American Oil and Gas Reporter - January 2016 - 16

IndustryDigest
likelihood of experiencing an incident.
However, it does not mean the facility
has a bad safety record or is a poor
safety performer, only that certain risk
factors are present that must be
managed."
According to BSEE, the pilot
program will use a systematic
approach, relying on quantitative model
and qualitative performances and riskbased data. It will be conducted
alongside current agency inspections
and audits. That information, combined
with incident investigations and other
reportable safety statistics, will help
identify offshore facilities with higher
risk profiles, BSEE states, adding other
factors such as the facility's size and
production of hydrogen sulfide also will
be considered when developing the risk
profile.
BSEE says it will identify five
facilities for participation using the
model, and conduct focused inspections
and reviews.
"BSEE's inspection teams will be
focusing on several risk areas or
operations," Salerno says. "We will be
taking a deeper look into how operators
implement and support their safety
readiness programs."
After the inspections and reviews are
completed, the agency says its teams
will discuss with operators the areas
needing attention or improvement, and
then ask operators to develop action
plans for addressing the areas of
concern. ❒

Industry Groups Attack
Decommissioning Rule
For Offshore Facilities
WASHINGTON-Several oil and gas
industry groups are questioning a
Bureau of Safety and Environmental
Enforcement proposal to revise rules on
decommissioning costs for offshore
facilities. BSEE issued a notice to
lessees in early December that it says
requires lessees to submit summaries of
actual expenditures for
decommissioning wells, platforms and
other Outer Continental Shelf facilities.
According to the Federal Register
notice "Oil and Gas and Sulphur
Operations in the Outer Continental
Shelf-Decommissioning Costs,"
published Dec. 3, BSEE is proposing to
amend its regulations under 30 CFR
Part 250, Subpart Q to:
16 THE AMERICAN OIL & GAS REPORTER

* Require lessees to submit information regarding actual expenditures
incurred for certain decommissioning
activities-including plugging and abandoning wells, removing platforms and
other facilities, and site clearance-required under federal law;
* Consolidate mechanisms for
maintaining and extending leases past
their primary term; and
* Require submittal of pipeline-related reports after approving assignments or changes of designated operator.
BSEE says it will use the
decommissioning cost summaries to set
financial assurance levels needed to
minimize or eliminate the possibility
that the government will be forced to
pay decommissioning costs.
The National Ocean Industries
Association, American Petroleum
Institute, and the Offshore Operators
Committee say BSEE has not provided a
clear definition of the problem it is trying
to solve, and has not provided justification
to change the regulatory framework.
The associations' comments contend
BSEE is not adhering to the
Administrative Procedures Act (APA)
as it moves through the rule-making
process under the NTL. Their
complaints include charges BSEE is
creating new binding requirements
outside APA restrictions, such as setting
new maximum upper limits for selfinsurance. That proposed rule would
restrict the regulated community's
options, and is not found in existing
regulations, they assert.
The groups also cite a blanket
prohibition on BSEE's ability to issue
waivers or consider the combined
financial strength of co-lessees when
determining decommissioning liability
as another weakness in the proposal.
They warn that would restrict further
the regulated community as well as the
agency's regional directors. The
comments urge that such binding norms
be promulgated as rules under APA
rather than through guidance documents
such as an NTL.
"In addition, we believe that BSEE
has failed to recognize the tremendous
burden the changes being contemplated
will have on the offshore oil and natural
gas and surety industries. One company
estimates that the proposed changes
could increase its compliance costs by
as much as $20 million annually," the
groups say. ❒

Wyoming's Regulators
Begin Rule Making For
Gas Capture, Flaring
CASPER, WY.-The Wyoming Oil &
Gas Conservation Commission's
proposed rule governing flaring
associated natural gas is a codification
of long-standing industry practices,
assesses John Robitaille, vice president
of the Petroleum Association of
Wyoming.
Mark Watson, WOGCC oil and gas
supervisor, says the proposed changes
are in the earliest stages of rule making.
Agency staff will respond to issues
raised in the public comment period and
then propose a rule to the commission.
Watson says the proposal's important
parts are a gas capture plan and
requirements for operators to provide
information on moving their gas to
market.
The proposal includes a gas capture
plan for wells that flare in excess of 60
Mcf a day, the document states. An
operator must provide a description of
gas gathering, transportation and
treatment facilities present in his area;
information on the gathering line he
proposes to use and its anticipated
service date; downstream gas
processing plant capacity and capacity
demand at time of first sales; and flaring
alternatives between first sales and the
connection to a gas gathering line.
The proposed rules allow gas venting
or flaring:
* During emergencies or for safety
purposes during necessary maintenance
or upgrades;
* During uploads or cleaning a well
during routine purging, producing or
evaluation tests; and
* During initial or recompletion
evaluation tests, not exceeding 15 days
unless authorized by the WOGCC.
As much as 60 Mcf/d of low-rate
casinghead gas is allowed to be flared
from individual oil wells, the rules state,
while venting of casinghead gas may
occur if the rate is less than 30 Mcf/d,
WOGCC says. Venting or flaring also is
authorized for wells or lease facilities
that serve several wells, under a 30
Mcf/d limit. The WOGCC says it is
allowed to administratively grant
authorization to flare beyond the 15-day
production test, up to 180 days, for
volumes as high as 250 Mcf/d (on a 30day average), not to exceed a total of 45



American Oil and Gas Reporter - January 2016

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

Contents
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American Oil and Gas Reporter - January 2016 - Contents
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