[Federal Register Volume 62, Number 247 (Wednesday, December 24, 1997)]
[Rules and Regulations]
[Pages 67278-67291]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33530]


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

DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Parts 250 and 251

RIN 1010-AC10


Geological and Geophysical (G&G) Explorations of the Outer 
Continental Shelf

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Final rule.

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

SUMMARY: This rule revises MMS' regulations and expands the Notice 
requirement to include all oil, gas, and sulphur related G&G scientific 
research not conducted under a permit. The revisions also update the 
addresses for applying for a permit or filing a Notice, standardize 
definitions, describe the procedures for protecting archaeological 
resources, reflect changes in technology, and clarify the obligations 
of third parties who obtain G&G data and information collected under a 
permit. These revisions are being made because there have been 
instances of commercial G&G exploration being conducted by academia 
without a permit, the addresses for all the MMS regions have changed, 
changes in technology need to be incorporated, and permittees and third 
parties have questioned MMS access to certain G&G data and information 
that were collected under a permit and further processed by third 
parties. The modifications will enable MMS to better ensure safe use 
and environmental protection of the outer continental shelf (OCS) for 
all G&G related operations, expedite permit applications and Notices to 
MMS, and make the regulatory language clearer

[[Page 67279]]

and more understandable. MMS also believes that it is necessary to more 
clearly assert its authority to acquire G&G data and information.
    Access to these data and information is needed to ensure that the 
U.S. Government receives fair market value on leases, especially in 
areas of complex geology, and for the Government to conduct analyses or 
assessments for royalty relief and other purposes.

EFFECTIVE DATE: January 23, 1998.

FOR FURTHER INFORMATION CONTACT: David R. Zinzer, Resource Evaluation 
Division, (703) 787-1515 or Kumkum Ray, Rules Processing Team, 703) 
787-1600.

SUPPLEMENTARY INFORMATION: This final rule implements changes put 
forward by our notice of proposed rulemaking (NPR) that was published 
February 11, 1997 (62 FR 6149) and which solicited public comments. The 
comment period was extended twice, the last extension ending July 29, 
1997. We met with industry twice during the comment period, May 15 in 
Washington, D.C., and July 10 in New Orleans, LA. We received 22 sets 
of written comments and recommendations in response to the NPR. Ten of 
these comments and recommendations were from industry associations, and 
twelve were from permittees and third party users of G&G data and 
information collected on the OCS. We have carefully considered each of 
these comments and recommendations. We did not adopt recommendations 
that did not appear to be in the public's best interest.
    In order to assist industry in understanding how MMS will implement 
the final rule, MMS will conduct a meeting with industry and other 
interested parties in the Gulf of Mexico Region following publication 
of a meeting time in the Federal Register.

Discussion and Analysis of Comments

    Some commenters requested that MMS withdraw the final rule in its 
entirety and/or conduct a negotiated rulemaking, citing adverse effects 
on the oil and gas industry, including oil and gas producers, 
independent oil and gas companies, and geophysical service companies, 
accompanied by a significant reduction in the amount of data collection 
and exploration by industry.
    MMS has decided to proceed with the final rule after carefully 
considering all written comments on the proposed rulemaking and after 
lengthy discussions with industry at the meetings in Washington, D.C., 
and New Orleans, Louisiana. MMS appreciates the candor and scope of the 
many comments that were put forth and the concerns of the industry. 
However, we believe that specific concerns with the proposed rulemaking 
have been addressed properly, and that where MMS and industry disagree, 
MMS is acting appropriately as the Federal agency required by the OCS 
Lands Act (OSCLA) to manage the oil and natural gas resources of the 
OCS in an environmentally responsible and safe manner. MMS must oversee 
G&G explorations on the OCS in an orderly and fair manner, balancing 
the needs of industry and the public interest.
    Some commenters questioned whether MMS had performed the analysis 
required under the Regulatory Flexibility Act, or made an estimate of 
how much it would cost the exploration and production industry to 
comply with the proposed revisions to part 251. These comments cited 
the potential administrative burdens of the proposed changes and their 
significant impact on the ability of smaller companies to compete in 
the Gulf of Mexico. MMS has addressed these concerns under the section 
of the preamble titled, ``Regulatory Flexibility Act.''

Section-by-Section Analysis

Section 251.1  Definitions

    The definition of exploration was expanded to include marine and 
airborne surveys. Although MMS proposed changing the definition of 
human environment, several comments criticized the proposed wording as 
broad and ambiguous. MMS agrees to retain the existing definition.
    The definitions of lease and lessee were changed to read the same 
as the definitions in part 250.
    The definitions of archaeological interest, material remains, and 
significant archaeological resource were added to explain 
archaeological protection requirements in part 251. The language 
adopted in this rule is the same as that used in part 250.
    The definition of third party was clarified to include all persons 
who, by whatever means, obtained from permittees or other third parties 
G&G data or information collected under a permit.
    The definition of you was changed in response to comments that the 
definition in the proposed rule was too vague and broad and should not 
include persons who only inquire about a permit or Notice. You also 
applies to third parties who assume certain responsibilities under 
Secs. 251.11 and 251.12.

Section 251.2  Purpose of This Part

    Paragraph (d) was added to this section to clarify the U.S. 
Government's right to certain data and information, explain MMS' 
obligation to pay certain reimbursements, and set out MMS' procedures 
for safeguarding proprietary and privileged data and information 
acquired from industry and other sources.

Section 251.3  Authority and Applicability of This Part

    One commenter questioned whether, under the OCSLA, the Secretary of 
the Interior (Secretary) could allow G&G exploration under a Notice, 
instead of requiring a permit. Section 11 of the OCSLA (43 U.S.C. 1340) 
gives the Secretary the authority to allow geological and geophysical 
exploration. Because of the commercial nature of the activity, MMS 
believes that it is preferable to require that G&G exploration be 
conducted only under the auspices of a permit. G&G scientific research 
can be conducted either under a permit or by filing a Notice, depending 
on the activity being conducted.
    The commenter also asked under what authority the Secretary applies 
MMS regulations to ships or vessels, and exempts Federal agencies from 
the permit procedures. The OCSLA definition of exploration includes 
geophysical surveys where magnetic, gravity, seismic, or other systems 
are used to detect or imply the presence of minerals. Ships and vessels 
are commonly used in, and are an integral part of, geophysical surveys. 
Therefore, it is necessary to apply MMS'' regulations to them. The 
definition of person in the OCSLA does not include Federal agencies. 
Thus, Federal agencies are not authorized as persons by the Secretary 
to conduct G&G explorations in the OCS and thus are not subject to part 
251.
    Finally, the same commenter found no regulatory language dealing 
with the Secretary's review or approval of permit applications or time 
limits to take action on applications. While section 11 of the OCSLA 
authorizes the Secretary to issue permits for exploration, it does not 
require the Secretary to set forth time limits to issue permits. The 
authority to review and approve permit applications is delegated to the 
appropriate MMS Regional Director who exercises this authority under 
Secs. 251.5 and 251.7, and sets the administrative time limits to 
review and approve permit applications. Time limits may vary in each 
OCS Region. Response times to permit applications have not been an 
issue in the past.

[[Page 67280]]

Section 251.4  Types of G&G Activities That Require Permits or Notices

    Several commenters asked whether commercial G&G research related to 
developing or testing new equipment or techniques would require a 
permit or could be conducted under a Notice. As mentioned earlier, MMS 
believes that a Notice is not appropriate for commercial G&G 
activities. Basically, whether the G&G company calls the activity 
``research'' or ``exploration'' is not important. A permit is required 
if the data collected from the ``research'' activity can be used in 
exploration for oil, gas, or sulphur, or if the ``research'' activity 
involves solid or liquid explosives, or deep stratigraphic tests. Other 
research activities that only involve developing or testing new 
equipment or techniques do not require a permit.
    The underlying concern of the commenters, however, seemed to be 
whether they were required to give MMS the testing and development work 
they perform when a permit is required. Generally, descriptions of new 
equipment, techniques, computer hardware/software, or the results of 
tests on those items do not need to be given to MMS. However, if these 
items were used to produce G&G data and information which must be 
submitted to MMS, it may be necessary to provide some explanatory 
information to MMS in order to allow the agency to properly evaluate 
the data and information.

Section 251.5  Applying for Permits or Filing Notices

    One commenter, addressing Sec. 251.5(c)(7), noted that 
collaboration on research between industry and universities may make it 
difficult to estimate the ``earliest time'' that data will be available 
to the public. MMS recognizes this difficulty and only requires a good 
faith estimate of the time that scientific research data and 
information will be released to the public. To alleviate these 
concerns, MMS has inserted the word ``practicable'' between 
``earliest'' and ``time'' to conform with the wording used in part 251 
since 1976.

Section 251.6  Obligations and Rights Under a Permit or a Notice.

    One commenter objected to the use of ``human environment'' in 
Sec. 251.6(a)(2), citing subjective judgments regarding the term 
``quality of life'', which was part of the proposed definition of 
``human environment.'' The definition of ``human environment'' was not 
changed in response to this and other comments. However, the word 
``property'' is added to Sec. 251.6(a)(2) to make the obligation under 
this part conform with the standards in part 250 which apply to 
operations under a lease, right of use or easement, or right-of-way. 
Several commenters objected to the wording of Sec. 251.6(a)(7) which 
removed the word ``unreasonably'' from the requirement to not interfere 
with or cause harm to other users of an area. We agree, and 
``unreasonably'' will be re-inserted before the word ``interfere'.
    Several commenters objected to new wording in Sec. 251.6(c) that 
requires entities conducting G&G operations to consult with and 
coordinate their operational activities with specific users of an area. 
The commenters argued that consultation is not always practicable and 
that, in certain cases, proprietary information regarding the timing 
and location of planned surveys would be unfairly revealed to 
competitors. The wording has been changed to reflect that MMS's intent 
is for companies to consult and coordinate their G&G activities solely 
for navigational and safety purposes. MMS also recognizes that the 
International Association of Geophysical Contractors acts on behalf of 
the geophysical survey companies to coordinate its members' activities 
through a time sharing system to promote safe operations and protect 
members' proprietary survey designs and plans.
    Several commenters objected to proposed language which expands the 
use of the best available and safest technologies (BAST) beyond the 
area of test drilling requirements. The wording in Sec. 251.6(d) is 
changed to make clear that the BAST requirement only applies to shallow 
test drilling and deep stratigraphic test drilling conducted under a 
permit.

Section 251.7  Test Drilling Activities Under a Permit

    One commenter suggested deleting Sec. 251.7(a)(2), stating that MMS 
cannot mandate compliance of shallow test drilling activities with 
requirements of the Coastal Zone Management Act (CZMA). We agree that 
MMS cannot establish requirements under the auspices of the CZMA. 
However, we disagree that the proposed language creates a new mandate. 
Section 251.7(a)(2) simply advises permit applicants that MMS may 
require submittal of consistency certification when a federally 
approved coastal management program requires consistency review.
    Section 251.7(b)(5), ``Protecting archaeological resources,'' is 
revised in the final rule to make the wording conform with similar 
requirements in part 250. Also, as mentioned previously, new 
definitions related to archaeological resources were added in the 
definitions section to better explain the requirements of this section.

Section 251.8  Inspection and Reporting Requirements for Activities 
Under a Permit

    One commenter questioned our proposed removal of the word 
``actual'' from the term ``actual costs'' in determining the amount of 
reimbursement to a permittee when MMS inspectors are required to be 
accommodated during activities authorized under part 251. The point of 
the proposed change was to impose a 90-day time limit for reimbursement 
requests so that MMS can quickly clear such expenses. Permittees will 
be reimbursed for actual expenses incurred as long as their request for 
reimbursement is made within the 90-day period.
    Some commenters noted that there was no provision in Sec. 251.8(b) 
for permittees to make oral requests to MMS for modifications to their 
programs with a followup in writing, although Sec. 251.4(b)(2) allows a 
person to file a Notice orally with a followup in writing if 
circumstances preclude a 30-day advance written Notice. MMS recognizes 
that there are circumstances when written requests to modify programs 
are not practicable, and that an oral request with a written followup 
could be acceptable in such cases. The wording in Sec. 251.8(b) is 
changed to allow for such oral requests, but we want to emphasize that 
oral requests for modifications should only be made when necessary.
    One commenter sought clarification as to the beginning date of the 
30-day period to submit a final report under Sec. 251.8(c)(2). The 
revised wording indicates that a final report of exploration or 
scientific research activities under a permit is due within 30 days 
after completion of ``acquisition activities.''

Section 251.9  Temporarily Stopping, Canceling, or Relinquishing 
Activities Approved Under a Permit

    This section sets out the situation under which MMS will halt 
ongoing permit activities. Section 251.9(a)(2) was changed to include 
G&G data and information in the examples of items required by MMS 
which, if not submitted, could constitute a failure to comply with 
applicable law, regulation, order, or provision of a permit and result 
in MMS halting the permit activities.

[[Page 67281]]

Section 251.10  Penalties and Appeals

    No comments were received regarding Sec. 251.10.

Section 251.11  Inspection, Selection, and Submission of Geological 
Data and Information Collected Under a Permit and Processed by 
Permittees or Third Parties

    Several commenters objected to the proposed requirement in 
Sec. 251.11(a)(1) that a permittee notify the Regional Director 
``immediately'' after acquiring, analyzing, processing, or interpreting 
geological data and information, citing excessive paperwork and other 
burdens. MMS agrees. The wording has been changed to require the 
permittee to notify the Regional Director after completion of the 
initial analysis, processing, and interpretation of geological data and 
information collected under a permit. MMS does not require continual 
notification of every analysis, processing, and interpretation.
    Furthermore, the reference in Sec. 251.11(a)(1) to acquisition of 
geological data is redundant and was therefore removed, since the 
requirement for reporting acquisition of geological data resides in 
Sec. 251.8(c)(2).
    Some commenters objected to the proposed wording in 
Sec. 251.11(c)(1) which requires a record of all geological data and 
information, ``describing each operation of analysis, processing, and 
interpretation.'' The commenters considered this a shift of MMS focus 
from geological information, as defined in part 251, to descriptions of 
the technologies and techniques used to arrive at processed, analyzed, 
or interpreted information. It is not the intent of MMS to acquire from 
industry these types of proprietary or confidential technical 
information. Therefore, MMS will require only a description of each 
``type'' of analysis, processing, or interpretation, as specified in a 
G&G permit.
    Several commenters objected to the provisions in Sec. 251.11(d), 
relating to the obligations of permittees and third parties who obtain 
geological data and information. Since the requirements of this section 
are similar to Sec. 251.12(d), we have combined our discussion of those 
two sections. Please see the section titled ``Third Party Issues'' for 
a complete discussion of obligations when G&G data and information 
collected under a permit are obtained by a third party.

Section 251.12  Inspection, Selection, and Submission of Geophysical 
Data and Information Collected Under a Permit and Processed by 
Permittees or Third Parties

    Similar to the comments on Sec. 251.11(a)(1), many commenters 
objected to the requirement in Sec. 251.12(a)(1) that a permittee 
notify the Regional Director ``immediately'' after initially acquiring, 
processing, and interpreting any geophysical data and information 
collected under a permit, again citing excessive costs and other 
burdens. MMS agrees. The wording is changed to require the permittee to 
notify the Regional Director after completion of the initial processing 
and interpretation of geophysical data and information collected under 
a permit. MMS does not intend to require continual notification of 
every step of initial processing and interpretation. In addition, the 
reference in Sec. 251.12(a)(1) to acquisition of geophysical data is 
redundant and removed, since the requirement for reporting acquisition 
of geophysical data also resides in Sec. 251.8(c)(2).
    Some commenters questioned the provisions in Secs. 251.12(c)(2) and 
251.12(c)(3) which require that processed geophysical information be 
submitted to MMS in a ``quality'' format suitable for processing or 
interpretive evaluation. There was a misunderstanding as to what was 
meant by ``quality'' format. Here ``quality'' means the same level of 
format used by a permittee or third party in the normal course of their 
business.
    Some commenters questioned whether MMS was seeking ``black box'' 
technologies that are privileged and proprietary to the person 
submitting the G&G data and information. MMS requires only the 
information, including a detailed format, necessary to load digital 
data and information. MMS does not request nor seek proprietary 
software or procedures used to prepare the data and information.

Third Party Issues

    Several commenters strongly objected to Secs. 251.11(d) and 
251.12(d), which clarify the permit obligations placed on both the 
permittee and the third party when geological and geophysical data and 
information are transferred by any means to a third party. Most 
commenters argued that the provisions of Secs. 251.11 and 251.12 should 
not apply to third parties who obtain G&G data and information from 
permittees through a license agreement since no ``transfer'' of data 
and information takes place. We disagree. The obligation to notify the 
Regional Supervisor when a permittee provides geophysical data or 
processed information to a third party, or a third party provides data 
and information received from a permittee to another third party, has 
been in place since part 251 was added to Title 30 of the Code of 
Federal Regulations, effective June 11, 1976.
    MMS has always considered a license agreement a form of transfer or 
exchange, as are a sale, trade, or other agreement between a permittee 
and a third party. In order to clarify any confusion resulting from 
industry's interpretation of what constitutes a transfer, MMS has 
revised the language of the regulation to make clear that the 
obligations under Secs. 251.11 and 251.12 are triggered whenever a 
third party obtains by any means data and information collected under a 
permit. However, in an effort to alleviate industry concerns over the 
burden and cost of reporting all license agreements, MMS will require 
identification of third parties who obtain data and information under 
licensing agreements only in response to a written request by MMS to 
the permittee, or to the third party which licensed the data to another 
third party.
    The commenters also questioned the statutory authority of MMS to 
acquire G&G data and information from third parties who obtain the data 
and information under a license agreement. The authority for obtaining 
data and information that were collected under a permit and further 
processed by a third party is at section 11 of the OCSLA (43 U.S.C. 
1340 (a)(1)). This section provides that only persons ``authorized'' by 
the Secretary may conduct G&G activities on the OCS. In the absence of 
a lease, MMS ``authorization'' is the ``permit.''
    One of the terms of the permit is the permittee's agreement to 
provide MMS with all of the data and information collected, 
interpretations, etc., and to identify third parties. The regulations 
in turn, at former Secs. 251.11(c) and 251.12 (c) required the 
recipients of those data and information or interpretation to accept 
those same permit obligations as a condition of receipt. Third party 
recipients are still subject to the regulatory requirements of a 
permittee in the revised Secs. 251.11 and 251.12, including the 
obligation to submit G&G data and information for inspection and 
possible retention by MMS.
    Several commenters stated that there would be an additional 
administrative burden on third parties who would be required to submit 
such data and information to MMS for inspection and possible retention, 
than is the case

[[Page 67282]]

under the current regulations. We acknowledge an increase in 
administrative work and costs to third parties. However, MMS does not 
consider the extra burden under the revised rule to be significant. 
Furthermore, the requirement for third parties to submit data and 
information is not new relative to the requirement of the existing 
regulations. MMS does anticipate a larger percentage of its data needs 
coming from third parties. However, we anticipate that most of MMS' 
future data needs will continue to come directly from permittees, who 
have provided over 95 percent of processed seismic information that MMS 
has acquired on the OCS.
    Some commenters also claimed that the proposed language would 
require that third parties assume all responsibilities of permittees, 
including operational and environmental requirements. That is not the 
intent of MMS. The responsibilities of third parties to whom data and 
information were transferred from permittees have always been limited 
to the data submittal sections of part 251, specifically Secs. 251.11 
and 251.12. The final rule has been modified so that third parties who 
obtained data and information are exempt from the Secs. 251.11(a)(1) 
and 251.12(a)(1) requirement of automatic notification to MMS. This 
exemption is a change from the proposed rulemaking and from previous 
final rulemakings and will ease the potential administrative burdens on 
third parties.
    Several commenters objected to the provisions that required third 
parties to submit data and information obtained from permittees to MMS, 
arguing that the terms of license agreements will be violated and/or 
license agreements will have to be rewritten to accommodate submittal 
to MMS, resulting in a large paperwork burden. MMS has always required 
that third parties assume all the data submittal obligations of a 
permittee if data and information are transferred to the third party by 
a permittee. License agreements should therefore have always reflected 
the possibility of submittal of data and information to MMS by third 
parties.
    Some commenters stated that the acquisition of G&G data and 
information by MMS from third parties who obtained the data under 
license agreements is a taking of private property. MMS disagrees. 
Applicants for a permit accept, as part of the permit terms, an 
obligation to provide data obtained under the permit to MMS. In 
addition, applicants agree to require that any third party who obtains 
the data accept those same obligations. If an applicant is unwilling to 
agree, they have the choice of not obtaining the permit. Third parties 
who agree to the requirements can obtain the data from the permittees. 
Those who choose not to agree also have an option. They simply cannot 
accept the data without also accepting the obligation imposed by the 
permit.
    Several commenters expressed concern about revealing to MMS the 
identity of third parties who obtained data and information from 
permittees. The commenters noted that public disclosure of a third 
party's identity, or the areas on the OCS for which the third party 
obtained data, could jeopardize a third party's competitive position 
and reveal business strategies of operating and obtaining leases on the 
OCS. MMS agrees that public disclosure of a third party's business 
interests and strategies, or of other privileged and proprietary 
information, would have a deleterious effect on third parties. Such 
information has been protected in the past by MMS, and we are 
reaffirming through these regulations that such information would 
continue to be protected by MMS as trade secrets or confidential 
business information which are exempt from the Freedom of Information 
Act and not subject to release under regulations which come under the 
purview of MMS. A new provision in Sec. 251.14(a)(3) provides further 
protection for third party recipients of data and information collected 
under permits. Under this provision, MMS will keep confidential the 
identities of third party recipients and will not release these 
identities unless both the permittee and the third parties agree to the 
disclosure.
    Several commenters suggested that MMS continue using the ``trial 
procedures'' set up in 1995 between MMS and industry as a mechanism for 
leases in the Gulf of Mexico. Under these procedures, bidders on a 
particular tract were required to submit to MMS specific seismic 
information collected under a permit and processed by the bidder (a 
third party). While some of the commenters acknowledged problems with 
implementation of the ``trial procedures,'' they encouraged MMS to 
pursue improvements instead of proceeding with this final rule.
    MMS has always considered the ``trial procedures'' to be temporary 
and has indicated such to industry. In the two meetings with industry, 
MMS cited instances of noncompliance, in some cases perhaps deliberate, 
with the provisions of the ``trial procedures.'' It is now also 
becoming apparent that there are data necessary for a thorough 
assessment of tracts receiving bids that are not available under the 
``trial procedures.'' Furthermore, MMS now needs to clarify and 
finalize the process of obtaining G&G data and information collected 
under permits for all of the OCS, not only the Gulf of Mexico.

Section 251.14  Protecting and Disclosing Data and Information 
Submitted to MMS Under a Permit

    Some commenters recommended that the Director, MMS, rather than the 
appropriate Regional Director, be responsible for the provisions of 
Sec. 251.14(c), the procedure that MMS follows to disclose acquired 
data and information to a contractor for reproduction, processing, and 
interpretation. The commenters argued that wrongful disclosure of data 
could have disastrous consequences from a competitive standpoint, and 
that ensuring that the top official of MMS is bound by all applicable 
laws and regulations regarding dissemination of the data would better 
protect data. We feel that it is unnecessary to specify that only the 
Director be responsible for disclosure of data or that only the 
Director can notify the proper party of disclosure of data to 
contractors for authorized purposes. The Director is still responsible 
for actions of subordinates acting in an official capacity.
    Section 251.14(c) was changed to clarify that the person, whether a 
permittee or third party, who submitted the data and information under 
Secs. 251.11 or 251.12 will be advised by MMS of any contemplated 
disclosure to a contractor for reproduction, processing, and 
interpretation.
    In this rulemaking, MMS is also making two corrections in 30 CFR 
part 250.
    The first correction is to Sec. 250.209(c). This technical 
amendment amends the citation in (c) from ``43 CFR part 62 subpart D'' 
to ``43 CFR part 12 subpart D.'' The second correction is to subpart O. 
The numbering of subpart O will be moved down one. The subpart will 
begin at Sec. 250.210 and end at Sec. 250.234.
    Authors: David R. Zinzer, Resource Evaluation Division, and Kumkum 
Ray, Rules Processing Team.

Executive Order (E.O.) 12866

    This rule is not significant under E.O. 12866, ``Regulatory 
Planning and Review,'' and does not require a review by the Office of 
Management and Budget (OMB). Most revisions to the rule are generally 
nonsubstantive changes and will have a negligible economic effect on 
the oil, gas, sulphur, and mining industries or scientific researchers. 
Bonding requirements in the rule affect G&G exploration costs as

[[Page 67283]]

outlined below. MMS estimated the economic effects by assuming that one 
deep stratigraphic well will be drilled per year, based on past history 
of frequency of wells drilled. Bonding requirements for single deep 
stratigraphic wells recently increased from $50,000 to $200,000; at a 
2-percent maximum rate, the bonding cost recently increased from $1,000 
to $4,000.
    MMS does not expect that any company will drill enough deep 
stratigraphic wells to warrant an area bond. If a company did want an 
area bond, then the bonding requirement would increase from $300,000 to 
$1,000,000; at a 2-percent maximum rate, the bonding cost would 
increase from $6,000 to $20,000. Since this increase in bonding cost 
will not have a major economic effect (less than $100 million), the 
proposed rule is not considered an economically significant rule. 
Additionally, the proposed revisions will not create a serious 
inconsistency or otherwise interfere with an action taken or planned by 
another agency, materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs, or raise novel legal or policy 
issues.

Regulatory Flexibility Act

    The changes to 30 CFR part 251 will not have a significant economic 
effect on the oil and gas industry or small business entities. The 
final rulemaking may involve small businesses or other small entities 
if they desire to perform geological or geophysical exploration or 
scientific research on the OCS. The Small Business Administration 
defines a small business as having:
     Annual revenues of $5 million or less for exploration 
service and field service companies;
     Less than 500 employees for drilling companies and for 
companies that extract oil, gas, or natural gas liquids.
    However, a typical exploratory well in the shallow waters of the 
Gulf of Mexico costs more than $2.7 million to drill; and the 
acquisition and processing of a single block (9 sq. mi) of exclusive 3D 
seismic data could cost as much as $1 million. Because of the technical 
and financial resources needed to perform these activities offshore, 
the majority of entities conducting these activities are not considered 
small.
    The primary economic effect on small businesses is the cost 
associated with information collection activities. The final rulemaking 
contains virtually all of the same reporting requirements and attendant 
costs as the existing regulations. There is only one change in 
reporting requirements which represents a small increase. The increased 
burden is not on the oil and gas industry, but for entities involved in 
scientific research.
    The increased reporting requirement contained in these regulations 
relates to the filing of a Notice for all scientific research involving 
geological and geophysical activities. Previously, the requirement for 
a Notice existed solely for certain geological scientific research 
activities, namely shallow test drilling. We estimate that the new 
requirement will result in the filing of an additional two to four 
Notices annually, all from small entities: 24 to 36 hours; $840 to 
$1,260.
    Several commenters on the proposed regulations commented on the 
extreme burden that would be imposed on the oil and gas industry if 
they were made to comply with our clarification of ``transfer.'' They 
alluded to the need to modify the large number of existing data 
licenses. MMS does not agree with the contention that there is a 
material change in the definition. We maintain that the requirement is 
unchanged from the existing regulations. To the extent existing 
licenses need to be revised we believe the burden and cost of this 
revision will not be incurred directly by small business entities. MMS 
will, however, be making requests directly to small business entities. 
These new requests will be offset in part by elimination of the current 
procedures.
    MMS concludes that complying with these regulations will not have a 
substantial or significant effect on small business entities operating 
on the OCS. MMS in its existing approved information collection budget 
estimated the total burden in complying with these regulations is 
10,604 hours for a total of $371,140. Our estimate of the annual burden 
to small business entities is approximately 1,060 hours at a cost of 
$37,100. This represents about 10 percent of the total compliance 
burden. These costs are insignificant given the fiscal resources 
required to perform exploration and development activities on the OCS. 
Furthermore, virtually all of this burden existed under the old rule.

Paperwork Reduction Act

    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 
et seq.), we submitted the collection of information contained in the 
proposed rule to OMB. The OMB approved the information collection 
requirements in proposed 30 CFR part 251, Geological and Geophysical 
(G&G) Explorations of the Outer Continental Shelf and assigned OMB 
control number 1010-0048. We have examined the information collection 
requirements in this final rule and have determined that there is no 
significant change from the currently approved collection of 
information for the proposed rule. The estimated annual burden for this 
collection of information is 10,604 hours, an average of 7.7 hour per 
response.

Takings Implication Assessment

    The rule does not represent a government action capable of 
interference with constitutionally protected property rights. A new 
requirement in the rule is a Notice for scientific research in the OCS. 
Since MMS is not requiring the researcher to submit data and 
information or analyses resulting from the research activity, there is 
no direct or indirect taking.
    The rule also clarifies the obligations of a third party. When a 
permittee transfers data and information to a third party, there is a 
transfer of the obligation to provide access to MMS as well. Further, 
the recipient of the data and information is subject to the same 
penalty provisions as the original permittee--if a third party fails to 
provide access. These clarifications better define existing 
requirements and add no new requirements.
    Other changes are not substantive or were made to put the 
regulation into plain English. Thus, a Takings Implication Assessment 
need not be prepared pursuant to E.O. 12630, ``Governmental Actions and 
Interference with Constitutionally Protected Property Rights.''

Unfunded Mandates Reform Act of 1995

    DOI has determined and certifies according to the Unfunded Mandates 
Reform Act, 2 U.S.C. 1502 et seq., that this rule will not impose a 
cost of $100 million or more in any given year on local, tribal, and 
State governments, or the private sector.

E.O. 12988

    DOI has certified to OMB that the rule meets the applicable reform 
standards provided in sections 3(a) and 3(b)(2) of E.O. 12988, ``Civil 
Justice Reform.''

National Environmental Policy Act

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

[[Page 67284]]

List of Subjects

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.

30 CFR Part 251

    Continental shelf, Freedom of information, Oil and gas exploration, 
Public lands-- mineral resources, Reporting and recordkeeping 
requirements, Research.

    Dated: December 16, 1997.
Bob Armstrong,
Assistant Secretary, Land and Minerals Management.

    For the reasons stated in the preamble, Minerals Management Service 
(MMS) amends 30 CFR parts 250 and 251 to read as follows:

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

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

    Authority: 43 U.S.C. 1334.

Subpart N--Outer Continental Shelf (OCS) Civil Penalties

    2. Section 250.209 paragraph (c) is revised as follows:


Sec. 250.209  What are my rights?

* * * * *
    (c) * * * The Department of Interior's regulations implementing 
these authorities are found at 43 CFR part 12 subpart D.

Subpart O--Training

    3. In subpart O, Secs. 250.209 through 250.233 are redesignated as 
Secs. 250.210 through 250.234, respectively.
    4. 30 CFR part 251 is revised to read as follows:

PART 251--GEOLOGICAL AND GEOPHYSICAL (G&G) EXPLORATIONS OF THE 
OUTER CONTINENTAL SHELF

Sec.
251.1  Definitions.
251.2  Purpose of this part.
251.3  Authority and applicability of this part.
251.4  Types of G&G activities that require permits or Notices.
251.5  Applying for permits or filing Notices.
251.6  Obligations and rights under a permit or a Notice.
251.7  Test drilling activities under a permit.
251.8  Inspection and reporting requirements for activities under a 
permit.
251.9  Temporarily stopping, canceling, or relinquishing activities 
approved under a permit.
251.10  Penalties and appeals.
251.11  Submission, inspection, and selection of geological data and 
information collected under a permit and processed by permittees or 
third parties.
251.12  Submission, inspection, and selection of geophysical data 
and information collected under a permit and processed by permittees 
or third parties.
251.13  Reimbursement for the cost of reproducing data and 
information and certain processing costs.
251.14  Protecting and disclosing data and information submitted to 
MMS under a permit.
251.15  Authority for information collection.

    Authority: 43 U.S.C. 1331 et seq.


Sec. 251.1  Definitions.

    Terms used in this part have the following meaning:
    Act means the Outer Continental Shelf Lands Act (OCSLA), as amended 
(43 U.S.C. 1331 et seq.).
    Analyzed geological information means data collected under a permit 
or a lease that have been analyzed. Analysis may include, but is not 
limited to, identification of lithologic and fossil content, core 
analyses, laboratory analyses of physical and chemical properties, well 
logs or charts, results from formation fluid tests, and descriptions of 
hydrocarbon occurrences or hazardous conditions.
    Archaeological interest means capable of providing scientific or 
humanistic understanding of past human behavior, cultural adaptation, 
and related topics through the application of scientific or scholarly 
techniques, such as controlled observation, contextual measurements, 
controlled collection, analysis, interpretation, and explanation.
    Archaeological resources means any material remains of human life 
or activities that are at least 50 years of age and of archaeological 
interest.
    Coastal environment means the physical, atmospheric, and biological 
components, conditions, and factors that interactively determine the 
productivity, state, condition, and quality of the terrestrial 
ecosystem from the shoreline inward to the boundaries of the coastal 
zone.
    Coastal Zone means the coastal waters (including the lands therein 
and thereunder) and the adjacent shorelands (including the waters 
therein and thereunder), strongly influenced by each other and in 
proximity to the shorelines of the several coastal States and extends 
seaward to the outer limit of the U.S. territorial sea.
    Coastal Zone Management Act means the Coastal Zone Management Act 
of 1972, as amended (16 U.S.C. 1451 et seq.).
    Data means facts, statistics, measurements, or samples that have 
not been analyzed, processed, or interpreted.
    Deep stratigraphic test means drilling that involves the 
penetration into the sea bottom of more than 500 feet (152 meters).
    Director means the Director of the Minerals Management Service, 
U.S. Department of the Interior, or a subordinate authorized to act on 
the Director's behalf.
    Exploration means the commercial search for oil, gas, and sulphur. 
Activities classified as exploration include, but are not limited to:
    (1) Geological and geophysical marine and airborne surveys where 
magnetic, gravity, seismic reflection, seismic refraction, gas 
sniffers, coring, or other systems are used to detect or imply the 
presence of oil, gas, or sulphur; and
    (2) Any drilling, whether on or off a geological structure.
    Geological and geophysical scientific research means any oil, gas, 
or sulphur related investigation conducted in the OCS for scientific 
and/or research purposes. Geological, geophysical, and geochemical data 
and information gathered and analyzed are made available to the public 
for inspection and reproduction at the earliest practicable time. The 
term does not include commercial geological or geophysical exploration 
or research.
    Geological exploration means exploration that uses geological and 
geochemical techniques (e.g., coring and test drilling, well logging, 
and bottom sampling) to produce data and information on oil, gas, and 
sulphur resources in support of possible exploration and development 
activities. The term does not include geological scientific research.
    Geophysical exploration means exploration that utilizes geophysical 
techniques (e.g., gravity, magnetic, or seismic) to produce data and 
information on oil, gas, and sulphur resources in support of possible 
exploration and development activities. The term does not include 
geophysical scientific research.
    Governor means the Governor of a State or the person or entity 
lawfully designated to exercise the powers

[[Page 67285]]

granted to a Governor pursuant to the Act.
    Human environment means the physical, social, and economic 
components, conditions, and factors which interactively determine the 
state, condition, and quality of living conditions, employment, and 
health of those affected, directly or indirectly, by activities 
occurring on the OCS.
    Hydrocarbon occurrence means the direct or indirect detection 
during drilling operations of any liquid or gaseous hydrocarbons by 
examination of well cuttings, cores, gas detector readings, formation 
fluid tests, wireline logs, or by any other means. The term does not 
include background gas, minor accumulations of gas, or heavy oil 
residues on cuttings and cores.
    Information means geological and geophysical data that have been 
analyzed, processed, or interpreted.
    Interpreted geological information means knowledge, often in the 
form of schematic cross sections, 3-dimensional representations, and 
maps, developed by determining the geological significance of 
geological data and analyzed and processed geologic information.
    Interpreted geophysical information means knowledge, often in the 
form of seismic cross sections, 3-dimensional representations, and 
maps, developed by determining the geological significance of 
geophysical data and processed geophysical information.
    Lease means an agreement which is issued under section 8 or 
maintained under section 6 of the Act and which authorizes exploration 
for, and development and production of, minerals or the area covered by 
that authorization, whichever is required by the context.
    Lessee means a person who has entered into, or is the MMS approved 
assignee of, a lease with the United States to explore for, develop, 
and produce the leased minerals. The term ``lessee'' also includes an 
owner of operating rights.
    Marine environment means the physical, atmospheric, and biological 
components, conditions, and factors that interactively determine the 
quality of the marine ecosystem in the coastal zone and in the OCS.
    Material remains mean physical evidence of human habitation, 
occupation, use, or activity, including the site, location, or context 
in which such evidence is situated.
    Minerals mean oil, gas, sulphur, geopressured-geothermal and 
associated resources, and all other minerals which are authorized by an 
Act of Congress to be produced from public lands as defined in section 
103 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 
1702).
    Notice means a written statement of intent to conduct geological or 
geophysical scientific research related to oil, gas, and sulphur in the 
OCS other than under a permit.
    Oil, gas, and sulphur mean oil, gas, sulphur, geopressured-
geothermal, and associated resources.
    Outer Continental Shelf (OCS) means all submerged lands lying 
seaward and outside the area of lands beneath navigable waters as 
defined in section 2 of the Submerged Lands Act (43 U.S.C. 1301), and 
of which the subsoil and seabed appertain to the United States and are 
subject to its jurisdiction and control.
    Permit means the contract or agreement, other than a lease, issued 
pursuant to this part, under which a person acquires the right to 
conduct on the OCS, in accordance with appropriate statutes, 
regulations, and stipulations:
    (1) Geological exploration for mineral resources;
    (2) Geophysical exploration for mineral resources;
    (3) Geological scientific research; or
    (4) Geophysical scientific research.
    Permittee means the person authorized by a permit issued pursuant 
to this part to conduct activities on the OCS.
    Person means a citizen or national of the United States; an alien 
lawfully admitted for permanent residence in the United States as 
defined in section 8 U.S.C. 1101(a)(20); a private, public, or 
municipal corporation organized under the laws of the United States or 
of any State or territory thereof; and associations of such citizens, 
nationals, resident aliens, or private, public, or municipal 
corporations, States, or political subdivisions of States or anyone 
operating in a manner provided for by treaty or other applicable 
international agreements. The term does not include Federal agencies.
    Processed geological or geophysical information means data 
collected under a permit and later processed or reprocessed. Processing 
involves changing the form of data so as to facilitate interpretation. 
Processing operations may include, but are not limited to, applying 
corrections for known perturbing causes, rearranging or filtering data, 
and combining or transforming data elements. Reprocessing is the 
additional processing other than ordinary processing used in the 
general course of evaluation. Reprocessing operations may include 
varying identified parameters for the detailed study of a specific 
problem area.
    Secretary means the Secretary of the Interior or a subordinate 
authorized to act on the Secretary's behalf.
    Shallow test drilling means drilling into the sea bottom to depths 
less than those specified in the definition of a deep stratigraphic 
test.
    Significant archaeological resource means those archaeological 
resources that meet the criteria of significance for eligibility to the 
National Register of Historic Places as defined in 36 CFR 60.4.
    Third Party means any person other than the permittee or a 
representative of the United States, including all persons who obtain 
data or information acquired under a permit from the permittee, or from 
another third party, by sale, trade, license agreement, or other means.
    Violation means a failure to comply with any provision of the Act, 
or a provision of a regulation or order issued under the Act, or any 
provision of a lease, license, or permit issued under the Act.
    You means a person who applies for and/or obtains a permit, or 
files a Notice to conduct geological or geophysical exploration or 
scientific research related to oil, gas, and sulphur in the OCS.


Sec. 251.2  Purpose of this part.

    (a) To allow you to conduct G&G activities in the OCS related to 
oil, gas, and sulphur on unleased lands or on lands under lease to a 
third party.
    (b) To ensure that you carry out G&G activities in a safe and 
environmentally sound manner so as to prevent harm or damage to, or 
waste of, any natural resources (including any mineral deposit in areas 
leased or not leased), any life (including fish and other aquatic 
life), property, or the marine, coastal, or human environment.
    (c) To inform you and third parties of your legal and contractual 
obligations.
    (d) To inform you and third parties of the U.S. Government's rights 
to access G&G data and information collected under permit in the OCS, 
reimbursement for submittal of data and information, and the 
proprietary terms of data and information submitted to, and retained 
by, MMS.


Sec. 251.3  Authority and applicability of this part.

    MMS authorizes you to conduct exploration or scientific research 
activities under this part in accordance with the Act, the regulations 
in this part, orders of the Director/Regional Director, and other 
applicable statutes, regulations, and amendments.
    (a) This part does not apply to G&G exploration conducted by or on 
behalf

[[Page 67286]]

of the lessee on a lease in the OCS. Refer to 30 CFR part 250 if you 
plan to conduct G&G activities related to oil, gas, or sulphur under 
terms of a lease.
    (b) Federal agencies are exempt from the regulations in this part.
    (c) G&G exploration or G&G scientific research related to minerals 
other than oil, gas, and sulphur is covered by regulations at 30 CFR 
part 280.


Sec. 251.4  Types of G&G activities that require permits or Notices.

    (a) Exploration. You must have an MMS-approved permit to conduct 
G&G exploration, including deep stratigraphic tests, for oil, gas, or 
sulphur resources. If you conduct both geological and geophysical 
exploration, you must have a separate permit for each.
    (b) Scientific research. You may only conduct G&G scientific 
research related to oil, gas, and sulphur in the OCS after you obtain 
an MMS-approved permit or file a Notice.
    (1) Permit. You must obtain a permit if the research activities you 
propose to conduct involve:
    (i) Using solid or liquid explosives;
    (ii) Drilling a deep stratigraphic test; or
    (iii) Developing data and information for proprietary use or sale.
    (2) Notice. Any other G&G scientific research that you conduct 
related to oil, gas, and sulphur in the OCS requires you to file a 
Notice with the Regional Director at least 30 days before you begin. If 
circumstances preclude a 30-day Notice, you must provide oral 
notification and followup in writing. You must also inform MMS in 
writing when you conclude your work.


Sec. 251.5  Applying for permits or filing Notices.

    (a) Permits. You must submit a signed original and three copies of 
the MMS permit application form (Form MMS-327). The form includes names 
of persons, type, location, purpose, and dates of activity, and 
environmental and other information.
    (b) Disapproval of permit application. If MMS disapproves your 
application for a permit, the Regional Director will state the reasons 
for the denial and will advise you of the changes needed to obtain 
approval.
    (c) Notices. You must sign and date a Notice and state:
    (1) The name(s) of the person(s) who will conduct the proposed 
research;
    (2) The name(s) of any other person(s) participating in the 
proposed research, including the sponsor;
    (3) The type of research and a brief description of how you will 
conduct it;
    (4) The location in the OCS, indicated on a map, plat, or chart, 
where you will conduct research;
    (5) The proposed dates you project for your research activity to 
start and end;
    (6) The name, registry number, registered owner, and port of 
registry of vessels used in the operation;
    (7) The earliest practicable time you expect to make the data and 
information resulting from your research activity available to the 
public;
    (8) Your plan of how you will make the data and information you 
collected available to the public;
    (9) That you and others involved will not sell or withhold for 
exclusive use the data and information resulting from your research; 
and
    (10) At your option, you may submit (as a substitute for the 
material required in paragraphs (c)(7), (c)(8), and (c)(9) of this 
section) the nonexclusive use agreement for scientific research 
attachment to Form 327.
    (d) Filing locations. You must apply for a permit or file a Notice 
at one of the following locations:
    (1) For the OCS off the State of Alaska--the Regional Supervisor 
for Resource Evaluation, Minerals Management Service, Alaska OCS 
Region, 949 East 36th Avenue, Anchorage, Alaska 99508-4302.
    (2) For the OCS off the Atlantic Coast and in the Gulf of Mexico--
the Regional Supervisor for Resource Evaluation, Minerals Management 
Service, Gulf of Mexico OCS Region, 1201 Elmwood Park Boulevard, New 
Orleans, Louisiana 70123-2394.
    (3) For the OCS off the coast of the States of California, Oregon, 
Washington, or Hawaii--the Regional Supervisor for Resource Evaluation, 
Minerals Management Service, Pacific OCS Region, 770 Paseo Camarillo, 
Camarillo, California 93010-6064.


Sec. 251.6  Obligations and rights under a permit or a Notice.

    While conducting G&G exploration or scientific research activities 
under MMS permit or Notice:
    (a) You must not:
    (1) Interfere with or endanger operations under any lease, right-
of-way, easement, right-of-use, Notice, or permit issued or maintained 
under the Act;
    (2) Cause harm or damage to life (including fish and other aquatic 
life), property, or to the marine, coastal, or human environment;
    (3) Cause harm or damage to any mineral resource (in areas leased 
or not leased);
    (4) Cause pollution;
    (5) Disturb archaeological resources;
    (6) Create hazardous or unsafe conditions; or
    (7) Unreasonably interfere with or cause harm to other uses of the 
area.
    (b) You must immediately report to the Regional Director if you:
    (1) Detect hydrocarbon occurrences;
    (2) Detect environmental hazards which imminently threaten life and 
property; or
    (3) Adversely affect the environment, aquatic life, archaeological 
resources, or other uses of the area where you are conducting 
exploration or scientific research activities.
    (c) You must also consult and coordinate your G&G activities with 
other users of the area for navigation and safety purposes.
    (d) Any persons conducting shallow test drilling or deep 
stratigraphic test drilling activities under a permit must use the best 
available and safest technologies that the Regional Director determines 
to be economically feasible.
    (e) You may not claim any oil, gas, sulphur, or other minerals you 
discover while conducting operations under a permit or Notice.


Sec. 251.7  Test drilling activities under a permit.

    (a) Shallow test drilling. Before you begin shallow test drilling 
under a permit, the Regional Director may require you to:
    (1) Gather and submit seismic, bathymetric, sidescan sonar, 
magnetometer, or other geophysical data and information to determine 
shallow structural detail across and in the vicinity of the proposed 
test.
    (2) Submit information for coastal zone consistency certification 
according to paragraphs (b)(3) and (b)(4) of this section, and for 
protecting archaeological resources according to paragraph (b)(5) of 
this section.
    (3) Allow all interested parties the opportunity to participate in 
the shallow test according to paragraph (c) of this section, and meet 
bonding requirements according to paragraph (d) of this section.
    (b) Deep stratigraphic tests. You must submit to the appropriate 
Regional Director, at the address given in Sec. 251.5, a drilling plan, 
an environmental report, and an application for permit to drill (Form 
MMS-123) as follows:
    (1) Drilling plan. The drilling plan must include:
    (i) The proposed type, sequence, and timetable of drilling 
activities;
    (ii) A description of your drilling rig, indicating the important 
features with special attention to safety, pollution prevention, oil-
spill containment and cleanup plans, and onshore disposal procedures;

[[Page 67287]]

    (iii) The location of each deep stratigraphic test you will 
conduct, including the location of the surface and projected bottomhole 
of the borehole;
    (iv) The types of geological and geophysical survey instruments you 
will use before and during drilling;
    (v) Seismic, bathymetric, sidescan sonar, magnetometer, or other 
geophysical data and information sufficient to evaluate seafloor 
characteristics, shallow geologic hazards, and structural detail across 
and in the vicinity of the proposed test to the total depth of the 
proposed test well; and
    (vi) Other relevant data and information that the Regional Director 
requires.
    (2) Environmental report. The environmental report must include all 
of the following material:
    (i) A summary with data and information available at the time you 
submitted the related drilling plan. MMS will consider site-specific 
data and information developed since the most recent environmental 
impact statement or other environmental impact analysis in the 
immediate area. The summary must meet the following requirements:
    (A) You must concentrate on the issues specific to the site(s) of 
drilling activity. However, you only need to summarize data and 
information discussed in any environmental reports, analyses, or impact 
statements prepared for the geographic area of the drilling activity.
    (B) You must list referenced material. Include brief descriptions 
and a statement of where the material is available for inspection.
    (C) You must refer only to data that are available to MMS.
    (ii) Details about your project such as:
    (A) A list and description of new or unusual technologies;
    (B) The location of travel routes for supplies and personnel;
    (C) The kinds and approximate levels of energy sources;
    (D) The environmental monitoring systems; and
    (E) Suitable maps and diagrams showing details of the proposed 
project layout.
    (iii) A description of the existing environment. For this section, 
you must include the following information on the area:
    (A) Geology;
    (B) Physical oceanography;
    (C) Other uses of the area;
    (D) Flora and fauna;
    (E) Existing environmental monitoring systems; and
    (F) Other unusual or unique characteristics that may affect or be 
affected by the drilling activities.
    (iv) A description of the probable impacts of the proposed action 
on the environment and the measures you propose for mitigating these 
impacts.
    (v) A description of any unavoidable or irreversible adverse 
effects on the environment that could occur.
    (vi) Other relevant data that the Regional Director requires.
    (3) Copies for coastal States. You must submit copies of the 
drilling plan and environmental report to the Regional Director for 
transmittal to the Governor of each affected coastal State and the 
coastal zone management agency of each affected coastal State that has 
an approved program under the Coastal Zone Management Act. (The 
Regional Director will make the drilling plan and environmental report 
available to appropriate Federal agencies and the public according to 
the Department of the Interior's policies and procedures).
    (4) Certification of coastal zone management program consistency 
and State concurrence. When required under an approved coastal zone 
management program of an affected State, your drilling plan must 
include a certification that the proposed activities described in the 
plan comply with enforceable policies of, and will be conducted in a 
manner consistent with such State's program. The Regional Director may 
not approve any of the activities described in the drilling plan unless 
the State concurs with the consistency certification or the Secretary 
of Commerce makes the finding authorized by section 307(c)(3)(B)(iii) 
of the Coastal Zone Management Act.
    (5) Protecting archaeological resources. If the Regional Director 
believes that an archaeological resource may exist in the area that may 
be affected by drilling, the Regional Director will notify you of the 
need to prepare an archaeological report.
    (i) If the evidence suggests that an archaeological resource may be 
present, you must:
    (A) Locate the site of the drilling so as to not adversely affect 
the area where the archaeological resources may be, or
    (B) Establish to the satisfaction of the Regional Director that an 
archaeological resource does not exist or will not be adversely 
affected by drilling. This must be done by further archaeological 
investigation, conducted by an archaeologist and a geophysicist, using 
survey equipment and techniques deemed necessary by the Regional 
Director. A report on the investigation must be submitted to the 
Regional Director for review.
    (ii) If the Regional Director determines that an archaeological 
resource is likely to be present in the area that may be affected by 
drilling, and may be adversely affected by drilling, the Regional 
Director will notify you immediately. You must take no action that may 
adversely affect the archaeological resource unless further 
investigations determine that the resource is not archaeologically 
significant.
    (iii) If you discover any archaeological resource while drilling, 
you must immediately halt drilling and report the discovery to the 
Regional Director. If investigations determine that the resource is 
significant, the Regional Director will inform you how to protect it.
    (6) Application for permit to drill (APD). Before commencing deep 
stratigraphic test drilling activities under an approved drilling plan, 
you must submit an APD (Form MMS-123) and receive approval. You must 
comply with all regulations relating to drilling operations in 30 CFR 
part 250.
    (7) Revising an approved drilling plan. Before you revise an 
approved drilling plan, you must obtain the Regional Director's 
approval.
    (8) After drilling. When you complete the test activities, you must 
permanently plug and abandon the boreholes of all deep stratigraphic 
tests in compliance with 30 CFR part 250. If the tract on which you 
conducted a deep stratigraphic test is leased to another party for 
exploration and development, and if the lessee has not disturbed the 
borehole, MMS will hold you and not the lessee responsible for problems 
associated with the test hole.
    (9) Deadline for completing a deep stratigraphic test. If your deep 
stratigraphic test well is within 50 geographic miles of a tract that 
MMS has identified for a future lease sale, as listed on the currently 
approved OCS leasing schedule, you must complete all drilling 
activities and submit the data and information to the Regional Director 
at least 60 days before the first day of the month in which MMS 
schedules the lease sale. However, the Regional Director may extend 
your permit duration to allow you to complete drilling activities and 
submit data and information if the extension is in the national 
interest.
    (c) Group participation in test drilling. MMS encourages group 
participation for deep stratigraphic tests.
    (1) Purpose of group participation. The purpose is to minimize 
duplicative

[[Page 67288]]

G&G activities involving drilling into the seabed of the OCS.
    (2) Providing opportunity for participation in a deep stratigraphic 
test. When you propose to drill a deep stratigraphic test, you must 
give all interested persons an opportunity to participate in the test 
drilling through a signed agreement on a cost-sharing basis. You may 
include a penalty for late participation of not more than 100 percent 
of the cost to each original participant in addition to the original 
share cost.
    (i) The participants must assess and distribute late participation 
penalties in accordance with the terms of the agreement.
    (ii) For a significant hydrocarbon occurrence that the Regional 
Director announces to the public, the penalty for subsequent late 
participants may be raised to not more than 300 percent of the cost of 
each original participant in addition to the original share cost.
    (3) Providing opportunity for participation in a shallow test 
drilling project. When you apply to conduct shallow test drilling 
activities, you must, if ordered by the Regional Director or required 
by the permit, give all interested persons an opportunity to 
participate in the test activity on a cost-sharing basis. You may 
include a penalty provision for late participation of not more than 50 
percent of the cost to each original participant in addition to the 
original share cost.
    (4) Procedures for group participation in drilling activities. You 
must:
    (i) Publish a summary statement that describes the approved 
activity in a relevant trade publication;
    (ii) Forward a copy of the published statement to the Regional 
Director;
    (iii) Allow at least 30 days from the summary statement publication 
date for other persons to join as original participants;
    (iv) Compute the estimated cost by dividing the estimated total 
cost of the program by the number of original participants; and
    (v) Furnish the Regional Director with a complete list of all 
participants before starting operations, or at the end of the 
advertising period if you begin operations before the advertising 
period is over. The names of any subsequent or late participants must 
also be furnished to the Regional Director.
    (5) Changes to the original application for test drilling. If you 
propose changes to the original application and the Regional Director 
determines that the changes are significant, the Regional Director will 
require you to publish the changes for an additional 30 days to give 
other persons a chance to join as original participants.
    (d) Bonding requirements. You must submit a bond under this part 
before you may start a deep stratigraphic test.
    (1) Before MMS issues a permit authorizing the drilling of a deep 
stratigraphic test, you must either:
    (i) Furnish to MMS a bond of not less than $200,000 that guarantees 
compliance with all the terms and conditions of the permit; or
    (ii) Maintain a $1 million bond that guarantees compliance with all 
the terms and conditions of the permit you hold for the OCS area where 
you propose to drill.
    (2) You must provide additional security to MMS if the Regional 
Director determines that it is necessary for the permit or area.
    (3) The Regional Director may require you to provide a bond, in an 
amount the Regional Director prescribes, before authorizing you to 
drill a shallow test well.
    (4) Your bond must be on a form approved by the Associate Director 
for Offshore Minerals Management.


Sec. 251.8  Inspection and reporting requirements for activities under 
a permit.

    (a) Inspection of permit activities. You must allow MMS 
representatives to inspect your exploration or scientific research 
activities under a permit. They will determine whether operations are 
adversely affecting the environment, aquatic life, archaeological 
resources, or other uses of the area. MMS will reimburse you for food, 
quarters, and transportation that you provide for MMS representatives 
if you send in your reimbursement request to the Region that issued the 
permit within 90 days of the inspection.
    (b) Approval for modifications. Before you begin modified 
operations, you must submit a written request describing the 
modifications and receive the Regional Director's oral or written 
approval. If circumstances preclude a written request, you must make an 
oral request and follow up in writing.
    (c) Reports. (1) You must submit status reports on a schedule 
specified in the permit and include a daily log of operations.
    (2) You must submit a final report of exploration or scientific 
research activities under a permit within 30 days after the completion 
of acquisition activities under the permit. You may combine the final 
report with the last status report and must include each of the 
following:
    (i) A description of the work performed.
    (ii) Charts, maps, plats, and digital navigational data in a format 
specified by the Regional Director, showing the areas and blocks in 
which any exploration or permitted scientific research activities were 
conducted. Identify the lines of geophysical traverses and their 
locations including a reference sufficient to identify the data 
produced during each activity.
    (iii) The dates on which you conducted the actual exploration or 
scientific research activities.
    (iv) A summary of any:
    (A) Hydrocarbon or sulphur occurrences encountered;
    (B) Environmental hazards; and
    (C) Adverse effects of the exploration or scientific research 
activities on the environment, aquatic life, archaeological resources, 
or other uses of the area in which the activities were conducted.
    (v) Other descriptions of the activities conducted as specified by 
the Regional Director.


Sec. 251.9  Temporarily stopping, canceling, or relinquishing 
activities approved under a permit.

    (a) MMS may temporarily stop exploration or scientific research 
activities under a permit when the Regional Director determines that:
    (1) Activities pose a threat of serious, irreparable, or immediate 
harm. This includes damage to life (including fish and other aquatic 
life), property, any mineral deposit (in areas leased or not leased), 
to the marine, coastal, or human environment, or to an archaeological 
resource;
    (2) You failed to comply with any applicable law, regulation, 
order, or provision of the permit. This would include MMS' required 
submission of reports, well records or logs, and G&G data and 
information within the time specified; or
    (3) Stopping the activities is in the interest of national security 
or defense.
    (b) Procedures to temporarily stop activities. (1) The Regional 
Director will advise you either orally or in writing. MMS will confirm 
an oral notification in writing and deliver all written notifications 
by courier or certified or registered mail. You must halt all 
activities under a permit as soon as you receive an oral or written 
notification.
    (2) The Regional Director will advise you when you may start your 
permit activities again.
    (c) Procedure to cancel or relinquish a permit. The Regional 
Director may cancel, or a permittee may relinquish, a permit at any 
time.
    (1) If MMS cancels your permit, the Regional Director will advise 
you by certified or registered mail 30 days before the cancellation 
date and will state the reason.

[[Page 67289]]

    (2) You may relinquish the permit by advising the Regional Director 
by certified or registered mail 30 days in advance.
    (3) After MMS cancels your permit or you relinquish it, you are 
still responsible for proper abandonment of any drill sites in 
accordance with the requirements of Sec. 251.7(b)(8). You must also 
comply with all other obligations specified in this part or in the 
permit.


Sec. 251.10  Penalties and appeals.

    (a) Penalties for noncompliance under a permit issued by MMS. You 
are subject to the penalty provisions of: (1) Section 24 of the Act (43 
U.S.C. 1350); and (2) The procedures contained in 30 CFR part 250, 
subpart N, for noncompliance with: (i) Any provision of the Act; (ii) 
Any provision of a G&G or drilling permit; or (iii) Any regulation or 
order issued under the Act.
    (b) Penalties under other laws and regulations. The penalties 
prescribed in this section are in addition to any other penalty imposed 
by any other law or regulation.
    (c) Procedures to appeal orders or decisions MMS issues. You may 
appeal any orders or decisions that MMS issues under the regulations in 
this part by referring to 30 CFR part 290. When you file an appeal with 
the Director, you must continue to follow all requirements for 
compliance with an order or decision other than payment of a civil 
penalty.


Sec. 251.11  Submission, inspection, and selection of geological data 
and information collected under a permit and processed by permittees or 
third parties.

    (a) Availability of geological data and information collected under 
a permit. (1) You must notify the Regional Director, in writing, when 
you complete the initial analysis, processing, or interpretation of any 
geological data and information. Initial analysis and processing are 
the stages of analysis or processing where the data and information 
first become available for in-house interpretation by the permittee, or 
become available commercially to third parties via sale, trade, license 
agreement, or other means.
    (2) The Regional Director may ask if you have further analyzed, 
processed, or interpreted any geological data and information. When so 
asked, you must respond to MMS in writing within 30 days.
    (b) Submission, inspection, and selection of geological data and 
information. The Regional Director may request the permittee or third 
party to submit the analyzed, processed, and interpreted geologic data 
and information for inspection and/or permanent retention by MMS. The 
data and information must be submitted within 30 days after such 
request.
    (c) Requirements for submission of geological data and information 
collected under a permit. Unless the Regional Director specifies 
otherwise, geological data and information must include:
    (1) An accurate and complete record of all geological (including 
geochemical) data and information describing each operation of 
analysis, processing, and interpretation;
    (2) Paleontological reports identifying microscopic fossils by 
depth, including the reference datum to which paleontological sample 
depths are related and, if the Regional Director requests, washed 
samples that you maintain for paleontological determinations;
    (3) Copies of well logs or charts in a digital format, if 
available;
    (4) Results and data obtained from formation fluid tests;
    (5) Analyses of core or bottom samples and/or a representative cut 
or split of the core or bottom sample;
    (6) Detailed descriptions of any hydrocarbons or hazardous 
conditions encountered during operations, including near losses of well 
control, abnormal geopressures, and losses of circulation; and
    (7) Other geological data and information that the Regional 
Director may specify.
    (d) Obligations when geological data and information collected 
under permit are obtained by a third party. A third party may obtain 
geological data and information from a permittee, or from another third 
party, by sale, trade, license agreement, or other means. If this 
happens:
    (1) The third party recipient of the data and information assumes 
the obligations under this section, except for the notification 
provisions of paragraph (a)(1), and is subject to the penalty 
provisions of 30 CFR part 250, subpart N; and
    (2) A permittee or third party that sells, trades, licenses, or 
otherwise provides data and information to a third party must advise 
the recipient, in writing, that accepting these obligations is a 
condition precedent of the sale, trade, license, or other agreement; 
and
    (3) Except for license agreements, a permittee or third party that 
sells, trades, or otherwise provides data and information to a third 
party must advise the Regional Director, in writing and within 30 days, 
of the sale, trade, or other agreement, including the identity of the 
recipient of the data and information; or
    (4) For license agreements a permittee or third party that licenses 
data and information to a third party must, within 30 days of a request 
by the Regional Director, advise the Regional Director, in writing, of 
the license agreement, including the identity of the recipient of the 
data and information.


Sec. 251.12  Submission, inspection, and selection of geophysical data 
and information collected under a permit and processed by permittees or 
third parties.

    (a) Availability of geophysical data and information collected 
under a permit. (1) You must notify the Regional Director, in writing, 
when you complete the initial processing and interpretation of any 
geophysical data and information. Initial processing is the stage of 
processing where the data and information become available for in-house 
interpretation by the permittee, or become available commercially to 
third parties via sale, trade, license agreement, or other means.
    (2) The Regional Director may ask if you have further processed or 
interpreted any geophysical data and information. When so asked, you 
must respond to MMS in writing within 30 days.
    (b) Submission, inspection and selection of geophysical data and 
information collected under a permit. The Regional Director may request 
that the permittee or third party submit geophysical data and 
information before making a final selection for retention. MMS 
representatives may inspect and select the data and information on your 
premises, or the Regional Director can request delivery of the data and 
information to the appropriate MMS regional office for review.
    (1) You must submit the geophysical data and information within 30 
days of receiving the request, unless the Regional Director extends the 
delivery time.
    (2) At any time before final selection, the Regional Director may 
return any or all geophysical data and information following review. 
You will be notified in writing of all or portions of those data the 
Regional Director decides to retain.
    (c) Requirements for submission of geophysical data and information 
collected under a permit. Unless the Regional Director specifies 
otherwise, you must include:
    (1) An accurate and complete record of each geophysical survey 
conducted under the permit, including digital navigational data and 
final location maps;

[[Page 67290]]

    (2) All seismic data collected under a permit presented in a format 
and of a quality suitable for processing;
    (3) Processed geophysical information derived from seismic data 
with extraneous signals and interference removed, presented in a 
quality format suitable for interpretive evaluation, reflecting state-
of-the-art processing techniques; and
    (4) Other geophysical data, processed geophysical information, and 
interpreted geophysical information including, but not limited to, 
shallow and deep subbottom profiles, bathymetry, sidescan sonar, 
gravity and magnetic surveys, and special studies such as refraction 
and velocity surveys.
    (d) Obligations when geophysical data and information collected 
under a permit are obtained by a third party. A third party may obtain 
geophysical data, processed geophysical information, or interpreted 
geophysical information from a permittee, or from another third party, 
by sale, trade, license agreement, or other means. If this happens:
    (1) The third party recipient of the data and information assumes 
the obligations under this section, except for the notification 
provisions of paragraph (a)(1), and is subject to the penalty 
provisions of 30 CFR part 250, subpart N; and
    (2) A permittee or third party that sells, trades, licenses, or 
otherwise provides data and information to a third party must advise 
the recipient, in writing, that accepting these obligations is a 
condition precedent of the sale, trade, license, or other agreement; 
and
    (3) Except for license agreements, a permittee or third party that 
sells, trades, or otherwise provides data and information to a third 
party must advise the Regional Director, in writing and within 30 days, 
of the sale, trade, or other agreement, including the identity of the 
recipient of the data and information; or
    (4) For license agreements, a permittee or third party that 
licenses data and information to a third party must, within 30 days of 
a request by the Regional Director, advise the Regional Director, in 
writing, of the license agreement, including the identity of the 
recipient of the data and information.


Sec. 251.13  Reimbursement for the costs of reproducing data and 
information and certain processing costs.

    (a) MMS will reimburse you or a third party for reasonable costs of 
reproducing data and information that the Regional Director requests 
if:
    (1) You deliver G&G data and information to MMS for the Regional 
Director to inspect or select and retain (according to Secs. 251.11 or 
251.12 );
    (2) MMS receives your request for reimbursement and the Regional 
Director determines that the requested reimbursement is proper; and
    (3) The cost is at your lowest rate (or a third party's) or at the 
lowest commercial rate established in the area, whichever is less.
    (b) MMS will reimburse you or the third party for the reasonable 
costs of processing geophysical information (which does not include 
cost of data acquisition):
    (1) If, at the request of the Regional Director, you processed the 
geophysical data or information in a form or manner other than that 
used in the normal conduct of business; or
    (2) If you collected the information under a permit that MMS issued 
to you before October 1, 1985, and the Regional Director requests and 
retains the information.
    (c) When you request reimbursement, you must identify reproduction 
and processing costs separately from acquisition costs.
    (d) MMS will not reimburse you or a third party for data 
acquisition costs or for the costs of analyzing or processing 
geological information or interpreting geological or geophysical 
information.


Sec. 251.14  Protecting and disclosing data and information submitted 
to MMS under a permit.

    (a) Disclosure of data and information to the public by MMS. (1) In 
making data and information available to the public, the Regional 
Director will follow the applicable requirements of:
    (i) The Freedom of Information Act (5 U.S.C. 552);
    (ii) The implementing regulations at 43 CFR part 2;
    (iii) The Act; and
    (iv) The regulations at 30 CFR parts 250 and 252.
    (2) Except as specified in this section or in 30 CFR parts 250 and 
252, if the Regional Director determines any data or information is 
exempt from public disclosure under paragraph (a) of this section, MMS 
will not provide the data and information to any State or to the 
executive of any local government or to the public, unless you and all 
third parties agree to the disclosure.
    (3) MMS will keep confidential the identity of third party 
recipients of data and information collected under a permit. MMS will 
not release the identity unless you and the third parties agree to the 
disclosure.
    (4) When you detect any significant hydrocarbon occurrences or 
environmental hazards on unleased lands during drilling operations, the 
Regional Director will immediately issue a public announcement. The 
announcement must further the national interest, but without unduly 
damaging your competitive position.
    (b) Timetable for release of G&G data and information that MMS 
acquires. MMS will release data and information that you or a third 
party submits and MMS retains, in accordance with paragraphs (b)(1) and 
(b)(2) of this section.
    (1) If the data and information are not related to a deep 
stratigraphic test, MMS will release them to the public in accordance 
with the following table:

------------------------------------------------------------------------
  If you or a third party submit and MMS     The Regional Director will 
                  retains                    disclose them to the public
------------------------------------------------------------------------
Geological data and information...........  10 years after issuing the  
                                             permit.                    
Geophysical data..........................  50 years after you or a     
                                             third party submit the     
                                             data.                      
Geophysical information...................  25 years after you or a     
                                             third party submit the     
                                             information.               
------------------------------------------------------------------------

    (2) If the data and information are related to a deep stratigraphic 
test, MMS will release them to the public at the earlier of the 
following times:
    (i) Twenty-five years after you complete the test; or
    (ii) If a lease sale is held after you complete a test well, 60 
calendar days after MMS issues the first lease, any portion of which is 
located within 50 geographic miles (92.7 kilometers) of the test.
    (c) Procedure that MMS follows to disclose acquired data and 
information to a contractor for reproduction, processing, and 
interpretation.
    (1) When practical, the Regional Director will advise the person 
who submitted data and information under Secs. 251.11 or 251.12 of the 
intent to disclose the data or information to an independent contractor 
or agent.
    (2) The person so notified will have at least 5 working days to 
comment on the action.
    (3) When the Regional Director advises the person who submitted the 
data and information, all other owners of the data or information will 
be considered to have been so notified.
    (4) Before disclosure, the contractor or agent must sign a written 
commitment not to sell, trade, license, or disclose data or information 
to anyone without the Regional Director's consent.
    (d) Sharing data and information with coastal States. (1) When MMS 
solicits nominations for leasing lands located within 3 geographic 
miles (5.6

[[Page 67291]]

kilometers) of the seaward boundary of any coastal State, the Regional 
Director, in accordance with 30 CFR 252.7 (a)(4) and (b) and 
subsections 8(g) and 26(e) of the Act (43 U.S.C. 1337(g) and 1352(e)), 
will provide the Governor with:
    (i) All information on the geographical, geological, and ecological 
characteristics of the areas and regions MMS proposes to offer for 
lease;
    (ii) An estimate of the oil and gas reserves in the areas proposed 
for leasing; and
    (iii) An identification of any field, geological structure, or trap 
on the OCS within 3 geographic miles (5.6 kilometers) of the seaward 
boundary of the State.
    (2) After receiving nominations for leasing an area of the OCS 
within 3 geographic miles of the seaward boundary of any coastal State, 
MMS will carry out a tentative area identification according to 30 CFR 
part 256, subparts D and E. At that time, the Regional Director will 
consult with the Governor to determine whether any tracts further 
considered for leasing may contain any oil or gas reservoirs that 
underlie both the OCS and lands subject to the jurisdiction of the 
State.
    (3) Before a sale, if a Governor requests, the Regional Director, 
in accordance with 30 CFR 252.7(a)(4) and (b) and sections 8(g) and 
26(e) of the Act (43 U.S.C. 1337(g) and 1352(e)), will share with the 
Governor information that identifies potential and/or proven common 
hydrocarbon bearing areas within 3 geographic miles of the seaward 
boundary of that State.
    (4) Information received and knowledge gained by a State official 
under paragraph (d) of this section is subject to applicable 
confidentiality requirements of:
    (i) The Act; and
    (ii) The regulations at 30 CFR parts 250, 251, and 252.


Sec. 251.15  Authority for information collection.

    (a) The Office of Management and Budget has approved the 
information collection requirements in this part under 44 U.S.C. 3501 
et seq. and assigned OMB control number 1010-0048. The title of this 
information collection is ``30 CFR Part 251, Geological and Geophysical 
(G&G) Explorations of the OCS.''
    (b) We may not conduct or sponsor, and you are not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number.
    (c) We use the information collected under this part to:
    (1) Evaluate permit applications and monitor scientific research 
activities for environmental and safety reasons.
    (2) Determine that explorations do not harm resources, result in 
pollution, create hazardous or unsafe conditions, or interfere with 
other users in the area.
    (3) Approve reimbursement of certain expenses.
    (4) Monitor the progress and activities carried out under an OCS 
G&G permit.
    (5) Inspect and select G&G data and information collected under an 
OCS G&G permit.
    (d) Respondents are Federal OCS permittees and Notice filers. 
Responses are mandatory or are required to obtain or retain a benefit. 
We will protect information considered proprietary under applicable law 
and under regulations at Sec. 251.14 and part 250 of this chapter.
    (e) Send comments regarding any aspect of the collection of 
information under this part, including suggestions for reducing the 
burden, to the Information Collection Clearance Officer, Minerals 
Management Service, Mail Stop 4230, 1849 C Street, N.W., Washington, 
D.C. 20240; and to the Office of Information and Regulatory Affairs, 
Office of Management and Budget, Attention: Desk Officer for the 
Department of the Interior (1010-0048), 725 17th Street, N.W., 
Washington, D.C. 20503.

[FR Doc. 97-33530 Filed 12-23-97; 8:45 am]
BILLING CODE 4310-MR-P