American Oil and Gas Reporter - February 2016 - 97

purchasers would use when reporting
production results.
"The BLM estimates there are 120,000
oil and gas facilities associated with federal and Indian leases," the agency says.
"Many facilities would have one FMP for
oil and one FMP for gas, resulting in
240,000 FMPs."
According to BLM, designating FMPs
would not require significant physical
changes to facilities other than changing
signage requirements to add longitude and
latitude, except in some instances of commingling or off-lease measurements.

meter would be required if the LACT or
CMS was subject to highly variable conditions.
* Maximum allowable volume measurement uncertainties would be set, with
FMPs measuring more than 10,000 barrels a month limited to ±0.35 percent.
FMPs measuring between 100 bbl/month
and 10,000 bbl/month would have a maximum overall measurement uncertainty of
±1.0 percent. BLM is proposing a new tier,
for facilities producing fewer than 100
bbl/month, of ±2.5 percent.

Oil Provisions

BLM says it will overhaul hardware
and software requirements in its changes
to Onshore Order No. 5, focusing on metering equipment, measurement performance standards, and record keeping.
The agency says the most significant
proposed change would be new requirements for determining and reporting the
heating value and relative density of all
produced gas. BLM says the change is
needed because current regulations have
no requirements for determining relative
density, which is used to calculate heating
values for royalty purposes. It cites a 2010
agency study that finds uncertainties in
heating values and relative densities exceed
5.0 percent, which it calculates amounts
to $127 million less paid in 2008 onshore
federal and Indian royalties.
The proposed rule also would require
operators, except at marginal-volume facilities measuring 15 Mcf a day or less, to
sample meters more frequently, the agency
says. Low-volume FMPs, measuring less
than 100 Mcf/d, would be sampled every
six months, while high-volume FMPs
(up to 1 million cubic feet a day) would
sample every three months. Very-high-volume FMPs, above 1 MMcf/d, would sample monthly.
BLM adds the proposed rule establishes new average heating value uncertainty
standards of ±2.0 percent for high-volume
FMPs and ±1.0 percent for very-highvolume FMPs. It also sets new standards for
gas sampling and analysis, specifying
sampling locations and methods, the minimum number of components to be analyzed, and how results are reported to BLM.
Under the revised regulations, operators for the first time would be required to
periodically inspect the insides of meter
tubes for pitting, scaling, and the presence
of foreign substances. Visual meter tube
inspections would be required once every
five years for low-volume FMPs, every two
years for high-volume FMPs, and yearly
for very-high-volume FMPs.
❒

Under the revised Onshore Order No.
4, BLM says operators would be allowed
to use a Coriolis measurement system
(CMS) without prior approval, in place of
lease automatic custody transfer (LACT)
systems now mandated. "The BLM is proposing this change because field and laboratory testing have proven the CMS to be
reliable and accurate," the agency states.
In addition, BLM says it proposes to
adopt a process for approving new measurement technologies that meet or exceed
its performance standards. The revised
rules also prohibit using automatic temperature/gravity compensators on LACT totalizers, instead requiring temperature-averaging devices to record LACT fluid temperatures.
According to the agency, the proposed
rule changes meter-certification requirements for operators producing large oil volumes. Regulations now require quarterly
testing for meters measuring less than
100,000 barrels a month, while larger-volume meters are tested monthly. Under the
revisions, meters would have to be recertified quarterly or any time the nonresettable totalizer increased by 50,000 barrels,
whichever occurred first. BLM predicts the
proposed changes would affect 5 percent
of LACT systems nationwide.
Among other proposed revisions to Order No. 4:
* Meters would not be eligible for royalty determinations unless they met BLM
standards.
* All equipment used to measure oil
volumes for royalty purposes installed after the rule's effective date must comply
with the revised requirements. Operators
will have 180 days to bring measuring
equipment on existing leases into compliance with the proposed changes.
* Operators would have to certify
meters under "normal" operating conditions, using defined limits of flow rate,
pressure and API oil gravity. A multipoint

Gas Measurements

SAB. . . . . . .
FROM PAGE 24
mendations, and cites as instructive a
remark by SAB member Katherine
Bennett Ensor, who has been quoted in
published reports saying the report
should offer more detail on "outlier"
incidents. "If something is an outlier it
is-by definition-not widespread or systemic." Brown observes.
The Independent Petroleum Association of America in December wrote a
letter endorsed by 49 other oil and gas
industry associations and sent to Administrator McCarthy, urging her not to
alter EPA's initial conclusion that fracturing did not pose an inherent danger
to groundwater (AOGR, January 2016,
pg. 149). The letter encourages EPA to
"reject calls to change its scientific
findings, which are based on political
campaigns, not scientific analyses or
technical review."
❒

BLM. . . . . . .
FROM PAGE 31
venting and flaring rates tomorrow simply by approving permits for gas capture
lines after years of delay."
"The BLM should focus on fixing permitting, infrastructure and pipeline delays
that slow our ability to capture more natural gas and get it to consumers," agrees
Erik Milito, director of upstream and industry for the American Petroleum Institute.
He adds, "Another duplicative rule at
a time when methane emissions are
falling and on top of an onslaught of other new BLM and EPA regulations could
drive more energy production off federal lands. That means less federal revenue,
fewer jobs, higher costs for consumers,
and less energy security."
❒

Coming In March
How are the operational characteristics unique to horizontal resource
plays shaping the future of compressor engineering and design, including requirements to accommodate
highly variable multiphase flows containing some amounts of dry gas,
NGLs and oil? AOGR turns to experts
in the natural gas compression and
process control industries to provide
insights on optimizing compression
efficiency, flexibility and reliability
in multiwell pad developments.
FEBRUARY 2016 97



American Oil and Gas Reporter - February 2016

Table of Contents for the Digital Edition of American Oil and Gas Reporter - February 2016

Contents
American Oil and Gas Reporter - February 2016 - Cover1
American Oil and Gas Reporter - February 2016 - Cover2
American Oil and Gas Reporter - February 2016 - Contents
American Oil and Gas Reporter - February 2016 - 4
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American Oil and Gas Reporter - February 2016 - Cover3
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