use to regulate lease operations?,''
which addresses the need to promote orderly exploration, development,
and production, prevent injury or loss of life, and prevent damage to
or waste of any natural resource, property, or the environment.
Collectively, compliance with these regulations help ensure operators
demonstrate, and BSEE confirms, that a commingling proposal is safe,
protects the environment, and ensures resource conservation.
BSEE disagrees with the commenter's suggestion that an independent
assessment of Gulf of America downhole commingling safety and resource
recovery risks be performed before issuing a final rule. This DFR only
revises the regulations to conform to the statutory requirement in the
OBBB. The OBBB's mandate remains in effect regardless of whether this
DFR is issued. Therefore, conducting an independent assessment will not
change the statutory mandate. As outlined in the OBBB and BSEE
regulations, BSEE will continue its mission to ensure safe operations
and welcomes the suggestion to conduct an independent assessment, which
it will consider in the future. BSEE will also continue to evaluate
commingling risks and ensure the commingling request comply with
applicable regulations.
With respect to the UT study that helped inform the development of
the April 2025 commingling policy, BSEE is not applying the results of
that study outside of the Paleogene (Wilcox) reservoirs, which was the
limit of the study's scope. However, BSEE is interested in evaluating
the study's applicability or methodology to other geologic provinces.
As referenced in BSEE's downhole commingling fact sheet,\3\ $500,000
has been allocated for further study to ensure commingling policies
remain effective and aligned with the latest science and industry
practices. And while the UT study was helpful in establishing
implementation policies that address specific developments, it would
not be
[[Page 10000]]
beneficial to incorporate such a prescription in the regulations as
circumstances may be different in other development areas. It is more
appropriate for BSEE to evaluate each commingling request on a case-by-
case basis to address site-specific conditions for safe downhole
commingling and optimal reservoir management.
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\3\ <a href="https://www.bsee.gov/sites/bsee.gov/files/2025-05/Commingling%20Fact%20Sheet%202025.pdf">https://www.bsee.gov/sites/bsee.gov/files/2025-05/Commingling%20Fact%20Sheet%202025.pdf</a>.
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With respect to accurate production measurements, BSEE will still
apply its oil and gas measurement requirements in 30 CFR subpart L,
which address ongoing well-monitoring, surveillance, and reporting to
ensure accurate production accounting. Operators must obtain
measurement approval from BSEE before commencing production. BSEE will
continue to ensure appropriate measurement for royalty purposes and
reporting.
With respect to concerns about the lack of opportunity to provide
public input, BSEE did not use notice and comment rulemaking consistent
with the Administrative Procedure Act, which allows agencies to skip
notice-and-comment procedures if the rule is deemed noncontroversial
and technical in nature. This DFR's scope was to ensure consistency
with the OBBB when BSEE reviews a request for downhole commingling.
As discussed above, this rule does not relieve BSEE of its
obligation to carry out the provisions in OCSLA, including provisions
that require lessees to safely produce any oil, gas, or both at rates
consistent with applicable law and orders to assure the maximum rate of
production that may be sustained without loss of ultimate recovery of
oil, gas, or both under sound engineering and economic principles. Nor
does it relieve the operator's obligation to comply with other
requirements in BSEE's regulations for lease operations. BSEE has
evaluated the commenter's concerns about public comment and, due to the
nature of the updates in this rule to be consistent with the OBBB, BSEE
will not withdraw the rule. However, BSEE agrees that a public forum or
workshop may improve stakeholder overall understanding of commingling
operations and may consider hosting downhole commingling outreach at a
later time.
Comment Summary
Another commenter generally supported the alignment with the OBBB
and recommended that BSEE ensure that safety standards and
environmental protections remain the highest priority in all
commingling approvals. The commenter also suggested that clear guidance
for industry compliance and transparent public reporting would also
strengthen confidence in this rule.
BSEE Response
BSEE agrees with the commenter's concerns. BSEE is committed to
maintaining the highest standards of safety and environmental
stewardship. As previously discussed, BSEE will continue to review each
commingling request on a case-by-case basis to ensure that each
operator's proposal maximizes resource recovery while minimizing risks
to human safety and the environment. As part of that review process,
BSEE will consider how advanced monitoring technologies, such as
intelligent completions, which allow for real-time control of each
reservoir zone, could enable operators to independently monitor each
reservoir's performance, ensuring that higher-pressure zones do not
suppress lower-pressure ones, which could cause inefficiency or well
damage. And looking ahead, BSEE is working to update its overall
downhole commingling guidance to ensure that all stakeholders are
involved in the ongoing dialogue regarding best practices. BSEE will
consider how this collaborative approach may achieve greater
transparency to the public.
II. Procedural Matters
Regulatory Planning and Review (E.O. 12866) and Improving Regulation
and Regulatory Review (E.O. 13563)
E.O. 12866 provides that the Office of Information and Regulatory
Affairs (OIRA) in the Office of Management and Budget (OMB) will review
all significant rules. OIRA has determined that this DFR is not
significant.
E.O. 13563 reaffirms the principles of E.O. 12866, while calling
for improvements in the Nation's regulatory system to promote
predictability, reduce uncertainty, and use the best, most innovative,
and least burdensome tools for achieving regulatory ends. E.O. 13563
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 agencies must base
regulations on the best available science and that the rulemaking
process must allow for public participation and an open exchange of
ideas. BSEE developed this DFR in a manner consistent with these
requirements.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA, 5 U.S.C. 601-612) requires an
agency to prepare a regulatory flexibility analysis for all rules
unless the agency certifies that the rule will not have a significant
economic impact on a substantial number of small entities. The RFA
applies only to rules for which an agency is required to first publish
notice of a proposed rule. See 5 U.S.C. 603(a) and 604(a). The RFA does
not apply because the Department is not required to publish a notice of
proposed rulemaking for this DFR.
Congressional Review Act
This DFR is not a major rule under the Congressional Review Act, 5
U.S.C. 804(2). Specifically, the DFR: (1) will not have an annual
effect on the economy of $100 million or more; (2) will not cause a
major increase in costs or prices for consumers, individual industries,
Federal, State, or local government agencies, or geographic regions; or
(3) will not have significant adverse effects on competition,
employment, investment, productivity, innovation, or on the ability of
U.S.-based enterprises to compete with foreign-based enterprises in
domestic and export markets.
Unfunded Mandates Reform Act of 1995
This DFR would not impose an unfunded mandate on State, local, or
Tribal governments or the private sector of more than $100 million per
year. The rule would not have a significant or unique effect on State,
local, or Tribal governments or the private sector. The rule merely
revises the offshore commingling regulations to implement requirements
in the OBBB. Therefore, a statement containing the information required
by Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) is not
required.
Takings Implication Assessment (E.O. 12630)
Under the criteria in E.O. 12630, this DFR does not have
significant takings implications. The rule is not a governmental action
capable of interference with constitutionally protected property
rights. Therefore, a takings implication assessment is not required.
Federalism (E.O. 13132)
Under the criteria in E.O. 13132, this DFR will not have federalism
implications. This rule will not substantially and directly affect the
relationship between the Federal and State governments. To the extent
that State and local governments have a role
[[Page 10001]]
in OCS activities, this rule will not affect that role. Therefore, a
federalism assessment is not required.
Civil Justice Reform (E.O. 12988)
This DFR complies with the requirements of E.O. 12988.
Specifically, this rule:
(1) 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
(2) 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)
BSEE strives to strengthen its government-to-government
relationships with federally recognized Indian Tribes through a
commitment to consultation with the Tribes and recognition of their
right to Tribal self-governance and sovereignty. We are also respectful
of our responsibilities for consultation with Alaska Native Claims
Settlement Act (ANCSA) Corporations and the Native Hawaiian Community.
BSEE is committed to compliance with E.O. 13175, ``Consultation and
Coordination with Indian Tribal Governments'' (dated November 6, 2000),
and DOI's policies and procedures on consultation with Indian Tribes,
Alaska Native Claims Settlement Act corporations, and the Native
Hawaiian Community (512 Departmental Manual 4, dated November 30, 2022,
512 Departmental Manual 6, dated November 30, 2022, 513 Departmental
Manual 1, dated January 16, 2025, 512 Departmental Manual 5, dated
November 30, 2022, Departmental Manual 7, dated November 30, 2022, and
513 Departmental Manual 2, dated January 16, 2025, respectively).
BSEE evaluated this DFR under E.O. 13175 and the Department's
consultation policies and procedures. BSEE determined that this DFR has
no substantial direct effects on federally recognized Indian Tribes,
ANCSA corporations, or the Native Hawaiian Community and that
consultation under the Department's consultation policies is not
required.
Paperwork Reduction Act (PRA) of 1995
This rule does not contain any new information collection
requirements. Thus, a submission to OMB under the PRA, 44 U.S.C. 3501
et seq, is not required. BSEE may not conduct or sponsor, and you are
not required to respond to, a collection of information unless it
displays a currently valid OMB control number. Please reference OMB
Control Number 1014-0019 which covers BSEE's Information Collection
under 30 CFR part 250; Subpart K, ``Oil and Gas Production
Requirements.''
National Environmental Policy Act of 1969 (NEPA)
This DFR does not constitute a major Federal action significantly
affecting the quality of the human environment. A detailed statement
under NEPA (42 U.S.C. 4321 et seq.) is not required because this rule
is covered by a categorical exclusion applicable to regulatory
functions ``that are of an administrative, financial, legal, technical,
or procedural nature.'' 43 CFR 46.210(i). In addition, BSEE determined
that this DFR does not involve any of the extraordinary circumstances
listed in 43 CFR 46.215 that would require further analysis under NEPA.
Data Quality Act
In developing this DFR, we did not conduct or use a study,
experiment, or survey requiring peer review under the Data Quality Act
(Pub. L. 106-554, app. C, sec. 515, 114 Stat. 2763, 2763A-153-154).
Effects on the Nation's Energy Supply (E.O. 13211)
This DFR is not a significant energy action under the definition in
E.O. 13211 because the rule is not a significant regulatory action
under E.O. 12866, and it is not likely to have a significant adverse
effect on the supply, distribution, or use of energy. Therefore, a
statement of energy effects is not required.
Clarity of This Regulation
We are required by E.O. 12866, E.O. 12988, and by the Presidential
memorandum of June 1, 1998, to write all rules in plain language. This
means that each rule we publish must:
(1) Be logically organized;
(2) Use the active voice to address readers directly;
(3) Use clear language rather than jargon;
(4) Be divided into short sections and sentences; and
(5) Use lists and tables wherever possible.
If you feel 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 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, or the sections where you feel lists or tables would be
useful.
List of Subjects in 30 CFR Part 250
Administrative practice and procedure, Continental shelf,
Environmental impact statements. Environmental protection, Government
contracts, Investigations, Mineral resources, Oil and gas exploration,
Penalties, Pipelines, Outer Continental Shelf--mineral resources, Outer
Continental Shelf--rights-of-way, Reporting and recordkeeping
requirements, Sulphur operations.
Lanny E. Erdos,
Director, Office of Surface Mining, Reclamation, and Enforcement
Exercising Authority of the Assistant Secretary, Land and Minerals
Management
For the reasons stated in the preamble, the Bureau of Safety and
Environmental Enforcement amends 30 CFR part 250 as follows:
PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER
CONTINENTAL SHELF
0
1. The authority citation continues to read as follows:
Authority: 30 U.S.C. 1751, 31 U.S.C. 9701, 33 U.S.C.
1321(j)(1)(C), 43 U.S.C. 1334.
0
2. Amend Sec. 250.1158 by revising paragraph (a) to read as follows:
Sec. 250.1158 How do I receive approval to downhole commingle
hydrocarbons?
(a) Before you perforate a well, you must request and receive
approval from the Regional Supervisor to commingle hydrocarbons
produced from multiple reservoirs within a common wellbore. The
Regional Supervisor will approve a request of an operator to commingle
hydrocarbons unless he or she finds, based on conclusive evidence, that
the commingling could not be conducted by the operator in a safe manner
or that the commingling would reduce ultimate recovery from the
applicable reservoirs. You must also include the service fee listed in
Sec. 250.125, according to the instructions in Sec. 250.126, and the
supporting information, as listed in the table in Sec. 250.1167, with
your request.
* * * * *
[FR Doc. 2026-04135 Filed 2-27-26; 8:45 am]
BILLING CODE 4310-VH-P
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