```
[Federal Register Volume 62, Number 153 (Friday, August 8, 1997)]
[Rules and Regulations]
[Pages 42669-42671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21037]

-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR

30 CFR Part 250

RIN 1010-AC12

Safety and Pollution Prevention Equipment Quality Assurance 
Requirements

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule amends the regulations governing the quality 
assurance (QA) program for safety and pollution prevention equipment 
(SPPE) used on the Outer Continental Shelf (OCS). The rule requires 
lessees to install only QA certified SPPE after April 1, 1998. However, 
the rule allows the continued use of noncertified SPPE installed prior 
to April 1, 1998, provided the equipment does not require 
remanufacturing. Amendments to the rule reduce the paperwork burden on 
both industry and MMS and ensure that OCS lessees continue to use the 
best available and safest equipment.

EFFECTIVE DATE: September 8, 1997. The incorporation by reference of 
certain publications listed in the rule is approved by the Director of 
the Federal Register as of September 8, 1997.

FOR FURTHER INFORMATION CONTACT: Bill Hauser, Engineering and Research 
Branch, at (703) 787-1613.

SUPPLEMENTARY INFORMATION:

Background

    MMS proposed revising the regulations for the SPPE program in a 
notice of proposed rulemaking published in the Federal Register (61 FR 
66639) on December 18, 1996. We received two sets of comments during 
the 60-day comment period, which closed on February 18, 1997. This 
final rule amends the regulations found at 30 CFR 250.126.
    To fully understand this rule, you need to know that SPPE consists 
of the following equipment: surface safety valves (SSV) and their 
actuators; underwater safety valves and their actuators; and subsurface 
safety valves (SSSV) and associated safety valve locks and landing 
nipples. MMS requires lessees to install SPPE in their wells to protect 
the safety of personnel and to prevent the accidental release of 
produced fluids or gases (thus the name safety and pollution prevention 
equipment). Certified SPPE means that the manufacturer built the 
equipment under a QA program recognized by MMS. Noncertified SPPE is 
SPPE that was not manufactured under a recognized QA program but was in 
a lessee's inventory on April 1, 1988. MMS required each lessee to 
submit a list of this inventory to MMS by August 29, 1988.

Intent of Proposed Rule

    The proposed rule had two goals: (1) to reduce the paperwork 
associated with the SPPE QA regulations and (2) to ensure that lessees 
continue to use high quality SPPE on the OCS. To reduce paperwork, the 
proposed rule eliminated the need for companies to update their list of 
noncertified SPPE. It also eliminated the detailed reporting 
requirements regarding the installation and failure of certified 
equipment.
    The proposed rule addressed the quality of SPPE by limiting the use 
of noncertified SPPE. Under the proposed rule a lessee could not 
install noncertified SPPE after April 1, 1998. In addition, a lessee 
would have to replace noncertified SPPE already in service with 
certified SPPE when one of the following conditions occurred:
    (1) Noncertified SPPE failed during normal operations,
    (2) Noncertified SPPE failed during testing, or
    (3) Noncertified SPPE was removed from service for any other 
reason.

Comments on the Rule

    The Offshore Operators Committee (OOC) and a major oil company were 
the only two commenters on the rule. OOC, an organization that 
represents 85 companies that operate in the Gulf of Mexico, commended 
MMS' effort to reduce the paperwork associated with the program, but 
strongly objected to replacing noncertified SPPE with certified SPPE as 
proposed by the rule. They stated that the rules should allow 
noncertified SPPE to stay in service as long as it functions properly. 
Replacement of an internal seal or temporary removal from a well during 
routine operations should not prohibit the use of noncertified SPPE 
after it has functioned acceptably for many years. OOC recommended that 
MMS should require replacement only when the noncertified SPPE has to 
be remanufactured.
    OOC estimated that approximately 3,000 noncertified SSV's and 1,000 
noncertified SSSV's remain in service on the OCS. OOC estimated that 
the cost to replace these noncertified SPPE would be $51,000,000. Their 
estimate did not include the cost to replace noncertified landing 
nipples for the SSSV.
    The major oil company endorsed OOC's comments. It reiterated that 
the rule should require replacement of noncertified SPPE only when it 
must be re-manufactured or repaired by hot work, such as welding.

Response to Comments

    After review of the comments, MMS agrees that the rule should not 
prohibit the use of noncertified SPPE if it requires only minor 
repairs, such as the replacement of a seal. Therefore, we have revised 
the final rule to require replacement of noncertified SPPE only when 
the noncertified SPPE requires offsite repair, remanufacturing, or hot 
work, such as welding. This will allow lessees to continue using 
noncertified SPPE provided the equipment works properly, and when 
necessary, requires only minor repairs. Once noncertified SPPE requires 
offsite repair, remanufacturing, or hot work, it may not be used on the 
OCS. MMS believes this restriction helps ensure that lessees continue 
to use high quality SPPE.
    MMS plans to examine the performance of noncertified and certified 
SPPE as part of a research study that will examine leakage rates and 
testing criteria for SPPE. This research will begin this year. We 
invite and encourage industry participation in this research study. The 
results will impact future rulemaking on SPPE testing requirements.
    We also clarified Sec. 250.126(b)(2) of the rule to state that a 
lessee may not install additional noncertified SPPE after April 1, 
1998.

[[Page 42670]]

Other Changes to the Regulations

    As part of amending the SPPE regulations, the rule updates the two 
QA documents referenced in Sec. 250.1, Documents Incorporated by 
Reference, paragraphs (c)(5)and (d)(1):

(1) American National Standards Institute/American Society Mechanical 
Engineers (ANSI/ASME) SPPE-1-1994, Quality Assurance and Certification 
of Safety and Pollution Prevention Equipment Used in Offshore Oil and 
Gas Operations, and
(2) American Petroleum Institute (API) Spec Q1, Specification for 
Quality Programs, Fifth Edition, December 1994.

    These documents update editions that MMS has previously 
incorporated by reference. MMS did not receive any comments on these 
documents. ASME has notified MMS that it will sunset its SPPE program 
on June 11, 1999. After that date, MMS will remove the reference to 
SPPE-1-1994 from the regulations. MMS believes that the sunset of this 
program will not have a significant effect on SPPE quality.

Executive Order (E.O.) 12866

    This is a significant rule under E.O. 12866 and has been reviewed 
by the Office of Management and Budget (OMB).

Regulatory Flexibility Act

    DOI has determined that this final rule will not have a significant 
economic effect on a substantial number of small entities. Most 
entities that engage in offshore activities as operators are not small 
because of the technical complexities and financial resources necessary 
to conduct such activities safely. Small entities are more likely to 
work as contractors to larger entities on the OCS, or in the case of 
SPPE, they may work at repairing SPPE. This rule will not have a 
negative effect on small SPPE repair shops or manufacturers since it 
does not impose any new restrictions on them. This rule should not 
change the business practices of repair and manufacturing SPPE.

Paperwork Reduction Act

    OMB has approved the information collection requirements in 30 CFR 
Part 250, Subpart H, Oil and Gas Production Safety Systems, as required 
by the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). The 
OMB control number is 1010-0059. The Paperwork Reduction Act of 1995 
provides that an agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a currently valid OMB control number.
    MMS received no comments with respect to the information collection 
aspects in the notice of proposed rulemaking. There is no significant 
change to the information collection required by the final rule.
    The collection of information consists of applications and 
approvals for design, installation, and operation of subsurface safety 
devices and surface production-safety systems and related requirements; 
notifying MMS prior to production and conduct of preproduction tests 
and inspections; approval of QA programs covering manufacture of SPPE; 
and related recordkeeping requirements. The requirement to respond is 
mandatory. MMS uses the information to evaluate equipment and/or 
procedures lessees propose to use during production operations and to 
verify compliance with minimum safety requirements. MMS will protect 
information considered confidential or proprietary under the Freedom of 
Information Act and under regulations at 30 CFR 250.18 (Data and 
information to be made available to the public) and 30 CFR Part 252 
(OCS Oil and Gas Information Program).
    Respondents are approximately 130 Federal OCS oil, gas, and sulphur 
lessees. The frequency of submission varies. We estimate that the 
public reporting burden for this information averages 1.25 hours per 
response, including the time to review instructions, search existing 
data sources, gather and maintain the data needed, and complete and 
review the information collection. MMS estimates that the total annual 
burden of this collection of information to be 352 reporting hours and 
2,548 recordkeeping hours. Based on $35 per hour, the total burden hour 
cost to respondents is $101,500.
    You may direct comment on the burden estimate or any other aspect 
of this collection to the Information Collection Clearance Officer, 
Minerals Management Service, Mail Stop 4230, 1849 C Street, N.W., 
Washington, D.C. 20240; and to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Attn: Desk Officer for the 
Department of the Interior (OMB control number 1010-0059), Room 10102, 
725 17th Street, N.W., Washington, D.C. 20503. You may obtain a copy of 
the collection of information by contacting the Bureau's Information 
Collection Clearance Officer at (202) 208-7744.

Takings Implication Assessment

    DOI certifies that this final rule does not represent a 
governmental action capable of interference with constitutionally 
protected property rights. Thus, MMS did not need to prepare a Takings 
Implication Assessment pursuant to E.O. 12630, Governmental Action and 
Interference with Constitutionally Protected Property Rights.

Unfunded Mandates Reform Act of 1995

    DOI has determined and certifies according to the Unfunded Mandates 
Reform Act, 2 U.S.C. 1502 et seq., that this rule will not impose a 
cost of $100 million or more in any given year on State, local, and 
tribal governments, or the private sector.

E.O. 12988

    DOI has certified to OMB that this rule meets the applicable civil 
justice reform standards provided in sections 3(a) and 3(b)(2) of E.O. 
12988.

National Environmental Policy Act

    DOI has determined that this action does not constitute a major 
Federal action significantly affecting the quality of the human 
environment. Therefore, preparation of an Environmental Impact 
Statement is not required.

List of Subjects in 30 CFR Part 250

    Continental shelf, Environmental impact statements, Environmental 
protection, Government contracts, Incorporation by reference, 
Investigations, Mineral royalties, Oil and gas development and 
production, Oil and gas exploration, Oil and gas reserves, Penalties, 
Pipelines, Public lands--mineral resources, Public lands--rights-of-
way, Reporting and recordkeeping requirements, Sulphur development and 
production, Sulphur exploration, Surety bonds.

    Dated: June 5, 1997.
Bob Armstrong,
Assistant Secretary, Land and Minerals Management.

    For the reasons stated in the preamble, the Minerals Management 
Service (MMS) amends 30 CFR part 250 as follows:

PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER 
CONTINENTAL SHELF

    1. The authority citation for part 250 continues to read as 
follows:

    Authority: 43 U.S.C. 1334.

[[Page 42671]]

    2. Section 250.1 is amended by revising paragraphs (c)(5) and 
(d)(1) to read as follows:

Sec. 250.1  Documents incorporated by reference.

* * * * *
    (c) * * *
    (5) ASME SPPE-1-1994 and ASME SPPE-1d-1996 ADDENDA, Quality 
Assurance and Certification of Safety and Pollution Prevention 
Equipment Used in Offshore Oil and Gas Operations, Incorporated by 
Reference at: Sec. 250.126(a)(2)(A).
* * * * *
    (d) * * *
    (1) API Spec Q1, Specification for Quality Programs, Fifth Edition, 
December 1994, API Stock No. 811-00001, Incorporated by Reference at: 
Sec. 250.126(a)(2)(B).
* * * * *
    3. MMS revises Sec. 250.126 to read as follows:

Sec. 250.126  Safety and pollution prevention equipment quality 
assurance requirements.

    (a) General requirements. (1) Except as provided in paragraph 
(b)(1) of this section, you may install only certified safety and 
pollution prevention equipment (SPPE) in wells located on the OCS. SPPE 
includes the following:
    (i) Surface safety valves (SSV) and actuators;
    (ii) Underwater safety valves (USV) and actuators; and
    (iii) Subsurface safety valves (SSSV) and associated safety valve 
locks and landing nipples.
    (2) Certified SPPE is equipment the manufacturer certifies as 
manufactured under a quality assurance program MMS recognizes. MMS 
considers all other SPPE as noncertified. MMS recognizes two quality 
assurance programs:
    (i) ANSI/ASME SPPE-1, Quality Assurance and Certification of Safety 
and Pollution-Prevention Equipment Used in Offshore Oil and Gas 
Operations; and
    (ii) API Spec Q1, Specification for Quality Programs.
    (3) All SSV's and USV's must meet the technical specifications of 
API Spec 14D or API Spec 6A and 6AV1. All SSSV's must meet the 
technical specifications of API Spec 14A.
    (b) Use of noncertified SPPE. (1) Before April 1, 1998, you may 
continue to use and install noncertified SPPE if it was in your 
inventory as of April 1, 1988, and was included in a list of 
noncertified SPPE submitted to MMS prior to August 29, 1988.
    (2) On or after April 1, 1998:
    (i) You may not install additional noncertified SPPE; and
    (ii) When noncertified SPPE that is already in service requires 
offsite repair, remanufacturing, or hot work such as welding, you must 
replace it with certified SPPE.
    (c) Recognizing other quality assurance programs. The MMS will 
consider recognizing other quality assurance programs covering the 
manufacture of SPPE. If you want MMS to evaluate other quality 
assurance programs, submit relevant information about the program and 
reasons for recognition by MMS to the Chief, Engineering and Operations 
Division; Minerals Management Service; Mail Stop 4700; 381 Elden 
Street; Herndon, Virginia 20170-4817.

[FR Doc. 97-21037 Filed 8-7-97; 8:45 am]
BILLING CODE 4310-MR-P
```