Document headings vary by document type but may contain
                    the following: the agency or agencies that issued and signed a document
the number of the CFR title and the number of each part
                      the document amends, proposes to amend, or is directly
                      related to
the agency docket number / agency internal file number
the RIN which identifies each regulatory action listed in
                      the Unified Agenda of Federal Regulatory and Deregulatory
                      Actions See the
                    Document Drafting Handbook
                    for more details.
 Department of the Interior Minerals Management Service 30 CFR Part 250
[Docket ID: MMS-2007-OMM-0068]
RIN 1010-AD47
 AGENCY: Minerals Management Service (MMS), Interior.
 ACTION: Final rule.
 SUMMARY: This final rule will establish regulations to address sustained casing pressure in oil and gas wells completed in the Outer Continental Shelf. Sustained casing pressure is a problem that, if left untreated, could cause serious harm to human life and the environment. The final rule will establish criteria for monitoring and testing of wells with sustained casing pressure, and will also incorporate the American Petroleum Institute's Recommended Practice for managing annular casing pressure. New regulations are needed because the current regulations do not adequately address the requirements for wells that have sustained casing pressure. This rule will promote human safety and environmental protection, and require Outer Continental Shelf lessees to follow best industry practices for wells with sustained casing pressure.
 DATES: *Effective Date:*
                         This rule becomes effective on June 3, 2010. The incorporation by reference of the publication listed in the regulation is approved by the Director of the Federal Register as of June 3, 2010.
 FOR FURTHER INFORMATION CONTACT: For comments or questions on procedural issues, contact Kirk Malstrom, Office of Offshore Regulatory Programs, Regulations and Standards Branch, 703-787-1751. For questions on technical issues, contact Russell Hoshman, Technical Assessment and Operations Support Section, Gulf of Mexico Outer Continental Shelf Region, 504-736-2627.


SUPPLEMENTARY INFORMATION: On July 31, 2009, MMS published the proposed rule Annular Casing Pressure Management for Offshore Wells (74 FR 38147). The comment period for the proposed rule was open for 60 days. During the comment period, MMS received three comments. Two comments were in favor of this rule and the remaining comment was not associated with this rulemaking. There are no changes between the proposed and final rule language. There are also no changes to the procedural matters discussion regarding information collection requirements, cost estimates, benefits, or impacts to small entities. *Public Comments:*
                     The MMS received three comments on the proposed rule 1010-AD47 Annular Casing Pressure Management for Offshore Wells. The comments received are summarized as follows: British Petroleum (BP)—BP, a large oil and gas company, expressed the importance of this rule and how they have been involved with MMS and industry to develop the industry standard.
                Offshore Operators Committee (OOC)—OOC, a large oil and gas industry organization, stated their support of this rulemaking and their involvement with the industry standard.
                Private citizen—This comment is not associated with this rulemaking. The two applicable comments received on the proposed rule are fully supportive of this rulemaking. *Background:*
                     Sustained casing pressure (SCP) is pressure between the casing and the well's tubing, or between strings of casing, that rebuilds after being bled down. The SCP represents an ongoing safety hazard and can cause serious or immediate harm or damage to human life, the marine and coastal environment, and property. The oil and gas industry in the Gulf of Mexico (GOM) has suffered serious accidents as a result of high SCP, and the lack of proper control and monitoring of these pressures. With over 8,000 affected wells in the GOM with SCP in at least one annulus, immediate elimination of all SCP has proved to be impractical and exceedingly costly. The MMS has sought to identify and eliminate SCP in cases that represent a clear hazard to the safety of personnel or the environment, and establish a monitoring system for the rest, all the while working towards elimination of the problem. The MMS is currently addressing the issue of casing pressure in a 1994 Letter 
                    ( print page 23583)
                    to Lessees (LTL) and a 2009 Notice to Lessees (NTL), 2009 G-22, August 3, 2009. Once the final rulemaking becomes effective, both the 1994 LTL and the 2009 NTL on casing pressure will be rescinded. Included in this final rule is the incorporation of a jointly developed industry standard that addresses management of casing pressure. The American Petroleum Institute (API), industry, and MMS have worked collectively to produce API Recommended Practice (RP) 90. As explained in API RP 90, Section 3, Annular Casing Pressure Management Program, this RP is based on establishing an annular casing pressure management program that filters out non-problematic wells that present an acceptable level of risk, thus allowing for a more focused effort on wells that are problematic. The management program, as outlined in API RP 90, includes monitoring, diagnostic testing, determining maximum allowable wellhead operating pressure (MAWOP) for each annulus, documentation, and risk assessment considerations. For further background information on this rulemaking, refer to the published proposed rule 1010-AD47 Annular Casing Pressure Management for Offshore Wells (74 FR 38147, July 31, 2009). Procedural Matters Regulatory Planning and Review (Executive Order (E.O.) 12866) This final 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 final rule will not have an annual effect of $100 million or more on the economy. It will not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. There will be some costs associated with this rulemaking, mostly for diagnostic testing, MAWOP calculations, and reporting to MMS. Taking into account paperwork burden requirements, diagnostic testing, and MAWOP calculations, the costs associated with this rulemaking will be approximately $5 million industry-wide. The final rule will not require any new equipment to be installed and diagnostic testing is currently being done throughout industry and is not new. (2) This final rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency. (3) This final rule will not alter the budgetary effects of entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients. The changes in the final rule are strictly planning requirements for management of annular casing pressure in offshore wells. (4) This final rule will not raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in E.O. 12866. Regulatory Flexibility Act The Department of the Interior certifies that this final rule will 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 rulemaking will affect lessees and operators of leases and pipeline right-of-way holders in the OCS. This could include about 130 active Federal oil and gas lessees. Small entities that operate under this rule are coded under the Small Business Administration's North American Industry Classification System (NAICS) codes 211111, Crude Petroleum and Natural Gas Extraction, and 213111, Drilling Oil and Gas Wells. For these NAICS code classifications, a small company is one with fewer than 500 employees. Based on these criteria, an estimated 70 percent (91) of these companies are considered small. This final rule, therefore, will affect a substantial number of small entities. This rule will affect every well in the OCS, and every operator both large and small will have the same criteria per well regardless of company size. Nonetheless, this rulemaking will not have a significant economic effect on a substantial number of small entities because management of annular casing pressure will be a moderate cost, mostly attributable to diagnostic testing. Taking into account recordkeeping, diagnostic testing, and MAWOP calculations, the costs associated with this rulemaking will be approximately $5 million industry-wide. In comparison, to remediate the approximate 8,000 wells with SCP (approximately $250,000 per well) would cost approximately $2 billion. The costs that are associated with this rulemaking will be minor when compared to SCP remediation costs and will not impede a company of any size. 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 MMS, call 1-888-734-3247. You may comment to the Small Business Administration without fear of retaliation. Allegations of discrimination/retaliation filed with the Small Business Administration will be investigated for appropriate action. Small Business Regulatory Enforcement Fairness Act This final rule is not a major rule under the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801 
                    *et seq.*). This 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. c. Will 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 of 1995 This final rule will not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The final rule will 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. 1501 
                    *et seq.*) is not required. Takings Implication Assessment (E.O. 12630) Under the criteria in E.O. 12630, this final rule does not have significant takings implications. The final 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 final rule does not have federalism implications. This final rule will 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 final rule will 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: 
                    ( print page 23584) 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 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 final rule and determined that it has no substantial effects on federally recognized Indian tribes. There are no Indian or tribal lands in the OCS nor tribally owned businesses subject to the regulation. Paperwork Reduction Act (PRA) The final rule contains no new reporting or recordkeeping requirements, and an Office of Management and Budget (OMB) submission under the PRA (44 U.S.C. 3501 
                    *et seq.*) is not required. The PRA provides that an agency may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. Until OMB approves a collection of information and assigns a control number, you are not required to respond. The final regulations will replace the references to LTLs and NTLs with specific cites to the Code of Federal Regulations. The final rulemaking refers to, but does not change, information collection requirements under approved OMB Control Number 1010-0067 (18,756 hours, expiration 12/31/2010). National Environmental Policy Act This 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 of 1969 is not required because we reached a Finding of No Significant Impact. A copy of the Environmental Assessment can be viewed at 
                    *http://www.Regulations.gov.*
                     (type in “environmental assessment” for the document type and use the keyword/ID “MMS-2007-OMM-0068.”) 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, app. C section 515, 114 Stat. 2763, 2763A-153-154). 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. List of Subjects in 30 CFR Part 250 Administrative practice and procedure
Continental shelf
Environmental protection
Incorporation by reference
Oil and gas exploration, and Reporting and recordkeeping requirements
 Dated: April 2, 2010. Ned Farquhar, Assistant Secretary—Land and Minerals Management.
 For the reasons stated in the preamble, the Minerals Management Service (MMS) is amending 30 CFR part 250 as follows: PART 250—OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER CONTINENTAL SHELF
 1.The authority citation for part 250 continues to read as follows: Authority:
                        31 U.S.C. 9701, 43 U.S.C. 1334. 2.Amend § 250.198 by adding paragraph (h)(78) to read as follows: § 250.198
  
 (h) * * * (78) API RP 90, Annular Casing Pressure Management for Offshore Wells, First Edition, August 2006, Product No. G09001, incorporated by reference at § 250.518.
 3.Revise § 250.517(c) to read as follows: § 250.517
  
 (c) When the tree is installed, you must equip wells to monitor for casing pressure according to the following chart: If you have * * *
you must equip * * *
so you can monitor * * *(1) fixed platform wells,
the wellhead,
all annuli (A, B, C, D, etc., annuli).(2) subsea wells,
the tubing head,
the production casing annulus (A annulus).(3) hybrid* wells,
the surface wellhead,
all annuli at the surface (A and B riser annuli). If the production casing below the mudline and the production casing riser above the mudline are pressure isolated from each other, provisions must be made to monitor the production casing below the mudline for casing pressure.* Characterized as a well drilled with a subsea wellhead and completed with a surface casing head, a surface tubing head, a surface tubing hanger, and a surface christmas tree.
 4.Add an undesignated center heading and new §§ 250.518 through 250.530 to Subpart E—Oil and Gas Well-Completion Operations to read as follows: 
 Casing Pressure ManagementSec.
                        250.518
                        What are the requirements for casing pressure management?
                        250.519
                        How often do I have to monitor for casing pressure?
                        250.520
                        When do I have to perform a casing diagnostic test?
                        250.521
                        How do I manage the thermal effects caused by initial production on a newly completed or recompleted well?
                        250.522
                        When do I have to repeat casing diagnostic testing?
                        250.523
                        How long do I keep records of casing pressure and diagnostic tests?
                        250.524
                        When am I required to take action from my casing diagnostic test?
                        250.525
                        What do I submit if my casing diagnostic test requires action?
                        250.526
                        What must I include in my notification of corrective action?
                        250.527
                        What must I include in my casing pressure request?
                        250.528
                        What are the terms of my casing pressure request?
                        250.529
                        What if my casing pressure request is denied?
                        250.530
                        When does my casing pressure request become invalid?
 § 250.518
  Once you install your wellhead, you must meet the casing pressure management requirements of API RP 90 (incorporated by reference as specified in § 250.198) and the requirements of §§ 250.519 through 250.530. If there is a conflict between API RP 90 and the casing pressure requirements of this 
                            ( print page 23585)
                            subpart, you must follow the requirements of this subpart.
 § 250.519
  You must monitor for casing pressure in your well according to the following table: If you have * * *
you must monitor * * *
with a minimum one pressure data point recorded per * * *(a) fixed platform wells,
monthly,
month for each casing.(b) subsea wells,
continuously,
day for the production casing.(c) hybrid wells,
continuously,
day for each riser and/or the production casing.(d) wells operating under a casing pressure request on a manned fixed platform,
daily,
day for each casing.(e) wells operating under a casing pressure request on an unmanned fixed platform,
weekly,
week for each casing.
 § 250.520
  (a) You must perform a casing diagnostic test within 30 days after first observing or imposing casing pressure according to the following table: If you have a * * *
you must perform a casing diagnostic test if * * *(1) fixed platform well,
the casing pressure is greater than 100 psig.(2) subsea well,
the measurable casing pressure is greater than the external hydrostatic pressure plus 100 psig measured at the subsea wellhead.(3) hybrid well,
a riser or the production casing pressure is greater than 100 psig measured at the surface.
 (b) You are exempt from performing a diagnostic pressure test for the production casing on a well operating under active gas lift.
 § 250.521
  A newly completed or recompleted well often has thermal casing pressure during initial startup. Bleeding casing pressure during the startup process is considered a normal and necessary operation to manage thermal casing pressure; therefore, you do not need to evaluate these operations as a casing diagnostic test. After 30 days of continuous production, the initial production startup operation is complete and you must perform casing diagnostic testing as required in §§ 250.520 and 250.522.
 § 250.522
  Casing diagnostic testing must be repeated according to the following table: When * * *
you must repeat diagnostic testing * * *(a) your casing pressure request approved term has expired,
immediately.(b) your well, previously on gas lift, has been shut-in or returned to flowing status without gas lift for more than 180 days,
immediately on the production casing (A annulus). The production casing (A annulus) of wells on active gas lift are exempt from diagnostic testing.(c) your casing pressure request becomes invalid,
within 30 days.(d) a casing or riser has an increase in pressure greater than 200 psig over the previous casing diagnostic test,
within 30 days.(e) after any corrective action has been taken to remediate undesirable casing pressure, either as a result of a casing pressure request denial or any other action,
within 30 days.(f) your fixed platform well production casing (A annulus) has pressure exceeding 10 percent of its minimum internal yield pressure (MIYP), except for production casings on active gas lift,
once per year, not to exceed 12 months between tests.(g) your fixed platform well's outer casing (B, C, D, etc., annuli) has a pressure exceeding 20 percent of its MIYP,
once every 5 years, at a minimum.
 § 250.523
  Records of casing pressure and diagnostic tests must be kept at the field office nearest the well for a minimum of 2 years. The last casing diagnostic test for each casing or riser must be retained at the field office nearest the well until the well is abandoned.
 § 250.524
  You must take action if you have any of the following conditions: (a) Any fixed platform well with a casing pressure exceeding its maximum allowable wellhead operating pressure (MAWOP); (b) Any fixed platform well with a casing pressure that is greater than 100 psig and that cannot bleed to 0 psig 
                            ( print page 23586)
                            through a 
                            1/2
                            -inch needle valve within 24 hours, or is not bled to 0 psig during a casing diagnostic test; (c) Any well that has demonstrated tubing/casing, tubing/riser, casing/casing, riser/casing, or riser/riser communication; (d) Any well that has sustained casing pressure (SCP) and is bled down to prevent it from exceeding its MAWOP, except during initial startup operations described in § 250.521; (e) Any hybrid well with casing or riser pressure exceeding 100 psig; or (f) Any subsea well with a casing pressure 100 psig greater than the external hydrostatic pressure at the subsea wellhead.
 § 250.525
  Within 14 days after you perform a casing diagnostic test requiring action under § 250.524: You must submit either:
to the appropriate:
and it must include:
You must also:(a) a notification of corrective action; or,
District Manager and copy the Regional Supervisor, Field Operations,
requirements under § 250.526
submit an Application for Permit to Modify or Corrective Action Plan within 30 days of the diagnostic test.(b) a casing pressure request,
Regional Supervisor, Field Operations,
requirements under § 250.527
 § 250.526
  The following information must be included in the notification of corrective (a) Lessee or Operator name; (b) Area name and OCS block number; (c) Well name and API number; and (d) Casing diagnostic test data.
 § 250.527
  The following information must be included in the casing pressure request: (a) API number; (b) Lease number; (c) Area name and OCS block number; (d) Well number; (e) Company name and mailing address; (f) All casing, riser, and tubing sizes, weights, grades, and MIYP; (g) All casing/riser calculated MAWOPs; (h) All casing/riser pre-bleed down pressures; (i) Shut-in tubing pressure; (j) Flowing tubing pressure; (k) Date and the calculated daily production rate during last well test (oil, gas, basic sediment, and water); (l) Well status (shut-in, temporarily abandoned, producing, injecting, or gas lift); (m) Well type (dry tree, hybrid, or subsea); (n) Date of diagnostic test; (o) Well schematic; (p) Water depth; (q) Volumes and types of fluid bled from each casing or riser evaluated; (r) Type of diagnostic test performed: (1) Bleed down/buildup test; (2) Shut-in the well and monitor the pressure drop test; (3) Constant production rate and decrease the annular pressure test; (4) Constant production rate and increase the annular pressure test; (5) Change the production rate and monitor the casing pressure test; and (6) Casing pressure and tubing pressure history plot; (s) The casing diagnostic test data for all casing exceeding 100 psig; (t) Associated shoe strengths for casing shoes exposed to annular fluids; (u) Concentration of any H2S that may be present; (v) Whether the structure on which the well is located is manned or unmanned; (w) Additional comments; and (x) Request date.
 § 250.528
  Casing pressure requests are approved by the Regional Supervisor, Field Operations, for a term to be determined by the Regional Supervisor on a case-by-case basis. The Regional Supervisor may impose additional restrictions or requirements to allow continued operation of the well.
 § 250.529
  (a) If your casing pressure request is denied, then the operating company must submit plans for corrective action to the respective District Manager within 30 days of receiving the denial. The District Manager will establish a specific time period in which this corrective action will be taken. You must notify the respective District Manager within 30 days after completion of your corrected action. (b) You must submit the casing diagnostic test data to the appropriate Regional Supervisor, Field Operations, within 14 days of completion of the diagnostic test required under § 250.522(e).
 § 250.530
  A casing pressure request becomes invalid when: (a) The casing or riser pressure increases by 200 psig over the approved casing pressure request pressure; (b) The approved term ends; (c) The well is worked-over, side-tracked, redrilled, recompleted, or acid stimulated; (d) A different casing or riser on the same well requires a casing pressure request; or (e) A well has more than one casing operating under a casing pressure request and one of the casing pressure requests become invalid, then all casing pressure requests for that well become invalid.
 5.Revise § 250.617(c) to read as follows: § 250.617
  
 (c) When reinstalling the tree, you must: (1) Equip wells to monitor for casing pressure according to the following chart: If you have * * *
you must equip * * *
so you can monitor * * *(i) fixed platform wells,
the wellhead,
all annuli (A, B, C, D, etc., annuli).(ii) subsea wells,
the tubing head,
the production casing annulus (A annulus).( print page 23587)(iii) hybrid* wells,
the surface wellhead,
all annuli at the surface (A and B riser annuli). If the production casing below the mudline and the production casing riser above the mudline are pressure isolated from each other, provisions must be made to monitor the production casing below the mudline for casing pressure.*Characterized as a well drilled with a subsea wellhead and completed with a surface casing head, a surface tubing head, a surface tubing hanger, and a surface christmas tree.
 (2) Follow the casing pressure management requirements in subpart E of this part.


[FR Doc. 2010-10291 Filed 5-3-10; 8:45 am] BILLING CODE 4310-MR-P