[Federal Register Volume 61, Number 244 (Wednesday, December 18, 1996)]
[Proposed Rules]
[Pages 66639-66642]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32041]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 250

RIN 1010-AC12


Oil and Gas and Sulphur Operations in the Outer Continental Shelf

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Proposed rule.

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SUMMARY: The MMS proposes to amend the regulations governing quality 
assurance (QA) of safety and pollution prevention equipment (SPPE). The 
SPPE QA requirements currently fond in the regulations need refining to 
lessen the paperwork burden on MMS and industry and to ensure that 
Outer Continental Shelf operators continue to use the best available 
and safest equipment.

DATES: MMS will consider all comments we receive by February 18, 1997. 
We will begin reviewing comments then and may not fully consider 
comments we receive after February 18, 1997.

ADDRESSES: Mail or hand-carry comments to the Department of the 
Interior; Minerals Management Service; Mail Stop 4700; 381 Elden 
Street; Herndon, Virginia 22070-4817; Attention: Chief, Engineering and 
Standards Branch.

FOR FURTHER INFORMATION CONTACT: Bill Hauser, Engineering and Standards 
Branch, telephone (703)787-1600.

SUPPLEMENTARY INFORMATION:

Background

    SPPE include the following equipment:
     Surface and underwater safety valves and their actuators,
     Subsurface safety valves and associated safety valve locks 
and landing nipples.
    The current SPPE regulations, found at 30 CFR 250.126, require that 
lessees use SPPE certified by the manufacturer as having been produced 
under a QA program MMS recognizes. MMS currently recognizes two QA 
standards:
    (1) American Society of Mechanical Engineers/American National 
Standards Institute Quality Assurance and Certification of Safety and 
Pollution Prevention Equipment Used in Offshore Oil and Gas Operations 
(ASME/ANSI SPPE-1).
    (2) American Petroleum Institute (API) Specification for Quality 
Programs (Spec Q1).
    MMS incorporated the QA requirements into the regulations in April 
1988 when the offshore operating rules governing oil, gas, and sulphur 
exploration, development, and production on the OCS were consolidated. 
MMS required lessees to submit a list of all certified and noncertified 
SPPE in their inventory as of April 1, 1988, and to notify MMS when 
listed SPPE were removed from service for failure, malfunction, or 
remanufacture.
    On July 6, 1988 (53 FR 25349), MMS proposed to recognize API's QA 
standard as an acceptable alternate or optional QA standard for the 
manufacture of SPPE. The API standard required manufacturers to meet 
API Spec Q1 in combination with API Specification for Subsurface Safety 
Valve Safety Equipment (Spec 14A) and API Specification for Surface 
Safety Valves and Underwater Safety Valves (Spec 14D). MMS evaluated 
the comments regarding the proposed rulemaking and determined that the 
API QA standard was an acceptable program. The API standard was 
recognized in a final rule dated March 22, 1990 (55 FR 10614). 
References to both API's and ASME/ANSI's QA standards were updated to 
incorporate the latest editions into the regulations on September 13, 
1990 (55 FR 37709).

Regulatory Review

    During a review of regulations, MMS evaluated the merit of 
continuing the SPPE QA requirements. The MMS examined the scope and 
effect of these requirements and determined that they were effective 
but needed revisions.
    In January 1994, MMS decided to pursue a negotiated rulemaking to 
develop a proposed rule governing SPPE QA regulations. The preliminary 
steps of this effort included contacting interested parties (valve 
manufacturers, lessees, standards organizations, and environmental 
groups) to educate them on negotiated rulemaking and to determine their 
willingness to participate in the rulemaking effort. In April 1994, the 
``convener'' held initial formal interviews with the interested 
parties. Over the next few months it became evident that, while MMS 
needed to revise the regulations, a negotiated rulemaking was not 
necessary.
    This negotiated rulemaking exercise did succeed in getting the 
parties involved in the SPPE QA program to communicate. 
Misunderstandings between the parties were cleared up, and the 
consensus emerged that the SPPE QA program should continue for MMS and 
industry to ensure that the best available and safest technology and 
equipment are being used on the OCS.

[[Page 66640]]

However, the parties also felt that MMS needed to change the current 
regulations to reduce the paperwork burden on SPPE manufacturers, 
lessees, and the MMS.

Intent of the Proposed Rule

    The intent of this proposed rule is to eliminate some paperwork 
involved in complying with the SPPE QA regulations and to ensure that 
lessees use high quality SPPE on the OCS. MMS proposes to eliminate the 
need for companies to update their lists of noncertified SPPE and to 
require that all SPPE installed on OCS wells after April 1, 1998 must 
be QA certified. Lessees can continue to use non-QA certified SPPE that 
were in service before April 1, 1998. However, the lessee must replace 
the noncertified SPPE with certified SPPE when the SPPE:
    (1) Fail during normal operations,
    (2) Fail during testing, or
    (3) Are removed from service for any other reason.
    The justification for proposing this rulemaking option comes from 
many areas. In repeated contacts with lessees, valve manufacturers, and 
standards organizations, the overwhelming consensus is that the QA 
program has succeeded in improving the overall quality of SPPE used on 
the OCS. In other words, the perception is that certified SPPE are 
better than noncertified SPPE. Also, lessees will have had 10 years 
from the date MMS codified the QA requirements to deplete their 
inventory of noncertified SPPE. MMS feels that 10 years is ample time 
for lessees to deplete their inventory of noncertified SPPE and that 
there are not enough noncertified SPPE left in inventories to cause the 
overall industry any undue hardship. So, MMS has decided that 
eliminating the use of SPPE designed and manufactured over 10 years ago 
will ensure that lessees use the best available and safest technology 
and equipment.

Other Changes to the Regulations

    As part of changing the SPPE QA regulations, MMS proposes to update 
30 CFR 250.1, Documents Incorporated by Reference. Specifically, MMS 
proposes to reference the following documents:
    (1) ANSI/ASME SPPE-1-1994, Quality Assurance and Certification of 
Safety and Pollution Prevention Equipment Used in Offshore Oil and Gas 
Operations, and
    (2) API Spec Q1, Specification for Quality Programs, Fifth Edition, 
December 1994. These documents are updates of previous editions that 
MMS incorporated by reference.

Executive Order (E.O.) 12866

    The Department of the Interior (DOI) reviewed this rule under E.O. 
12866 and determined that this is not an economically significant rule. 
The Office of Management and Budget (OMB) has reviewed this rule at 
OMB's request.

Regulatory Flexibility Act

    The DOI has also determined that this proposed rule will not have a 
significant economic effect on a substantial number of small entities. 
Most entities that engage in offshore activities as operators are not 
small because of the technical complexities and financial resources 
necessary to conduct such activities safely. Small entities are more 
likely to operate onshore or in State waters--areas not covered by this 
proposed rule. Small entities are more likely to work as contractors to 
larger entities on the OCS, or, in the case of SPPE, they may work at 
repairing SPPE. This proposed rule will not have any effect on small 
SPPE repair shops or manufacturers since it does not impose any new 
restrictions on them. This proposed rule should not cause the business 
practices of SPPE repair and manufacturing entities to change. Under 
the current rule, a lessee may not re-install an uncertified SSSV on 
the OCS after it fails or malfunctions. As uncertified SSV or USV may 
not be re-installed on the OCS after the lessee removes it for 
remanufacturing. Therefore, this proposed rule should not cause the 
business practices of SPPE repair and manufacturing entities to change.

Paperwork Reduction Act

    This rule eliminates the information collection requirement 
contained in Sec. 250.126(b)(2) which reduces the information 
collection inventory by 1,000 hours. The OMB approved the information 
collection requirements remaining in Sec. 250, Subpart H, under OMB 
control number 1010-0059. However, as part of our continuing effort to 
reduce paperwork and respondent burden, MMS invites the public and 
other Federal agencies to comment on any aspect of the reporting burden 
in Subpart H. Submit your comments to the Office of Information and 
Regulatory Affairs, OMB, Attention Desk Officer for the Department of 
the Interior (OMB control number 1010-0059), Washington, DC 20503. Send 
a copy of your comments to the Chief, Engineering and Standards Branch; 
Mail Stop 4700; Minerals Management Service; 381 Elden Street; Herndon, 
Virginia 20170-4817. You may obtain a copy of the collection of 
information by contacting the Bureau's Information Collection Clearance 
Officer at (703) 787-1242.
    OMB may make a decision to approve or disapprove this collection of 
information after 30 days from receipt of our request. Therefore, your 
comments are best assured of being considered by OMB if OMB receives 
them within that time period. However, MMS will consider all comments 
received during the comment period for this notice of proposed 
rulemaking.
    The Paperwork Reduction Act of 1995 provides that an agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number.
    The title of this collection of information is ``30 CFR 250, 
Subpart H, Oil and Gas Production Safety Systems.
    The collection of information consists of applications and approval 
for design, installation, and operation of subsurface safety devices 
and surface production-safety systems and related requirements; 
notifying MMS prior to production and conduct of preproduction tests 
and inspections; approval of quality assurance programs covering 
manufacture of SPPE; and related recordkeeping requirements. The 
requirement to respond is mandatory. MMS uses the information to 
evaluate equipment and/or procedures lessees propose to use during 
production operations and to verify compliance with minimum safety 
requirements.
    Respondents are approximately 130 Federal OCS oil, gas, and sulphur 
lessees. The frequency of submission varies. The public reporting 
burden for this information is estimated to average 1.25 hours per 
response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the information collection. MMS estimates the 
total annual burden of this collection of information to be 352 
reporting hours and 2,548 recordkeeping hours. Based on $35 per hour, 
the total burden hour cost to respondents is estimated to be $101,500.
    In calculating the burden, MMS assumed that respondents perform 
some of the requirements and maintain records in the normal course of 
their activities. MMS considers these to be usual and customary and did 
not include them in the burden estimates. Commenters are invited to 
provide information if they disagree with this assumption and they 
should tell us what are the burden hours and costs imposed by this 
collection of information.

[[Page 66641]]

    The MMS will summarize written responses to this notice and address 
them in the final rule. All comments will become a matter of public 
record.
    1. MMS specifically solicits comments on the following questions:
    (a) Is the proposed collection of information necessary for the 
proper performance of MMS's functions, and will it be useful?
    (b) Are the estimates of the burden hours of the proposed 
collection reasonable?
    (c) Do you have any suggestions that would enhance the quality, 
clarity, or usefulness of the information to be collected?
    (d) Is there a way to minimize the information collection burden on 
those who are to respond, including through the use of appropriate 
automated electronic, mechanical, or other forms of information 
technology?
    2. In addition, the Paperwork Reduction Act of 1995 requires 
agencies to estimate the total annual cost burden to respondents or 
recordkeepers resulting from the collection of information. MMS needs 
your comments on this item. Your response should split the cost 
estimate into two components: (a) total capital and startup cost, and 
(b) annual operation, maintenance, and purchase of services. Your 
estimates should consider the costs to generate, maintain, and disclose 
or provide the information. You should describe the methods you use to 
estimate major cost factors, including system and technology 
acquisition, expected useful life of capital equipment, discount 
rate(s), and the period over which you incur costs. Capital and startup 
costs include, among other items, computers and software you purchase 
to prepare for collecting information; monitoring, sampling, drilling, 
and testing equipment; and record storage facilities. Generally, your 
estimates should not include equipment or services purchased: before 
October 1, 1995; to comply with requirements not associated with the 
information collection; for reasons other than to provide information 
or keep records for the Government; or as part of customary and usual 
business or private practices.

Takings Implication Assessment

    The DOI certifies that the proposed rule does not represent a 
governmental action capable of interference with constitutionally 
protected property rights. Thus, a Taking Implication Assessment need 
not be prepared pursuant to E.O. 12630, Government Action and 
Interference with Constitutionally Protected Property Rights.

Unfunded Mandate Reform Act of 1995

    This rule does not contain any unfunded mandates to State, local, 
or tribal governments or the private sector.

E.O. 12988

    The DOI has certified to OMB that this proposed regulation meets 
the applicable civil justice reform standards provided in Sections 3(a) 
and 3(b)(2) of E.O. 12988.

National Environmental Policy Act

    The DOI has determined that this action does not constitute a major 
Federal action significantly affecting the quality of the human 
environment; therefore, preparation of an Environmental Impact 
Statement is not required.

List of Subjects in 30 CFR Part 250

    Continental shelf, Environmental impact statements, Environmental 
protection, Government contracts, Incorporation by reference, 
Investigations, Mineral royalties, Oil and gas development and 
production, Oil and gas exploration, Oil and gas reserves, Penalties, 
Pipelines, Public lands--mineral resources, Public lands--rights-of-
way, Reporting and recordkeeping requirements, Sulphur development and 
production, Sulphur exploration, Surety bonds.

    Dated: September 30, 1996.
Sylvia V. Baca,
Assistant Secretary, Land and Minerals Management.
    For the reasons set out in the preamble, MMS proposes to amend 30 
CFR part 250 as follows:

PART 250--OIL AND GAS AND SULFUR OPERATIONS IN THE OUTER 
CONTINENTAL SHELF

    1. The authority citation for part 250 continues to read as 
follows:

    Authority: U.S.C. 1334.

    2. Section 250.1 is amended by revising paragraphs (c)(5), (d)(1), 
(d)(4) and (d)(5) to read as follows:


Sec. 250.1  Documents incorporated by reference.

* * * * *
    (c) * * *
    (5) ANSI/ASME SPPE-1-1994, Quality Assurance and Certification of 
Safety and Pollution Prevention Equipment Used in Offshore Oil and Gas 
Operations, Incorporated by Reference at: Sec. 250.126(a)(2)(A).
* * * * *
    (d) * * *
    (1) API Spec Q1, Specification for Quality Programs, Fifth Edition, 
December 1994, API Stock No. 811-00001, Incorporated by Reference at: 
Sec. 250.126(a)(2)(B).
* * * * *
    (4) API Spec 6A, Specification for Valves and Wellhead Equipment, 
Seventeenth Edition, February 1, 1996, API Stock No. G06A17, 
Incorporated by Reference at: Secs. 250.126(a)(3) and 250.152 (b)(1) 
and (b)(2).
    (5) API Spec 6AV1, Specification for Verification Test of Wellhead 
Surface Safety Valves and Underwater Safety Valves for Offshore 
Service, First Edition, February 1, 1996, API Stock No. G06AV1, 
Incorporated by Reference at: Sec. 250.126(a)(3).
* * * * *
    3. MMS is revising Sec. 250.126 to read as follows:


Sec. 250.126  Safety and pollution prevention equipment quality 
assurance requirements.

    (a) General requirements. (1) A lessee may only install certified 
safety and pollution prevention equipment (SPPE) in wells located on 
the OCS. SPPE include the following:
    (i) Surface safety valves (SSV) and actuators;
    (ii) Underwater safety valves (USV) and actuators; and
    (iii) Subsurface safety valves (SSSV) and associated safety valve 
locks and landing nipples.
    (2) Certified SPPE are those the manufacturer certifies as having 
been manufactured under a quality assurance program MMS recognizes. MMS 
considers all other SPPE noncertified. MMS currently recognizes two 
quality assurance programs:
    (i) ANSI/ASME SPPE-1, Quality Assurance and Certification of Safety 
and Pollution-Prevention Equipment Used in Offshore Oil and Gas 
Operations; and
    (ii) API Spec Q1, Specification for Quality Programs.
    (3) All SSV's and USV's must meet the technical specifications of 
API Spec 14D or API Spec 6A and 6AV1. All SSSV's must meet the 
technical specifications of API Spec 14A.
    (b) Use of noncertified SPPE. Before April 1, 1998, you may 
continue to use or install noncertified SPPE if the noncertified SPPE 
were in your inventory as of April 1, 1988, and were included in a list 
of nonconcertified SPPE submitted to MMS prior to August 29, 1988. 
After April 1, 1998, you must replace noncertified SPPE with certified 
SPPE when the noncertified SPPE:
    (1) Fail during normal operations,
    (2) Fail during testing, or

[[Page 66642]]

    (3) Are removed from service for any other reason.
    (c) Recognizing other quality assurance programs. The MMS will 
consider approving other quality assurance programs covering the 
manufacture of SPPE. If you want MMS to evaluate other quality 
assurance programs, submit relevant information about the program and 
reasons for MMS approval to the Deputy Associate Director for 
Operations and Safety Management; Minerals Management Service; Mail 
Stop 4600; 381 Elden Street; Herndon, Virginia 20170-4817.

[FR Doc. 96-32041 Filed 12-17-96; 8:45 am]
BILLING CODE 4310-MR-M