[Federal Register Volume 61, Number 170 (Friday, August 30, 1996)]
[Proposed Rules]
[Pages 45926-45927]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22193]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3100

[WO-310-3110-02 1A]


Royalty Rate Reduction for Stripper Oil Properties

AGENCY: Bureau of Land Management, Interior.

ACTION: Review of regulations; request for comments.

-----------------------------------------------------------------------

[[Page 45927]]

SUMMARY: The Bureau of Land Management (BLM) is seeking public comments 
on the effectiveness of the royalty rate reduction available to 
producers of Federal stripper well properties. A stripper well produces 
a daily average of less than 15 barrels of oil. BLM is evaluating the 
effectiveness of this program. Comments will assist BLM in deciding 
whether to continue, modify or end the royalty rate reduction program.

DATES: Comments must be submitted on or before October 29, 1996.

ADDRESSES: You may hand-deliver comments to the Bureau of Land 
Management, Administrative Record, Room 401, 1620 L St., NW., 
Washington, DC; or mail comments to the Bureau of Land Management, 
Administrative Record, Room 401LS, 1849 C Street, NW, Washington, DC 
20240. You also may transmit comments electronically via the Internet 
to: [email protected].

Please include ``Attn: AC68'' in your message. If you do not receive a 
confirmation from the system that we have received your Internet 
message, contact the person identified at FOR FURTHER INFORMATION 
CONTACT. You will be able to review comments at BLM's Regulatory 
Management Team office, Room 401, 1620 L St., N.W., Washington, D.C., 
during regular business hours (7:45 a.m. to 4:15 p.m.) Monday through 
Friday.

FOR FURTHER INFORMATION CONTACT: Wayne Melton, Roswell (NM) District 
Office, (505) 627-0254.

SUPPLEMENTARY INFORMATION:

I. Public Comment Procedures

    Written comments should be specific, should be confined to issues 
pertinent to the regulations under review, and should explain the 
reason for any recommended change. Where possible, comments should 
reference the specific section or paragraph of the regulations that the 
commenter is addressing. BLM may not necessarily consider or include in 
the Administrative Record comments that BLM receives after the close of 
the comment period (see DATES) or comments delivered to an address 
other than those listed above (see ADDRESSES).

II. Background

    In 1992, BLM amended 43 CFR 3103.4-1 to establish conditions under 
which an operator or an owner of a Federal stripper oil well property 
could obtain a reduction in the royalty rate (57 FR 35968, August 11, 
1992). This action was intended to encourage operators of stripper 
properties to place marginal or uneconomic shut-in wells back in 
production and to provide an economic incentive to increase production 
by reworking such wells, drilling new wells, and/or by implementing 
enhanced oil recovery projects. In addition, the 1992 final rule 
contained procedures for operators to follow in (1) determining whether 
a property qualifies for the royalty reduction and (2) calculating the 
appropriate royalty rate.
    BLM's regulations at 43 CFR 3103.4-1(d)(5) indicate that the 
Secretary of the Interior will evaluate the effectiveness of the 
stripper well royalty reduction program and may at any time after 
September 10, 1997, terminate any or all royalty reductions granted 
upon six months notice. Based on this review, the Secretary could 
continue the program, modify it, or terminate it.
    At the request of the Secretary, the BLM has established a task 
force to evaluate the effectiveness of the stripper royalty rate 
reduction in meeting the goals of encouraging operators of stripper 
properties to place marginal or uneconomic shut-in wells back in 
production and providing an economic incentive to increase production 
by reworking such wells, drilling new wells, and/or by implementing 
enhanced oil recovery projects. Through this notice, the task force is 
actively seeking public comments in support of, or against, continuance 
of this program. These comments, in conjunction with a Department of 
Energy analysis, will provide the basis for the task force's final 
recommendation to the Secretary.
    Comments are specifically requested on whether or not the royalty 
reduction program has:
    1. Enabled existing stripper oil well properties to continue 
producing;
    2. Caused additional drilling into known reservoirs;
    3. Caused drilling into previously undeveloped reservoirs;
    4. Triggered implementation of enhanced recovery programs; and
    5. Affected the economies of States and local communities where the 
stripper properties are located.
    BLM is also interested in receiving any other information that may 
have a bearing on whether the royalty reduction program is 
accomplishing its goals.

    Dated: August 26, 1996.
Annetta L. Cheek,
Chief, Regulatory Management Team.
[FR Doc. 96-22193 Filed 8-29-96; 8:45 am]
BILLING CODE 4310-84-P