Oversight of the Oil and Gas Inspection and Enforcement Program

UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
WASHINGTON, D.C. 20240
http://www.blm.gov

July 27, 2012

In Reply Refer To:  

3100 (310) P         

EMS TRANSMISSION 08/01/2012

Instruction Memorandum No. 2012-161

Expires:  09/30/2013

To:                   All Field Office Officials

From:               Assistant Director, Minerals and Realty Management

Subject:           Oversight of the Oil and Gas Inspection and Enforcement Program

Program Area:  Fluid Minerals.

Purpose:  This Instruction Memorandum (IM) clarifies guidance in documenting and performing oversight inspections of the Inspection and Enforcement (I&E) program.

Policy/Action:  The Bureau of Land Management (BLM) oil and gas program is only as strong as the quality and completeness of inspections, the coaching provided, and the oversight engagement of leads, supervisors, and management at all levels.  In December 2010, the Office of the Inspector General (OIG) agreed and recommended increased BLM oversight of written inspection and file documentation protocols, increased oversight inspections by supervisors, and evidence of inspection completion.  Therefore, all staff involved in performing, documenting, reviewing, or overseeing I&E inspections must adhere to the following protocols. 

For the purpose of this IM, “inspector” is any person that performs any inspection entered into the Automated Fluid Minerals Support System (AFMSS).  The “oversight reviewer” or “reviewer” is a person with detailed I&E program knowledge, experience, and authority (certification) to perform the inspection that is being reviewed.  Reviewers are usually supervisory or lead Petroleum Engineering Technicians (PET), Production Accountability Technicians (PAT), Natural Resource Specialists (NRS), Environmental Protection Specialists (EPS), State Office Program Leads (I&E, surface, etc.), or senior inspectors designated to perform a review.  The reviewer may or may not be assigned to the same office as the inspector.

The reviewer must record all oversight inspections associated with specific field inspections in the official file and in AFMSS as OV (Oversight Inspection) and include a Records Review (RR) activity code, field, travel, and office inspection time, as appropriate.  Do not enter remarks about the quality of the inspection reviewed; the “Employee Performance Appraisal Plan” (EPAP) is the appropriate venue for addressing inspection quality.  Each inspector must have at least one OV review conducted each fiscal year.  The BLM encourages reviewers to perform additional OV/RR and field OV inspections with individual inspectors regularly during the year.   

The BLM has amended the current OV and RR definitions in BLM Handbook H-3160-5, Inspection and Enforcement Documentation and Strategy Development Handbook (Appendix 1), to read as follows:

OV- Oversight Inspection: An inspection performed independently to verify results of previous inspections by local or remote inspection personnel to gauge inspection effectiveness, accuracy, and conformance to standards for the inspection work.  All OV inspections must include an RR activity code of the inspection documentation (official file and AFMSS), coded as OV/RR.  If a field inspection is conducted either with the inspector or independently of the inspector, the appropriate activity code must also be documented in the official file and AFMSS.  All activity codes may be used.

RR - Records Review:  An office or field review of the Oil and Gas Operations Report (OGOR) as part of a Production Inspection (PI) or Records Verification (RV); or an office review of AFMSS and the official files as part of an OV.  If a complete records review is conducted under a PI, as defined under the PR activity, this code is not used.  Coded as PI/RR, RV/RR, Theft (TH)/RR, or OV/RR.

All OV/RR inspections must include the following information in remarks:

1. The name of the inspector (as found in AFMSS) whose inspection was reviewed.
2. The “Inspection Type” code (PI – Production, DW – Drilling Well, OV – Oversight Review, TH – Theft, etc.) of the inspection that was reviewed. 
3. The close date of the inspection reviewed.

Example:  J. Doe performed the PI that was closed on 6/1/2012.

At a minimum the oversight reviewer must verify that:

1. All appropriate official BLM forms (inspection, witnessing, etc.) are used and completed correctly.
2. Necessary independent calculations are performed, accurate, and documented (cementing, volumes, pressures, etc.).
3. Appropriate copies of supporting documents (cementers, calibration/proving, testing reports, operators records, photos, etc.) are in the file.
4. Inspector comments/remarks in AFMSS and the file are relevant to the inspection.
5. The information in AFMSS (activity codes, dates, volumes, wells/facilities inspected, remarks, etc.) is supported by the official file, i.e., official forms, supporting documents, and remarks. 
6. The AFMSS remarks (general, well, facility) provide an adequate summary of the inspection and would be understood by another reviewer with a basic understanding of oil and gas operations.
7. If Incidents of Noncompliance (INC) or written orders were issued, they were properly issued, appropriate, according to policy, and documented (photos, conversation record, etc.).  If verbal warnings are used, they must be entered into AFMSS and used only for a minor, inadvertent, and non-recurring violation that is corrected immediately and prior to the inspector leaving the location.
8. Inspection, travel, and office times appear reasonably accurate for the inspection performed.

Note:  Supervisors should check that the inspector is not coding more time in AFMSS for office, travel, and inspection than is accounted for in Time and Attendance (T&A) records.

9. Office time appears reasonable.

If the reviewer is not responsible for the inspector’s EPAP and supervision, the reviewer must not discuss the results of a review with anyone other than the inspector or the inspector’s supervisor, unless legally required.  Failure to maintain confidentiality of review findings will result in disciplinary action.

State offices are responsible for overall programmatic oversight of field office operations.  State offices with four or fewer field offices must establish a schedule to complete a detailed review (Internal Control Review) of the I&E program for each field office at least once every 3 years.  State offices with five or more field offices must establish a schedule to complete a detailed review of the I&E program for each field office at least once every 6 years.  The State Director must submit a report of findings to the Chief, Division of Fluid Minerals (WO-310), for each office reviewed within 30 days after completing the review.  The report must:

1. Explain if the inspections (drilling, production, abandonment, environmental, follow-up, and oversight) are conducted in accordance with policy.
2. Describe inspection documentation in AFMSS and the official file.
3. Determine and discuss if enforcement actions (INCs, written orders, verbal warnings) are accurate, appropriate, properly documented (AFMSS, official files), and in accordance with policy.
4. Discuss the I&E strategy.  Is it being followed and are planned inspections being completed?
5. Review staffing (PE, PET, PAT, NRS/EPS, and support) and training needs.
6. Identify areas where existing program guidance (local, state, or national) is not clear, contradictory, inconsistent, or nonexistent.
7. Note the number and types of inspections reviewed (PI, DW, OV, etc.).
8. Note the name and title of the person(s) that performed the program review.
9. If appropriate, include an action plan detailing what, when, and how issues will be resolved with a follow-up schedule to verify the action plan progress and success.
10. If the required action plan is complete, attach a close-out report.

State offices should consider reciprocal arrangements with other states for staff assistance to perform the planned field office program reviews.

Timeframe:  Effective immediately, implementation plan (attachment 1).

Budget Impact:  This policy will result in a slight reduction in the number of field inspections that a reviewer would perform to meet the annual Inspection and Enforcement Strategy.  We anticipate some increase in travel and per diem to perform the field office programmatic reviews. 

Background:  In December 2010, the OIG issued a report entitled, “Bureau of Land Management’s Oil and Gas Inspection and Enforcement Program,” CR-EV-BLM-0001-2009.  Recommendation 5 states, “Develop and implement standardized and written oversight inspection and file documentation protocols to improve the quality of inspections.  These protocols should include increasing the number of oversight inspections conducted by supervisors and requiring evidence in the inspection report files to demonstrate inspections were actually performed.”

Manual/Handbook Sections Affected:  BLM Manual H 3160-5, Inspection and Enforcement Documentation and Strategy Development Handbook, will incorporate the interim policy contained in this IM during its next revision.

Coordination:  The Division of Fluid Minerals, State Office Inspection and Enforcement Coordinators, and field office personnel coordinated preparation of this IM.

Contact:  If you have any questions concerning the content of this IM, please contact me at 202-208-4201, or your staff may contact Steven Wells, Chief, Division of Fluid Minerals, at 202-912-7143 (s1wells@blm.gov) or Michael Wade at 303-236-1930 (mwade@blm.gov).

Signed by:                                                       Authenticated by:

Mitchell Leverette                                           Robert M. Williams

Acting, Assistant Director                              Division of IRM Governance,WO-560

Minerals and Realty Management