Implementation of 43 CFR subparts 3174 and 3175 and Gas Analysis Reporting and Verification System
UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
WASHINGTON, D.C. 20240
https://www.blm.gov
June 29, 2018
In Reply Refer To:
3170 (310) P
EMS TRANSMISSION 07/11/2018
Instruction Memorandum No. 2018-077
Expires: 09/30/2020
To: All Field Office Officials
From: Assistant Director, Energy, Minerals and Realty Management
Subject: Implementation of 43 CFR subparts 3174 and 3175 and Gas Analysis Reporting and Verification System
Program Areas: Oil and Gas Exploration and Operations
Purpose: This Instruction Memorandum (IM) contains enforcement guidance for Bureau of Land Management (BLM) state and field offices regarding certain provisions in 43 CFR subparts 3174 and 3175 (referred to in this IM as “3174” and “3175”) and the Gas Analysis Reporting and Verification System (GARVS).
Policy/Action:
1. Operator letters. State and field offices shall post an informational letter (see Attachment) to their state website and mail the informational letter to local industry groups and state oil and gas commissions by July 31, 2018. State and field offices shall also mail an informational letter to oil and gas operators. This letter explains interim policy and procedures describing which of the corresponding requirements in 43 CFR 3175, Onshore Order No. 5, or the Statewide Statewide Notices to Lessees (NTLs) the BLM will enforce during the phase-in periods for Facility Measurement Points (FMPs) installed on or before January 17, 2017.
2. Use of BLM-approved equipment. Certain provisions in 3174 and 3175 require operators to use specific makes, models, and sizes of equipment and software versions approved by the BLM (upon recommendation of the Production Measurement Team (PMT)) beginning January 17, 2019. These provisions are:
Oil Measurement
3174.6(b)(5)(ii)(A) (ATG systems)
3174.6(b)(5)(iii) (in-line meters)
3174.8(a)(1) (Coriolis meters and positive displacement meters)
3174.9(b) (Coriolis meters and associated software)
3174.13 (Any method of oil measurement other than tank gauging, LACT, or CMS)
Gas Measurement
3175.43 (Transducers)
3175.44 (Flow computer software)
3175.46 (Flow conditioners)
3175.47 (Differential meters other than flange-tapped orifice plates)
3175.48 (Linear devices)
3175.49 (Accounting systems)
There have been unforeseen delays in the formation and functioning of the PMT. The BLM now recognizes that it will not be able to approve the equipment and software versions required by these provisions until late 2018, at the earliest, which would give operators only a month or two to identify, budget for, purchase, and install approved equipment and software by the January 17, 2019 deadline.
To reduce regulatory uncertainty and ensure fairness to operators, state and field offices will delay enforcement of the above-cited provisions (insofar as they require the use of equipment and software approved by the BLM and listed at www.blm.gov) until the BLM has executed the prerequisite approvals of equipment and software, and operators have been afforded a reasonable opportunity to comply. The Washington Office (WO) will provide further guidance to state and field offices on this matter as approvals are made.
3. Gas Analysis Reporting and Verification System (GARVS). The BLM is in the process of developing a new database for the purpose of receiving and analyzing gas analysis reports from operators. This database is referred to in the 3175 regulations as the Gas Analysis Reporting and Verification System, or GARVS. Under 3175.120(e), the “operator must submit all gas analysis reports to the BLM within 15 days of the due date for the sample…” Section 3175.120(f) requires operators to “submit all gas analysis reports and other required related information electronically through the GARVS.” Pursuant to 3175.60, the gas analysis reporting requirements in 3175.120(e) and (f) do not begin until January 17, 2019. The regulations included the two-year delay to allow time for the BLM to develop, test, and implement GARVS.
Due to competing work priorities, the BLM now recognizes that it will not be able to develop and implement the GARVS software by January, 17, 2019. Presently, the BLM does not expect the GARVS to be ready for use by operators before June, 2019, at the earliest. State and field offices will delay enforcement of 3175.120(e) and (f) until the BLM has implemented the GARVS and operators have been afforded a reasonable opportunity to comply. The WO will provide further guidance to state and field offices as the development of the GARVS progresses.
Timeframe: This IM is effective upon issuance.
Budget Impact: None.
Background: On November 17, 2016, the BLM issued final rules for the measurement of oil and gas removed or sold from Federal and Indian leases (codified in 43 CFR Part 3170, subparts 3174 and 3175). Certain provisions in the new regulations require operators to use specific equipment or software approved by the BLM (upon recommendation of the PMT) and listed at www.blm.gov. Other provisions in the new regulations require operators to submit gas analysis reports through the GARVS. These requirements are set to become operative on January 17, 2019. However, due to unexpected delays in the formation and functioning of the PMT, and unexpected delays in the development of the GARVS, state and field offices should delay enforcement of these provisions as described in the Policy/Action section of this IM.
Manual/Handbook Sections Affected: The Appendices to the Inspection and Enforcement Handbook dealing with 3174 and 3175.
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 me at 202-208-4201. Staff may contact Steve Wells, Chief, Division of Fluid Minerals (WO-310), at 202-912-7123 and s1wells@blm.gov or Rich Estabrook, Petroleum Engineer (WO-310), at 707-468-4052 and restabro@blm.gov.
Michael D. Nedd Authenticated by:
Assistant Director Robert M. Williams
Energy, Minerals and Realty Management Division of IT Policy and Planning,WO-870
1 Attachment
1 – Dear Operator letter (7 pp)