72652 Federal Register / Vol. 72, No. 245 / Friday, December 21, 2007 / Proposed Rules 

rejected at the discretion of the 

authorized officer. 

* * * * * 

PART 280—PROSPECTING FOR 

MINERALS OTHER THAN OIL, GAS, 

AND SULPHUR ON THE OUTER 

CONTINENTAL SHELF 

10. The authority citation for part 280 

is revised to read as follows: 

Authority: 31 U.S.C. 9701, 43 U.S.C. 1334. 

11. Section 280.12(a) is revised to 

read as follows: 

§ 280.12 What must I include in my 

application or notification? 

(a) Permits. You must submit to the 

Regional Director a signed original and 

three copies of the permit application 

form (Form MMS–134) at least 30 days 

before the startup date for activities in 

the permit area. If unusual 

circumstances prevent you from 

meeting this deadline, you must 

immediately contact the Regional 

Director to arrange an acceptable 

deadline. The form includes names of 

persons, type, location, purpose, and 

dates of activity, as well as 

environmental and other information. A 

nonrefundable service fee of $1,900 

must be paid electronically through 

Pay.Gov at: https://www.pay.gov/ 

paygov/, and you must include a copy 

of the Pay.Gov confirmation receipt 

page with your application. 

* * * * * 

PART 281—LEASING OF MINERALS 

OTHER THAN OIL, GAS, AND 

SULPHUR IN THE OUTER 

CONTINENTAL SHELF 

12. The authority citation for part 281 

is revised to read as follows: 

Authority: 43 U.S.C. 1334. 

13. Section 281.41(a)(2) is revised to 

read as follows: 

§ 281.41 Requirements for filing for 

transfers. 

(a) * * * 

(2) An application for approval of any 

instrument required to be filed shall not 

be accepted unless a nonrefundable fee 

of $50 is paid electronically through 

Pay.Gov at: https://www.pay.gov/ 

paygov/ and a copy of the Pay.Gov 

confirmation receipt page is included 

with your application. For any 

document you are not required to file by 

these regulations but which you submit 

for record purposes, you must also pay 

electronically through Pay.Gov the 

service fee listed in § 256.63 (Nonrequired Document Filing Fee) per lease 

affected, and you must include a copy 

of the Pay.Gov confirmation receipt 

page with your document. Such 

documents may be rejected at the 

discretion of the authorized officer. 

* * * * * 

PART 290—APPEAL PROCEDURES 

14. The authority citation for part 290 

continues to read as follows: 

Authority: 5 U.S.C. 301; 25 U.S.C. 396, 

2107; 30 U.S.C. 189, 359, 1023, 1701 et seq., 

1751(a); 31 U.S.C. 3716, 9701; and 43 U.S.C. 

1334. 

15. Section 290.4(b) is revised to read 

as follows: 

§ 290.4 How do I file an appeal? 

* * * * * 

(b) A nonrefundable processing fee of 

$150.00 paid with the Notice of Appeal. 

(1) You must pay electronically 

through Pay.Gov at: https:// 

www.pay.gov/paygov/, and you must 

include a copy of the Pay.Gov 

confirmation receipt page with your 

Notice of Appeal. 

(2) You cannot extend the 60-day 

period for payment of the processing 

fee. 

[FR Doc. 07–6173 Filed 12–20–07; 8:45 am] 

BILLING CODE 4310–MR–P 

DEPARTMENT OF THE INTERIOR 

Minerals Management Service 

30 CFR Parts 203 and 260 

RIN 1010–AD29 

[Docket ID: MMS–2007–OMM–0074] 

Royalty Relief for Deepwater Outer 

Continental Shelf (OCS) Oil and Gas 

Leases—Conforming Regulations to 

Court Decision 

AGENCY: Minerals Management Service 

(MMS), Interior. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

amend 30 CFR parts 260 and 203 to 

conform the regulations to the decision 

of the United States Court of Appeals for 

the Fifth Circuit in Santa Fe Snyder 

Corp., et al. v. Norton (the Decision). 

That decision found that certain 

provisions of the MMS regulations 

interpreting section 304 of the Deep 

Water Royalty Relief Act are contrary to 

the requirements of the statute. 

DATES: Submit comments by February 

19, 2008. The MMS may not fully 

consider comments received after this 

date. 

ADDRESSES: You may submit comments 

on the proposed rulemaking by any of 

the following methods. Please use the 

Regulation Identifier Number (RIN) 

1010–AD29 as an identifier in your 

message. See also Public Availability of 

Comments under Procedural Matters. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Select ‘‘Minerals 

Management Service’’ from the agency 

drop-down menu, then click ‘‘submit.’’

In the Docket ID column, select MMS–

2007–OMM–0074 to submit public 

comments and to view supporting and 

related materials available for this 

rulemaking. Information on using 

Regulations.gov, including instructions 

for accessing documents, submitting 

comments, and viewing the docket after 

the close of the comment period, is 

available through the site’s ‘‘User Tips’’

link. The MMS will post all comments. 

• Mail or hand-carry comments to the 

Department of the Interior; Minerals 

Management Service; Attention: 

Regulations and Standards Branch 

(RSB); 381 Elden Street, MS–4024; 

Herndon, Virginia 20170–4817. Please 

reference ‘‘Royalty Relief for Deepwater 

OCS Oil and Gas Leases—Conforming 

Regulations to Court Decision, 1010–

AD29’’ in your comments and include 

your name and return address. 

FOR FURTHER INFORMATION CONTACT: 

Marshall Rose, Chief, Economics 

Division, at (703) 787–1536. 

SUPPLEMENTARY INFORMATION: 

Background 

On November 28, 1995, President 

Clinton signed Public Law 104–58, 

which included the Deep Water Royalty 

Relief Act (Act). The Act was designed 

to encourage development of new 

supplies of energy. It included 

incentives to promote investment in a 

particularly high-cost, high-risk area, 

the deep waters of the Gulf of Mexico. 

These deep Gulf of Mexico waters were 

viewed as having potential for large oil 

and gas discoveries, but technological 

advances and multi-billion dollar 

investments would be needed to realize 

that potential. Since the enactment of 

the incentive, the deep waters of the 

Gulf of Mexico have become one of the 

most important sources of domestic oil 

and gas production. 

The Secretary was required to 

suspend royalties for certain volumes of 

production on all leases in more than 

200 meters of water in the central and 

western Gulf of Mexico issued in the 

first 5 years following enactment of the 

Act. These royalty suspension volumes 

(RSVs) (i.e., specified volumes of 

royalty-free production) ranged from 

17.5 million to 87.5 million barrels of 

oil equivalent, depending on water 

depth. The royalty suspension incentive 


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Federal Register / Vol. 72, No. 245 / Friday, December 21, 2007 / Proposed Rules 72653 

was intended to provide companies that 

undertook these investments specific 

volumes of royalty-free production to 

help recover a portion of their capital 

costs before starting to pay royalties. 

Once the specified volume has been 

produced, royalties become due on all 

additional production. This was not a 

matter of agency discretion. 

We published an advance notice of 

proposed rulemaking (ANPR) in the 

Federal Register on February 23, 1996 

(61 FR 6958), and informed the public 

of our intent to develop comprehensive 

regulations implementing the Act. The 

ANPR sought comments and 

recommendations to assist us in that 

process. We continued to collect 

comments and conducted a public 

meeting in New Orleans on March 12–

13, 1996, about the matters the ANPR 

addressed. We published an interim 

rule on March 25, 1996 (effective 30 

days later). We invited comments on the 

interim rule, and stated that we would 

consider them as part of our review of 

responses to the ANPR mentioned 

above. We further stated that based on 

comments received and experience 

gained, we may include changes to the 

matters the interim rule addresses in a 

comprehensive rulemaking 

implementing the Act. 

Section 304 of the Act specifies RSVs 

for offshore oil and gas leases in three 

defined water depth ranges deeper than 

200 meters of water issued in lease sales 

held in the first 5 years after the Act’s 

enactment on November 28, 1995. We 

stated in our March 25, 1996, interim 

rule entitled Deepwater Royalty Relief 

for New Leases that ‘‘[s]ection 304 of the 

Act does not provide specific guidance 

on how to apply the royalty suspension 

volumes to leases issued during sales 

after November 28, 1995’’ and that 

‘‘[t]he primary question is how to apply 

the minimum royalty suspension 

volumes laid out in the statute’’ (61 FR 

12023). We published a final rule 

implementing section 304 of the Act in 

the Federal Register, with no 

substantive change in the regulatory 

language, on January 16, 1998 (63 FR 

2626), that became effective on February 

17, 1998. 

On October 4, 2004, the U.S. Court of 

Appeals for the Fifth Circuit in Santa Fe 

Snyder Corp., et al. v. Norton, 385 F.3d 

884, agreed with the conclusion of the 

U.S. District Court for the Western 

District of Louisiana that the regulations 

implementing royalty relief under 

section 304 are inconsistent with the 

statute. The regulations provided that 

leases issued under section 304 that are 

assigned to a field with a current lease 

that produced before November 28, 

1995, are not eligible for royalty relief. 

The regulations further provided that 

where there is more than one section 

304 lease in a field, leases share in the 

statutory RSV. These requirements were 

promulgated in the interim rule 

effective on April 24, 1996 (61 FR 

12022). 

The effect of the court’s ruling in 

Santa Fe Snyder was that: (1) The MMS 

could not condition royalty relief under 

section 304 on the lease being part of a 

field that was not producing before 

November 28, 1995; and (2) the RSVs 

prescribed in section 304 apply to each 

lease, not jointly to all leases in a 

particular field. An information to 

lessees (ITL) dated August 8, 2005, 

alerted affected lessees that we would 

respect the decision and revise the 

regulations to conform to this decision, 

resulting in this proposed rule. 

Regulatory Change 

This proposed rule would revise 30 

CFR part 260, which pertains to OCS 

leasing, and 30 CFR part 203, which 

pertains to royalty relief, to treat leases 

issued under section 304 (referred to in 

our regulations as ‘‘eligible leases’’) in a 

manner consistent with the Santa Fe 

Snyder ruling. These proposed revisions 

conform our regulations to the court 

ruling and are non-discretionary. The 

revisions to the regulations in part 260 

would modify § 260.3 relating to MMS’s 

authority to collect information and 

remove references in § 260.113(a) to 

prior production on the field to which 

a lease is assigned. Deletions in 

§ 260.114 would remove paragraphs on 

procedures for notification, 

determination of RSVs, and having more 

than one RSV on a lease because they 

would no longer be required. Section 

260.114(b) would also be revised to 

change the reference to ‘‘fields’’ to a 

reference to ‘‘each eligible lease.’’

Section 260.124 would be revised to 

remove a reference to eligible leases 

establishing an RSV for a field, which is 

not valid under section 304 of the Act, 

as interpreted in Santa Fe Snyder. Thus, 

royalty-free production from an RS lease 

only counts against the royalty 

suspension volume of a field if that 

volume was established as a result of an 

approved application for royalty relief 

for a pre-Act lease under part 203. 

Finally, all of § 260.117 would be 

eliminated, because provisions for 

allocation of royalty suspension 

volumes among multiple leases on a 

field would no longer be needed. 

Changes in 30 CFR part 203 would 

delete references to ‘‘eligible leases’’ in 

§ 203.69 and would change the sharing 

rule in § 203.71 for purposes of 

consistency. It would remove the 

eligible leases from the section that 

discusses how to allocate RSVs on a 

field. Those changes mean that 

regardless of the outcome of an 

application for royalty relief for leases 

issued either before or after the 5-year 

period covered by section 304, which 

may affect the field to which they are 

assigned, both eligible leases and leases 

issued in sales held after November 25, 

2000 (referred to in the regulation as 

‘‘Royalty Suspension’’ (RS) leases), 

would get the full RSVs stated in the 

lease instrument. Further, as with an RS 

lease, production from an eligible lease 

would count against any RSVs available 

to pre-Act leases on a field to which the 

eligible lease or RS lease has been 

assigned. However, unlike RS leases, 

lessees of eligible leases may not initiate 

an application seeking, or requesting a 

share in, an additional RSV granted to 

an RS lease. This is because there would 

now be more than enough financial 

incentive for any single lease. 

Retroactive Effect 

As explained above, the need for the 

change in this proposed rule arises from 

the Fifth Circuit’s decision. The effect of 

the Fifth Circuit’s decision was to 

declare void the relevant regulatory 

provisions that the court found to be 

inconsistent with section 304. Because 

section 304 had not changed, the 

necessary implication is that the 

relevant regulations were unlawful from 

their inception. The Fifth Circuit 

decision thus has created a regulatory 

void between the date on which the 

interim rule became effective (April 24, 

1996) and the present. The Fifth Circuit 

plainly would apply its interpretation of 

section 304 for all time periods, not just 

the period after the decision. This 

proposed rule does nothing more than 

conform the regulations to the Fifth 

Circuit’s decision, and reflects the legal 

interpretation of section 304 that the 

Fifth Circuit would apply. It is therefore 

permissible to replace the rule that the 

court struck down with this rule for the 

time period that the invalidated 

provisions covered, so as to avoid 

having a gap and consequent ambiguity 

in the rule between April 24, 1996, and 

the date of this rule. See, Citizens to 

Save Spencer County v. EPA, 600 F.2d 

844, 879–880 (DC Cir. 1979); Beverly 

Hospital v. Bowen, 872 F.2d 483, 485–

486 (DC Cir. 1989). Therefore, this 

proposed rule will be effective 

immediately upon being published as a 

final rule with retroactive effect to April 

24, 1996. 


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Procedural Matters 

Public Availability of Comments 

Before including your address, phone 

number, email address, or other 

personal identifying information in your 

comment, you should be aware that 

your entire comment—including your 

personal identifying information—may 

be made publicly available at any time. 

While you can ask us in your comment 

to withhold your personal identifying 

information from public review, we 

cannot guarantee that we will be able to 

do so. 

Regulatory Planning and Review 

(Executive Order (E.O.) 12866) 

This proposed rule is not a significant 

rule as determined by the Office of 

Management and Budget (OMB) and is 

not subject to review under E.O. 12866. 

(1) This proposed rule would conform 

the regulations with the Fifth Circuit’s 

decision. It would have an annual effect 

on the economy of $100 million or 

more. 

The Fifth Circuit’s decision means 

that more production on many section 

304 leases will be subject to royalty 

relief than under current regulations, 

resulting in larger fiscal costs to the 

federal government. The magnitudes of 

these fiscal losses (on past and future 

royalty collections) would vary 

significantly depending upon whether 

the federal government ultimately 

prevails (low case) or does not prevail 

(high case) in pending litigation over the 

MMS authority to condition royalty 

relief on price thresholds (see Kerr 

McGee Oil and Gas Corp. v. Allred 

Docket No. 2:06 CV 0439). In the low 

case, only deepwater leases issued in 

1998 and 1999 likely would be affected, 

because those leases were not issued 

with price thresholds, and for the other 

DWRRA leases, market prices most 

likely will exceed threshold levels, 

thereby eliminating future royalty relief 

on these other deepwater leases. In the 

high case, all deepwater leases issued 

throughout the 1996 to 2000 period 

would be affected, because deepwater 

leases issued in 1996, 1997, and 2000 

then would be treated similar to 

deepwater leases issued in 1998 and 

1999 with respect to price thresholds. 

For section 304 leases placed on fields 

by MMS that consist of one or more 

leases which produced prior to the 

DWRRA, we projected that from 2000 

through 2024, production of oil and gas 

could range from 4 million barrels of oil 

equivalent (BOE) in the low case to 27 

million BOE in the high case. The total 

royalty losses during this 25-year period 

are estimated to range from $16 million 

in the low case to almost $205 million 

in the high case (expressed in current 

year dollars). Applying discount rates of 

3 and 7 percent to the potential cash 

flows, the range of fiscal losses becomes 

$17–192 million at 3 percent and $20–

189 million at 7 percent (the lower 

bound figures increase as the discount 

rate rises because all of the losses in this 

case, associated with leases issued in 

1998 and 1999, represent historical 

royalties that must be paid back to the 

lessees). 

The Fifth Circuit Court’s ruling also 

means that the suspension volumes 

cited in the DWRRA must apply to each 

lease, not shared by all leases on a 

geologic field, as MMS interpreted the 

Act. Thus, the added production from a 

field that could be eligible for royalty 

relief consists of production from all the 

leases on the field in excess of the single 

royalty suspension volume cited in the 

Act (for the applicable water depth), up 

to an amount equal to that suspension 

volume times the number of leases 

included in the field. In fact, the vast 

majority of the royalty losses from 

section 304 leases will occur as a result 

of this aspect of the court’s ruling. We 

estimate the additional production that 

will be subject to royalty relief from this 

‘‘lease-based’’ court interpretation will 

be about 400 million BOE in the 20-year 

period from 2007 through 2026 in the 

low case (covering only DWRRA leases 

issued in 1998 and 1999), and 

approximately 1.3 billion BOE in the 28- 

year period from 2007 through 2034 in 

the high case (covering all DWRRA 

leases). The royalty costs associated 

with these production levels during the 

time periods of production are 

estimated to be $3 billion in the low 

case and $10 billion in the high case 

(expressed in current year dollars). 

Discounting at 3 and 7 percent yields 

ranges of royalty losses of $2.5–7.5 

billion at 3 percent and $1.9–5.2 billion 

at 7 percent. 

Thus, almost all of the fiscal costs of 

the Fifth Circuit Court’s ruling in Santa 

Fe Snyder can be attributed to the 

expansion of designated amounts of 

royalty relief from geologic fields to 

individual leases. The total royalty costs 

of the court’s ruling, spanning the 35- 

year period from 2000 through 2034, are 

estimated to be between $3.1 and $10.3 

billion (expressed in current year 

dollars). 

(2) This proposed rule would not 

create a serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency because 

royalty relief is confined to leasing in 

Federal offshore waters that lie outside 

the coastal jurisdiction of state and 

other local agencies. Careful review of 

the lease sale notices, along with 

stringent leasing policies now in force, 

ensure that the Federal OCS leasing 

program, of which royalty relief is only 

a component, does not conflict with the 

work of other Federal agencies. 

(3) This proposed rule would not alter 

the budgetary effects of entitlements, 

grants, user fees, or loan programs or the 

rights or obligations of their recipients. 

(4) This proposed rule would not raise 

novel legal or policy issues. 

Regulatory Flexibility Act 

The Department of the Interior 

certifies that this proposed rule would 

not have a significant economic effect 

on a substantial number of small entities 

under the Regulatory Flexibility Act (5 

U.S.C. 601, et seq.). 

This proposed rule conforms the 

regulations to the Fifth Circuit’s 

decision, and reflects the legal 

interpretation of section 304 that the 

Fifth Circuit would apply. We are 

replacing the rule that the court struck 

down with this rule for the time period 

that the invalidated provisions covered, 

so as to avoid having a gap and 

consequent ambiguity in the rule 

between April 24, 1996, and the date of 

this rule. 

A Regulatory Flexibility Analysis is 

not required because there are no legal 

alternatives to the court’s decision that 

deemed our current regulations to be 

inconsistent with the statute, as cited in 

the preamble, other than to publish this 

rule. We have determined that the 

proposed rule will not have a significant 

economic effect on a substantial number 

of small entities. A Small Entity 

Compliance Guide is not required. 

This change would affect lessees and 

operators of deepwater leases in the 

OCS. This includes about 40 different 

companies. These companies are 

generally classified under the North 

American Industry Classification 

System (NAICS) Code 211111, which 

includes companies that extract crude 

petroleum and natural gas. For this 

NAICS code classification, a small 

company is one with fewer than 500 

employees. Based on these criteria, only 

10 of these companies are considered 

small. This proposed rule, therefore, 

would not affect a substantial number of 

small entities. 

Your comments are important. The 

Small Business and Agriculture 

Regulatory Enforcement Ombudsman 

and 10 Regional Fairness Boards were 

established to receive comments from 

small businesses about Federal agency 

enforcement actions. The Ombudsman 

will annually evaluate the enforcement 

activities and rate each agency’s 

responsiveness to small business. If you 

wish to comment on the actions of 


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Federal Register / Vol. 72, No. 245 / Friday, December 21, 2007 / Proposed Rules 72655 

MMS, call 1–888–734–3247. You may 

comment to the Small Business 

Administration without fear of 

retaliation. Disciplinary action for 

retaliation by an MMS employee may 

include suspension or termination from 

employment with the DOI. 

Small Business Regulatory Enforcement 

Fairness Act 

This proposed rule is a major rule 

under 5 U.S.C. 804(2) of the Small 

Business Regulatory Enforcement 

Fairness Act. This proposed rule: 

a. Would have an annual effect on the 

economy of $100 million or more, based 

on the analysis presented in the 

previous section. Current MMS 

estimates indicate the royalty costs of 

the rule, occasioned by the court ruling, 

will be from $3.1 billion to $10.3 

billion, based on applicable production 

amounts during the 35-year period from 

2000 through 2034. This low case dollar 

amount represents the added royalty 

losses to the Federal government only 

on deepwater leases issued without 

price thresholds, i.e., in 1998 and 1999. 

The high case estimate represents 

royalty losses on all DWRRA leases, and 

assumes MMS cannot condition royalty 

relief on market prices for oil and gas. 

Note that it is likely that all of the future 

production associated with this added 

royalty cost would have occurred even 

without the royalty relief offered in the 

Act. The decisions to develop at least 

some of the fields responsible for this 

production occurred under incentive 

terms in effect before the Santa Fe 

Snyder judgment. Moreover, oil and gas 

prices have been and are expected to be 

much higher than anticipated by the 

Act’s authors. 

b. Would not cause a major increase 

in costs or prices for consumers, 

individual industries, Federal, State, or 

local government agencies, or 

geographic regions. 

c. Would not have significant adverse 

effects on competition, employment, 

investment, productivity, innovation, or 

the ability of U.S.-based enterprises to 

compete with foreign-based enterprises. 

Unfunded Mandates Reform Act 

This proposed rule would not impose 

an unfunded mandate on State, local, or 

tribal governments or the private sector 

of more than $100 million per year. The 

proposed rule would not have a 

significant or unique effect on State, 

local, or tribal governments or the 

private sector. A statement containing 

the information required by the 

Unfunded Mandates Reform Act (2 

U.S.C. 1531, et seq.) is not required. 

Takings Implication Assessment (E.O. 

12630) 

Under the criteria in E.O. 12630, this 

proposed rule does not have significant 

takings implications. The proposed rule 

is not a governmental action capable of 

interference with constitutionally 

protected property rights. A takings 

implication assessment is not required. 

Federalism (E.O. 13132) 

Under the criteria in E.O. 13132, this 

proposed rule does not have sufficient 

federalism implications to warrant the 

preparation of a Federalism Assessment. 

This proposed rule would not 

substantially and directly affect the 

relationship between the Federal and 

State governments. To the extent that 

State and local governments have a role 

in OCS activities, this proposed rule 

would not affect that role. A Federalism 

Assessment is not required. 

Civil Justice Reform (E.O. 12988) 

This rule complies with the 

requirements of E.O. 12988. 

Specifically, 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; and 

(b) Meets the criteria of section 3(b)(2) 

requiring that all regulations be written 

in clear language and contain clear legal 

standards. 

Consultation With Indian Tribes (E.O. 

13175) 

Under the criteria in E.O. 13175, we 

have evaluated this proposed rule and 

determined that it has no potential 

effects on federally recognized Indian 

tribes. There are no Indian or tribal 

lands in the OCS. 

Paperwork Reduction Act 

This rulemaking does not contain any 

information collection subject to the 

PRA, and does not require a submittal 

to OMB for review and approval under 

section 3507(d) of the PRA. The one 

remaining requirement in Part 260 

(§ 260.124(a)(l)) is exempt from the PRA 

under 5 CFR 1320.4(a)(2), (c). 

An information letter was sent to all 

lessees of deep water leases on August 

8, 2005, and DOI informed the lessees 

that it would apply the court’s decision. 

It was neither necessary nor appropriate 

for the Department to collect 

information used only for purposes of 

applying the regulatory provisions that 

the court held invalid. 

National Environmental Policy Act 

This rule does not constitute a major 

Federal action significantly affecting the 

quality of the human environment. The 

MMS has analyzed this rule under the 

criteria of the National Environmental 

Policy Act and 516 Departmental 

Manual 6, Appendix 10.4C(1). The 

MMS completed a Categorical Exclusion 

Review for this action and concluded 

that ‘‘the rulemaking does not represent 

an exception to the established criteria 

for categorical exclusion; therefore, 

preparation of an environmental 

analysis or environmental impact 

statement will not be required.’’

Data Quality Act 

In developing this rule we did not 

conduct or use a study, experiment, or 

survey requiring peer review under the 

Data Quality Act (Pub. L. 106–554). 

Effects on the Energy Supply (E.O. 

13211) 

This rule is not a significant energy 

action under the definition in E.O. 

13211. A Statement of Energy Effects is 

not required. 

Clarity of This Regulation 

We are required by E.O. 12866, E.O. 

12988, and by the Presidential 

Memorandum of June 1, 1998, to write 

all rules in plain language. This means 

that each rule we publish must: 

(a) Be logically organized; 

(b) Use the active voice to address 

readers directly; 

(c) Use clear language rather than 

jargon; 

(d) Be divided into short sections and 

sentences; and 

(e) Use lists and tables wherever 

possible. 

If you feel that we have not met these 

requirements, send us comments by one 

of the methods listed in the ADDRESSES

section. To better help us revise the 

rule, your comments should be as 

specific as possible. For example, you 

should tell us the numbers of the 

sections or paragraphs that you find 

unclear, which sections or sentences are 

too long, the sections where you feel 

lists or tables would be useful, etc. 

List of Subjects 

30 CFR Part 203 

Continental shelf, Government 

contracts, Indians—lands, Mineral 

royalties, Oil and gas exploration, 

Public lands—mineral resources, 

Sulphur. 

30 CFR Part 260 

Continental shelf, Government 

contracts, Mineral royalties, Oil and gas 

exploration, Public lands—mineral 

resources, Reporting and recordkeeping 

requirements. 


pwalker on PROD1PC71 with PROPOSALS
72656 Federal Register / Vol. 72, No. 245 / Friday, December 21, 2007 / Proposed Rules 

Dated: August 3, 2007. 

C. Stephen Allred, 

Assistant Secretary—Land and Minerals 

Management. 

For the reasons stated in the 

preamble, the Minerals Management 

Service (MMS) proposes to amend 30 

CFR parts 203 and 260 as follows: 

PART 203—RELIEF OR REDUCTION IN 

ROYALTY RATES 

1. The authority citation for part 203 

continues to read as follows: 

Authority: 25 U.S.C. 396, et seq.; 25 U.S.C. 

396a, et seq.; 25 U.S.C. 2101, et seq.; 30 

U.S.C. 181, et seq.; 30 U.S.C. 351, et seq.; 30 

U.S.C. 1001, et seq.; 30 U.S.C. 1701, et seq.; 

31 U.S.C. 9701, et seq.; 43 U.S.C. 1301, et 

seq.; 43 U.S.C. 1331, et seq.; and 43 U.S.C. 

1801, et seq. 

2. Section 203.69(c) is revised to read 

as follows: 

§ 203.69 If my application is approved, 

what royalty relief will I receive? 

* * * * * 

(c) If your application includes preAct leases in different categories of 

water depth, we apply the minimum 

royalty suspension volume for the 

deepest such lease then assigned to the 

field. We base the water depth and 

makeup of a field on the water-depth 

delineations in the ‘‘Lease Terms and 

Economic Conditions’’ map and the 

‘‘Fields Directory’’ documents and 

updates in effect at the time your 

application is deemed complete. These 

publications are available from the 

MMS GOM Regional Office. 

* * * * * 

3. Section 203.71 is amended as set 

forth below: 

A. Revise paragraphs (a)(1), (3), and 

(5). 

B. Remove paragraph (b). 

C. Redesignate paragraphs (c) and (d) 

as paragraphs (b) and (c). 

The revisions read as follows: 

§ 203.71 How does MMS allocate a field’s 

suspension volume between my lease and 

other leases on my field? 

* * * * * 

(a) * * * 

If * * * Then * * * And * * * 

(1) We assign an eligible lease 

to your authorized field after 

we approve relief 

We will not change your authorized field’s royalty suspension volume determined under 

§ 203.69 

Production from the assigned eligible lease(s) counts toward 

the royalty suspension volume for the authorized field, but 

the eligible lease will not share any remaining royalty suspension volume for the authorized field after the eligible 

lease has produced the volume applicable under § 260.114 

of this chapter. 

* * * * * * * 

(3) We assign another lease 

that you operate to your field 

while we are evaluating your 

application 

In our evaluation of your authorized field, we 

will take into account the value of any royalty relief the added lease already has 

under § 260.114 or its lease document. If we 

find your authorized field still needs additional royalty suspension volume, that volume will be at least the combined royalty 

suspension volume to which all added 

leases on the field are entitled, or the minimum suspension volume of the authorized 

field, whichever is greater 

(i) You toll the time period for evaluation until you modify your 

application to be consistent with the new field; (ii) We have 

an additional 60 days to review the new information; and 

(iii) The assigned pre-act lease or royalty suspension lease 

shares the royalty suspension we grant to the new field. An 

eligible lease does not share the royalty suspension we 

grant to the new field. If you do not agree to toll, we will 

have to reject your application due to incomplete information. Production from an assigned eligible lease counts toward the royalty suspension volume that we grant under 

§ 203.69 for your authorized field, but you will not owe royalty on production from the eligible lease until it has produced the volume applicable under § 260.114 of this chapter. 

* * * * * * * 

(5) We reassign a well on a 

pre-Act, eligible, or royalty 

suspension lease to another 

field 

The past production from the well counts toward the royalty suspension volume that we 

grant under § 203.69 to the authorized field 

to which we assigned the well 

The past production for that well will not count toward any 

royalty suspension volume that we grant under § 203.69 to 

the authorized field from which we reassigned it. But, if the 

well is on an eligible lease or royalty suspension lease, production from that well will count toward the volume applicable under § 260.114 or § 260.124 of this chapter. 

* * * * * 

PART 260—OUTER CONTINENTAL 

SHELF OIL AND GAS LEASING 

4. The authority citation for part 260 

continues to read as follows: 

Authority: 43 U.S.C. 1331, et seq. 

5. Section 260.3 is revised to read as 

follows: 

§ 260.3 What is MMS’s authority to collect 

information? 

The information collected under 30 

CFR 260 is exempt from the Paperwork 

Reduction Act of 1995 under 5 CFR 

1320.4(a)(2), (c). 

6. Section 260.113 is revised to read 

as follows: 

§ 260.113 When does an eligible lease 

qualify for a royalty suspension volume? 

(a) Your eligible lease will receive a 

royalty suspension volume as specified 

in the Act. The bidding system in 

§ 260.110(g) applies. 

(b) Your eligible lease may receive a 

royalty suspension volume only if your 

entire lease is west of 87 degrees, 30 

minutes West longitude. 

7. Section 260.114 is revised to read 

as follows: 

§ 260.114 How does MMS assign and 

monitor royalty suspension volumes for 

eligible leases? 

(a) We have specified the water depth 

for each eligible lease in the final Notice 

of OCS Lease Sale. Our determination of 

water depth for each lease became final 

when we issued the lease. 

(b) We have specified in the Notice of 

OCS Lease Sale the royalty suspension 

volume applicable to each water depth. 

The following table shows the royalty 

suspension volumes for each eligible 


pwalker on PROD1PC71 with PROPOSALS
Federal Register / Vol. 72, No. 245 / Friday, December 21, 2007 / Proposed Rules 72657 

lease in million barrels of oil equivalent 

(MMBOE): 

Water depth 

Minimum royalty suspension volume 

(MMBOE) 

(1) 200 to less than 400 meters .......................................................................................................................................... 17.5 

(2) 400 to less than 800 meters .......................................................................................................................................... 52.5 

(3) 800 meters or more ....................................................................................................................................................... 87.5 

8. Section 260.117 is removed. 

9. The title of § 260.124 and the 

introductory language of paragraph (b) 

are revised to read as follows: 

§ 260.124 How will royalty suspension 

apply if MMS assigns a lease issued in a 

sale held after November 2000 to a field that 

has a pre-Act lease? 

* * * * * 

(b) If we establish a royalty 

suspension volume for a field as a result 

of an approved application for royalty 

relief submitted for a pre-Act lease 

under part 203 of this chapter, then: 

* * * * * 

[FR Doc. 07–6161 Filed 12–20–07; 8:45 am] 

BILLING CODE 4310–MR–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 600 

[Docket No. 071121736–7619–01] 

RIN 0648–AR78 

Magnuson-Stevens Act Provisions; 

Experimental Permitting Process, 

Exempted Fishing Permits, and 

Scientific Research Activity 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Proposed rule; request for 

comments. 

SUMMARY: NMFS proposes new and 

revised definitions for certain regulatory 

terms, and procedural and technical 

changes to the regulations addressing 

scientific research activities, exempted 

fishing, and exempted educational 

activities under the Magnuson-Stevens 

Fishery Conservation and Management 

Act. This action is necessary to provide 

better administration of these activities 

and to revise the regulations consistent 

with the Magnuson-Stevens Fishery 

Conservation and Management 

Reauthorization Act (MSRA). NMFS 

intends to clarify the regulations, ensure 

necessary information to complete 

required analyses is requested and made 

available, and provide for expedited 

review of permit applications where 

possible. 

DATES: Comments must be received by 

March 20, 2008. 

ADDRESSES: You may submit comments, 

identified by RIN 0648–AR78, by any 

one of the following methods: 

• Electronic Submissions: Submit all 

electronic public comments via the 

Federal eRulemaking Portal http:// 

www.regulations.gov 

• Fax: 301–713–1193, Attn: Jason 

Blackburn 

• Mail: Alan Risenhoover, Director, 

Office of Sustainable Fisheries, 1315 

East-West Highway, SSMC3, Silver 

Spring, MD 20910, Attn: EFP Comments 

Instructions: All comments received 

are a part of the public record and will 

generally be posted to http:// 

www.regulations.gov without change. 

All Personal Identifying Information (for 

example, name, address, etc.) 

voluntarily submitted by the commenter 

may be publicly accessible. Do not 

submit Confidential Business 

Information or otherwise sensitive or 

protected information. 

NMFS will accept anonymous 

comments. Attachments to electronic 

comments will be accepted in Microsoft 

Word, Excel, WordPerfect, or Adobe 

PDF file formats only. 

Send comments on collection-ofinformation requirements to the same 

address and to the Office of Information 

and Regulatory Affairs, Office of 

Management and Budget, Washington, 

D.C. 20503 (Attn: NOAA Desk Officer), 

or email to 

DavidlRostker@omb.eop.gov, or fax to 

(202) 395–7285. 

Copies of the categorical exclusion 

(CE) prepared for this action are 

available from NMFS at the above 

address or by calling the Office of 

Sustainable Fisheries, NMFS, at 301–

713–2341. 

FOR FURTHER INFORMATION CONTACT: 

Jason Blackburn at 301–713–2341, or by 

e-mail at jason.blackburn@noaa.gov. 

SUPPLEMENTARY INFORMATION: 

Background and Need for Action 

On May 28, 1996, NMFS established 

procedures pertaining to scientific 

research, exempted fishing, and 

exempted educational activities (61 FR 

26435). These procedures were 

established to provide minimum 

standards for dealing with scientific 

research, exempted fishing and 

exempted educational activities under 

the Magnuson-Stevens Act. These 

standards clarified the requirements for 

those managing and enforcing the 

fishery regulations, and for the public. 

These regulations were subsequently 

codified in 50 CFR part 600 (61 FR 

32538, June 24, 1996). Shortly 

thereafter, the Magnuson-Stevens Act 

was amended by the Sustainable 

Fisheries Act, which included 

important provisions dealing with 

essential fish habitat (EFH), rebuilding 

of overfished fisheries, and the 

requirement to minimize bycatch and 

bycatch mortality to the extent 

practicable. These new requirements 

resulted in an increased interest in 

fisheries research. 

On January 12, 2007, the MSRA was 

enacted. Section 204 of the MSRA 

added a new Cooperative Research and 

Management Program section (Section 

318) to the MSA. Section 318(d) of the 

revised MSA requires that the Secretary, 

through NMFS, ‘‘promulgate regulations 

that create an expedited, uniform, and 

regionally-based process to promote 

issuance, where practicable, of 

experimental fishing permits.’’

A major reason for the expansion in 

fisheries research has been the need to 

minimize bycatch and the mortality of 

bycatch as required under National 

Standard 9 of the Magnuson-Stevens 

Act. Much of this effort has been 

concentrated on studies investigating 

fish behavior and the development and 

testing of new gear technology and 

fishing techniques to minimize bycatch 

and promote the efficient harvest of 

target species. 

Over the years, many questions have 

arisen regarding the differences between 

a scientific research activity and fishing 

and how NMFS interprets each type of 

activity under the implementing 

regulations. The existing regulations 


pwalker on PROD1PC71 with PROPOSALS