[Federal Register Volume 59, Number 4 (Thursday, January 6, 1994)]
[Proposed Rules]
[Pages 718-725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-149]


[[Page Unknown]]

[Federal Register: January 6, 1994]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3160

[WO-610-4111-02-24 1A]
RIN 1004-AB22

 

Onshore Oil and Gas Operations, Federal and Indian Oil and Gas 
Leases; Onshore Oil and Gas Order No. 5, Measurement of Gas

AGENCY: Bureau of Land Management, Interior.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise Onshore Oil and Gas Order No. 
5 under 43 CFR 3164.1, originally issued February 24, 1989 (54 FR 
8100), and made effective March 27, 1989, for new facilities, August 
23, 1989, for existing facilities measuring 200 thousand cubic feet 
(Mcf) or more per day of gas, and February 26, 1990, for existing 
facilities producing less than 200 Mcf per day of gas. This proposed 
revision would reorganize the Order to make it more logical in 
sequence, remove unnecessary provisions, resolve internal 
inconsistencies discovered in the Order, and clarify certain 
provisions. These changes are based on several years of experience 
implementing the Order, and on suggestions from the public.

DATES: Comments should be submitted by March 7, 1994. Comments received 
or postmarked after the above date may not be considered in the 
decisionmaking process on the final rule.

ADDRESSES: Comments should be sent to: Director (140), Bureau of Land 
Management, Room 5555, Main Interior Building, 1849 C Street, N.W., 
Washington, D.C. 20240. Comments will be available for public review at 
the above address during regular business hours (7:45 a.m. to 4:15 
p.m.), Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Lonny R. Bagley, (406) 255-2847.

SUPPLEMENTARY INFORMATION: Order No. 5, Measurement of Gas, implements 
and supplements requirements found in 43 CFR Part 3160 relating to the 
measurement of gas produced under the terms of Federal and Indian 
(except Osage) oil and gas leases, as well as gas produced from State 
or privately owned lands when Federal and/or Indian leases receive a 
share of such production under the terms of an approved agreement. The 
Order addresses gas measurement by orifice meter and gas measurement by 
other methods acceptable to the authorized officer of the Bureau of 
Land Management (BLM). Gas measurement by electronic flow computers, 
utilizing an orifice, which calculate volume using the equations 
specified by the American Gas Association (AGA) Committee Report No. 3, 
may be implemented without prior approval if the minimum standards 
outlined in the Order are adhered to.
    Several years of experience implementing the Order have revealed 
some areas where the organization of the Order can be improved, and 
certain provisions that require amendment or clarification or both.
    The statement of the purpose of the Order in section I.B. is 
proposed to be amended to remove the reference to the assessments and 
penalties imposed as a result of noncompliance or the failure to 
correct noncompliance, because the Order does not set forth such 
assessments and penalties. The purpose statement also is proposed to be 
amended to include the purpose that measurements be accurate.
    There are no amendments proposed in the definitions included in the 
existing Order. However, one new definition (meter uncertainty) would 
be added in this proposed rule.
    Section III.A. on Required Recordkeeping is proposed to be amended 
by adding requirements for the retention of data generated by 
electronic flow computers. The revised Order would set forth 
specifically the kinds of data required to be retained, without 
prescribing an exhaustive list.
    Article III. would be reorganized in the proposed Order. Two new 
sections would be added to cover minimum standards specific to the 
secondary element of the orifice meter and to allow the use of other 
types of secondary elements, and to cover other requirements not 
specific to orifice meters or the secondary element. Requirements 
included in section C. on orifice meters are proposed to be moved, and 
in some cases amended, as part of the new section D. on secondary 
elements or section E. on other requirements, and several new 
requirements have been added as part of section C. and new section D. 
These changes are stated in table form below. 

------------------------------------------------------------------------
      Existing order citations             Proposed order citations     
------------------------------------------------------------------------
III.C. Gas Measurement by Orifice    III.C Primary Element--Orifice     
 Meter.                               Meters.                           
C.1................................  C.1.                               
C.2................................  C.2.                               
C.3................................  C.3.                               
C.4................................  D.10.a.                            
C.5................................  D.10.b.                            
C.6................................  C.4.                               
C.7................................  D.1.                               
C.8................................  C.5.                               
                                     C.6. (new).                        
C.9................................  C.7.                               
C.10...............................  C.8.                               
C.11...............................  C.9.                               
C.12...............................  C.10.                              
C.13...............................  (removed).                         
                                     D. Secondary Element (new).        
                                     D.2. (new).                        
C.14...............................  D.10.c.                            
C.15...............................  D.3.                               
                                     D.4. (new).                        
                                     D5. (new).                         
C.16...............................  D.10.d.                            
C.17...............................  D.6.                               
C.18...............................  D.7.                               
C.19...............................  D.8.                               
                                     D.11.a., b., and c. (new).         
                                     E. Other Requirements (new).       
C.20...............................  E.1.                               
C.21...............................  C.11.                              
C.22...............................  Removed.                           
C.23...............................  E.2.                               
C.24...............................  D.9.                               
C.25...............................  E.3.                               
C.26...............................  E.4.                               
D. Gas Measurmeent by Other Methods  F. Gas Measurement by Other        
                                      Methods.                          
D.1................................  F.1.                               
D.2................................  F.2.                               
------------------------------------------------------------------------


    The automatic exemption from some requirements for meters measuring 
100 Mcf per day or less on a monthly basis would be expanded to include 
3 additional standards. These added exemptions would include the 
existing requirement that the static element be sized to make the pen 
that records the static pressure operate in the outer \2/3\ of the 
chart range for the majority of the flowing period, the new requirement 
that electronic flow computers be installed, operated, and maintained 
to achieve an overall meter uncertainty of plus or minus 3 percent, and 
the new requirement for inspecting meter tubes every 5 years. Language 
has been added to the Order identifying the applicable standards for 
the exemption.
    The following requirements proposed to be amended in revised Order 
No. 5 are discussed below in the order they appear in this proposed 
rule.
    III.C.5. (formerly C.8.) is proposed to be amended purely for 
clarification. It is the difference between the internal diameters of 
the meter tube pipe and the orifice fittings that is to be within AGA 
tolerance limits, not the diameters themselves, as the existing Order 
seems to provide.
    III.C.6. (new) is added to ensure that the meter tubes conform with 
AGA Committee Report No. 3. Proper meter tube condition is essential 
for accurate measurement. It is intended that all meter tube 
inspections would be conducted within the first 5 years after the 
effective date of the final rule, and every 5 years thereafter. Meters 
measuring 100 Mcf per day or less on a monthly basis would be exempt 
from this new requirement.
    III.C.8. (formerly C.10.) is proposed to be amended for precision 
in stating the requirement. As stated in this rule, orifice plates 
would be required to be inspected during calibration of the secondary 
element.
    III.C.10. (formerly C.12.) is proposed to be amended by removing 
the requirement that, when leaks are detected, the meter setting shall 
be determined and recorded ``as found,'' and ``as left'' after the 
meter is calibrated. This part of the existing requirement is 
duplicated by the linearity test in requirement III.D.3. of the 
proposed Order.
    III.C.13. in the existing Order would be removed in the proposed 
Order because it is duplicated by the linearity test in requirement 
III.D.3. of the proposed Order.
    III.C.11. (formerly C.21.) would be amended by revising the 
corrective action to provide for the submittal of a report to BLM. The 
form called for in existing requirement C.21. is now submitted to the 
Minerals Management Service, not to the BLM. Under the proposed rule, 
the operator would be required to submit a report to the BLM showing 
what corrections were made.
    III.D.1. (formerly C.7.) would be amended by removing the provision 
allowing consideration of a variance for sales or allocation meters 
measuring between 200 and 500 Mcf per day. This provision duplicates 
the general provision for a variance under Article IV. of the Order. 
The requirement for the use of an indicating thermometer would be 
removed because when using an indicating thermometer the temperature is 
not a true average flowing temperature. All meters measuring more than 
100 Mcf per day are required to have a temperature recorder. Meters 
measuring 100 Mcf per day or less are required to use either a 
temperature recorder or an average flowing temperature.
    III.D.2. (new) would ensure that the accuracy of the temperature 
recording device is maintained.
    III.D.3. (formerly C.15.) would be amended for clarification and to 
require the recording of readings before and after adjustments are 
made. The words ``of the element range'' would be added to make it 
clear what the 0 and 100 percent refer to.
    III.D.4. (new) would be added to require calibration equipment to 
be more accurate than the equipment being calibrated. If the testing 
equipment is not more accurate than the equipment being calibrated, the 
inherent uncertainty in the metering equipment increases.
    III.D.5. (new) would be added to require documentation of the 
certification or recertification of calibration equipment to be 
available to the authorized officer at the time of calibration.
    III.D.6. (formerly C.17.) would be amended to allow meters that 
measure 100 Mcf or less per day to be inspected and calibrated 
semiannually rather than quarterly. Experience has shown that quarterly 
inspections and calibrations of meters measuring such low volumes are 
neither cost effective nor necessary to assure an acceptable degree of 
accuracy.
    III.D.7. (formerly C.18.) would be amended to require operators to 
notify the authorized officer of the BLM well in advance of 
calibrations to enable the planning of inspections.
    III.D.8. (formerly C.19.) would be amended by changing the 
reference to ``measuring equipment'' to ``recording device'' to conform 
with changes in other requirements. The current Order requires that an 
adjustment be made whenever a volume error of 2 percent or greater 
occurs. It is proposed to change this standard to ``more than 1 
percent'' because volume errors of less than 2 percent on higher volume 
wells are very significant. However, in most instances, it will be the 
policy of the BLM not to pursue volume errors of less than 200 Mcf per 
month, because the cost of doing so would exceed the value of any 
additional royalty that might result. The requirement that the meter be 
adjusted to zero error would be removed because this is part of the 
linearity test requirement in Section III.D.3. For the sake of 
simplicity, the abatement period would be stated as 60 days only rather 
than also stating the alternative ``prior to completion of 
calibration.''
    III.D.10. would be added combining several requirements from the 
existing Order, as explained below.
    III.D.10.a. (formerly C.4.) would be revised to clarify what is 
meant by the outer \2/3\ of the chart range. Also, the reference to 
sizing the orifice would be removed because doing so is not the only 
alternative available to the operator to maintain the differential pen 
in the outer \2/3\ of the chart.
    III.D.10.b. (formerly C.5.) would be revised to clarify what is 
meant by the outer \2/3\ of the chart range.
    III.D.10.c. (formerly C.14.) would be amended by revising the 
corrective action. It would no longer require recordation of the ``as 
found'' and ``as left'' readings, which are meaningless.
    III.D.11.a., b., and c. (new) would be added as requirements for 
Electronic Flow Computers (EFCs). The requirements for EFCs would be no 
more stringent than those for chart recorders. The current static 
pressure, differential pressure, and temperature would have to be 
displayed on a continuous basis, and the EFC would be required to have 
a back-up power source capable of retaining data collected for a 
minimum of 35 days.
    III.E.3. and 4. (formerly C.25. and 26.) would be amended to make 
them read as requirements rather than as descriptions or definitions, 
as they appear to do in the existing Order.
    Other editorial changes have been proposed to correct errors in the 
existing Order and cross-references that must be changed as a result of 
the proposed reorganization of the Order.
    The principal authors of this proposed rule are Lonny R. Bagley, 
Inspection and Enforcement Specialist, Montana State Office, Richard 
Estabrook, Petroleum Engineer, Ukiah District Office, California, 
Michael Kolling, Petroleum Engineering Technician, Dickinson District 
Office, North Dakota, Will Lambert, Petroleum Engineer, Grand Junction 
District Office, Colorado, and Larry Bray, Petroleum Engineering 
Technician, Roswell Resource Area Office, New Mexico, assisted by the 
staff of the Division of Legislation and Regulatory Management, all of 
the BLM.
    It is hereby determined that this proposed rule does not constitute 
a major Federal action significantly affecting the quality of the human 
environment, and that no detailed statement pursuant to Section 
102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 
4332(2)(C)) is required. The Bureau of Land Management has determined 
that this proposed rule is categorically excluded from further 
environmental review pursuant to 516 Departmental Manual (DM), Chapter 
2, Appendix 1, Item 1.10, and that the proposal would not significantly 
affect the 10 criteria for exceptions listed in 516 DM 2, Appendix 2. 
Pursuant to the Council on Environmental Quality regulations (40 CFR 
1508.4) and environmental policies and procedures of the Department of 
the Interior, ``categorical exclusions'' means a category of actions 
that do not individually or cumulatively have a significant effect on 
the human environment and that have been found to have no such effect 
in procedures adopted by a Federal agency and for which neither an 
environmental assessment nor an environmental impact statement is 
required.
    This rule has been reviewed under Executive Order 12866.
    The Department has determined under the Regulatory Flexibility Act 
(5 U.S.C. 601 et seq.) that it will not have a significant economic 
impact on a substantial number of small entities for the same reasons. 
The rule codifies industry standards that apply to all entities in the 
industry, regardless of size. The Order would not require a substantial 
amount of additional information or monitoring. Some additional 
equipment may be required in certain cases, but the total cost of these 
changes would not approach the threshold specified in the Executive 
Order. Costs to the public should not increase at all as a result of 
the Order.
    The Department certifies that this proposed rule does not represent 
a governmental action capable of interference with constitutionally 
protected property rights. There would be no taking of private property 
without due process. Failure to abate violations could result in 
assessments under the Mineral Leasing Act and/or penalties under the 
Federal Oil and Gas Royalty Management Act, and possibly lease 
cancellation if the failure continues, but not without due process. 
Therefore, as required by Executive Order 12630, the Department of the 
Interior has determined that the proposed rule would not cause a taking 
of private property.
    The Department has certified to the Office of Management and Budget 
that this proposed rule meets the applicable standards provided in 
section 1(a) and 2(b)(2) of Executive Order 12788.
    The information collection requirement(s) contained in Part 3160 
that relate to this Order have been approved by the Office of 
Management and Budget under 44 U.S.C. 3501 et seq. and assigned 
clearance number 1004-0134.

List of Subjects in 43 CFR Part 3160

    Government contracts; Mineral royalties; Oil and gas exploration; 
Oil and gas production; Public lands--Mineral resources; Indian lands--
Mineral resources; Reporting requirements.

    For the reasons stated above, under the authority of the Mineral 
Leasing Act of 1920, as amended and supplemented (30 U.S.C. 181 et 
seq.), the Department proposes to amend part 3160, Group 3100, 
subchapter C, chapter II of title 43 of the Code of Federal Regulations 
as set forth below:

PART 3160--ONSHORE OIL AND GAS OPERATIONS

    1. The authority citation for part 3160 continues to read as 
follows:

    Authority: 43 U.S.C. 1733; 30 U.S.C. 181 et seq.; 30 U.S.C. 351-
359; 30 U.S.C. 301-306; 25 U.S.C. 396; 25 U.S.C. 396a-396q, 397, 
398, 398a-398e, 399; 43 U.S.C. 1457; see also 40 Op.Atty.Gen. 41; 40 
U.S.C. 471 et seq.; 42 U.S.C. 4321 et seq.; 43 U.S.C. 6508; 30 
U.S.C. 1701 et seq.; and 25 U.S.C. 2101 et seq.

Subpart 3164--Special Provisions

    2. Section 3164.1(b) is amended by revising the fifth entry of the 
table to read as follows:


Sec. 3164.1  Onshore Oil and Gas Orders.

* * * * *
    (b) * * * 

----------------------------------------------------------------------------------------------------------------
      Order No. & Subject                 Effective date             Federal Register reference      Supersedes 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
                                                  * * * * * * *                                                 
5. Measurement of Gas..........  [30 days after date of           [FR reference for final rule]..  None.        
                                  publication of final rule].                                                   
                                                                                                                
                                                  * * * * * * *                                                 
                                                                                                                
----------------------------------------------------------------------------------------------------------------

    Dated: September 27, 1993.
Bob Armstrong,
Assistant Secretary of the Interior.

Appendix--Text of Oil and Gas Order No. 5

    Note.--This appendix will not appear in the Code of Federal 
Regulations.

Onshore Oil and Gas Order No. 5

Measurement of Gas

I. Introduction
    A. Authority
    B. Purpose
    C. Scope
II. Definitions
III. Requirements
    A. Required Recordkeeping
    B. General
    C. Primary Element--Orifice Meters
    D. Secondary Element
    E. Other Requirements
    F. Gas Measurement by Other Methods or at Other Locations 
Acceptable to the Authorized Officer
IV. Variances from Minimum Standards

Attachment

I. Sections from 43 CFR Subparts 3163 and 3165

Onshore Oil and Gas Order No. 5

Measurement of Gas on Federal and Indian Oil and Gas Leases

I. Introduction

A. Authority
    This Order is established pursuant to the authority granted to the 
Secretary of the Interior under various Federal and Indian mineral 
leasing statutes and the Federal Oil and Gas Royalty Management Act of 
1982. This authority has been delegated to the Bureau of Land 
Management and is implemented by the onshore oil and gas operating 
regulations contained in 43 CFR part 3160. Section 3164.1 thereof 
specifically authorizes the Director to issue Onshore Oil and Gas 
Orders when necessary to implement or supplement the operating 
regulations and provides that all such Orders shall be binding on the 
lessees and operators of Federal and restricted Indian oil and gas 
leases which have been, or may hereafter, be issued.
    Specific authority for the provisions contained in this Order is 
found at: section 3162.4-1, Well records and reports; section 3162.4-2, 
Samples, tests, and surveys; section 3162.7-1, Disposition of 
production; section 3162.7-3, Measurement of gas; and subpart 3163, 
Noncompliance, Assessments, and Penalties.
B. Purpose
    One purpose of this Order is to establish requirements and minimum 
standards for the accurate measurement of gas by the methods authorized 
in 43 CFR 3162.7-3, i.e., measurement by orifice meter or other methods 
acceptable to the authorized officer. Accurate gas measurement ensures 
that the Federal Government, the general public, State Governments that 
share in the proceeds, and Indian mineral owners receive the royalties 
due, as specified in the governing oil and gas leases.
    Another purpose of this Order is to establish abatement periods for 
corrective action when noncompliance with the minimum standards is 
detected.
    This Order also serves as notice to any party cited for 
noncompliance that it may request from the authorized officer an 
extension of the abatement period for any violation, provided that the 
request for extension is applied for and granted prior to the 
expiration of the abatement period previously allowed.
C. Scope
    This Order is applicable to all Federal and Indian (except Osage) 
oil and gas leases. In addition, this Order is also applicable to all 
wells and facilities on State or privately owned mineral lands 
committed to a unit or communitization agreement that affects Federal 
or Indian interests, notwithstanding any provision of a unit or 
communitization agreement to the contrary.

II. Definitions

    A. ``Authorized officer'' means any employee of the Bureau of Land 
Management authorized to perform the duties described in 43 CFR Groups 
3000 and 3100 (see 43 CFR 3000.0-5).
    B. ``Business day'' means any day Monday through Friday excluding 
Federal holidays.
    C. ``Gas'' means any fluid, either combustible or noncombustible, 
that is produced in a natural state from the earth and that maintains a 
gaseous or rarefied state at standard temperature and pressure 
conditions (see 43 CFR 3000.0-5(a)).
    D. ``INC'' means incident of noncompliance, which serves as a 
Notice of Violation under CFR subpart 3163.
    E. ``Lessee'' means a person or entity holding record title in a 
lease issued by the United States (see 43 CFR 3160.0-5).
    F. ``Major violation'' means noncompliance that causes or threatens 
immediate, substantial, and adverse impacts on public health and 
safety, the environment, production accountability, or royalty income 
(see 43 CFR 3160.0-5).
    G. ``Meter uncertainty'' means the overall inaccuracy of a flow 
meter caused by the inherent errors of the flow measurement equipment.
    H. ``Minor violation'' means noncompliance that does not rise to 
the level of a major violation (see 43 CFR 3160.0-5).
    I. ``Operating rights owner'' means a person or entity holding 
operating rights in a lease issued by the United States. A lessee also 
may be an operating rights owner if the operating rights in a lease or 
portion thereof have not been severed from record title.
    J. ``Operator'' means any person or entity, including but not 
limited to the lessee or operating rights owner, who has stated in 
writing to the authorized officer that it is responsible under the 
terms and conditions of the lease for the operations conducted on the 
leased lands or portion thereof.
    K. ``Production unit'' means, for purposes of reporting gas 
production, a measurement unit of 1000 standard cubic feet (Mcf).
    L. ``Standard cubic foot'' means the volume of gas contained in one 
cubic foot at a base pressure of 14.73 pounds per square inch absolute, 
and at a base temperature of 60 deg. F or 519.67 deg. Rankine (see 43 
CFR 3162.7-3).

III. Requirements

A. Required Recordkeeping
     The operator shall keep all test data, meter reports, charts/
recordings, or other similar records for 6 years from the date they 
were generated, unless the operator is notified that an audit or 
investigation involving such records has been initiated. If the 
operator is notified that an audit or investigation involving the 
records has been initiated, the operator shall maintain the records 
until released in writing from the obligation to maintain them. The 
authorized officer may request, and the operator shall produce, such 
records any time within this period. For electronic flow computers 
(EFCs), this includes but is not limited to:
    1. Field edits or volume adjustments.
    2. Hourly average static and differential pressures, hourly flow 
temperatures, hourly sums of extensions calculated at each data point, 
hourly volumes, and the method used to obtain the summation of 
extensions, averages, and volumes. For the purposes of this Order, 
extensions are the square root of the product of the differential 
pressure and static pressure.
    3. Subsequent edits or adjustments. If several changes are made, 
only the original and the final readings shall be retained.
    Along with any records submitted at the request of the authorized 
officer, the operator shall provide all additional information used to 
compute volumes so that computations may be verified.
B. General
    All gas production shall be measured in accordance with an 
authorized method of measurement. As set out in 43 CFR 3162.7-3, gas 
measurement authorized for gas produced from leases, unit areas, and 
communitization agreements subject to the jurisdiction of the Bureau of 
Land Management, as such jurisdiction is defined in 43 CFR 3161.1, may 
be by orifice meter or other methods acceptable to the authorized 
officer. The requirements and minimum standards for gas measurement are 
set out below. If these requirements for the primary element and chart 
recorder are met, a meter accuracy of plus or minus 3 percent will be 
attained. However, given the complex components and sophistication of 
electronic flow computers (EFCs), no ``cook book'' method can be 
established. Therefore, an uncertainty standard of plus or minus 3 
percent would be included for EFCs.
    The requirements of this Order are based on the standards and 
specifications published by the American Gas Association (AGA) and 
officially designated as ANSI/API 2530 and AGA Committee Report No. 3, 
second edition, 1985, hereafter referred to as AGA Committee Report No. 
3. The AGA-published standards and specifications are considered to be 
appropriate for proper gas measurement by both the Department of the 
Interior and the oil and gas industry. The requirements set minimum 
standards necessary to promote conservation of natural resources and to 
ensure proper measurement of gas production for sales and allocation 
purposes, so that the Federal Government and Indian mineral owners will 
receive the royalties due under governing oil and gas leases.
    All future sales and allocation facilities and sales or allocation 
facilities in existence on the effective date of this Order, unless 
covered by a valid variance, shall meet the minimum standards 
prescribed in this Order; provided, however, that all gas produced from 
or allocated to Federal and Indian (except Osage) oil and gas leases 
wherein the gas is measured through sales or allocation meters handling 
100 thousand cubic feet (Mcf) per day or less on a monthly basis are 
exempt from the standards in section III. C.1., C.2., D.10.a., D.10.b., 
and D.11.c. of this Order. The authorized officer may, where 
appropriate and necessary for proper measurement, work with the 
operators in designating consolidated gas sales and/or allocation meter 
stations.
    Meter installations constructed in accordance with the AGA 
Committee Report No. 3 standards in effect at that time shall not 
automatically be required to retrofit if the standards are revised. The 
Bureau will review any revised standards and, when necessary, will 
amend the Order through the rulemaking process.
    The intent of these minimum standards is to ensure that when 
equipment malfunctions occur that could result in inaccurate 
measurement, proper corrective actions are taken, the authorized 
officer is notified, and a report is submitted.
    Failure to comply with these minimum standards will be considered 
noncompliance and an incident of noncompliance (INC) will be issued. 
Operators who discover noncompliance with these minimum standards and 
take immediate corrective action will not be issued an INC. If the 
authorized officer or his representative is present when an operator 
discovers a malfunction or uses incorrect procedures as specified in 
this Order, an INC will be issued unless immediate corrective action is 
taken. Failure of equipment will not be considered a violation. 
However, the incidents of noncompliance which may result from equipment 
failure are considered violations. A partial list of such incidents 
follows:
    Failure to install equipment properly.
    Failure to repair or correct equipment malfunction properly or in a 
timely manner.
    Failure to submit report of alternate method of sales.
    Failure to submit required reports in a timely manner.
    Failure to adhere to the minimum standard procedures specified in 
this Order.
    The use of improper equipment, when discovered, will be considered 
a violation and a formal INC will be issued.
    The use of improper procedures will be considered a violation and 
when witnessed by the authorized officer or his representative, 
immediate corrective action will be required. In the event that proper 
procedures are then used as required by this Order, and prior to 
completing the operation, calibration, or proving, the violation will 
be considered as properly corrected. In this case, although the 
violation will be documented in the agency files, no INC will be 
issued.
    The failure to take timely corrective action as required to meet 
any standard in this article will be considered either a major or minor 
violation in accordance with the classification set out below for each 
standard, unless an applicable variance has been granted or the 
standards have been otherwise modified in accordance with Article IV.
    A major violation, as defined in this Order, will generally require 
an immediate shut-in of the metering device. However, where the non-
recoupable loss is not significant or where damage to the resource is 
likely to occur if a shut-in is required, an abatement period of 24 
hours may be granted by the authorized officer or his representative.
    Where abatement is required ``prior to sales or removal,'' action 
is required to be taken so that no gas can be removed beyond the 
measurement point until properly measured.
C. Primary Element--Orifice Meters
    The following are minimum standards for the measurement of natural 
gas using orifice meters.
    1. For meters measuring more than 100 Mcf per day on a monthly 
basis, the orifice to pipe diameter ratio (d/D), or the beta ratio, 
with meters using ``flange taps,'' shall be between 0.15 and 0.70.
    Violation: Major.
    Corrective Action: Install an orifice of such size that subsequent 
measurements will be within the appropriate beta ratio range. If 
changing the orifice causes the differential pressure to be recorded in 
the lower one-third of the chart, then either the meter tube or the 
differential element shall be changed, sizing the straight pipe 
sections in a manner that will provide subsequent measurement within 
the appropriate beta ratio range.
    Abatement Period: Prior to sales or removal.
    2. For meters measuring more than 100 Mcf per day on a monthly 
basis, the orifice to pipe diameter ratio (d/D), or the beta ratio, 
with meters using ``pipe taps,'' shall be between 0.20 and 0.67.
    Violation: Major.
    Corrective Action: Same as C.1. above.
    Abatement Period: Prior to sales or removal.
    3. To obtain flow conditions as near optimum as possible and 
minimize the effects of turbulence in gas flow, the minimum length of 
straight pipe preceding and following an orifice, and the use of 
straightening vanes, shall conform to the specifications shown in 
Figures 4 through 9 of AGA Committee Report No. 3.
    Violation: Major.
    Corrective Action: Install proper length of pipe where appropriate 
or install straightening vanes in accordance with appropriate AGA 
Committee Report No. 3 specifications.
    Abatement Period: Prior to sales or removal.
    4. There shall be no pipe connections between the orifice and the 
nearest pipe fitting other than the pressure taps and/or thermometer 
wells as specified in AGA Committee Report No. 3.
    Violation: Major.
    Corrective Action: Replace entire length of pipe ahead of the 
orifice meter with pipe of appropriate length and inside smoothness in 
accordance with AGA Committee Report No. 3.
    Abatement Period: Prior to sales or removal.
    5. The difference between the internal diameters of the meter tube 
pipe and the orifice fittings shall be within the tolerance limits set 
by AGA.
    Violation: Major.
    Corrective Action: Install properly sized meter tube.
    Abatement Period: Prior to sales or removal.
    6. For meters measuring more than 100 Mcf per day on a monthly 
basis, meter tubes shall be inspected at least every 5 years to ensure 
continuing conformance with the meter tube specifications in AGA 
Committee Report No. 3. Record results of inspections and take any 
necessary corrective actions to bring the meter tube into conformance 
with AGA Committee Report No. 3.
    Violation: Minor.
    Corrective Action: Inspect meter tube for conformance with AGA 
Committee Report No. 3, record results of inspection, and take 
necessary corrective actions.
    Abatement Period: 60 days.
    7. Meter tubes using flange taps or pipe taps shall have the 
pressure tap holes located as specified in AGA Committee Report No. 3.
    Violation: Major.
    Corrective Action: Install pressure tap as specified.
    Abatement Period: Prior to sales or removal.
    8. Orifice plates shall be removed from the flange or plate holder, 
and visually inspected for conformance with AGA standards and 
specifications, at least semi-annually, during calibration of the 
secondary element.
    Violation: Minor.
    Corrective Action: Remove and visually inspect orifice plate for 
conformance with AGA standards and specifications.
    Abatement Period: No later than the next meter calibration.
    9. Any plate or orifice that is determined not to be in conformance 
with AGA standards shall be replaced with one that is in conformance.
    Violation: Major.
    Corrective Action: Replace orifice plate.
    Abatement Period: Prior to sales or removal.
    10. All connections and fittings of the secondary element 
(including meter pots and meter manifolds) shall be leak tested prior 
to conducting tests of the meter's accuracy.
    Violation: Minor.
    Corrective Action: Stop meter calibration and conduct leak test.
    Abatement Period: Prior to completion of calibration.
    11. Volumes of gas delivered shall be determined according to the 
flow equations specified in AGA Committee Report No. 3.
    Violation: Minor.
    Corrective Action: Recalculate all gas volumes not determined in 
accordance with flow equations specified in AGA Committee Report No. 3. 
Submit a report adjusting the volume of gas measured, and showing or 
discussing all calculations made in correcting the volumes.
    Abatement Period: 60 days.
D. Secondary Element
    The following are minimum standards for the secondary element of 
the orifice meter.
    1. Continuous temperature recorders to measure the flowing gas 
temperature are required on all sales and allocation meters measuring 
more than 100 Mcf per day on a monthly basis. Meters measuring 100 Mcf 
or less per day on a monthly basis shall determine the flowing 
temperature of the gas by one of the following:
    a. Continuous temperature recorder, or
    b. Average flowing temperature, as determined by a method approved 
by the authorized officer.
    Violation: Major.
    Corrective Action: Install temperature measuring device as 
required.
    Abatement Period: Prior to sales or removal.
    2. The temperature recording device shall be tested for accuracy 
utilizing one of the following:
    a. ``Test well'' in the meter run; or
    b. Water bath.
    Record ``as found'' readings, make any necessary adjustments, and 
record ``as left'' readings.
    Violation: Minor.
    Corrective Action: Test temperature recording device as specified, 
record ``as found'' readings, make necessary adjustments, and record 
``as left'' readings.
    Abatement Period: Prior to completion of calibration.
    3. Differential and static pen accuracy shall be tested for 
linearity at zero, at 100 percent of the element range, and at 1 point 
within the normal operating range of the differential and static 
recordings. Record ``as found'' readings, make any necessary 
adjustments, and record ``as left'' readings.
    Violation: Minor.
    Corrective Action: Test linearity at the required points, record 
``as found'' readings, make necessary adjustments, and record ``as 
left'' readings.
    Abatement Period: Prior to completion of calibration.
    4. All calibrating equipment shall be more accurate than the 
required accuracy of the equipment being calibrated, as shown in the 
documentation required in paragraph 5. Calibration equipment shall be 
recertified at least annually.
    Violation: Minor.
    Corrective Action: Stop calibration, substitute proper calibrating 
equipment, and restart calibration.
    Abatement Period: Prior to completion of calibration.
    5. Documentation of the certification/recertification of the 
calibrating equipment shall be available to the authorized officer at 
the time of calibration.
    Violation: Minor.
    Corrective Action: Provide documentation.
    Abatement Period: 20 days.
    6. The accuracy of the recording device(s) shall be tested 
following initial meter installation and following repairs. Meters 
measuring more than 100 Mcf per day on a monthly basis shall be tested 
at least quarterly. Meters measuring 100 Mcf per day or less on a 
monthly basis shall be tested at least semi-annually.
    Violation: Minor.
    Corrective Action: Test meter for accuracy.
    Abatement Period: a. 24 hours for initial meter installation or 
following repairs.
    b. 30 days to conduct the quarterly or semi-annual meter test, as 
applicable.
    7. The authorized officer shall be notified in writing of all meter 
calibrations. Calibration schedules covering monthly, quarterly, 
semiannual, or annual periods shall be submitted at least 10 days prior 
to the date of the first calibration on the schedule.
    Violation: Minor.
    Corrective Action: Submit the calibration schedule, as required.
    Abatement Period: Prior to next calibration.
    8. If the inaccuracy in the recording device(s) results in a volume 
calculation more than 1 percent in error, the volume measured since the 
last calibration shall be corrected. However, if the magnitude of the 
volume error is less than 200 Mcf per month, it will not be pursued 
unless it occurs on a continuing basis. In that case, the meter shall 
be adjusted in accordance with Sections III.D.2. and III.D.3. Also, the 
operator shall submit a report adjusting the volumes of gas measured, 
and showing or discussing all calculations made in correcting the 
volumes. The volumes shall be corrected back to the time the inaccuracy 
occurred, if known. If this time is unknown, volumes shall be corrected 
for the last half of the period elapsed since the date of last 
calibration.
    Violation: Minor.
    Corrective Action: Submit report with adjusted volumes.
    Abatement Period: 60 days.
    9. All meter calibration report forms shall include the following 
information, if applicable, and shall be submitted to the authorized 
officer upon request.
    a. Name of producer or seller;
    b. Name of purchaser;
    c. Federal or Indian lease number, communitization agreement 
number, or unit name or number and participating area identification;
    d. Station or meter number;
    e. Meter data (make, differential, and static and temperature 
range, recording period);
    f. Type of connections (flange or pipe, upstream or downstream 
static connections);
    g. Orifice data (plate size and ID of meter tube);
    h. Time and date of test;
    i. Instrument error(s) found and certification of corrections, and 
``as found'' and ``as left'' data for all instruments;
    j. Signature and affiliation of tester and witness;
    k. Remarks.
    Violation: Minor.
    Corrective Action: Submit amended meter calibration report(s) to 
authorized officer, including all required information.
    Abatement Period: 15 days.
    10. Chart Recorder: The following are minimum standards that only 
apply to chart recorders.
    a. For meters measuring more than 100 Mcf per day on a monthly 
basis, the pen that records differential pressure shall operate in the 
outer \2/3\ of the chart range (the physical distance on the chart 
measured from zero) for the majority of the flowing period.
    Violation: Minor.
    Corrective Action: Size the metering equipment so that the 
differential pen will record in the outer \2/3\ of the chart range.
    Abatement Period: 20 days.
    b. For meters measuring more than 100 Mcf per day on a monthly 
basis, the static element shall be sized to make the pen that records 
the static pressure operate in the outer \2/3\ of the chart range (the 
physical distance on the chart measured from zero) for the majority of 
the flowing period.
    Violation: Minor.
    Corrective Action: Size static element so as to cause static pen to 
record in the outer \2/3\ of the chart range.
    Abatement Period: 20 days.
    c. The meter's differential pen arc, the ability of the 
differential pen to duplicate the test chart's time arc over the full 
range of the test chart, shall be checked during each testing of the 
meter's accuracy and adjustments made if necessary.
    Violation: Minor.
    Corrective Action: Stop meter calibration, check differential pen 
arc, make necessary adjustments, and restart calibration.
    Abatement Period: Prior to completion of calibration.
    d. During testing of the meter accuracy, the static pen time lag 
shall be adjusted to ensure independent movement of the static pen in 
relation to the differential pen.
    Violation: Minor.
    Corrective Action: Make appropriate adjustments.
    Abatement Period: Prior to completion of calibration.
    11. Electronic Flow Computers: The following are minimum standards 
that only apply to electronic flow computers (EFCs).
    a. The current static pressure, differential pressure, and 
temperature shall be displayed on a continuous basis.
    Violation: Minor.
    Corrective Action: Display required data.
    Abatement Period: 30 days.
    b. The EFC shall be equipped with a back-up power source capable of 
retaining data collected for a minimum of 35 days.
    Violation: Minor.
    Corrective Action: Install back-up power source capable of 
retaining data collected for a minimum of 35 days.
    Abatement Period: 30 days.
    c. For meters measuring more than 100 Mcf per day on a monthly 
basis, the EFC shall be installed, operated, and maintained to achieve 
an overall meter uncertainty of within plus-minuse>3 percent.
    Violation: Minor.
    Corrective Action: Make any necessary changes to bring the overall 
meter uncertainty within plus-minuse>3 percent.
    Abatement Period: 20 days.
E. Other Requirements
    The following are minimum standards that apply to all sales and 
sales allocation meter installations.
    1. If, for any reason, the measuring equipment is out of service or 
malfunctioning so that the quantity of gas delivered is not known, the 
volume delivered during this period shall be estimated using one of the 
following methods, in this order of priority:
    a. Record data on check metering equipment if used in lieu of main 
meter recordings. If check meters are not installed or are found to be 
recording inaccurately, then
    b. Base corrections on the percentage error found during the 
instrument test. If that is not feasible, then
    c. Estimate the quantity of gas run, based on deliveries made under 
similar conditions when the metering equipment was registering 
accurately.
    Violation: Minor.
    Corrective Action: Estimate volumes delivered during those periods 
cited using one or more of the approved methods identified in the order 
of priority and, where necessary, submit a report showing corrected 
volumes.
    Abatement Period: 60 days.
    2. The Btu content shall be determined at least annually, unless 
otherwise required by the authorized officer, by means of (1) a 
recording calorimeter, (2) calculations based on a complete 
compositional analysis of the gas and the heating value of each 
constituent, in accordance with AGA Committee Report No. 3, or (3) any 
other method acceptable to the authorized officer. The authorized 
officer shall be apprised of the method used for each determination and 
be furnished with all needed analytical data or other documentation 
upon request. The Btu content most recently determined and used for 
royalty purposes shall be reported.
    Violation: Minor.
    Corrective Action: Determine Btu content and submit a report.
    Abatement Period: 30 days.
    3. For purposes of measurement and meter calibration, atmospheric 
pressure shall be established through an actual measurement or assumed 
to be a constant value based on the elevation at the metering station.
    Violation: Minor.
    Corrective Action: Recalibrate gas meter and submit a report 
indicating corrected volumes using the adjusted absolute zero or 
properly calculated pressure extensions.
    Abatement Period: 30 days.
    4. The method and frequency of determining specific gravity shall 
be determined by use of one of the following methods:
    a. Continuous recording gravitometer;
    b. Complete compositional analysis of a spot or cumulative gas 
sample determined at least annually.
    Violation: Minor.
    Corrective Action: Determine specific gravity of gas by approved 
method and submit a report with corrected volume.
    Abatement Period: 30 days.
F. Gas Measurement by Other Methods or at Other Locations Acceptable to 
the Authorized Officer
    Using any method of gas measurement other than by orifice meter at 
a location on the lease, unit, unit participating area, or communitized 
area, requires prior approval from the authorized officer pursuant to 
43 CFR 3162.7-3. Other measurement methods include, but are not limited 
to:

Turbine metering systems
Positive displacement meter
Pitot tube
Orifice well tester
Critical flow prover
Gas-oil ratio

    The requirements and minimum standards for gas measurement on the 
lease, unit, unit participating area, or communitized area by an 
alternate method of measurement, or at a location off the lease, unit, 
unit participating area, or communitized area by either an authorized 
or an alternate method of measurement, are as follows:
1. Measurement on the Lease, Unit, Unit Participating Area, or 
Communitized Area
    A written application for approval of an alternate gas measurement 
method shall be submitted to the authorized officer and written 
approval obtained before any such alternate gas measurement method is 
installed or operated. Any operator requesting approval of any 
alternate gas sales measurement system shall submit performance data, 
actual field test results, or any other supporting data or evidence 
acceptable to the authorized officer, that will demonstrate that the 
proposed alternate gas sales measurement system will meet or exceed the 
objectives of the applicable minimum standards or will not adversely 
affect royalty income or production accountability.
    Violation: Major.
    Corrective Action: Submit application and obtain approval.
    Abatement Period: Prior to sales or removal.
2. Measurement at a Location Off the Lease, Unit, Unit Participating 
Area, or Communitized Area
    a. A written application for off-lease measurement shall be 
submitted to the authorized officer and written approval obtained 
before any such off-lease gas measurement facilities are installed or 
operated. The application for approval of off-lease measurement shall 
justify the location of the measurement facilities at the desired off-
lease location before approval will be granted, but no additional 
approval as to the gas sales measurement method is required, provided 
measurement is to be accomplished by orifice meter pursuant to the 
requirements and minimum standards of this Order.
    Violation: Minor.
    Corrective Action: Submit application and obtain approval.
    Abatement Period: 20 days.
    b. If gas measurement is to be accomplished at a location off the 
lease, unit, unit participating area, or communitized area by any 
alternate measurement method (any method other than measurement by 
orifice meter), then the application, in addition to justifying the 
location of the measurement facilities, shall also demonstrate the 
acceptability of the alternate measurement method pursuant to Section 
III.F.1. of this Order.
    Violation: Major.
    Corrective Action: Submit application and obtain approval.
    Abatement Period: Prior to sales.

IV. Variances From Minimum Standards

    An operator may request that the authorized officer approve a 
variance from any of the minimum standards prescribed in Article III. 
All such requests shall be submitted in writing to the appropriate 
authorized officer and shall provide information as to the 
circumstances warranting approval of the variance(s) requested and the 
proposed alternative means by which the related minimum standard(s) 
will be satisfied. The authorized officer, after considering all 
relevant factors, shall approve the requested variance(s) if it is 
determined that the proposed alternative(s) meets or exceeds the 
objectives of the applicable minimum standard(s), or does not adversely 
affect royalty income or production accountability.
    In addition, approval may be given orally by the authorized officer 
before the operator initiates actions which require a variance from 
minimum standards. The oral request, if granted, shall be followed by a 
written request not later than the fifth business day following oral 
approval, and written approval will then be appropriate.
    The authorized officer may also issue NTLs that establish modified 
standards and requirements for specific geographic areas of operations.
    After notice to the operator, the authorized officer may also 
require compliance with standards that exceed those contained in this 
Order whenever such additional requirements are necessary to achieve 
protection of royalty income or production accountability. The 
rationale for any such additional requirements shall be documented in 
writing to the operator.

[FR Doc. 94-149 Filed 1-5-94; 8:45 am]
BILLING CODE 4310-84-P