Fiscal Year 2020 Oil and Gas Inspection and Enforcement Strategy Matrices Instructions and Strategy Goals
UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
WASHINGTON, D.C. 20240
http://www.blm.gov
September 26, 2019
In Reply Refer To:
3160 (310) P
Supersedes IM No. 2019-004
EMS TRANSMISSION 09/27/2019
Instruction Memorandum No. 2019-043
Expires: 09/30/2021
To: All Field Office Officials
From: Assistant Director, Energy, Minerals, and Realty Management
Subject: Fiscal Year 2020 Oil and Gas Inspection and Enforcement Strategy Matrices Instructions and Strategy Goals DD: 11/1/2019
Program Area: Oil and Gas Management, Inspection and Enforcement.
Purpose: This Instruction Memorandum (IM) provides the Bureau of Land Management (BLM) Field Offices (FO) with oil and gas inspection and enforcement (I&E) strategy inspection plan matrices, instructions and goals for conducting oil and gas I&E activities in Fiscal Year (FY) 2020.
Administrative or Mission Related: Mission.
Policy/Action: For FY 2020, all offices are to complete 100 percent of the high-priority inspections and to share resources across FO boundaries to accomplish this goal. The BLM will continue the risk-based strategy for production inspections, records analysis/record verification inspections, and idle well inspections. Drilling inspection prioritization will follow the guidance in Attachment 1. Inspection prioritization for abandonment, environmental, and workovers will continue to follow the guidance in BLM Handbook H-3160-5, Inspection and Enforcement Documentation and Strategy Development Handbook.
The BLM’s goal is to have the entire I&E strategy be risk-based and in the Automated Fluid Minerals Support System (AFMSS). The BLM has automated the risk ratings for the production inspection and the idle well inspection portions of the strategy in AFMSS. The risk factors are on a scale of 1 to 10, with 1 for the lowest and 10 representing the highest risk. The AFMSS also applies a weighting factor for each of the risk factors based on the relative importance of the risk. Using these weighting factors, AFMSS averages the risk factors for an identified type of inspection to determine an overall risk rating. Attachment 2 details the risk, weighting factors for the idle well and production inspections.
The AFMSS carries the risk information forward to a matrix in the AFMSS database for the FOs to plan their technical field inspections (e.g., drilling, abandonment, production) based on their available workforce and workload. The BLM has not yet automated the records analysis/records verification (RA/RV) inspections or the environmental inspection portions of the strategy and therefore, for FY 2020, the FOs must plan these inspections manually using the attached spreadsheet (Attachment 3).
For FY 2020, the risk factors remain the same as FY 2019; the minimum high-risk factor is 4.0 for both production and idle well inspections. The BLM stabilized the risk factors at the FY 2014 level allowing for more consistent reporting from year-to-year and for more reliable planning for future years. The Government Accountability Office (GAO) identified the Department of the Interior (DOI) as a high-risk for assuring production accounting. In response, the BLM’s goal is to inspect all (100 percent) of high-risk/priority cases (overall production inspection risk factor of 4.0 and above) and at least one-third of the cases with overall rating factors lower than 4.0. For idle well inspections in FY 2020, the goal is to have each FO inspect 20 percent of the high-risk factor wells (risk rating of 4.0 and above). For RA/RV inspections, the goal is to complete an RA on 10 percent of the cases with a production inspection overall rating of 4.0 or higher and to complete an RV inspection on 10 percent of the remainder of the production inspection cases. The cases selected for review are to be a mix of various operators and geographic locations. For drilling, abandonment, and environmental inspections, the goal is to inspect all wells/facilities rated as high-priority.
Creating the Inspection Strategy Matrices
For FY 2020, the FOs must create the I&E strategy using a combination of AFMSS and spreadsheets. For the technical field inspections (e.g., drilling, abandonment, production), the FOs will use the matrix in AFMSS (IEP.13S screen). Attachment 4 provides the instructions for running the risk-based reports for production inspections and idle well inspections, along with instructions for completing the matrix in AFMSS. The AFMSS database will automatically create the FY 2020 priorities on October 1, 2019, which will allow the FOs to run the risk-based reports and create their strategy matrices anytime thereafter. Offices need to be aware that the AFMSS database is dynamic and that changes to data, such as a change of operator, can change the production inspection case ranking. Therefore, the production inspection goals within the matrix may change until the FO saves an official version of the strategy. After the FO saves an official version of the strategy, the production inspection goal remains constant throughout the FY.
For the RA/RV and environmental inspection portions of the strategy, the FOs will use the spreadsheet provided. Attachment 5 provides the instructions for completing the spreadsheet. For the FOs with Indian Trust responsibility, the FOs must complete two separate spreadsheets (i.e. one for Federal data and one for Indian Trust data).
In addition to completing the technical inspection strategy in AFMSS, the FOs must complete and return the Excel spreadsheet in Attachment 3 to the Washington Office Division of Fluid Minerals (WO-310) and their State Office (SO) by November 1, 2019. Each SO should require their FOs to submit draft spreadsheets to them for review prior to the WO-310 due date. This oversight review by the SO ensures improved consistency and awareness within the state.
Taking into consideration the number of inspection hours available to the FO annually, the FO will develop a plan to identify the number of inspections planned for completion during the year. Each FO must follow the “Inspection Workloads - Priority Order” as detailed in this IM.
Increased Inspection Time for Production Inspections
The BLM published new oil and gas measurement regulations that became effective January 17, 2017. The new regulations contain additional requirements and are more complex than the previous regulations. These changes require inspectors to use additional forms and will result in increased production inspection times. Therefore, offices should increase their average field time for production inspections by 10 percent and increase their average office time for production inspections by 2.5 percent when completing the strategy matrix. Attachment 4 contains instructions for determining the increased inspection times. The change in average inspection times will result in a decrease of around 340 in the number of planned production inspections, which is a decrease of around 4.3 percent from FY 2017.
Amending the Inspection Strategy Matrices
Due to the number of inspection databases, it is difficult for the WO-310 to know when a FO creates new versions of the matrix. Therefore, FOs must notify the WO-310 and their SO by email of all “Official Versions” of the matrix (AFMSS or Attachment 3) created after November 15, 2019, within 7 calendar days. The first “Official Version” the FO saves sets the goals and expectations for the FY that subsequent “Official Versions” do not affect.
Inspection Workloads - Priority Order
In determining the number of each type of inspection, use the following priorities. Please keep in mind, however, that conducting high-priority production inspections is a top priority for the DOI and the BLM Director. The FOs must take the necessary steps (e.g., sharing resources, using flexible work schedules) to conduct production inspections on 100 percent of the high-priority cases to meet the Director’s goal. However, due to the time sensitivity of drilling and abandonment inspections, and the need to ensure protection of resources and public health and safety, drilling and abandonment inspections remain the highest priorities in addition to high-risk production inspections.
For Petroleum Engineering Technicians (PET):
- High-priority drilling wells.
- High-priority plugging operations.
- One-hundred percent (100%) of Federal and Indian production cases with a risk factor of 4.0 and above. If the FO anticipates not being able to accomplish all of these cases, immediately begin to coordinate with their SO for additional resources (staff) from other FOs.
- Twenty percent (20%) of high-priority idle wells with a risk factor of 4.0 and above.
- Production accountability inspections, such as Records Analysis and Records Verification.
- Well production testing that may occur during or after drilling operations, but before placing the well on a producing well status (see Attachment 6 for details).
- High-priority workover operations.
- One-third of Federal and Indian production cases with a risk factor below 4.0. (FOs should conduct inspections in risk-factor order, highest to lowest considering the location of cases to minimize travel times and cost and not randomly.)
- Production inspections on cases that have had a change of operator (see Attachment 6 for details).
For Production Accountability Technicians (PAT):
- Records Analysis inspections.
- Records Verification inspections.
For Surface Compliance Specialists:
- High-priority construction/drilling wells (surface compliance).
- High-priority environmental inspections (see Attachment 6 for details).
- Interim Reclamation inspections (see Attachment 6 for details).
- Final Reclamation inspections.
AFMSS Inspection “Type” and “Activity” Codes
Attachment 7 replaces and supersedes Appendix 1 in the Inspection and Enforcement Documentation and Strategy Development Handbook, BLM H-3160-5, and all other definitions for “Inspection Type” and “Inspection Activity.”
Inspection Forms
To facilitate complete and accurate documentation of inspections, Attachment 8 lists the mandatory inspection forms, which now includes the 3160-33 - Environmental Surface (ES) Inspection Form and the 3160-EU - Undesirable Events Form.
Closing Inspections
Once an inspection is open in AFMSS, the inspection remains “Open” until the inspection is completed. However, inspections are not to remain open while enforcement actions (Incidents of Noncompliance (INC) or Written Orders) are pending. Enter Enforcement Action dates (follow-up, extensions, etc.) for the individual INC or Written Order. Add the amount of time spent conducting follow-up inspections to the ‘Office,’ ‘Travel,’ and/or ‘Inspection’ Time(s) for the original Inspection Activity where the violation occurred. Do not change the inspection close date. In summary, close an inspection when the last inspection activity is complete; do not leave the inspection open because there is an outstanding enforcement action.
Also, do not close inspections at the end of the FY (including the end of FY 2019) and re-open after the start of the next FY in order to complete the inspection later. This allows the BLM to accurately count and report the number of inspections the BLM completes each FY. Closing an incomplete inspection and re-opening it the following year, as was a past practice, led to inconsistent reporting of program accomplishments. The goal remains to close all open inspections by the end of each FY; however, there are circumstances that may prevent that from occurring.
Completing Inspection Data Entry
Offices must enter all FY 2020 completed inspections in AFMSS by September 23, 2020. This will allow State I&E coordinators and WO-310 one week prior to the end of the FY to reconcile any anomalies. The WO-310 will begin pulling end-of-year accomplishment reports on October 1, 2020.
Additional Guidance
The PAT group and Measurement Production Team (MPT) at the National Operations Center (NOC) are available to assist FOs in performing production inspections and production accountability reviews (RA and RV) and referrals based on unfamiliar or questionable measurement methods and activities. Attachment 9 provide details for requesting referrals to the PAT group for RA and RV inspections; the due date for submitting referral requests to the NOC is November 4, 2019. Attachment 10 provides a brief description the MPTs roles, interaction with BLM FOs, and other agencies. To request assistance with measurement issues, field inspections, or for more information contact James Wood, Oil and Gas Section Chief at 303-236-5426 (jtwood @blm.gov).
In development of the strategy matrices, the FOs must coordinate several different areas, including:
- Coordination must take place with the applicable Tribes and/or the Bureau of Indian Affairs to ensure the BLM is aware of their concerns regarding the prioritization of cases.
- Interdisciplinary coordination must occur within the FOs to ensure that the FO coordinates all environmental priority ratings with appropriate staff such as Natural Resource Specialists or Environmental Scientists.
- Coordination between the SO and reporting FOs is essential to ensure the FOs meet all of the inspection goals, particularly high-priority drilling, plugging, production, and environmental inspections.
- Coordination among states must take place to enhance the sharing of resources to accomplish the nationwide goal of completing 100 percent of the high-priority production inspections.
Attachment 9 contains links to other relevant IMs, IBs, and resources.
Timeframes: The FOs must complete and save the technical field inspection matrix in AFMSS as “Official” by November 1, 2019. If the FOs saves a new “Official” version of the matrix (AFMSS or Attachment 3) after November 1, 2019, they must notify Michael Wade (mwade@blm.gov) and William Lambert (wlambert@blm.gov) via email within 7 calendar days. FOs must also submit the completed matrix spreadsheets (Attachment 3) to WO-310 and their SO by November 1, 2019 (SOs set their own internal deadline to ensure they provide time to review prior to WO). The FOs must enter all FY 2020 completed inspections in AFMSS by September 23, 2020. The SOs must send a memorandum to WO-310 by October 15, 2020, with the results of the drilling priority ranking review as identified in Attachment 1.
Budget Impact: The I&E budget increased in FY 2016 and 2017, allowing for the hiring of additional BLM inspectors. All FOs should have the capacity to accomplish all of the goals of the strategy once the new inspectors are fully trained and certified.
Background: The BLM provides instructions for preparing the Inspection Plan matrices on an annual basis to coincide with any current updates to AFMSS and/or other policy changes that may occur on an annual basis. This guidance will help BLM meet the Secretarial priority to “Sustainably Develop Our Energy and Natural Resources” by ensuring efficiency in BLM operations. Additionally, the BLM will accomplish Executive Order 13783, “Promoting Energy Independence and Economic Growth,” by administering the appropriate development of all forms of energy on our Federal lands.
Pages of Manual/Handbook Sections Affected: BLM Handbook 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: WO-310 coordinated preparation of this IM with WO-310 I&E Specialists, SO I&E Coordinators, NOC personnel, and FO personnel.
Contact: If you have any questions concerning the content of this IM, please contact me 202-208-4201, or your staff may contact Lorenzo Trimble, Acting Chief, Division of Fluid Minerals, at 202-912-7342 (ltrimble@blm.gov). For questions regarding the strategy goals or strategy amendments, contact William Lambert at 406-896-5328 (wlambert@blm.gov) or Michael Wade at 303-239-3737 (mwade@blm.gov).
Signed by: Authenticated by:
Nicholas E. Douglas Robert M. Williams
Assistant Director Division of Business Resources,WO-850
Energy, Minerals, and Realty Management
11 Attachments:
- Instructions for Prioritization of Drilling Inspections (3 pp)
- Risk and Rating Factors for Production and Idle Wells Inspections (6 pp)
- Federal and Indian RA/RV/ES Inspection Strategy Matrix for FY2020 (5 pp)
- Instructions for Generating the Risk-Based Reports in AFMSS (20 pp)
- Instructions for Completing the Records Analysis/Records Verification and Environmental Inspection Strategy Spreadsheet (4 pp)
- Selected Inspection Workload Explanations (5 pp)
- Complete Rewrite of Appendix 1 of the Strategy and Documentation Handbook (14 pp)
- Mandatory Inspection Forms (1 p)
- Production Accountability Team Referral (2 pp)
- Measurement and Production Team Referral (2 pp)
- Useful Links (2 pp)