Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Rules and Regulations 5329

TABLE (b)—PRODUCTION SAFETY SYSTEMS—Continued

High-low pressure sensors

High-low level sensors

Combustible gas detectors

Pressure relief devices

Flow line check valves

Surface safety valves

Shutdown valves

Fire (flame, heat, or smoke) detectors

Auxiliary devices (3-way block & bleed valves, time relays, 3-way snap acting valves, etc.)

Surface-controlled subsurface safety valves &/or surface-control equipment

Subsurface-controlled subsurface safety valves

4. Instructions on inspecting, testing & maintaining surface & subsurface devices & surface control systems for subsurface safety valves

5. Instructions in at least one safety device that illustrates the primary operation principle in each class for safety devices:

Basic operations principles

Limits affecting application

Problems causing equipment malfunction & how to correct these problems

A test for proper actuation point & operation

Adjustments or calibrations

Recording inspection results & malfunctions

Special techniques for installing safety devices

6. Instructions on the basic principle & logic of the emergency support system:

Combustible & toxic gas detection system

Liquid containment system

Fire loop System

Other fire detection systems

Emergency shutdown system

Subsurface safety valves

§ 250.230 If MMS tests employees at my

worksite, what must I do?

(a) You must allow MMS to test

employees at your worksite.

(b) You must identify your employees

by:

(1) Current job classification;

(2) Name of the operator;

(3) Name of the most recent basic or

advanced course taken by your

employees for their current job; and

(4) Name of the training organization.

(c) You must correct any deficiencies

found by MMS. Steps for correcting

deficiencies may include:

(1) Isolating problems by doing more

testing; and

(2) Reassigning employees or

conducting training (MMS will not

identify the employees it tests).

§ 250.231 If MMS test trainees at a training

organization’s facility, what must occur?

(a) Training organizations must allow

MMS to test trainees.

(b) The trainee must pass the MMSconducted test or a retest in order for

MMS to consider that the trainee

completed the training.

§ 250.232 Why might MMS conduct its own

tests?

MMS needs to identify the

effectiveness of a training program that

provides for safe and clean operations.

§ 250.233 Can a training organization lose

its accreditation?

Yes, an accredited organization can

lose its accreditation. MMS may revoke

or suspend an organization’s

accreditation for noncompliance with

regulations or conditions of its

accredited program, or assess civil

penalties under subpart N of this part.

[FR Doc. 97–2721 Filed 2–4–97; 8:45 am]

BILLING CODE 4310–MR–M

Minerals Management Service

30 CFR Part 250

RIN 1010–AC19

Unitization

AGENCY: Minerals Management Service

(MMS), Interior.

ACTION: Final rule.

SUMMARY: This rule amends the

unitization regulations by removing the

two model unit agreements—one for

exploration, development, and

production units and the other for

development and production units. The

model agreements will be available from

the Regional Supervisor. The rule is

written in ‘‘plain English.’’ We take this

action to support the President’s

initiative to reform Government

regulations. Our objective is to shorten

the regulation and clarify the wording.

EFFECTIVE DATE: This rule is effective on

March 7, 1997.

FOR FURTHER INFORMATION CONTACT:

Judith M. Wilson, Engineering and

Standards Branch, telephone (703) 787–

1600.

SUPPLEMENTARY INFORMATION: The rules

on unitization in 30 CFR part 250,

implementing section 5(a)7 of the Outer

Continental Shelf (OCS) Lands Act

Amendments of 1978, are intended to

prevent waste (defined in § 250.2),

conserve natural resources (protection

of marine life was incorporated into

conservation in 1971; also refers to

deterring unnecessary facilities), and/or

protect correlative rights. The rules

include provisions to:

• Explain the authority and

requirements for unitization;

• Provide for compulsory or

voluntary unitization;

• Explain requirements for

competitive reservoir operations;

• Explain how a lessee may request a

determination of whether a reservoir is

competitive;

• Explain how to submit a joint

development and production plan;

• Explain the process for voluntary

unitization;

• Explain the process for compulsory

unitization; and

• Explain the role of a model

agreement.

This final rule does not intend any

substantive changes to the regulations. It

shortens existing regulations by

removing the model unit agreements.

The ‘‘plain English’’ clarifies the

existing rule.

There are two model unit

agreements—one for exploration,

development, and production units and

the other for development and

production units. The model agreements

will be available from the Regional

Supervisor. The Regional Supervisor
5330 Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Rules and Regulations

can still approve variations from the

model agreements for good cause. If

MMS changes the model unit

agreements, MMS will publish the

revised model unit agreements in the

Federal Register.

Comments

The Federal Register published the

proposed rule on June 5, 1996 (61 FR

28525). During the 74-day comment

period, MMS received 10 sets of

comments on the proposed rule. Six

commenters did not agree with using

‘‘plain English’’ and removing the

model unit agreements from the Code of

Federal Regulations. Overall, those who

opposed ‘‘plain English’’ are

comfortable with the existing language

and understand it. One specific

comment on the proposed rule language

included that it did not clarify that

‘‘Pugh’’ concepts (State law authorizes

unitized leases to be segregated) do not

apply to the OCS, and it omitted

potential hydrocarbon accumulations

from the definition of a unit area.

Commenters concerned about removal

of the model unit agreements expressed

a need to operate in a climate of greater

certainty. The four remaining comments

support the proposed rule change.

Response to Comments

We appreciate the comments we

received on the proposed rule. While

there was some opposition to using

‘‘plain English,’’ MMS supports the

President’s initiative, and we will

continue to improve our regulations

with ‘‘plain English.’’ ‘‘Plain English’’

allows us to express legal requirements

clearly and accurately and communicate

information to a wide audience.

We incorporated many of the specific

editorial comments in an effort to

further clarify the rule. Regarding the

‘‘Pugh’’ concept, the 1982 Department of

the Interior (DOI) Solicitor’s Opinion

M–36927, concludes that the Secretary

of the Interior does not have the legal

authority to require segregation of

unitized portions of leases from the

remainder of leases. We clarified the

language in the final rule to maintain

that portions of leases, as well as whole

leases, may be included in units.

It continues to be our policy that we

may approve exploratory units before a

successful exploratory well is

completed when geophysical data

reasonably support including a lease in

the unit. The unit area is limited to the

leases that encompass the productive

area of a reservoir, for reservoir units, or

to the leases containing all or part of a

geologic structure, i.e., a potential

hydrocarbon accumulation.

In § 250.191(2)(c), we retain the word

‘‘minimum’’ for the number of leases, or

portions of leases, in a unit area.

Industry suggested we use the word

‘‘appropriate.’’ Our policy is designed to

minimize the number of unitized leases

necessary for efficient exploration,

development, and production.

The model unit agreements will be

withdrawn. MMS will publish any

‘‘permanent’’ changes made to those

agreements in the Federal Register for

public notice and comment.

In this rulemaking, MMS is also

correcting a typographical error in 30

CFR part 250. The error occurs in

§ 250.124(a)(3)(i). This technical

amendment amends the sentence in

paragraph (i) from ‘‘All PSH or PSL’’ to

‘‘All PSH and PSL.’’ This has always

been the intent of the requirement.

Executive Order (E.O.) 12866

This rule is not a significant rule

requiring the Office of Management and

Budget (OMB) review under E.O. 12866.

Regulatory Flexibility Act

Since this amendment has no

economic effects, DOI has determined

that this rule will have no effect on a

substantial number of small entities.

Paperwork Reduction Act

The information collection

requirements in 30 CFR Part 250,

Subpart M, Unitization, are approved by

OMB as required by the Paperwork

Reduction Act of 1995 (44 U.S.C. 3501

et seq.). The OMB control number is

1010–0068. 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 collects the information under

regulations implementing the OCS

Lands Act. MMS uses the information to

determine if unitized operations will

conserve natural resources, prevent

waste, and protect correlative rights and

Government interests. The information

is required to obtain or retain a benefit

as specified in the OCS Lands Act. MMS

will protect information considered

confidential or proprietary under

applicable law 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).

MMS estimates the annual reporting

burden to be approximately 2,424 hours,

an average of 45.7 hours per response.

This includes the time for reviewing

instructions, searching existing data

sources, gathering and maintaining the

data needed, and completing and

reviewing the information collection.

MMS received no comments on the

information collection aspects of the

proposed rule during the public

comment period.

You may direct comments on the

burden estimate or any other aspect of

this collection to the Information

Collection Clearance Officer, Mail Stop

2053, Minerals Management Service,

381 Elden Street, Herndon, VA 20170–

4817; and to the Office of Information

and Regulatory Affairs, Office of

Management and Budget, Desk Officer

for the Department of the Interior (OMB

No. 1010–0068), Room 10102, 725 17th

Street NW., Washington, D.C. 20503.

Takings Implication Assessment

The DOI certifies that this rule does

not represent a governmental action

capable of interference with

constitutionally protected property

rights. A Takings Implication

Assessment prepared pursuant to E.O.

12630, Governmental Actions and

Interference with Constitutionally

Protected Property Rights, is not

required.

Unfunded Mandates Reform Act of 1995

The 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(b)(2) of E.O. 12988.

National Environmental Policy Act

MMS has examined the rulemaking

and has determined that this rule does

not constitute a major Federal action

significantly affecting the quality of the

human environment pursuant to section

102(2)(c) of the National Environmental

Policy Act of 1969 (42 U.S.C.

4332(2)(c)).

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.
Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Rules and Regulations 5331

Dated: January 27, 1997.

Sylvia V. Baca,

Assistant Secretary, Land and Minerals

Management.

For the reasons stated in the

preamble, the Minerals Management

Service amends 30 CFR part 250 as

follows:

PART 250—OIL AND GAS AND

SULFUR OPERATIONS IN THE OUTER

CONTINENTAL SHELF

1. The authority citation for part 250

continues to read as follows:

Authority: 43 U.S.C. 1334.

Subpart H—Oil and Gas Production

Safety Systems

2. In § 250.124, paragraph (a)(3)(i) is

revised as follows:

§ 250.124 Production safety-system

testing and records.

(a) * * *

(3) * * *

(i) All PSH and PSL,

* * * * *

Subpart M—Unitization

3. Subpart M is revised to read as

follows:

Subpart M—Unitization

Sec.

250.190 What is the purpose of this

subpart?

250.191 What are the requirements for

unitization?

250.192 What if I have a competitive

reservoir on a lease?

250.193 How do I apply for voluntary

unitization?

250.194 How will MMS require unitization?

Subpart M—Unitization

§ 250.190 What is the purpose of this

subpart?

This subpart explains how Outer

Continental Shelf (OCS) leases are

unitized. If you are an OCS lessee, use

the regulations in this subpart for both

competitive reservoir and unitization

situations. The purpose of joint

development and unitization is to:

(a) Conserve natural resources;

(b) Prevent waste; and/or

(c) Protect correlative rights,

including Federal royalty interests.

§ 250.191 What are the requirements for

unitization?

(a) Voluntary unitization. You and

other OCS lessees may ask the Regional

Supervisor to approve a request for

voluntary unitization. The Regional

Supervisor may approve the request for

voluntary unitization if unitized

operations:

(1) Promote and expedite exploration

and development; or

(2) Prevent waste, conserve natural

resources, or protect correlative rights,

including Federal royalty interests, of a

reasonably delineated and productive

reservoir.

(b) Compulsory unitization. The

Regional Supervisor may require you

and other lessees to unitize operations

if unitized operations are necessary to:

(1) Prevent waste;

(2) Conserve natural resources; or

(3) Protect correlative rights,

including Federal royalty interests, of a

reasonably delineated and productive

reservoir.

(c) Unit area. The area that a unit

includes is the minimum number of

leases that will allow the lessees to

minimize the number of platforms,

facility installations, and wells

necessary for efficient exploration,

development, and production of mineral

deposits, oil and gas reservoirs, or

potential hydrocarbon accumulations. A

unit may include whole leases or

portions of leases.

(d) Unit agreement. You, the other

lessees, and the unit operator must enter

into a unit agreement. The unit

agreement must: allocate benefits to

unitized leases, designate a unit

operator, and specify the effective date

of the unit agreement. The unit

agreement must terminate when: the

unit no longer produces unitized

substances, and the unit operator no

longer conducts drilling or wellworkover operations (§ 250.13) under

the unit agreement, unless the Regional

Supervisor orders or approves a

suspension of production under

§ 250.10.

(e) Unit operating agreement. The unit

operator and the owners of working

interests in the unitized leases must

enter into a unit operating agreement.

The unit operating agreement must

describe how all the unit participants

will apportion all costs and liabilities

incurred maintaining or conducting

operations. When a unit involves one or

more net-profit-share leases, the unit

operating agreement must describe how

to attribute costs and credits to the netprofit-share lease(s), and this part of the

agreement must be approved by the

Regional Supervisor. Otherwise, you

must provide a copy of the unit

operating agreement to the Regional

Supervisor, but the Regional Supervisor

does not need to approve the unit

operating agreement.

(f) Extension of a lease covered by

unit operations. If your unit agreement

expires or terminates, or the unit area

adjusts so that no part of your lease

remains within the unit boundaries,

your lease expires unless:

(1) Its initial term has not expired;

(2) You conduct drilling, production,

or well-reworking operations on your

lease consistent with applicable

regulations; or

(3) MMS orders or approves a

suspension of production or operations

for your lease.

(g) Unit operations. If your lease, or

any part of your lease, is subject to a

unit agreement, the entire lease

continues for the term provided in the

lease, and as long thereafter as any

portion of your lease remains part of the

unit area, and as long as operations

continue the unit in effect.

(1) If you drill, produce or perform

well-workover operations on a lease

within a unit, each lease, or part of a

lease, in the unit will remain active in

accordance with the unit agreement.

Following a discovery, if your unit

ceases drilling activities for a reasonable

time period between the delineation of

one or more reservoirs and the initiation

of actual development drilling or

production operations and that time

period would extend beyond your

lease’s primary term or any extension

under § 250.13, the unit operator must

request and obtain MMS approval of a

suspension of production under

§ 250.10 in order to keep the unit from

terminating.

(2) When a lease in a unit agreement

is beyond the primary term and the

lease or unit is not producing, the lease

will expire unless:

(i) You conduct a continuous drilling

or well reworking program designed to

develop or restore the lease or unit

production; or

(ii) MMS orders or approves a

suspension of operations under

§ 250.10.

§ 250.192 What if I have a competitive

reservoir on a lease?

(a) The Regional Supervisor may

require you to conduct development

and production operations in a

competitive reservoir under either a

joint Development and Production Plan

or a unitization agreement. A

competitive reservoir has one or more

producing or producible well

completions on each of two or more

leases, or portions of leases, with

different lease operating interests. For

purposes of this paragraph, a producible

well completion is a well which is

capable of production and which is shut

in at the well head or at the surface but

not necessarily connected to production

facilities and from which the operator

plans future production.
5332 Federal Register / Vol. 62, No. 24 / Wednesday, February 5, 1997 / Rules and Regulations

(b) You may request that the Regional

Supervisor make a preliminary

determination whether a reservoir is

competitive. When you receive the

preliminary determination, you have 30

days (or longer if the Regional

Supervisor allows additional time) to

concur or to submit an objection with

supporting evidence if you do not

concur. The Regional Supervisor will

make a final determination and notify

you and the other lessees.

(c) If you conduct drilling or

production operations in a reservoir

determined competitive by the Regional

Supervisor, you and the other affected

lessees must submit for approval a joint

plan of operations. You must submit the

joint plan within 90 days after the

Regional Supervisor makes a final

determination that the reservoir is

competitive. The joint plan must

provide for the development and/or

production of the reservoir. You may

submit supplemental plans for the

Regional Supervisor’s approval.

(d) If you and the other affected

lessees cannot reach an agreement on a

joint Development and Production Plan

within the approved period of time,

each lessee must submit a separate plan

to the Regional Supervisor. The

Regional Supervisor will hold a hearing

to resolve differences in the separate

plans. If the differences in the separate

plans are not resolved at the hearing and

the Regional Supervisor determines that

unitization is necessary under

§ 250.191(b), MMS will initiate

unitization under § 250.194.

§ 250.193 How do I apply for voluntary

unitization?

(a) You must file a request for a

voluntary unit with the Regional

Supervisor. Your request must include:

(1) A draft of the proposed unit

agreement;

(2) A proposed initial plan of

operation;

(3) Supporting geological,

geophysical, and engineering data; and

(4) Other information that may be

necessary to show that the unitization

proposal meets the criteria of § 250.190.

(b) The unit agreement must comply

with the requirements of this part. MMS

will maintain and provide a model unit

agreement for you to follow. If MMS

revises the model, MMS will publish

the revised model in the Federal

Register. If you vary your unit

agreement from the model agreement,

you must obtain the approval of the

Regional Supervisor.

(c) After the Regional Supervisor

accepts your unitization proposal, you,

the other lessees, and the unit operator

must sign and file copies of the unit

agreement, the unit operating

agreement, and the initial plan of

operation with the Regional Supervisor

for approval.

§ 250.194 How will MMS require

unitization?

(a) If the Regional Supervisor

determines that unitization of

operations within a proposed unit area

is necessary to prevent waste, conserve

natural resources of the OCS, or protect

correlative rights, including Federal

royalty interests, the Regional

Supervisor may require unitization.

(b) If you ask MMS to require

unitization, you must file a request with

the Regional Supervisor. You must

include a proposed unit agreement as

described in §§ 250.191(d) and

250.193(b); a proposed unit operating

agreement; a proposed initial plan of

operation; supporting geological,

geophysical, and engineering data; and

any other information that may be

necessary to show that unitization meets

the criteria of § 250.190. The proposed

unit agreement must include a

counterpart executed by each lessee

seeking compulsory unitization. Lessees

who seek compulsory unitization must

simultaneously serve on the

nonconsenting lessees copies of:

(1) The request;

(2) The proposed unit agreement with

executed counterparts;

(3) The proposed unit operating

agreement; and

(4) The proposed initial plan of

operation.

(c) If the Regional Supervisor initiates

compulsory unitization, MMS will serve

all lessees of the proposed unit area

with a proposed unitization plan and a

statement of reasons for the proposed

unitization.

(d) The Regional Supervisor will not

require unitization until MMS provides

all lessees of the proposed unit area

written notice and an opportunity for a

hearing. If you want MMS to hold a

hearing, you must request it within 30

days after you receive written notice

from the Regional Supervisor or after

you are served with a request for

compulsory unitization from another

lessee.

(e) MMS will not hold a hearing

under this paragraph until at least 30

days after MMS provides written notice

of the hearing date to all parties owning

interests that would be made subject to

the unit agreement. The Regional

Supervisor must give all lessees of the

proposed unit area an opportunity to

submit views orally and in writing and

to question both those seeking and those

opposing compulsory unitization.

Adjudicatory procedures are not

required. The Regional Supervisor will

make a decision based upon a record of

the hearing, including any written

information made a part of the record.

The Regional Supervisor will arrange for

a court reporter to make a verbatim

transcript. The party seeking

compulsory unitization must pay for the

court reporter and pay for and provide

to the Regional Supervisor within 10

days after the hearing three copies of the

verbatim transcript.

(f) The Regional Supervisor will issue

an order that requires or rejects

compulsory unitization. That order

must include a statement of reasons for

the action taken and identify those parts

of the record which form the basis of the

decision. Any adversely affected party

may appeal the final order of the

Regional Supervisor under 30 CFR part

290.

[FR Doc. 97–2822 Filed 2–4–97; 8:45 am]

BILLING CODE 4310–MR–P

DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Parts 255 and 340

Confidentiality of Medical Quality

Assurance (QA) Records and

Delegation of Authority to Deputy

Secretary of Defense; Removal

AGENCY: Department of Defense.

ACTION: Final rule.

SUMMARY: This document removes the

Department of Defense’s Confidentiality

of Medical Quality Assurance (QA)

Records and the organizational charter

on the Delegation of Authority to

Deputy Secretary of Defense codified in

the CFR. The parts have served the

purpose for which they were intended

in the CFR and are no longer necessary.

EFFECTIVE DATE: February 5, 1997.

FOR FURTHER INFORMATION CONTACT: L.

Bynum or P. Toppings, 703–697–4111.

SUPPLEMENTARY INFORMATION: DoD

Directive 6040.37, ‘‘Confidentiality of

Medical Quality Assurance (QA)

Records’’ was revised by a July 9, 1996

version. DoD Directive 5105.2,

‘‘Delegation of Authority to the Deputy

Secretary of Defense’’ was revised by a

January 24, 1997 version. Copies of the

Directives may be obtained from the

National Technical Information Service

(NTIS), 5285 Port Royal Road,

Springfield, VA 22161.