In July 2020, the Bureau of Land Management (BLM) announced proposed revisions to November 2016 regulations dealing with onshore oil and gas measurement and site security.

The proposed revisions followed a period of review to determine whether certain provisions may have added regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation. The result was BLM proposed revisions to reduce unnecessary and burdensome regulations.

Which Onshore Oil and Gas Regulations Are Impacted

On September 10, 2020, a proposed rule was published in the Federal Register. Included was information on planned revisions to certain aspects of the BLM Onshore Orders contained in the 2016 Final Rules for onshore oil and gas operations on Federal and Indian lands. Proposed revisions to the final rules would affect:

• CFR 3170 and 3173: Site Security and Production Handling
• CFR 3174: Measurement of Oil
• CFR 3175: Measurement of Gas

The decision to propose revisions to the 2016 Final Rules included feedback from industry stakeholders, advancements in technology to support measurement and recordkeeping, and an important cost analysis, which showed nearly $100 million in cost burden to the industry and the BLM itself.

Specific Proposed Changes to the 2016 Final Rules

The BLM noted that the proposed rule would incorporate a number of industry standards and recommended practices, either in whole or in part. In effect, the incorporated standards would become regulatory requirements. A summary of proposed modifications to various subparts includes the following.

43 CFR 3170 and 3173 Proposed Changes

• Reduce certain equipment seal requirements for equipment locations deemed to be of low risk to mishandling or theft.
• Reduce recordkeeping requirements associated with water draining operations.
• Reduce requirements for co-located facility on-site facility diagrams.
• Remove a requirement to submit a new site facility diagram when change of operator occurs.
• Increase volume thresholds for submitting FMP applications.
• Remove immediate assessment for seals associated with LACT units.

43 CFR 3174 Proposed Changes

• Update all incorporated API standards to the latest published edition.
• Create a third low-volume FMP category with no measurement uncertainty requirements.
• Add Production Measurement Team (PMT) review and BLM approval requirements for electronic thermometers, LACT sampling systems, temperature and pressure transducers, and temperature averaging devices.
• Delay the requirement for using BLM-approved equipment on existing high-volume FMPs and low-volume FMPs until such time as the equipment is replaced or the FMP elevates to a very-high-volume FMP.
• Remove the immediate assessment for failure to notify the BLM of a LACT component failure.

43 CFR 3175 Proposed Changes

The following are the proposed modifications to CFR 3175 (Gas Measurement):

• Update all incorporated API standards to the latest published edition.
• Add PMT review and BLM approval requirements for Gas Chromatograph (GC) software and water vapor detection methods.
• Reduce basic meter-tube inspection frequency and remove detailed meter-tube inspection requirement for low-volume FMPs.
• Add initial meter-tube inspections for high- and very-high volume FMPs.
• Eliminate the requirement of installing composite samplers or on-line GCs for very-high volume FMPs.
• Add language to make portions of the rule apply to gas meters associated with gas storage agreements.

Have Questions About the Proposed Changes?

The proposed changes to oil and gas regulations on Federal and Indian lands continues to be a fluid situation, especially during the COVID-19 environment. We believe the BLM took a positive step forward by introducing proposed changes that would reduce the unnecessary regulatory burden on oil and gas producers, while still maintaining a strong commitment to measurement and record-keeping accuracy.

If you have questions about how the proposed changes could affect your oil and gas production activity on federally-regulated land, reach out to Gas Certification Institute (GCI) to further discuss the changes.

– Note that after the publication of the proposed rule on September 10, interested parties have until November 9 to submit comments to the BLM on the proposed rule. There is an additional comment element that if you wish to comment on the “information collection requirements” in the proposed rule, those comments should be submitted to the Office of Management and Budget (OMB) by October 13.

– We also invite you to consider implementing or updating measurement Standard Operating Procedures (SOPs) to help your company increase measurement accuracy so that other parties can rely on reported measurements.

GCI offers a measurement SOPs program that includes procedures specific to BLM requirements that are designed for oil and gas producers, midstream companies, and E&P companies operating on Federal and Indian lands. The implementation of procedures leads to consistency in the field, and consistency leads to accuracy.

Consider how we can support your production efforts as you review the proposed changes to oil and gas regulations. Contact us today for measurement support.