Partial Delayed Implementation of 43 CFR 3170 Regulations

UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
WASHINGTON, D.C. 20240-0036
http://www.blm.gov

January 17, 2017

In Reply Refer To:
3160 (310) P

EMS TRANSMISSION 01/18/2017
Instruction Memorandum No. 2017-032
Expires:  09/30/2020

To:                   All Field Office Officials

From:               Assistant Director, Energy, Minerals, and Realty Management

Subject:            Partial Delayed Implementation of 43 CFR 3170 Regulations

Program Areas:    Oil and Gas Exploration and Operations

Purpose:  This Instruction Memorandum (IM) outlines the Bureau of Land Management (BLM) policy and procedures for delaying full implementation of 43 Code of Federal Regulations (CFR) 3173 as it relates to electronic filing requirements for Facility Measurement Points (FMP) and site facility diagrams, and 43 CFR 3174 as it relates to permanent oil measurement facilities installed before January 17, 2017.  

Policy/Action:  State and field offices must post an informational letter (see Attachment) to their state webpages and mail the informational letter to appropriate local industry groups and state oil and gas commissions by January 20, 2017. State and field offices must also mail an informational letter to oil and gas operators as appropriate. This letter explains interim policy and procedures for delaying implementation of electronic filing of requests for FMPs and new/amended site facility diagrams. The Washington Office will also post the operator informational letter attachment on the 3173 and 3174 web pages and plans to follow with a Notice to Lessee. 

State and field offices will delay implementation and enforcement of new oil measurement regulations under 3174 as they apply to permanent oil measurement facilities in place before January 17, 2017. The length of the delay will be the number of days between January 17, 2017, and the date when the BLM fully implements FMP functionality in the Automated Fluid Minerals Support System (AFMSS) 2.  The phase-in periods in 3174.2(f) will apply this same delay. 

The delay does not affect the implementation of 43 CFR 3174 for permanent oil measurement facilities installed after January 17, 2017, or for the implementation of 43 CFR 3175 for permanent gas measurement facilities. 

Timeframe:  This IM is effective upon issuance.

Budget Impact:  There is an increased workload associated with implementing this policy.  Additional funding may be necessary in some offices for staff time to prepare operator letters; with less fieldwork coverage during this shift to handle the initialization of FMP workload.

Background:  On November 17, 2016, the Federal Register published final rules (43 CFR 3173 and 3174) with an effective date of January 17, 2017. One of the provisions of the rule (3173.12(e)) requires that operators electronically submit applications for FMPs. For permanent measurement facilities that were in place prior to January 17, 2017, the requirements provide operators between one and three years to apply for an FMP, depending on the average volume of oil and gas produced from the lease, Communitization Agreement (CA), or Participating Area (PA) unit. For permanent measurement facilities installed after January 17, 2017, operators must apply for an FMP before they can remove oil and gas from the lease, CA, or PA through that facility. 

The BLM is in the process of updating the functionality in AFMSS 2, the system that will receive electronic FMP submissions and automatically assign an FMP number once the BLM approves an FMP. The BLM anticipated that this functionality would be complete prior to the effective date of the rule. However, due to unanticipated delays and complexity in updating the FMP functionality, the BLM will not be able to accept electronic filing requests for FMP numbers by January 17, 2017. The BLM estimates that the FMP functionality will be available to operators by May 2017.  

For oil measurement facilities existing before January 17, 2017, 43 CFR 3174.2(f) includes phase-in periods for operators to bring the facilities into compliance with the new rule. The FMP application deadlines in 3173.12(e) determine the phase-in periods. The BLM will extend the FMP application timeframes in 3173.12(e) and the phase-in periods in 3174.2 by the number of days beyond January 17, 2017, it takes to achieve the FMP functionality in AFMSS 2. 

Manual/Handbook Sections Affected:  None.

Coordination:  This IM was coordinated with the Department of the Interior; Office of the Solicitor; and the BLM Washington Office Division of Fluid Minerals.

Contact:  State Directors may direct any questions or concerns to Michael D. Nedd, Assistant Director, Energy, Minerals, and Realty Management, at 202‑208‑4201; Staff may contact Steven Wells, Division Chief Fluid Minerals (WO-310) at 202-912-7143 and s1wells@blm.gov; or Mike Wade, Senior Oil and Gas Compliance Specialist (WO-310) at 303-239-3737 and mwade@blm.gov.

Signed by:                                                        Authenticated by:
Michael Nedd                                                  Robert M. Williams
Assistant Director                                            Division of IT Policy and Planning,WO-870
Energy, Minerals, and Realty Management

1 Attachment
    1 – Master letter to operators (3 pp)