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 Department of the Interior Bureau of Land Management 43 CFR Part 3170
[BLM_HQ_FRN_MO4500181705]
RIN 1004-AF01
 AGENCY: Bureau of Land Management, Interior.
 ACTION: Direct final rule.
 SUMMARY: On April 10, 2024, the Bureau of Land Management (BLM) published a final rule that aims to reduce the waste of natural gas from venting, flaring, and leaks during oil and gas production activities on Federal and Indian leases. This direct final rule corrects technical errors in that final rule, including revisions to equations for consistency with, or to better reflect, the regulatory text. It separately lists definitions of the variables for those equations for increased clarity. It also corrects typographical errors and makes minor re-arrangements of provisions for better clarity.
 DATES: This direct final rule is effective on December 23, 2024, without further notice, unless the BLM receives significant adverse comment by December 23, 2024. If the BLM receives a significant adverse comment that leads it to conclude that the rule is controversial, the BLM will publish a timely withdrawal of this direct final rule in the 
                        **Federal Register**
                         and the technical corrections described in this direct final rule will not go into effect. The incorporation by reference of certain material listed in the rule was approved by the Director of the Federal Register as of June 10, 2024.
 ADDRESSES:  *Mail, personal, or messenger delivery:*
                         U.S. Department of the Interior, Director (630), Bureau of Land Management, 1849 C St. NW, Room 5646, Washington, DC 20240, Attention: 1004-AF01. *Federal eRulemaking Portal: https://www.regulations.gov.*
                         In the Searchbox, enter “RIN 1004-AF01” and click the “Search” button. Follow the instructions at this website.
 FOR FURTHER INFORMATION CONTACT: John Ajak, Acting Division Chief, Division of Fluid Minerals at 505-549-9654 or 
                        *jajak@blm.gov*
                         for information about the final rule. Please use “RIN 1004-AF01” in the subject line. Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States. For a short, plain language summary of the direct final rule, please see the direct final rule summary document in docket BLM-2024-0001 on 
                        *www.regulations.gov.*


SUPPLEMENTARY INFORMATION:  I. Background This direct final rule corrects technical errors in 43 CFR subpart 3179 of the final rule that published in the 
                    **Federal Register**
                     on April 10, 2024 (89 FR 25378), entitled, “Waste Prevention, Production Subject to Royalties, and Resource Conservation” (Waste Prevention rule). The Waste Prevention rule established various measures to reduce waste of natural gas from onshore Federal and Indian oil and gas leases, including measures that are intended to ensure that, when such gas is wasted, the public or Indian mineral owners are compensated for that gas through royalty payments. To assist in meeting these objectives, § 3179.71(b) requires operators to measure flared gas for high-pressure flares for volumes greater than 1,050 Mcf per month above the averaging period (as defined in 43 CFR 3170.3). The Waste Prevention rule also sets out, in § 3179.71(g) and (h), three equations intended to be used by operators when reporting or allocating flared gas. In addition, the Waste Prevention rule established a Leak Detection and Repair (LDAR) program for production facilities located on Federal or Indian surface estates. API 22.3 is referenced in the amendatory text of this document and was previously approved for § 3179.71. II. Direct Final Rulemaking The BLM is publishing corrections to the Waste Prevention rule as a direct final rule. This rule merely corrects inadvertent errors that would otherwise cause unnecessary confusion for the operators attempting to comply with the reporting requirements of the Waste Prevention rule, but does not impose new requirements. None of the changes are inconsistent with the BLM's explanation of the Waste Prevention rule in its preamble. Therefore, the Department of the Interior has determined that it is appropriate for this rule to go into effect at the close of a 30-day comment period unless BLM receives a significant adverse comment. A significant adverse comment is one that explains: (1) why the rule is inappropriate, including challenges to the rule's underlying premise or approach; or (2) why the direct final rule will be ineffective or unacceptable without additional changes. After the 30-day comment period closes, the BLM will assess whether any of the comments received qualify as a significant adverse comment. If the BLM finds that there is a significant adverse comment, then it will withdraw this direct final rule. If no such comment is received, this direct final rule will become effective on December 23, 2024, without further BLM action. The BLM will not consider a comment recommending an addition to the rule to be significant or adverse unless the comment explains how this direct final rule would be ineffective without additional change. Aside from the technical corrections described in this direct final rule, this rule does not affect the Waste Prevention rule. III. Discussion The BLM is making technical corrections to Equations 2 and 3 in § 3179.71, as further discussed below. In addition, the BLM is restyling Equation 1 by moving the value to be determined from the right side of the equal sign to the left, in keeping with mathematical convention. In addition, for clarity, the rule as now corrected separately lists the variable definitions for each equation (in the final rule, the variable definitions for Equations 1 and 2 were combined in a single list). This rule also adds clarifying language in § 3179.71(b) and (g) and removes unintended and unworkable references to low-pressure flare volumes, discussed below, and 
                    ( print page 92603)
                    corrects typographical errors, such as in § 3179.2(a) (removing a second unintended instance of the word “provide”) and in § 3179.71(b) (correcting the reference to paragraph (h) so that it refers instead to the intended paragraph (g)). In response to public comment on the proposed rule and based on further consideration, the BLM included equations in § 3179.71(g) and (h) of the final Waste Prevention rule to guide operators in reporting estimated volumes of flared gas. The BLM included Equations 1 and 2 in paragraph (g) for operators to use in estimating the flared volumes for high-pressure flares measuring less than 1,050 Mcf per month. The BLM included Equation 3 in paragraph (h) to assist operators in allocating flared volumes when gas from multiple leases, unit participating areas (unit PAs), or communitization areas (CAs) is commingled and then measured at a single flare, as authorized in § 3179.71(a). Following publication of the final rule, the BLM received questions from several industry groups. One group observed that Equation 2 does not account for the on-lease use of gas when accounting for the disposition of the total gas produced, contrary to the Waste Prevention rule preamble acknowledgment that “[t]he BLM authorizes royalty-free use of lease production for operations and production purposes, 
                    *including placing oil or gas in marketable condition.*
                    ” 89 FR 25420 (emphasis added). Equation 2 calculates total gas produced by multiplying total oil produced by the gas-to-oil ratio, which is derived from operator-submitted Oil and Gas Operations Reports (OGORs) over a 6-month period (Equation 1). The equation in the April 10 rule would calculate the total volume of gas produced and then subtract the volume of gas sold to arrive at the total flared volume. The BLM agrees that Equation 2 in the Waste Prevention rule inadvertently omitted a variable for straightforward recognition of deductions for gas used on-lease (VLU) that is necessary to put the product in marketable condition. This rule corrects that inadvertent omission. Equation 3 allocates total flared volume from a commingled high-pressure flare to individual leases, unit PAs, or CAs that send gas to a common flare. The Waste Prevention rule provided in § 3179(h) that the allocation is to be “based on the oil production while flaring.” Because of an error in Equation 3, however, that equation uses the volume of oil 
                    *sold,*
                     commonly referred to as net standard volume (NSV). The BLM is correcting that typographical error in this final rule. As corrected, Equation 3 allocates the flared volume based on the total volume of oil produced (Vopi), which is consistent with the text of paragraph (h). In the Waste Prevention rule, § 3179.71(g) would apply when, “the flared volume for a high-pressure flare is less than or equal to 1,050 Mcf per month,” instead of simply “less than,” as the BLM intended and as reflected in Table 1 to § 3179.71(f). The BLM is correcting this typographical error by removing the reference to “or equal to” in § 3179.71(g). In § 3179.71(g) of the Waste Prevention rule, the BLM required estimation of low-pressure flare volumes based on Equations 1 and 2. Industry representatives, however, correctly pointed out that Equations 1 and 2 do not work for low-pressure flare volumes. The inclusion of “and for low-pressure flares” in the first sentence of § 3179.71(g) was therefore a mistake and would require operators to use inappropriate formulas to estimate low-pressure flare volumes. The preamble to the Waste Prevention rule discussing § 3179.71 did not mention calculating low-pressure flare volumes, see 89 FR 25413 through 25415, and neither did the proposed rule. Generally, low-pressure flares combust tank vapors that lack sufficient pressure to enter the sales line, so, under § 3179.41(b)(7), normal operating losses from oil storage tanks are unavoidable losses and thus are not subject to royalty obligations. Because low-pressure flare volumes are also normally small in volume, and difficult to measure, there are several industry-accepted methods operators may use in estimating and reporting low-pressure flare volumes on the OGOR. For these reasons, this rule clarifies that the requirements in § 3179.71(g) apply to high-pressure flares, and the first sentence now states, “For high-pressure flares with volumes less than 1,050 Mcf per month, the flared volume may be estimated, or measured.” The BLM is also correcting a typographical error in § 3179.71(b). That section—which currently requires operators to “measure flared gas for high-pressure flares for volumes greater than 1,050 Mcf per month above the averaging period”—inadvertently omitted the words “or equal to” after “greater.” The correct phrasing appears in Table 1 to § 3179.71(f) and is referenced twice in the final rule's preamble. 
                    *See*89 FR 25413 (“requiring measurement on flared volumes less than 1,050 Mcf per month over the averaging period would encompass flaring operations that would meet the BLM's emergency criteria”); 
                    *id.*
                     at 89 FR 25413 (“The study[ ] . . . supports the final rule requirement to measure high-pressure flares with volumes greater than or equal to 1,050 Mcf per month over the averaging period”). This direct final rule also corrects “above the averaging period” in § 3179.71(b) to read “over the averaging period,” as BLM intended. There is no substantive difference, but “over” is a more standard expression (as in the above-quoted Waste Prevention rule preamble) and should prevent any confusion. There are two other inadvertent errors in § 3179.71(b). The Waste Prevention rule provided that “operators may estimate the volume flared, as described in paragraph (h) of this section.” Paragraph (h), however, applies to combusting gas that is combined across multiple units, unit PAs, or CAs. Paragraph (h) and its Equation 3 make no sense for operators who are not combining gas for flaring. The intended reference in paragraph (b) was to paragraph (g), and this direct final rule corrects that typographical error. A second inadvertent error in § 3179.71(b) is that it encourages operators to estimate volumes of low-pressure flaring, as provided in paragraph (g). For the reasons discussed above, paragraph (g) and its Equations 1 and 2 are not appropriate or intended for use in estimating low-pressure flare volumes. Accordingly, the BLM is removing the inadvertent language. The corrected second sentence in § 3179(b) now states, “For high-pressure flares measuring less than 1,050 Mcf per month over the averaging period, operators may estimate the volume flared, as described in paragraph (g) of this section,” In this direct final rule, the BLM also adds the full wording for the acronym AVO, which stands for Audio-Visual-Olfactory, in § 3179.100(b)(2)(i). The AVO acronym appears in the List of Acronyms (81 FR 25328) in the Waste Prevention rule preamble. However, the AVO acronym explanation does not appear within the regulatory text. For clarity, this final rule will add the AVO acronym explanation to § 3179.100(b)(2)(i) to read, “Well pads with only wellheads and no production equipment or storage must include quarterly Audio-Visual-Olfactory (AVO) inspections for leak detection.” This change is not substantive and only provides further clarity for a reader who does not have access to the preamble with its List of Acronyms.
                    ( print page 92604) IV. Procedural Matters A. Regulatory Planning and Review (Executive Order (E.O.) 12866, E.O. 13563) E.O. 12866, as amended by E.O. 14094, provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) will review all significant rules. OIRA has determined that this rule is not significant. E.O. 13563 reaffirms the principles of E.O. 12866, as amended by E.O. 14094, while calling for improvements in the Nation's regulatory system to promote predictability, reduce uncertainty, and use the best, most innovative, and least burdensome tools for achieving regulatory ends. E.O. 13563 directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O.13563 emphasizes further that agencies must base regulations on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. The BLM developed this rule in a manner consistent with those requirements. B. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA, 5 U.S.C. 601-612) requires an agency to prepare a regulatory flexibility analysis for all rules unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The RFA applies only to rules for which an agency is required to first publish a proposed rule. 
                    *See*5 U.S.C. 603(a) and 604(a). As the BLM is not required to publish a notice of proposed rulemaking for this direct final rule, the RFA does not apply. C. Congressional Review Act This rule is not a major rule under the Congressional Review Act, 5 U.S.C. 804(2). Specifically, the direct final rule: (a) will not have an annual effect on the economy of $100 million or more; (b) will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) will not have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Regulatory or Economic Impacts This direct final rule only corrects errors and provides consistency and clarity to the April 10 rule. The changes neither create new requirements nor eliminate substantive requirements from the Waste Prevention rule. Therefore, the regulatory impacts are unchanged from those analyzed for the Waste Prevention rule, and there is no need for a separate regulatory impact analysis for this rule. D. Unfunded Mandates Reform Act This rule does not impose an unfunded mandate on State, local, or Tribal governments, or the private sector, of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or Tribal governments, or the private sector. The rule merely corrects inadvertent errors in the Waste Prevention rule and other potential sources of confusion. Therefore, a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 
                    *et seq.*) is not required. E. Takings (E.O. 12630) This rule does not result in a taking of private property or otherwise have regulatory takings implications under E.O. 12630. The rule primarily corrects inadvertent errors and sources of confusion in the Waste Prevention rule without substantive change; therefore, the rule will not result in private property being taken for public use without just compensation. A takings implication assessment is not required. F. Federalism (E.O. 13132) Under the criteria of section 1 of E.O. 13132, this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. A federalism summary impact statement is not required. G. Civil Justice Reform (E.O. 12988) This direct final rule complies with the requirements of E.O. 12988. Among other things, this rule: (a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; (b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards. H. Consultation With Indian Tribes (E.O. 13175 and Departmental Policy) The Department of the Interior strives to strengthen its government-to-government relationship with Indian Tribes through a commitment to consultation with Tribes and recognition of their right to self-governance and Tribal sovereignty. The BLM evaluated this direct final rule under E.O. 13175 and the Department's and the BLM's consultation policies and determined that it has no substantial direct effects on federally recognized Indian Tribes and that consultation under the Tribal consultation policies is not required. The rule merely revises the BLM's regulation to correct inadvertent errors and other potential sources of confusion. I. Paperwork Reduction Act (44 U.S.C. 3501 et seq.) This rule does not impose any new information collection burden under the Paperwork Reduction Act. OMB previously approved the information collection activities contained in the April 10 rule and assigned OMB control number 1004-0211. This rule does not impose an information collection burden because the BLM is only clarifying, not increasing, the information collection requirements. J. National Environmental Policy Act This direct final rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act (NEPA, 42 U.S.C. 4321 
                    *et seq.*) is not required because this rule is covered by a categorical exclusion applicable to regulatory functions “that are of an administrative, financial, legal, technical, or procedural nature.” 43 CFR 46.210(i). In addition, the BLM has determined that this rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under NEPA. K. Effects on the Energy Supply (E.O. 13211) This direct final rule is not a significant energy action as defined in E.O. 13211. Therefore, a Statement of Energy Effects is not required. List of Subjects in 43 CFR Part 3170 Administrative practice and procedure
Flaring
Immediate assessments
Incorporation by reference,
 For the reasons set out in the preamble, the Bureau of Land Management amends 43 CFR part 3170 as follows: PART 3170—ONSHORE OIL AND GAS PRODUCTION
 1.The authority citation for part 3170 continues to read as follows: Authority:
                        25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and 1751; and 43 U.S.C. 1732(b), 1733, and 1740. 2.In § 3179.2, revise paragraph (a) introductory text to read as follows: § 3179.2
  (a) Except as provided in paragraph (b), this subpart applies to:
 3.Revise § 3179.71 to read as follows: § 3179.71
  (a) The operator may commingle flared gas from more than one lease, unit PA, or CA to a common high-pressure flare without BLM approval, subject to the allocation requirement in paragraph (h). The site facility diagram required under § 3173.11 must indicate that the high-pressure flare is a common, commingled flare and list the leases, unit PAs, or CAs contributing gas to the common flare. (b) The operator must measure flared gas for high-pressure flares for volumes greater than or equal to 1,050 Mcf per month over the averaging period. For high-pressure flares measuring less than 1,050 Mcf per month over the averaging period, operators may estimate the volume flared, as described in paragraph (g) of this section. (c) High-pressure flares requiring measurement must use either orifice plates and orifice meter tubes, or ultrasonic meters. High-pressure flare measurement systems must meet the following requirements: (1) Orifice metering systems must comply with the low-volume measurement requirements in § 3175.80, low-volume electronic gas measurement requirements in § 3175.100, and the low-volume gas sampling and analysis requirements in § 3175.110 with the gas sampling location requirements provided in paragraph (d) or (e) of this section. (2) Ultrasonic metering systems must comply with the following requirements: (i) Each ultrasonic meter make and model must be tested for flare use. Flare gas meter testing must be conducted and reported pursuant to API 22.3 (incorporated by reference, see § 3179.30) and results must be made available to the AO upon request. (ii) Ultrasonic meters must be installed and operated for flare use according to the manufacturer's specifications and those specifications must be provided to the AO upon request. (iii) Ultrasonic metering systems must comply with the low-volume electronic gas measurement requirements in § 3175.100, and the low-volume gas sampling analysis requirements in § 3175.110, except for the gas sampling requirements in paragraph (d) or (e) of this section. (3) Operators must evaluate the production facility to determine which type of flare measurement is safe for the facility. (d) The gas sample must be taken from one of the following locations when the high-pressure flare is measuring a single lease, unit PA, or CA: (1) At the flare meter; (2) At the gas FMP, if there is a gas FMP at the well site and the gas composition is the same as that of the flare-meter gas; or (3) At another location approved by the AO with a Sundry Notice submission. (e) The gas sample must be taken from one of the following locations for a common high-pressure flare that measures more than one lease, unit PA, or CA; (1) At the flare meter; or (2) At another location approved by the AO with a Sundry Notice submission. (f) Appropriate meters must be installed at all high-pressure flares pursuant to paragraph (c) of this section, and gas sampling must be taken from the appropriate location pursuant to paragraph (d) or (e) of this section according to the following phase-in timeline: Table 1 to Paragraph (
                                f
                                )—Deadline for Compliance With High-Pressure Flare Measurement, and Gas Sampling Location
Flare flow category
Deadline for measurement
                                     compliance for 
                                     high-pressure flares and 
                                     gas sampling location≥30,000 Mcf per month
December 10, 2024.<30,000 Mcf per month and ≥6,000 Mcf per month
June 10, 2025.<6,000 Mcf per month and ≥1,050 Mcf per month
December 10, 2025.<1,050 Mcf per month
Not applicable.
 (g) For high-pressure flares with volumes less than 1,050 Mcf per month, the flared volume may be estimated, or measured. Estimated flared gas volumes must be based on production reported on the ONRR OGORs over the previous 6 months and calculated as follows: Equation 1 to Paragraph (g)  Where: GORr
                                 = The gas-to-oil ratio for the previous 6 months of production as reported on the OGOR m = The previous 6 months of flaring Vg
                                 = The total volume of gas produced from oil wells in the previous 6 months as reported on the OGOR Vo
                                 = The total volume of oil produced from oil wells in the previous 6 months as reported on the OGOR Equation 2 to Paragraph (g) *V**f*
                            = (
                            *V**op*
                             × 
                            *GOR**r*)−
                            *V**LU*
                            −
                            *V**s* Where: *V**f*
                                 = The estimated gas flared from oil wells to be reported on the OGOR
                                ( print page 92606) *V**op*
                                 = The total oil produced from oil wells while flaring *GOR**r*
                                 = The gas-to-oil ratio for the previous 6 months of production as calculated from Equation 1 to Paragraph (g) using volumes reported on the OGOR VLU
                                 = The total gas used on lease, unit PA, or CA pursuant to subpart 3178 *V**s*
                                 = The total gas volume produced and sent through a gas FMP from oil wells while flaring (h) If a flare is combusting gas that is combined across multiple leases, unit PAs, or CAs, the operator may measure the gas at a single point at the flare and allocate flared volumes based on the oil production while flaring from each lease, unit PA, or CA as follows: Equation 3 to Paragraph (h)  Where: n = The total number of leases, unit PAs, or CAs sending gas to a common flare VFi
                                 = The volume flared from the ith lease, unit PA, or CA sent to a common flare VFt
                                 = The total volume flared from a common flare Vopi
                                 = The total volume of oil produced from oil wells on the ith lease, unit PA, or CA while flaring (i) Measurement points for flared volumes are not FMPs for the purposes of subpart 3175.
 4.Revise § 3179.100 to read as follows: § 3179.100
  (a) Pursuant to paragraph (b) of this section, the operator must maintain a BLM administrative statewide LDAR program designed to prevent the waste of Federal or Indian gas. (b) Operators must submit a statewide LDAR program to the BLM state office with jurisdiction over the production for review. The LDAR program must cover operations and production equipment located on a Federal or Indian oil and gas lease and not operations and production equipment located on State or private tracts, even though those tracts are committed to a federally approved unit PA or CA. When there is a change of operator, the new operator must update the LDAR program on the annual update and revision timeline. Operators must submit the LDAR program in writing for review until such time as the BLM's electronic filing system is capable of receiving LDAR program submissions. At minimum, the LDAR program must contain the following information, as applicable: (1) Identification of the leases, unit PAs, CAs by geographic State for all States within BLM's administrative State boundaries to which the LDAR program applies; and (2) Identification of the method and frequency of leak detection inspection used at the lease, unit PA, or CA. Acceptable methods, as well as other methods approved by the BLM, and frequency include the following: (i) Well pads with only wellheads and no production equipment or storage must include quarterly Audio-Visual-Olfactory (AVO) inspections for leak detection; (ii) Well pads with any production and processing equipment and oil storage must include AVO inspections every other month and quarterly optical gas imaging for leak detection; and (iii) Other leak detection inspection methods and frequency acceptable to the BLM (
                            *e.g.,*
                             continuous monitoring). (3) Identification of the operator's recordkeeping process for leak detection and repair pursuant to § 3179.102. (c) The BLM will review the operator's LDAR program and notify the operator if the BLM deems the program to be inadequate. The notification will explain the basis for the BLM's determination, identify the plan's inadequacies, describe any additional measures that could address the inadequacies, and provide a reasonable time frame in which the operator must submit a revised LDAR program to the BLM for review. (d) For leases in effect on June 10, 2024, the operator must submit a statewide LDAR program to the state office no later than December 10, 2025. (e) Operators must review and update submitted LDAR programs on an annual basis in the month in which the operator submitted the first LDAR program to ensure the identified leases, unit PAs, and CAs, leak detection methods, and frequency of inspections are current. If the operator's LDAR program requires no changes, then the operator must notify the BLM state office that the LDAR program submitted and reviewed by the BLM remains in effect. Any updates to the LDAR program must be submitted in writing to the BLM state office for review until such time as the BLM's electronic system is capable of receiving the annual LDAR updates.
 Delegation of Signing Authority The action taken herein is pursuant to an existing delegation of authority. Steven H. Feldgus, Principal Deputy Assistant Secretary, Land and Minerals Management.


[FR Doc. 2024-27333 Filed 11-21-24; 8:45 am] BILLING CODE 4331-29-P