[Federal Register Volume 65, Number 144 (Wednesday, July 26, 2000)]
[Rules and Regulations]
[Pages 45859-45873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18498]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 270, 375 and 381

[Docket No. RM00-6-000; Order No. 616]


Well Category Determinations

Issued July 14, 2000.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final Rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
amending its regulations to reinstate provisions for well category 
determinations for certain categories of high-cost gas under NGPA 
section 107. An NGPA determination will enable such gas to be eligible 
for a tax credit under Section 29 of the Internal Revenue Code (Section 
29 tax credit). The final Rule extends the provisions to all wells, and 
tight formation areas that could qualify for the Section 29 tax credit.

EFFECTIVE DATE: This rule is effective September 25, 2000.

FOR FURTHER INFORMATION CONTACT:
Marilyn Rand (Technical Information), Office of Pipeline Regulation, 
888 First Street, NE., Washington, DC 20426, (202) 208-0444.
Jacob Silverman (Advisory Attorney), Office of the General Counsel, 888 
First Street, NE., Washington, D.C. 20426, (202) 208-2078.

SUPPLEMENTARY INFORMATION:
Before Commissioners: James J. Hoecker, Chairman; William L. Massey, 
Linda Breathitt, and Curt Hebert, Jr.

[[Page 45860]]

Order No. 616, Final Rule, issued July 14, 2000.

I. Introduction

    The Federal Energy Regulatory Commission (Commission) is amending 
its regulations to reinstate provisions for making well category 
determinations under section 503 of the Natural Gas Policy Act of 1978 
(NGPA). In a Notice of Proposed Rulemaking (NOPR) issued on January 27, 
2000,\1\ the Commission proposed to reinstate well determination 
procedures for certain categories of high-cost gas under NGPA section 
107. An NGPA determination will enable such gas to be eligible for a 
tax credit under Section 29 of the Internal Revenue Code (Section 29 
tax credit). The NOPR specifically proposed to limit the availability 
of the reinstated procedures to determinations on post-January 1, 1993 
recompletions in wells drilled after December 31, 1979, but before 
January 1, 1993. The Commission also did not propose any regulations 
that would allow a jurisdictional agency to designate new tight 
formations. The Final Rule extends the provisions to all wells spudded 
before January 1, 1993, and recompletions both before and after that 
date that could qualify for the Section 29 tax credit, and provides for 
the designation of new tight formations.
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    \1\ 65 FR 6048 (Feb. 8, 2000), FERC Stats.& Regs., Proposed 
Regulations para. 32,549 (Jan. 27, 2000).
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II. Background

    Section 29 of the Internal Revenue Code, as amended by the Revenue 
Reconciliation Act of 1990, allows taxpayers to claim a tax credit for 
certain qualified fuels which (1) are produced from wells drilled after 
December 31, 1979, and before January 1, 1993,\2\ and (2) are sold 
before January 1, 2003. The qualified fuels include high cost gas as 
defined in NGPA section 107 (c)(2)-(4) (gas produced from geopresssured 
brine, coal seams and Devonian shale), as well as some gas the 
Commission defined as tight formation gas pursuant to NGPA section 
107(c)(5).
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    \2\ For purposes of the tax credit, the initial drilling had to 
be started after January 1, 1980, and this date was never changed. 
Thus, this starting date is assumed throughout.
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    Section 29(c)(2)(A) of the Internal Revenue Code also provides that 
the determination whether gas falls into a category qualifying for the 
tax credit ``shall be made in accordance with section 503 of the 
(NGPA).'' NGPA section 503 set forth the procedures used for 
determining whether gas qualified for the various categories of gas 
entitled to the higher ceiling prices established by the NGPA as 
incentives for increased production. These included section 107(c) 
``high-cost natural gas.'' Under NGPA section 503, the agency having 
regulatory jurisdiction with respect to the production of the natural 
gas in question (the jurisdictional agency) \3\ made the initial 
determination, and submitted it to the Commission. The Commission could 
either affirm, reverse, remand, make a preliminary finding on, or 
simply take no action, regarding the agency's determination. If the 
Commission took no action within 45 days after receipt of the agency's 
determination, that determination became final. Judicial review was 
available under section 503 only if the Commission remanded or reversed 
the determination.
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    \3\ That agency may be either a State or Federal agency.
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    The Wellhead Decontrol Act of 1989 (Decontrol Act) \4\ decontrolled 
all wellhead sales of natural gas by January 1, 1993, and repealed NGPA 
section 503 as of that date. After decontrol, the Commission's policy 
was not to accept determinations for any post-January 1, 1993 drilling 
activity. The Commission, however, continued to process well category 
determinations it received from jurisdictional agencies through April 
30, 1994, for wells spudded before January 1, 1993, and pre-January 1, 
1993 recompletions. The Commission explained that the reason for 
continuing to review those agency determinations for a transition 
period, was that, while NGPA section 107 well category determinations 
no longer had any price consequence, they were necessary to obtain the 
Section 29 tax credit.
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    \4\ Pub. L. 101-60; 103 Stat. 157 (1989).
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    As discussed above, section 29 of the Code provides that, in order 
to qualify for the tax credit, gas must be produced from a well drilled 
before January 1, 1993, the same date the last remaining NGPA ceiling 
prices were eliminated and NGPA section 503 was repealed. When the 
Commission decided not to process well determination requests for wells 
recompleted after December 31, 1992, it was assumed that the tax credit 
would not be available with respect to any drilling activity after that 
date, and therefore there was no need to continue the well category 
determination procedures to enable producers to qualify for the tax 
credit for such drilling activity. However, on August 16, 1993, the 
Internal Revenue Service (IRS), which administers the Section 29 tax 
credit, issued Revenue Ruling 93-54,\5\ clarifying the provision of 
section 29 that states that gas must be produced from a well drilled 
before January 1, 1993. The IRS held that, while the initial drilling 
of a well had to have been performed before January 1, 1993, tax 
credits are available for non-conventional fuels produced through a 
post-January 1, 1993 recompletion in the well, as long as the 
recompletion does not involve additional drilling to deepen or extend 
the well.
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    \5\ 1993-2 CB.3 (1993).
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    After the IRS Revenue Ruling 93-54, the Commission received 
jurisdictional agency determinations for recompletions commenced after 
January 1, 1993. However, the Commission refused to process them since 
it appeared that the IRS would permit the Section 29 credit for such 
recompletions without any Commission action. On July 29, 1994, the 
Commission issued Order No. 567,\6\ which deleted regulations that were 
no longer required due to the decontrol of wellhead sales of natural 
gas, including regulations which set forth eligibility requirements, 
filing requirements, and the procedures for making well determinations 
under section 503 of the NGPA.
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    \6\ Removal of Outdated Regulations Pertaining to the Sales of 
Natural Gas Production, 59 FR 40240, FERC Stats. & Regs., 
Regulations Preambles 1991-1996 para. 30,999 (1994), Order on 
Rehearing, 69 FERC Paras.  61,055 and 61,042 (1994). A petition to 
review the deletion of other provisions in these regulations was 
denied by the Court of Appeals in Hadson Gas System, Inc. v. FERC, 
75 F.3d 680 (D.C. Cir. 1996).
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    Thus matters stood from 1994 until the True Oil decision changed 
the legal landscape. In 1999 the United States Court of Appeals for the 
Tenth Circuit held in True Oil Co. v. Commissioner of Internal Revenue 
\7\ (True Oil) that, in order to obtain the section 29 tax credit, 
there must be a formal determination under the procedures provided by 
NGPA section 503 that the gas is high cost gas.
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    \7\ 170 F.3d 1294 (10th Cir. 1999).
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A. The NOPR

    In the NOPR the Commission proposed to accept jurisdictional agency 
determinations for those post-January 1, 1993 recompletions which 
satisfy the IRS' definition under Revenue Ruling 93-54, including that 
the recompletion does not involve additional drilling to deepen or 
extend the well. For this purpose, the Commission proposed to reinstate 
regulations necessary to (1) Define the categories of high cost gas 
eligible for the tax credit and (2) provide procedures for 
jurisdictional agencies to file their determinations and the Commission 
to review those determinations.
    The Commission proposed not to accept determinations from 
jurisdictional agencies with respect to either initial completions in 
wells

[[Page 45861]]

spudded before January 1, 1993, or any pre-1993 recompletions. Thus, 
the well category determination procedures the Commission proposed to 
reinstate in Sec. 270.201 would be limited to recompletions commenced 
after January 1, 1993, in wells initially drilled after December 31, 
1979, but before January 1, 1993. This reflected the Commission's 
decision to limit the determination process to correct the situation 
caused by the True Oil decision, but parties were invited to comment on 
this matter. The Commission proposed to accept determinations for 
recompletions in tight formations, coal seams, and Devonian Shale.\8\ 
The Commission also proposed only to accept jurisdictional agency 
determinations for qualifying recompletions in already designated tight 
formations, and would not allow a jurisdictional agency to designate 
additional tight formations. The NOPR stated that the Commission must 
rely upon the jurisdictional agencies to develop the full record in 
these proceedings, and the Commission would limit its role to reviewing 
initial determinations made by the jurisdictional agencies. 
Accordingly, the Commission requested comments from the jurisdictional 
agencies whether they will make initial determinations under NGPA 
section 503, if the proposed rule is adopted.
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    \8\ The NOPR stated that it did not include a definition for gas 
produced from geopressured brine since past experience has shown 
that there is no gas likely to qualify for this category given the 
Commission's definition of geopressured brine and the current state 
of technology. The NOPR requested comments on this matter, but none 
was filed.
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    In summary, the Commission proposed to reinstate those portions of 
its prior regulations, with appropriate modifications, that are 
necessary to allow producers to obtain well category determinations 
solely for tax credit purposes. In general, the proposed regulations 
retain the definitions, the filing and notice requirements, and the 
review procedures that the Commission promulgated prior to the 
termination of the regulations due to the Decontrol Act.\9\
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    \9\ The substantive rulings that the Commission made previously 
concerning well determinations and the qualification under these 
NGPA section 107 category would also continue to govern.
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B. The Comments

    The Commission received comments from over 40 parties, as set forth 
in the Appendix, including comments by the United States Department of 
Energy (DOE), fourteen state jurisdictional agencies,\10\ and the 
United States Department of the Interior, Bureau of Land Management 
(BLM). All commentors, without exception, support the reinstatement of 
the NGPA procedures. Most of the commentors, including DOE and the 
jurisdictional agencies, urge the Commission to extend the 
determination procedures to all wells spudded before January 1, 1993, 
and pre-1993 recompletions so that all gas eligible for a tax credit 
may receive a determination. In addition, several commentors, assert 
that the Commission should allow jurisdictional agencies to designate 
new tight formation areas.
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    \10\ The jurisdictional agencies were from the following states: 
Alabama, Colorado, Kansas, Kentucky, Louisiana, Michigan, New 
Mexico, New York, Ohio, Oklahoma, Texas, Virginia, West Virginia, 
and Wyoming.
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    In response to the NOPR's question, the jurisdictional agencies 
filing comments stated they would make the initial determinations.\11\ 
Several jurisdictional agencies that previously made NGPA section 107 
determinations did not file comments.\12\ In its comments, BLM stated 
that it does not have the staffing and budgetary resources to assume 
the additional workload that would result if the Commission extends the 
procedures to all eligible wells and permits jurisdictional agencies to 
designate new tight formations. Some commentors urged the Commission to 
adopt revised procedures to ease the burden of implementing the 
reinstated review process.
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    \11\ Michigan simply stated it is willing to make the necessary 
determinations on post-January 1, 1993 recompletions.
    \12\ Those not filing comments were Arkansas, California, 
Illinois, Indiana, Mississippi, Montana, Nebraska, North Dakota, 
Pennsylvania, South Dakota, Tennessee, and Utah.
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III. Discussion

    In this final rule, the Commission is reinstating its well 
determination review procedures in order to allow producers to obtain 
the Section 29 tax credit. This is consistent with Congress' desire to 
encourage, enhance, and expand the United States' natural gas supply 
base by allowing legitimately qualified producers to receive a tax 
credit associated with developing and producing gas from formations and 
wells that otherwise might not have been available to supply consumers. 
In the NOPR, the Commission explained the legal authority for 
reinstating the well determination review procedures to allow producers 
to obtain the Section 29 tax credit despite the repeal of NGPA section 
503 by the Wellhead Decontrol Act. This authority has not been 
questioned by any commentor, and all commentors support reinstatement 
of the well determination review procedures. However, the extent of the 
review process was subject to extensive comment, which the Commission 
will now address.

1. Should the review process be limited to post-January 1, 1993 
recompletions?

    In the NOPR the Commission proposed not to accept determinations 
with respect to either initial completions in wells spudded before 
January 1, 1993, or any pre-1993 recompletions. The Commission stated 
that in Order No. 539, the Commission established deadlines for filing 
applications involving wells that were spudded and/or recompleted prior 
to January 1, 1993, and the time has long passed when those 
applications should have been filed. Also, the NOPR stated that in a 
petition filed by a number of producers requesting the Commission to 
reinstate the NGPA section 503 well category procedures, the producers 
had not requested that the Commission accept determinations with regard 
to wells spudded or recompleted before January 1, 1993.
    In their comments, parties have urged that the proposal not be so 
limited. The commentors maintain that the reasons stated in the NOPR do 
not present a valid basis for limiting the review process to post-
January 1, 1993 recompletions. They assert that the fact that the 
deadline set by the Commission for submitting determinations for pre-
January 1, 1993 drilling activity has passed should not bar producers 
from seeking to obtain the tax credit. Moreover, they argue that there 
are many reasons why the Commission's April 1994 deadline for 
jurisdictional agencies to file determinations with respect to pre-
January 1, 1993 drilling activity may not have been met.
    Commentors state that the Order No. 539 deadlines were imposed 
because the Commission assumed that the Section 29 tax credit would not 
be available for wells originally drilled before January 1, 1993, that 
were recompleted after that date.\13\ Thus, the Commission had 
concluded that it needed to go out of the business of making well 
determinations by a time certain. Moreover, it was assumed that the 
fact that the Commission would not process well determinations did not 
mean that the Section 29 tax credit could not be obtained by the 
producer. Commentors assert that those reasons for the April 30, 1994 
deadline are no longer valid because the IRS in Revenue Ruling 93-54 
allowed certain

[[Page 45862]]

recompletions performed after January 1, 1993, to qualify for the tax 
credit, and True Oil requires the NGPA section 503 procedures to be 
followed to obtain the tax credit.
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    \13\ FERC Stats & Regs., Regulations Preamble 1991-1996 para. 
30, 940 n.41 at 30, 488.
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    Commentors also assert that there were a number of reasons 
producers did not meet the April 30, 1994 deadline established in the 
Order No. 539 series. They contend that there was some question at the 
time as to what the consequences were of not meeting the Commission's 
deadline. This was especially true after the IRS issued Revenue Ruling 
93-54, which permitted the tax credit for post-January 1, 1993 
recompletions. In addition, as DOE explained, there was a large amount 
of drilling activity which occurred prior to the close of the drilling 
window on December 31, 1992. This inevitably led to some oversights on 
the part of producers, or it simply made the deadline impossible to 
meet. In addition, subsequent purchasers of pre-1993 wells may not have 
been aware of the filing deadlines imposed by the Commission in Order 
No. 539.
    We explained in the NOPR, and no one has contested, that the 
Commission has continuing authority to process NGPA section 503 
determinations to allow producers to qualify for the Section 29 tax 
credit. In light of this authority, the Commission finds merit in 
commentors' request that the Commission reinstate the NGPA section 503 
well category determination procedure for most pre-January 1, 1993 
drilling activity, as well as post-January 1, 1993 recompletions, where 
necessary to allow a producer to qualify for the Section 29 tax credit. 
We will not reinstate the NGPA section 503 well category determination 
procedure for pre-January 1, 1980 completions because the gas produced 
from such completions is not eligible for the Section 29 tax credit.
    The Commission did not impose any deadline on filing requests for 
determinations, nor a deadline for submitting the determinations by the 
jurisdictional agency, until the decontrol of wellhead sales. The 
Commission then set deadlines only as a means of implementing the 
complete termination of the well category determination program. Now 
that the Commission is reinstating that program so that producers can 
obtain the Section 29 tax credit, there is no basis to decline to 
process well category determination for pre-January 1, 1993 drilling 
activity while processing determinations for post-January 1, 1993 
recompletion drilling activity. Section 29 allows a credit if the 
producer obtains the section 503 determination. The Commission has the 
authority to make the section 503 determination. Therefore, the 
Commission concludes it should process determinations for any well that 
could qualify for a Section 29 tax credit, regardless of when the 
drilling activity occurred, as long as it meets the requirements of 
section 29 of the Code. We will not reinstate the NGPA section 503 well 
category determination procedure for pre-January 1, 1980 completions 
because the gas produced from such completions is not eligible for the 
Section 29 tax credit.
    Accordingly, except for gas produced from a pre-January 1, 1980 
completion, the Commission will modify the proposed rule, and will 
apply the section 503 review process to wells drilled and spudded, and 
recompletions commenced prior to December 31, 1992, as well as to post-
January 1, 1993 recompletions.\14\
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    \14\ We note that a new determination will not be required for 
some recompletions involving Devonian shale gas if there is a prior 
determination covering the entire gross Devonian age stratigraphic 
interval penetrated by the wellbore. The Commission will view all 
natural gas produced from a well to have been previously qualified 
as Devonian shale production if: (1) The well previously received an 
affirmative Devonian shale determination that was not reversed or 
remanded by the Commission; and (2) that determination was based on 
a gamma ray index test for non-shale footage that spans the entire 
gross Devonian age stratigraphic interval. In such cases, the 
Commission sees no reason to re-affirm what has already been 
established, i.e., that any gas produced from the gross Devonian age 
stratigraphic interval penetrated by such well qualifies as natural 
gas produced from Devonian shale within the meaning of section 
107(c)(4) of the NGPA.
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2. Should The Designation of New Tight Formation Areas be Permitted?

    Before a specific well can obtain a tight formation determination, 
a portion of the formation into which the well is, or will be 
completed, must be designated as a tight formation by a jurisdictional 
agency, which determination is also subject to Commission review. After 
a field is designated as a tight formation, applications with respect 
to completions in specific wells in the designated tight formation can 
be filed.\15\
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    \15\ The Commission originally designated tight formation areas 
by rule making and listed approved tight formations in Sec. 271.703 
of the Commission's regulations, but after the decision in Williston 
Basin Interstate Pipeline Co. v. FERC, 816 F.2d 816 (D.C. Cir. 
1987), the Commission followed the procedures under NGPA section 
503.
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    In the NOPR, the Commission stated that the Commission was not 
proposing any regulations that would allow a jurisdictional agency to 
designate additional tight formations. The Commission explained that to 
permit the designation of additional tight formations would require the 
Commission to review extensive geologic data, which could place an 
undue burden on the Commission.\16\ In addition, the Commission noted 
that it appeared likely that most producing formations that qualify as 
tight formations have already been designated as such.
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    \16\ FERC Stats. & Regs. Proposed Regulations para. 32,549 at 
33,897.
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    A number of commentors, including two jurisdictional agencies, urge 
that the Commission should permit the designation of additional tight 
formation areas. They assert that the reasons stated in the NOPR for 
not doing so, do not justify denying the tax credit that producers 
would be entitled to from production in these areas.
    Commentors argue that, contrary to the contention that most tight 
formation areas have already been designated, there are numerous 
additional tight formation areas that could qualify for the tax credit. 
Specifically, Texas makes reference to proceedings in the State of 
Texas that resulted in 357 additional tight formation designations 
covering thousands of acres.
    Commentors also assert that the concern about placing an undue 
burden on the Commission does not justify denying producers the ability 
to obtain the tax credit that Congress provided for. Moreover, new and 
revised procedures could be adopted by the Commission to lessen the 
expected workload from the new filings.
    For the same reasons we have concluded to allow the review process 
for wells drilled and spudded, and recompletions commenced prior to 
December 31, 1992, as well as to the post-January 1, 1993 
recompletions, we will also permit the designation of new tight 
formations. As explained above, the Commission has been authorized to 
carry out the NGPA section 503 well category determination procedure so 
producers can obtain the section 29 tax credit for qualifying gas. 
Permitting the designation of new tight formations is consistent with, 
and furthers Congress' purpose in establishing the Section 29 tax 
credit to encourage domestic natural gas production.
    On balance, the Commission concludes that it should permit the 
designation of new tight formations. Therefore, the regulations are 
being amended to include procedures for designating new tight 
formations and the information required to support such designation. In 
its comments, BLM stated that permitting the designation of new tight 
formations would result in ``a substantial administrative burden'' to 
it.

[[Page 45863]]

The Commission will address this, and other procedural matters in the 
next section.

3. Procedural Matters

    Commission staff, by letter, notified all jurisdictional agencies 
that previously made determinations for gas that qualified for Section 
29 tax credits of the NOPR, and requested them to advise the Commission 
as to whether they would be willing to make determinations again. The 
fourteen jurisdictional agencies that filed comments, responded that 
they would make the determinations. Several other jurisdictional 
agencies that previously made Section 107 determinations did not 
respond to staff's letter. However, this will not preclude them from 
submitting determinations when this rule becomes effective.
    In addition, BLM indicated it would not have appropriate staff 
resources to make determinations if the determination procedures were 
expanded to include all wells and new tight formation areas. BLM 
suggests that the Commission could provide resources since the 
Commission proposes to collect a fee, or the industry could fund a 
position in BLM's office. BLM, also has proposed that the section 503 
procedures ``be radically streamlined to minimize the technical review 
process and jurisdictional agency involvement,'' and seems to suggest 
that the Commission use BLM's Automated Fluid Minerals Support System 
to make the determinations.
    The NOPR stated that NGPA section 503 requires the jurisdictional 
agencies to make an initial well category determination, unless, as 
permitted by section 503(c)(2), the Commission enters into an agreement 
with a State or Federal agency under which the Commission would make 
the determinations that would otherwise be made by that agency. The 
NOPR stated that the Commission intended not to exercise its discretion 
to enter into any such agreement \17\ because the Commission's role in 
the producing area has virtually been eliminated, and consequently the 
Commission's resources in this area have been substantially reduced.
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    \17\ FERC Statutes & Regulations, Proposed Regulations para. 
32,549 at 33,897.
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    In its comments, Equitable Production Company (Equitable) asserts 
that the Commission does not have the discretion to determine that it 
will not make determinations if the jurisdictional agencies decline to 
do so. The Commission disagrees, because NGPA section 503(c)(2) permits 
waiver of the jurisdictional agency's authority to make the initial 
determination only if the Commission agrees to enter into a written 
agreement with the jurisdictional agency wherein the Commission agrees 
to make the initial determination.\18\ Since the NGPA makes Commission 
performance of initial determinations contingent on the Commission's 
agreement to do so, the Commission clearly has the discretion to refuse 
to agree. Given its limited resources in this area, the Commission 
cannot undertake to perform the initial review of producer applications 
of well category determinations, and must rely on the jurisdictional 
agencies to perform this function. Accordingly, the Commission 
concludes that it will not accept applications for determinations from 
producers if the applicable jurisdictional agency has not agreed to 
make determinations.\19\ As to the BLM's concerns, BLM may wish to 
consider entering into an agreement with the applicable state 
jurisdictional agencies that would provide that the state 
jurisdictional agency will be responsible for determinations involving 
Federal lands in that state. The previous regulations provided for 
this, and the NOPR proposed to reinstate this provision. Further, the 
filing fee under the Commission's regulations does not preclude BLM 
from collecting a separate fee to recover its costs of processing the 
well determination applications.
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    \18\ The Joint Explanatory Statement of the Committee on 
Conference explained that waiver under section 503 (c)(2) will take 
place only ``if the Commission agrees'' to make the determination. I 
FERC Stats. & Regs. para. 3101 at 3142.
    \19\ The Commission did not enter into any such waiver agreement 
when the prior regulations were in effect.
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    The Commission has reviewed the coal seam, Devonian shale, and 
tight formation gas well certification requirements of the State of 
Texas Severance Tax Incentive for High Cost Gas program, as set forth 
under Secs. 3.101(e)(3), (4), and (5) of Railroad Commission Statewide 
Rule 101. We find those filing requirements provide virtually the same 
documentation and evidentiary support for those certifications that we 
are requiring for a coal seam gas, Devonian shale, or tight formation 
gas determination under the NGPA. Accordingly, Texas may utilize the 
documents and information filed pursuant to Railroad Commission Rule 
101 to satisfy the corresponding filing requirements for a well 
category determination under the NGPA. However, all applicants whose 
applications for determinations rely upon such documents and 
information must provide Texas with appropriate oath statements and 
Form 121 required under the NGPA regulations. Texas, in turn, must 
include this material with the notice of determination that Texas files 
with the Commission.
    Texas and the Producer Coalition propose significant procedural 
changes in the review of new tight formations. Texas notes that it has 
approved 357 tight formation designations since 1993 under its ``State 
of Texas Severance Tax Incentive for High Cost Gas program'' (under RRC 
Statewide Rule 101). In contrast, 172 tight formation designations in 
Texas were approved before 1993 under the NGPA procedures. Texas 
asserts the Commission should accept these area designations because 
the requirements under RRC Statewide Rule 101 are equivalent to the 
Commission's requirements for tight formations. Texas also asserts the 
Commission should accept any determinations it makes in the future 
under its Rule 101. The Producer Coalition urges the Commission to 
allow jurisdictional agencies to designate additional tight formations 
without Commission review.
    In order to qualify as a tight formation, a formation must meet 
guidelines for permeability and stabilized flow ratio. The Commission 
clarified these guidelines in Order No. 539.\20\ The Commission 
understands that in designating tight formations, Texas uses the 
geometric mean or median values to satisfy the 0.1 millidarcy (md) in-
situ permeability and maximum allowable pre-stimulation stabilized flow 
rate requirements under Texas' program. This conflicts with the 
Commission's use of the arithmetic mean to determine if formations meet 
the Order No. 539 guidelines for permeability and stabilized flow rates 
. The Commission found that using median or geometric mean averaging 
hides ``sweet spots'' which allows areas that do not meet the 
qualifications to be designated as tight formations. Accordingly, the 
Commission rejects Texas' proposal that the Commission accept Texas' 
designation of new tight formations under RRC Statewide Rule 101.
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    \20\ FERC Stats.& Regs., Regulations Preambles 1991-1996 para. 
30,940 (1992).
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    The Commission also rejects the Producer Coalition's suggestion 
that the Commission accept all tight formation designations by 
jurisdictional agencies without any Commission review. Therefore, the 
previously existing review process will be reinstated.
    Vastar Resources, Inc. (Vastar) a large independent oil and natural 
gas company, like most commentors,

[[Page 45864]]

requests the Commission to broaden the scope of the reinstated well 
determination process to include any and all wells that otherwise 
qualify for the section 29 tax credit, regardless of circumstances. 
However, its request goes beyond what other commentors have requested.
    First, it requests that a post-1992 replacement well should be 
included within the scope of the reinstated determination process. By 
replacement well, Vastar refers to the situation where a qualified 
section 29 well stops producing for mechanical reasons and cannot be 
economically sidetracked, and the producer may be able to drill a 
replacement well. On its face, the request is contrary to the statutory 
requirement that the well must be drilled or spudded before December 
31, 1992. The Commission is unaware of any I.R.S. ruling that such a 
``replacement'' well could receive the Section 29 tax credit. Thus, the 
``replacement'' well does not present the same situation as a post-
December 31, 1992 recompletion since the IRS has ruled on recompletions 
in Revenue Ruling 93-54. Vastar also requests the Commission to include 
wells drilled prior to 1993 where production did not begin prior to 
January 1, 1993. However, since the final rule expands the eligible 
class to all wells that could qualify for the Section 29 tax credit 
there is no need to make a special provision for this type of well.
    Finally, as we stated in the NOPR, since the Section 29 tax credit 
is now scheduled to end on December 31, 2002, the reinstatement of the 
well determination review procedures will remain effective until the 
later of June 30, 2003, or six months after the tax credit is no longer 
available for production from any well should Congress further extend 
the tax credit.

IV. Environmental Statement

    The Commission excludes certain actions not having a significant 
effect on the human environment from the requirement to prepare an 
environmental assessment or an environmental impact statement. Since 
the final rule reinstates regulations that were previously in effect, 
and does not substantially change the effect of the underlying 
legislation or the regulations being revised, it falls under the 
exclusion in para. 380.4 (a)(2)(ii) of the Commission's 
regulations.\21\ In the NOPR, the Commission expressed this view, and 
none of the comments questioned this position. Accordingly, no 
environmental consideration is necessary.
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    \21\ 18 CFR 380.4(a)(2)(ii).
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V. Information Collection Statement

    The Office of Management and Budget's (OMB) regulations in 5 CFR 
1320.11 require that it approve certain reporting and recordkeeping 
requirements (collections of information) imposed by an agency. Upon 
approval of a collection of information, OMB will assign an OMB control 
number and an expiration date. Respondents subject to the filing 
requirements of this Rule will not be penalized for failing to respond 
to these collections of information unless the collections of 
information display a valid OMB control number.
    The collections of information related to the subject of this final 
rule fall under FERC Form No. 121, Applications for Maximum Lawful 
Price under the Natural Gas Policy Act of 1978 (OMB Control No. 1902-
0038) and FERC-568 Well Category Determinations (OMB Control No. 1902-
0112). Under this Final Rule, the overall burden of filing will be 
increased as the Commission is expanding the number of wells that will 
be eligible for the Section 29 tax credit. Therefore, the Commission is 
revising its initial burden estimates as stated in the NOPR on the 
number of applications it anticipates it will receive from 1800 to 
2400. The Section 29 tax credit is scheduled to expire on December 31, 
2002.
    The burden estimates for complying with this final rule are as 
follows:

----------------------------------------------------------------------------------------------------------------
                                                                                                        Total
                       Data collection                           No. of       No. of     Hours per      annual
                                                              respondents   responses     response      hours
----------------------------------------------------------------------------------------------------------------
FERC Form 121...............................................         2400            1          .25          600
FERC-568....................................................         2400            1         6.01       14,424
----------------------------------------------------------------------------------------------------------------

The total annual hours for collection (including recordkeeping) is 
estimated to be: 15,024 hours.
The average annualized cost for all respondents is projected to be the 
following:

----------------------------------------------------------------------------------------------------------------
                                                           Annualized      Annualized costs
                   Data collection                      capital/start-up    (operations &     Total annualized
                                                             costs           maintenance)          costs
---------------------------------------------------------------------------------------------------------------
FERC Form 121........................................            $32,176              $0.00            $32,176
FERC-568.............................................            773,522               0.00            773,522
----------------------------------------------------------------------------------------------------------------

The total annualized costs for collection is estimated to be: $805,698. 
Cost per respondent = (Form 121, $13.41), (FERC-568, $ 322.00).
    The Commission received forty four comments on the proposed rule, 
but none on its reporting burden or cost estimates. The Commission's 
responses to the comments are being addressed elsewhere in this rule. 
Further, we note that, as required under OMB's regulations, the 
Commission submitted the NOPR for OMB review. OMB took no action on the 
NOPR. However, in response, OMB stated that the Commission should 
resubmit its information collection request when it takes final action.
    Interested persons may obtain information on the reporting 
requirements by contacting the Federal Energy Regulatory Commission, 
888 First Street, NE, Washington, DC 20426 [Attention: Michael Miller, 
Office of the Chief Information Officer, CI-1, Phone: (202) 208-1415, 
fax: (202) 208-2425, e-mail [email protected]] or send comments 
to the Office of Management and Budget [Attention: Desk Officer for the 
Federal Energy Regulatory Commission]. The Desk Officer can be reached 
at (202) 395-3087, fax: 395-7285.

VI. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires 
rulemakings to contain either a description and analysis of the effect 
that the proposed rule will have on small entities or a certification 
that the rule will not have

[[Page 45865]]

a significant economic impact on a substantial number of small 
entities.
    In Mid-Tex Elec. Coop. v. FERC, 773 F.2d 327 (D.C. Cir. 1985), the 
court found that Congress, in passing the RFA, intended agencies to 
limit their consideration ``to small entities that would be directly 
regulated'' by proposed rules. Id. at 342. The court further concluded 
that ``the relevant `economic impact' was the impact of compliance with 
the proposed rule on regulated small entities.'' Id. at 342.
    The final rule reinstates regulations that were previously in 
effect, and would enable entities to obtain Internal Revenue Code 
Section 29 tax credits. The Commission certifies that this proposed 
rule will not have a significant adverse economic impact upon a 
substantial number of small entities.

VII. Effective Date

    These regulations become effective September 25, 2000. The 
Commission has determined, with the concurrence of the Administrator of 
the Office of Information and Regulatory Affairs of OMB, that this rule 
is a ``major rule'' as defined in Section 251 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.\22\ The Commission will 
submit the rule to both houses of Congress and the Comptroller General 
prior to its publication in the Federal Register.
---------------------------------------------------------------------------

    \22\ 5 U.S.C. 804(2).
---------------------------------------------------------------------------

VIII. Document Availability

    In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through FERC's Home Page (http://www.ferc.fed.us) and in 
FERC's Public Reference Room during normal business hours (8:30 a.m. to 
5:00 p.m. Eastern time) at 888 First Street, NE, Room 2A, Washington, 
DC 20426.
    From FERC's Home Page on the Internet, this information is 
available in both the Commission Issuance Posting System (CIPS) and the 
Records and Information Management System (RIMS).
--CIPS provides access to the texts of formal documents issued by the 
Commission since November 14, 1994.
--CIPS can be accessed using the CIPS link or the Energy Information 
Online icon. The full text of this document will be available on CIPS 
in ASCII and WordPerfect 8.0 format for viewing, printing, and/or 
downloading.
--RIMS contains images of documents submitted to and issued by the 
Commission after November 16, 1981. Documents from November 1995 to the 
present can be viewed and printed from FERC's Home Page using the RIMS 
link or the Energy Information Online icon. Descriptions of documents 
back to November 16, 1981, are also available from RIMS-on-the-Web; 
requests for copies of these and other older documents should be 
submitted to the Public Reference Room.
    User assistance is available for RIMS, CIPS, and the Website during 
normal business hours from our Help line at (202) 208-2222 (E-Mail to 
[email protected]) or the Public Reference at (202) 208-1371 (E-
Mail to [email protected]).
    During normal business hours, documents can also be viewed and/or 
printed in FERC's Public Reference Room, where RIMS, CIPS, and the FERC 
Website are available. User assistance is also available.

List of Subjects

18 CFR. Part 270

    Natural gas, Price controls, Record and recordkeeping requirements.

18 CFR Part 375

    Authority delegations (Government agencies), Seals and insignia, 
Sunshine Act.

18 CFR Part 381

    Natural gas, Reporting and recordkeeping requirements.
    By the Commission.

Linwood A. Watson, Jr.,
Acting Secretary.

    In consideration of the foregoing, the Commission amends Chapter I, 
Title 18, of the Code of Federal Regulations, as follows:
    1. The heading of Subchapter H is revised and part 270 is added to 
read as follows:
Subchapter H--Procedures Governing Determinations for Tax Credit 
Purposes

PART 270--DETERMINATION PROCEDURES

Subpart A--General Definitions
Sec.
270.101   General definitions
Subpart B--Determinations by Jurisdictional Agencies
270.201   Applicability
270.202   Definition of determination
270.203   Determinations by jurisdictional agencies
270.204   Notice to the Commission
Subpart C--Requirements for Filing with Jurisdictional Agencies
270.301   General requirements
270.302   Occluded natural gas produced from coal seams
270.303   Natural gas produced from Devonian shale
270.304   Tight formation gas
270.305   Determination of tight formation areas
270.306   Devonian shale wells in Michigan
Subpart D--Identification of State and Federal Jurisdictional Agencies
270.401   Jurisdictional agency
Subpart E--Commission Review of Jurisdictional Agency Determinations
270.501   Publication of notice from jurisdictional agency
270.502   Commission review of final determinations
270.503   Protests to the Commission
270.504   Contents of protests to the Commission
270.505   Procedure for reopening determinations
270.506   Confidentiality

    Authority: 15 U.S.C. 717-717w, 3301 et. seq.; 42 U.S.C. 7101 et 
seq.; EO 12009, 3 CFR 1978 Comp., p. 142.

Subpart A--General Definitions


Sec. 270.101  General definitions.

    (a) NGPA definitions. Terms defined in the Natural Gas Policy Act 
of 1978 (NGPA) will have the same meaning for purposes of this 
subchapter as they have under the NGPA, unless further defined in this 
subchapter.
    (b) Subchapter H definitions. For purposes of this part:
    (1) NGPA means the Natural Gas Policy Act of 1978.
    (2) Surface location means the point on the Earth's surface from 
which drilling of a well is commenced except that in the case of a well 
drilled in permanent surface waters, ``the Earth's surface'' means the 
mean elevation of the surface of the water.
    (3) Jurisdictional agency means the state or federal agency 
identified in Sec. 270.401.
    (4) Tight formation gas means natural gas that a jurisdictional 
agency has determined to be produced from a designated tight formation.
    (5) Designated tight formation means the portion of a natural gas 
bearing formation that was:
    (i) Designated as a tight formation by the Commission, pursuant to 
section 501 of the NGPA, or
    (ii) Determined to be a tight formation pursuant to section 503 of 
the NGPA.
    (6) Occluded natural gas produced from coal seams means naturally 
occurring natural gas released from entrapment from the fractures, 
pores and bedding planes of coal seams.

[[Page 45866]]

    (7) Natural gas produced from Devonian shale means natural gas 
produced from fractures, micropores and bedding planes of shales 
deposited during the Paleozoic Devonian Period.
    (8) Shales deposited during the Paleozoic Devonian Period can be 
defined as either:
    (i) The gross Devonian age stratigraphic interval encountered by a 
well bore, at least 95 percent of which has a gamma ray index of 0.7 or 
greater; or
    (ii) One continuous interval within the gross Devonian age 
stratigraphic interval, encountered by a well bore, as long as at least 
95 percent of the selected Devonian shale interval has a gamma ray 
index of 0.7 or greater (but if the interval selected is more than 200 
feet thick, the bottom and top 100 foot portions must meet the five 
percent test independently).
    (9) Gamma ray index means when measuring the Devonian age 
stratigraphic interval, the gamma ray index at any point is to be 
calculated by dividing the gamma ray log value at that point by the 
gamma log value at the shale base line established over the entire 
Devonian age interval penetrated by the well bore.
    (10) Mcf means one thousand cubic feet of natural gas at 60 degrees 
Fahrenheit under a pressure equivalent to that of 30.00 inches of 
mercury at 32 degrees Fahrenheit, under standard gravitational force 
(980.665 centimeters per second squared).
    (11) Data well means a well for which permeability and/or pre-
stimulation production rate data are available for a pay section in the 
formation for which a tight formation designation is being sought.

Subpart B--Determinations by Jurisdictional Agencies


Sec. 270.201  Applicability.

    (a) This part applies to determinations of jurisdictional agencies 
for tight formation gas, occluded natural gas produced from coal seams, 
and natural gas produced from Devonian shale that is produced through:
    (1) A well the surface drilling of which began after December 31, 
1979, but before January 1, 1993;
    (2) A recompletion commenced after January 1, 1993, in a well the 
surface drilling of which began after December 31, 1979, but before 
January 1, 1993; or
    (3) A recompletion commenced after December 31, 1979, but before 
January 1, 1993, where such gas could not have been produced from any 
completion location in existence in the well bore before January 1, 
1980.
    (b) This part also applies to determinations of jurisdictional 
agencies that designate a formation, or portion thereof, as a tight 
formation.


Sec. 270.202  Definition of determination.

    For purposes of this subpart, a determination has been made by a 
jurisdictional agency when such determination is administratively final 
before such agency.


Sec. 270.203  Determinations by jurisdictional agencies.

    A jurisdictional agency must make determinations to which this part 
applies in accordance with procedures applicable to it under the law of 
its jurisdiction for making such determinations or for making 
comparable determinations.


Sec. 270.204  Notice to the Commission.

    Within 15 days after making a determination under this part, the 
jurisdictional agency must give written notice of the determination to 
the Commission. The notice must include the following:
    (a) A list of all participants in the proceeding as well as any 
persons who submitted or who sought an opportunity to submit written 
comments (whether or not such persons participated in the proceeding);
    (b) A statement indicating whether the matter was opposed before 
the jurisdictional agency;
    (c) A copy of the application together with a copy or description 
of all other materials upon which the jurisdictional agency relied in 
the course of making the determination, together with any information 
which may be inconsistent with the determination.
    (d) An explanatory statement, including appropriate factual 
findings and references, which is sufficient to enable a person 
examining the notice to ascertain the basis for the determination 
without reference to information or data not contained in the notice.

Subpart C--Requirements for Filings With Jurisdictional Agencies


Sec. 270.301  General requirements.

    (a) An application for determination may be filed with the 
jurisdictional agency and signed by any person the jurisdictional 
agency designates as eligible to make filings with respect to the well 
for which the application is made.
    (b) The documents required by this subpart are the minimum required 
in support of a request for a determination. The jurisdictional agency 
may require additional support as it deems appropriate, and may more 
specifically identify the documents indicated as the minimum required.
    (c) Each applicant must pay the fee prescribed in Sec. 381.401 of 
this chapter. The applicant will be billed annually by the Commission 
for each jurisdictional agency determination received by the 
Commission. The applicant must submit the fee, or petition for waiver 
pursuant to Sec. 381.106 of this chapter, within 30 days following the 
billing date.


Sec. 270.302  Occluded natural gas produced from coal seams.

    A person seeking a determination that natural gas is occluded 
natural gas produced from coal seams must file an application with the 
jurisdictional agency which contains the following items:
    (a) FERC Form No. 121;
    (b) All well completion reports.
    (c) A radioactivity, electric or other log which will define the 
coal seams.
    (d) Evidence to establish that the natural gas was produced from a 
coal seam;
    (e) A statement by the applicant, under oath, that gas is produced 
from a coal seam through:
    (1)(i) A well the surface drilling of which began after December 
31, 1979, but before January 1, 1993;
    (ii) A recompletion commenced after January 1, 1993, in a well the 
surface drilling of which began after December 31, 1979, but before 
January 1, 1993; or
    (iii) A recompletion that was commenced after December 31, 1979 but 
before January 1, 1993, where such gas could not have been produced 
from any completion location in existence in the well bore before 
January 1, 1980; and
    (2) The applicant has no knowledge of any information not described 
in the application which is inconsistent with his conclusion.


Sec. 270.303  Natural gas produced from Devonian shale.

    A person seeking a determination that natural gas is produced from 
Devonian shale shall file an application with the jurisdictional agency 
which contains the following items:
    (a) FERC Form No. 121;
    (b) All well completion reports;
    (c) A gamma ray log with superimposed indications of the shale base 
line and the gamma ray index of 0.7 over the Devonian age stratigraphic 
section designated pursuant to Sec. 270.101(b)(8);
    (d) A reference to a standard stratigraphic chart or text 
establishing that the producing interval is a shale of Devonian age; 
and
    (e) A sworn statement:
    (1) Calculating the percentage of footage of the producing interval 
which

[[Page 45867]]

is not Devonian shale as indicated by a Gamma ray index of less than 
0.7;
    (2) Demonstrating that the percentage of potentially disqualifying 
non-shale footage for the stratigraphic section selected is equal to or 
less than 5 percent of the Devonian stratigraphic age interval 
designated pursuant to Sec. 270.101(b)(7);
    (3) Attesting that the natural gas is being produced from Devonian 
shale through:
    (i) A well the surface drilling of which began after December 31, 
1979, but before January 1, 1993;
    (ii) A recompletion commenced after January 1, 1993, in a well the 
surface drilling of which began after December 31, 1979, but before 
January 1, 1993; or
    (iii) A recompletion that was commenced after December 31, 1979 but 
before January 1, 1993, where such gas could not have been produced 
from any completion location in existence in the well bore before 
January 1, 1980; and
    (4) Attesting that the applicant has no knowledge of any 
information not described in the application which is inconsistent with 
his conclusion.


Sec. 270.304  Tight formation gas.

    A person seeking a determination that natural gas is tight 
formation gas must file with the jurisdictional agency an application 
which contains the following items:
    (a) FERC Form No. 121;
    (b) All well completion reports;
    (c) A map that identifies the surface location of the well and the 
completion location in the well in the designated tight formation, 
along with the geographic boundaries of the designated tight formation, 
or a location plat identifying the surface location of the well and the 
completion location in the designated tight formation, along with a 
list of the tract (or tracts) of land that comprise the designated 
tight formation;
    (d) A complete copy of the well log, including the log heading 
identifying the designated tight formation stratigraphically; and
    (e) A statement by the applicant, under oath, that:
    (1) The natural gas is being produced from a designated tight 
formation through:
    (i) A well the surface drilling of which began after December 31, 
1979, but before January 1, 1993;
    (ii) A recompletion commenced after January 1, 1993, in a well the 
surface drilling of which began after December 31, 1979, but before 
January 1, 1993; or
    (iii) Through a recompletion that was commenced after December 31, 
1979 but before January 1, 1993, where such gas could not have been 
produced from any completion location in existence in the well bore 
before January 1, 1980; and
    (2) The applicant has no knowledge of any information not described 
in the application which is inconsistent with his conclusion.


Sec. 270.305  Determination of tight formation areas.

    (a) General requirement. A jurisdictional agency determination 
designating a portion of a formation as a tight formation must be made 
in the form and manner prescribed in this subpart.
    (b) Guidelines for designating tight formations. A jurisdictional 
agency determination designating a portion of a formation as a tight 
formation must be made in accordance with the following guidelines:
    (1) Within the geographic boundaries of the portion of the 
formation being recommended for tight formation designation, the 
estimated in situ gas permeability, throughout the pay section, is 
expected to be 0.1 millidarcy (md) or less. The expected in situ 
permeability is to be determined through an arithmetic mean averaging 
of the known permeabilities obtained from the wells that penetrate, and 
have a pay section in, such portion of such formation.
    (2) Within the geographic boundaries of the portion of the 
formation being recommended for tight formation designation, the 
stabilized production rate of natural gas, against atmospheric 
pressure, of wells completed for production in such portion of such 
formation, without stimulation, is not expected to exceed the 
production rate determined in accordance with the table in this 
paragraph (b)(2). Such expected stabilized, pre-stimulation production 
rate is to be determined through an arithmetic mean averaging of the 
known stabilized, pre-stimulation production rates obtained from the 
wells that penetrate, and have a pay section in, such portion of such 
formation.

------------------------------------------------------------------------
 If the average depth to the top of the formation (in     The maximum
                        feet)                              allowable
------------------------------------------------------  production rate
                                                         of natural gas
                                       but does not     (in Mcf per day)
             exceeds--                   exceed--     ------------------
                                                        may not exceed--
------------------------------------------------------------------------
0.................................              1,000                 44
1,000.............................              1,500                 51
1,500.............................              2,000                 59
2,000.............................              2,500                 68
2,500.............................              3,000                 79
3,000.............................              3,500                 91
3,500.............................              4,000                105
4,000.............................              4,500                122
4,500.............................              5,000                141
5,000.............................              5,500                163
5,500.............................              6,000                188
6,000.............................              6,500                217
6,500.............................              7,000                251
7,000.............................              7,500                290
7,500.............................              8,000                336
8,000.............................              8,500                388
8,500.............................              9,000                449
9,000.............................              9,500                519
9,500.............................             10,000                600
10,000............................             10,500                693
10,500............................             11,000                802
11,000............................             11,500                927
11,500............................             12,000              1,071
12,000............................             12,500              1,238

[[Page 45868]]

 
12,500............................             13,000              1,432
13,000............................             13,500              1,655
13,500............................             14,000              1,913
14,000............................             14,500              2,212
14,500............................             15,000              2,557
------------------------------------------------------------------------

    (c) Notice to the Commission. Any jurisdictional agency making a 
determination that a formation, or portion thereof, qualifies as a 
tight formation will provide timely notice, in writing, of such 
determination, to the Commission. Such notice shall include the 
following to substantiate the jurisdictional agency's findings:
    (1) Geological and geographical descriptions of the formation, or 
portion thereof, which is determined to qualify as a tight formation; 
and (2)
    Geological and engineering data to support the determination, 
including (but not limited to):
    (i) A map of the area for which a tight formation determination is 
being sought that clearly locates and identifies all data wells and all 
dry holes that penetrate the subject formation and all wells that are 
currently producing from the subject formation.
    (ii) A well-by-well table of each in situ permeability value (in 
millidarcies), pre-stimulation stabilized production rate (in Mcf per 
day), and depth to the top of the formation (in feet) for each well, 
and the arithmetic mean of each set of data.
    (iii) For any data that the jurisdictional agency excludes from the 
above calculations, a statement explaining why the data was excluded.
    (iv) The underlying well test, well logs, cross-sections, or other 
data sources, and all calculations performed to derive the formation 
tops, permeability values, and pre-stimulation stabilized production 
rates shown in the well-by-well table.
    (v) Any other information that the jurisdictional agency deems 
relevant and/or that the jurisdictional agency relied upon in making 
its determination.


Sec. 270.306  Devonian shale wells in Michigan.

    A person seeking a determination that natural gas is being produced 
from the Devonian Age Antrim shale in Michigan shall file an 
application that contains the following items:
    (a) FERC Form No. 121;
    (b) All well completion reports;
    (c) A gamma ray log from the closest available well bore (producing 
or dry hole) that is within a one mile radius of the well for which a 
determination is sought, with superimposed indications of:
    (1) The shale base line and the gamma ray index of 0.7 over the 
Devonian age stratigraphic section penetrated by the well bore; and
    (2) The boundary between the Antrim shale and the overlying 
formation (Berea Sandstone, Ellsworth, Bedford, or Sunbury shales, or 
their equivalents);
    (d) A location plat showing the well for which the determination is 
sought and the well for which a gamma ray log has been filed;
    (e) A mud log from the well for which the determination is sought, 
with a detailed description of samples taken from 10-foot, or less, 
intervals through-out the Devonian age stratigraphic section penetrated 
by the well bore;
    (f) A driller's log, or similar report, from the well for which the 
determination is sought, indicating the general characteristics of the 
strata penetrated and the corresponding depths at which they are 
encountered throughout the Devonian age stratigraphic section 
penetrated by the well bore;
    (g) A reference to a standard stratigraphic chart or text 
establishing that the producing interval is a shale of Devonian age; 
and
    (h) A sworn statement:
    (1) Calculating the percentage of footage of the producing interval 
(or the Antrim Shale in the event the well is a dry hole) in the well 
for which a gamma ray log was submitted which is not Devonian shall as 
indicated by a gamma ray index of less than 0.7;
    (2) Demonstrating that the percentage of potentially disqualifying 
non-shale footage for the Devonian age stratigraphic section penetrated 
by the well bore for which the submitted gamma ray log is equal to or 
less than 5 percent;
    (3) Attesting that the natural gas is being produced from the 
Devonian Age Antrim shale through:
    (i) A well the surface drilling of which began after December 31, 
1979, but before January 1, 1993;
    (ii) A recompletion commenced after January 1, 1993, in a well the 
surface drilling of which began after December 31, 1979, but before 
January 1, 1993; or
    (iii) A recompletion that was commenced after December 31, 1979 but 
before January 1, 1993, where such gas could not have been produced 
from any completion location in existence in the well bore before 
January 1, 1980 and
    (4) Attesting the applicant has no knowledge of any information not 
described in the application which is inconsistent with his conclusion.

Subpart D--Identification of State and Federal Jurisdictional 
Agencies


Sec. 270.401  Jurisdictional agency.

    (a) Definition. With respect to a well the surface location of 
which is on lands within the boundaries of a State (including Federal 
lands and offshore State lands), ``jurisdictional agency'' means the 
Federal or State agency having regulatory jurisdiction with respect to 
the production of natural gas.
    (b) The jurisdictional agency for wells located on Federal lands in 
each state are:
    (1) Alabama--Chief, Branch of Resources, Planning & Protection, 
Bureau of Land Management, Eastern States Office (931), 7450 Boston 
Boulevard, Springfield, VA 22153.
    (2)(i) Alaska, Anchorage Field Office--Assistant District Manager 
for Mineral Resources, Bureau of Land Management, 6881 Abbott Loop 
Road, Anchorage, AK 99507.
    (ii) Alaska, Northern Field Office--Assistant District Manager for 
Mineral Resources, Bureau of Land Management, 1150 University Avenue, 
Fairbanks, AK 99709.
    (3)(i) Arizona, except for the Navaho and Hopi Indian 
Reservations--Deputy State Director for Mineral Resources, Bureau of 
Land Management, PO Box 555, Phoenix, AZ 85000-0555.
    (ii) Arizona, Navaho and Hopi Indian Reservations--District 
Manager, Bureau of Land Management, Albuquerque District Office (NGPA), 
435 Montano Road, NE., Albuquerque, NM 87107.
    (4) Arkansas--Chief, Branch of Resources, Planning & Protection,

[[Page 45869]]

Bureau of Land Management, Eastern States Office (931), 7450 Boston 
Boulevard, Springfield, VA 22153.
    (5) California, except Naval Petroleum Reserve No. 1 (Elk Hills) 
and No. 2 (Buena Vista)--Chief, Branch of Fluid and Solid Minerals, 
Bureau of Land Management, Division of Mineral Resources (C-920), 2800 
Cottage Way, Suite W-1834, Sacramento, CA 95825.
    (6) Colorado--Deputy State Director for Resource Services, Bureau 
of Land Management, Colorado State Office (CO-930), 2850 Youngfield 
Street, Lakewood, CO 80215.
    (7) Florida and Georgia--Chief, Branch of Resources, Planning & 
Protection, Bureau of Land Management, Eastern States Office (931), 
7450 Boston Boulevard, Springfield, VA 22153.
    (8) Idaho--Deputy State Director Resources and Science, Bureau of 
Land Management, Idaho State Office (931), 1387 Vinnell Way, Boise, ID 
83709.
    (9) Illinois, Indiana, and Iowa--Chief, Branch of Resources, 
Planning & Protection, Bureau of Land Management, Eastern States Office 
(931), 7450 Boston Boulevard, Springfield, VA 22153.
    (10) Kansas--Deputy State Director for Resource Services, Bureau of 
Land Management, Colorado State Office (CO-931), 2850 Youngfield 
Street, Lakewood, CO 80215.
    (11) Kentucky, Louisiana, Maryland, Michigan, Mississippi, and 
Missouri--Chief, Branch of Resources, Planning & Protection, Bureau of 
Land Management, Eastern States Office (931), 7450 Boston Boulevard, 
Springfield, VA 22153.
    (12) Montana--Chief, Branch of Fluid and Solid Minerals, Bureau of 
Land Management, Division of Mineral Resources, PO Box 36800, Billings, 
MT 59107.
    (13) Nebraska--Chief, Branch of Resources, Planning & Protection, 
Bureau of Land Management, Eastern States Office (931), 7450 Boston 
Boulevard, Springfield, VA 22153.
    (14) Nevada--State Director, Bureau of Land Management, Nevada 
State Office (NV-92000), PO Box 12000, Reno, NV 89520.
    (15)(i) New Mexico, Northern New Mexico--Field Office Manager, 
Bureau of Land Management, Albuquerque Field Office (NGPA), 435 Montano 
Road, NE., Albuquerque, NM 87107.
    (ii) New Mexico, Southern New Mexico--Field Office Manager, Bureau 
of Land Management, Roswell Field Office (NGPA), 2909 West Second 
Street, Roswell, NM 88201.
    (16) New York and North Carolina--Chief, Branch of Resources, 
Planning & Protection, Bureau of Land Management, Eastern States Office 
(931), 7450 Boston Boulevard, Springfield, VA 22153.
    (17) North Dakota--Chief, Branch of Fluid Minerals, Bureau of Land 
Management, Division of Mineral Resources, PO Box 36800, Billings, MT 
59107.
    (18) Ohio--Chief, Branch of Resources, Planning & Protection, 
Bureau of Land Management, Eastern States Office (931), 7450 Boston 
Boulevard, Springfield, VA 22153.
    (19)(i) Oklahoma, except the Osage Reservation--Field Office 
Manager, Bureau of Land Management, Tulsa Field Office (NGPA), 7906 
East 33rd Street, Suite 101, Tulsa, OK 74145.
    (ii) Oklahoma, the Osage Reservation only--Superintendent, Osage 
Indian Agency, Bureau of Indian Affairs, U. S. Department of the 
Interior, Pawhuska, OK 74056.
    (20) Oregon--Deputy State Director, Planning, Use, and Protection, 
Bureau of Land Management, Oregon State Office, PO Box 2965, Portland, 
OR 97208.
    (21) Pennsylvania and South Carolina--Chief, Branch of Resources, 
Planning & Protection, Bureau of Land Management, Eastern States Office 
(931), 7450 Boston Boulevard, Springfield, VA 22153.
    (22) South Dakota--Chief, Branch of Fluid Minerals, Bureau of Land 
Management, Division of Mineral Resources, PO Box 36800 Billings, MT 
59107.
    (23) Tennessee--Chief, Branch of Resources, Planning & Protection, 
Bureau of Land Management, Eastern States Office (931), 7450 Boston 
Boulevard, Springfield, VA 22153.
    (24) (i) Texas, east of the 100th Meridian--Field Office Manager, 
Bureau of Land Management, Tulsa Field Office (NGPA), 7906 East 33rd 
Street, Suite 101, Tulsa, OK 74145.
    (ii) Texas, west of the 100th Meridian--Field Office Manager, 
Bureau of Land Management, Roswell Field Office (NGPA), 2909 West 
Second Street, Roswell, NM 88201.
    (25) (i) Utah, except for the Navajo and Hopi Indian Reservations--
Deputy State Director for Natural Resources, Bureau of Land Management, 
Utah State Office (U-930), 324 South State Street, Suite 301, Salt Lake 
City, UT 84111.
    (ii) Utah, the Navajo and Hopi Indian Reservations only--Field 
Office Manager, Bureau of Land Management, Albuquerque Field Office 
(NGPA), 435 Montano Road, NE., Albuquerque, NM 87107.
    (26) Virginia--Chief, Branch of Resources, Planning & Protection, 
Bureau of Land Management, Eastern States Office (931), 7450 Boston 
Boulevard, Springfield, VA 22153.
    (27) Washington--Deputy State Director for Mineral Resources, 
Bureau of Land Management, Oregon State Office, PO Box 2965, Portland, 
OR 97208.
    (28) West Virginia--Chief, Branch of Resources, Planning & 
Protection, Bureau of Land Management, Eastern States Office (931), 
7450 Boston Boulevard, Springfield, VA 22153.
    (29) (i) Wyoming, excluding Naval Petroleum Reserve No. 3 (Teapot 
Dome) Casper Field Office--Field Office Manager, Bureau of Land 
Management, 1701 East E Street, Casper, WY 82601.
    (ii) Rawlins Field Office--Field Office Manager, Bureau of Land 
Management, PO Box 2407, Rawlins, WY 82301.
    (iii) Rock Springs Field Office--Field Office Manager, Bureau of 
Land Management, 280 Highway 191 North, Rock Springs, WY 82901.
    (iv) Worland Field Office--Field Office Manager, Bureau of Land 
Management, PO Box 119, Worland, WY 82401.
    (c) The jurisdictional agency for wells located on Other lands in 
each state are:
    (1) Alabama--State Oil and Gas Board, 420 Hackberry Lane, P O Box 
869999, Tuscaloosa, AL 35486-9780.
    (2) Alaska--Department of Natural Resources, Oil & Gas Division, 
550 West 7th Avenue, Anchorage, AK 99501.
    (3) Arizona--Oil and Gas Conservation Commission, 416 West Congress 
Street, Suite 100, Tucson, AZ 85701
    (4) Arkansas--Oil & Gas Commission, PO Box 1472, El Dorado, AR 
71730-1472.
    (5) California--Department of Conservation, Division of Oil & Gas, 
801 K Street, MS24-01, Sacramento, CA 95814.
    (6) Colorado--Oil & Gas Conservation Commission, 1120 Lincoln, 
Suite 801, Denver, CO 80203.
    (7) Florida--Administrator Oil and Gas, Bureau of Geology, 
Department of Natural Resources, 903 West Tennessee Street, 
Tallahassee, FL 32304.
    (8) Georgia--Department of Natural Resources, Geologic & Water 
Resources Division, 19 Martin Luther King Drive, SW, Atlanta, GA 30334.
    (9) Idaho--Idaho Public Utilities Commission, Statehouse Mail, 
Boise, ID 83720.
    (10) Illinois--Department of Natural Resources, Oil & Gas Division, 
524 South 2nd Street, Springfield, IL 62701.
    (11) Indiana--Department of Natural Resources, Oil & Gas Division, 
402 West Washington Street, Room 256 Indianapolis, IN 46204.
    (12) Kansas--Kansas Corporation Commission, Finney State Office

[[Page 45870]]

Building, 130 South Market, Room 2078, Wichita, KS 67202-3802.
    (13) Kentucky--Public Service Commission, 211 Sower Blvd., PO Box 
6615, Frankfort, KY 40602-0615.
    (14) Louisiana--Department of Natural Resources, Office of 
Conservation, PO Box 94275, Baton Rouge, LA 70804.
    (15) Maryland--Department of Natural Resources, Tawes State Office 
Building., Annapolis, MD 21404.
    (16) Michigan--Department of Environmental Quality, Geological 
Survey Division, Hollister Building, PO Box 30473, Lansing MI 48909.
    (17) Mississippi--State Oil & Gas Board, 500 Graymont Avenue, Suite 
E, Jackson, MS 39202.
    (18) Missouri--Department of Natural Resources Geology and Survey 
Division, PO Box 250, 111 Fairgrounds Road, Rolla, MO 65402.
    (19) Montana--Department of Natural Resources and Oil and Gas 
Conservation Division, 2535 St. John's Avenue, Billings, MT 59102.
    (20) Nebraska--Oil & Gas Conservation Commission, Box 399, Sidney, 
NE 69162.
    (21) Nevada--Department of Conservation and Natural Resources, 
Division of Mineral Resources, Capitol Complex, 201 S. Fall Street, 
Carson City, NV 89710.
    (22) New Mexico--Department of Energy and Minerals and Natural 
Resources, Oil Conservation Division, 2040 S. Pacheco Street, Sante Fe, 
NM 87505.
    (23) New York--New York State Department of Environmental 
Conservation, Division of Mineral Resources, Bureau of Oil and Gas 
Regulation, 50 Wolf Road, Albany, NY 12233-6500.
    (24) North Carolina--Department of Natural Resources and Community 
Development, 512 North Salisbury Street, Raleigh, NC 27611.
    (25) North Dakota--Industrial Commission, State Capitol, 600 East 
Boulevard Avenue, Department 405, Bismarck, ND 58505.
    (26) Ohio--Department of Natural Resources, Division of Oil and Gas 
4383 Fountain Square Drive, Columbus, OH 43224-1362.
    (27) Oklahoma---Corporation Commission, 300 Jim Thorpe Building, PO 
Box 52000-2000, Oklahoma City, OK 73152-2000.
    (28) Oregon--Department of Geology & Mineral Industries, 800 N.E. 
Oregon Street, #28 Portland, OR 972332.
    (29) Pennsylvania `` Department of Conservation and Natural 
Resources, PO Box 8767, Harrisburg, PA 17105-8767.
    (30) South Carolina--South Carolina Public Service Commission, PO 
Drawer 11649, Columbia, SC 29211.
    (31) South Dakota--Oil and Gas Supervisor, Department of 
Environment and Natural Resources, 2050 West Main, Suite 1, Rapid City, 
SD 57702.
    (32) Tennessee--Office of Conservation, Division of Geology, 401 
Church Street, Nashville, TN 37243.
    (33) Texas--Railroad Commission Oil and Gas Division, 1701 North 
Congress Avenue, PO Box 12967, Austin, TX 78711-2967.
    (34) Utah---Department of Natural Resources, Division of Oil, Gas 
and Mining, PO Box 145801 West North Temple, Suite 1210, Salt Lake 
City, UT 84114-5801.
    (35) Virginia--Department of Mines, Minerals & Energy, Division of 
Gas and Oil, PO Box 1416, Abingdon, VA 24210.
    (36) Washington--Department of Natural Resources, Geology and Earth 
Resources Division, PO Box 47001, Olympia, WA 98504.
    (37) West Virginia---Division of Environmental Protection, Office 
of Oil and Gas, #10 McJunkin Road, Nitro, WV 25143-2506.
    (d) Federal lands. For purposes of this section, Federal lands 
means:
    (1) All lands leased under:
    (i) The Mineral Lands Leasing Act, as amended, 30 U.S.C. 181 et 
seq.; and
    (ii) The Mineral Leasing Act for Acquired Lands, as amended, 30 
U.S.C. 351 et seq.; and
    (2) All Indian lands which are under the supervision of the United 
States Geological Survey or any successor federal agency (30 CFR part 
221); and
    (3) All Indian lands which are under the supervision of the Osage 
Indian Agency, Bureau of Indian Affairs, U.S. Department of the 
Interior.
    (e) Divided-interest leases. Unless an agreement under this 
paragraph provides otherwise, where a well is located on a divided-
interest lease involving Federal (or Indian) and private (or State) 
ownership:
    (1) The Federal jurisdictional agency will make the determination 
where the majority lease interest is Federal (or Indian);
    (2) The State jurisdictional agency will make the determination 
where the majority lease interest is private (or State); and
    (3) The State jurisdictional agency will make the determination 
where the lease is divided equally.
    (f) Drilling units. Unless an agreement under paragraph (e) of this 
section provides otherwise, where a drilling unit is drained by two or 
more wells, the Federal jurisdictional agency will make the 
determination if the completion location of the well in question is 
located on a Federal (or Indian) lease, and the State jurisdictional 
agency will make the determination if the completion location of the 
well in question is located on a private (or State) lease.
    (g) Agreements. If a jurisdictional agency that has jurisdiction 
over Federal lands enters into an agreement with a jurisdictional 
agency that has jurisdiction over State lands that either authorizes 
the State jurisdictional agency to make determinations for wells 
located on Federal lands or the Federal agency to make determinations 
for wells located on State lands, such agreement shall be filed with 
the Commission. Upon the filing of such an agreement, the agency so 
authorized will be considered to be the jurisdictional agency for wells 
on the lands subject to the agreement.

Subpart E--Commission Review of Jurisdictional Agency 
Determinations


Sec. 270.501  Publication of notice from jurisdictional agency.

    (a) Upon receipt of a notice of determination by a jurisdictional 
agency under Sec. 270.204, the Commission will send an acknowledgment 
to the applicant and will post acknowledgment in the Commission's 
Public Reference Room and on the Commission's web site. Another source 
of the information is the Commission's copy contractor, RVJ 
International, Inc. RVJ International, Inc. is located in the Public 
Reference Room at 888 First Street, NE., Washington, DC 20426.
    (b) The acknowledgment will contain the following:
    (1) The date on which the jurisdictional agency notice was 
received;
    (2) Certain information contained in FERC Form No. 121;
    (3) A statement that the application and a copy or description of 
other materials in the record on which such determination was made is 
available for inspection, except to the extent the material is treated 
as confidential under Sec. 270.506, at the offices of the Commission; 
and
    (4) A statement that persons objecting to the final determination 
may, in accordance with this subpart, file a protest with the 
Commission within 20 days after the date that notice of receipt of a 
determination is issued by the Commission pursuant to this section.


Sec. 270.502  Commission review of final determinations.

    (a) Review by Commission. Except as provided in paragraphs (b), (c) 
and (d)

[[Page 45871]]

of this section, a determination submitted to the Commission by a 
jurisdictional agency will become final 45 days after the date on which 
the Commission received notice of the determination, unless within the 
45 day period, the Commission:
    (1) Makes a preliminary finding that:
    (i) The determination is not supported by substantial evidence in 
the record on which the determination was made; or
    (ii) The determination is not consistent with information which is 
contained in the public records of the Commission and which was not 
part of the record on which the jurisdictional agency made the 
determination, and
    (2) Issues written notice of such preliminary finding, including 
the reasons therefor. Copies of the written notice will be sent to the 
jurisdictional agency that made the determination, to the persons 
identified in the notice under Sec. 270.204 of such determination, and 
to any persons who have filed a protest.
    (b) Incomplete notice. Notwithstanding the provisions of paragraph 
(a) of this section, the 45-day period for Commission review of a 
determination will not begin if:
    (1) The notice forwarded to the Commission pursuant to Sec. 270.204 
does not contain all the material specified therein; and
    (2) The Commission notifies the jurisdictional agency, within 45 
days after the date on which the Commission receives notice of the 
determination, that the notice is incomplete.
    (c) Withdrawal of notice. (1) The jurisdictional agency may 
withdraw a notice of determination by giving notice as specified in 
paragraph (c)(2) of this section at any time prior to the issuance of a 
final order with respect to such determination under paragraphs (g)(1) 
and (g)(2) of this section, or at any time prior to the date such 
determination becomes final under paragraph (a) or (g)(4) of this 
section. Such notice must include the jurisdictional agency's reasons 
for the withdrawal.
    (2) Withdrawal of a notice of determination will take effect at 
such time as the jurisdictional agency has notified the Commission, and 
the parties to the proceeding before the agency, of such withdrawal.
    (3) Withdrawal of a notice of determination shall nullify such 
notice of determination.
    (d) Withdrawal of application. (1) An applicant may withdraw an 
application for a determination which is before the Commission by 
giving notice as specified in paragraph (d)(2) of this section at any 
time prior to the issuance of a final order with respect to such 
determination under paragraphs (g)(1) and (g)(2) of this section, or at 
any time prior to the date such determination becomes final under 
paragraph (a) or (g)(4) of this section.
    (2) Withdrawal of an application will take effect at such time as 
the applicant has notified the Commission and the jurisdictional 
agency.
    (3) Withdrawal of an application will nullify such application and 
the notice of determination on such application.
    (e) Public notice. The Commission will publish notice of the 
preliminary finding in the Federal Register and will post the notice in 
its Public Reference Room. The notice will set forth the reasons for 
the preliminary finding.
    (f) Procedures following notice of preliminary finding. Any state 
or federal agency or any person may submit, within 30 days after 
issuance of the preliminary finding, written comments, and request an 
informal conference with the Commission staff. Any jurisdictional 
agency, any state agency and any person receiving notice under 
paragraph (a)(2) of this section may request an informal conference 
with the Commission staff. All timely requests for conferences will be 
granted. Notice of, and permission to attend, such conferences will be 
given to persons identified in paragraph (a)(2) of this section and to 
state or federal agencies or persons who submitted comments under this 
paragraph.
    (g) Final orders. (1) In any case in which a protest was filed with 
the Commission and a preliminary finding was issued, the Commission 
will issue a final order within 120 days after issuance of the 
preliminary finding.
    (2) In any case in which no protest was filed with the Commission 
and a preliminary finding was issued, the Commission may issue a final 
order within 120 days after issuance of the preliminary finding.
    (3) A final order issued under paragraph (g)(1) or (g)(2) of this 
section will either affirm, reverse, or remand the determination of the 
jurisdictional agency. Such order will state the specific basis for the 
Commission's action. Notice of the issuance of such order will be given 
to the jurisdictional agency, to participants in the proceeding before 
the jurisdictional agency, and to participants in the proceeding before 
the Commission under paragraph (d) of this section and under 
Sec. 270.503.
    (4) In the event that the Commission fails to issue a final order 
within 120 days after issuance of the preliminary finding, the 
determination of the jurisdictional agency shall become final.


Sec. 270.503  Protests to the Commission.

    (a) Who may file. Any person may file a protest with the Commission 
with respect to a determination of a jurisdictional agency within 20 
days after the date that notice of receipt of a determination is issued 
by the Commission pursuant to Sec. 270.204.
    (b) Grounds. Protests may be based only on the grounds the final 
determination is:
    (1) Not supported by substantial evidence;
    (2) Not consistent with information which is contained in the 
public records of the Commission and which was not part of the record 
on which the determination was made;
    (3) Not consistent with information submitted with the protests for 
inclusion in the public records of the Commission, which information 
was not part of the record on which the determination was made; or
    (4) Not based on an application which complied with the filing 
requirements set forth in this part.


Sec. 270.504  Contents of protests to the Commission.

    Each protest must include:
    (a) An identification of the determination protested;
    (b) The name and address of the person filing the protest;
    (c) A statement of whether or not the person filing the protest 
participated in the proceeding before the jurisdictional agency, and if 
not, the reason for the nonparticipation;
    (d) A statement of the effect the determination will have on the 
protestor;
    (e) A statement of the precise grounds under Sec. 270.503(f) for 
the protest, and all supporting documents or references to any 
information relied on which is in the record on which the determination 
is based or is in or to be inserted in the public files of the 
Commission; and
    (f) A statement that the protestor has served, in accordance with 
Sec. 385.2010 of this chapter, a copy of the protest together with all 
supporting documents on the jurisdictional agency and all persons 
listed in the notice of determination filed pursuant to Sec. 270.204.


Sec. 270.505  Procedure for reopening determinations.

    (a) Grounds. At any time subsequent to the time a determination 
becomes final pursuant to this subpart, the Commission, on its own 
motion, or in response to a petition filed by any person aggrieved or 
adversely affected by the determination, may reopen the determination 
if it appears that:

[[Page 45872]]

    (1) In making the determination, the Commission or the 
jurisdictional agency relied on any untrue statement of material fact; 
or
    (2) There was omitted a statement of material fact necessary in 
order to make the statements made not misleading, in light of the 
circumstances under which they were made to the jurisdictional agency 
or the Commission.
    (b) Contents of petition. A petition to reopen the determination 
proceedings must contain the following information, under oath:
    (1) The name and address of the person filing the petition;
    (2) The interest of the petitioner in the outcome of the 
determination proceeding;
    (3) The statement of material fact that is alleged to be untrue or 
omitted;
    (4) A statement explaining why the outcome of the determination 
proceeding would have been different had the statement or omission not 
occurred; and
    (5) Copies of all documents relied on by the petitioner, or 
references to such documents if they are contained in the public files 
of the Commission.
    (c) Procedures after reopening. In the event the Commission reopens 
a determination pursuant to this section it will:
    (1) Give notice to the jurisdictional agency and all persons who 
participated before both that agency and the Commission in the 
proceedings resulting in the determination in question;
    (2) Permit the jurisdictional agency and other persons receiving 
notice pursuant to paragraph (c)(1) of this section to submit whatever 
documentary evidence such agency or persons deem relevant; and
    (3) Take such other action or hold or cause to be held such 
proceedings as it deems necessary or appropriate for a full disclosure 
of the facts.
    (d) Final order of Commission. Within 150 days after issuance of 
the notice under paragraph (c)(1) of this section, the Commission shall 
issue a final order. If the Commission finds that the grounds referred 
to in paragraph (a) of this section exist, it will vacate the 
determination.


Sec. 270.506  Confidentiality.

    (a) Except as provided in paragraph (b) of this section, the 
Commission will accord confidential protection to, and not disclose to 
the public, any information submitted by a jurisdictional agency under 
Sec. 270.204, if:
    (1) The jurisdictional agency, on its own motion or on request of 
the applicant, afforded such information confidential treatment before 
the jurisdictional agency; and
    (2) The agency order or the applicant's request stated grounds for 
confidential treatment which fall within one of the exemptions 
described in paragraphs (1) through (9) of 5 U.S.C. 552(b).
    (b) Upon receipt of a request for disclosure of information treated 
as confidential under paragraph (a) of this section, the Commission 
will determine in accordance with 5 U.S.C. 552 whether the information 
is exempt. 5 U.S.C. 552(b). If it determines the information is not 
exempt, the information will be made public. If it determines the 
information is exempt, the Commission will not make it public unless 
determines that its conduct of the proceeding to review the 
jurisdictional agency determination requires making such information 
available to the public or to particular parties, subject to conditions 
(including a protective order) as the Commission may prescribe. Before 
making any information public under this paragraph, the Commission will 
provide at least 5 days notice to the person who submitted the 
information.

PART 375--THE COMMISSION

    2. The authority citation for part 375 continues to read as 
follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717w, 3301-3432; 16 
U.S.C. 791-825r, 2601-2645; 42 U.S.C. 7101-7352.


    3. In Sec. 375.307, paragraph (p) is added to read as follows:


Sec. 375.307  Delegation to the Director of the Office of Markets, 
Tariffs, and Rates

* * * * *
    (p) Take the following actions under the Natural Gas Policy Act of 
1978:
    (1) Notify jurisdictional agencies within 45 days after the date on 
which the Commission receives notice of a determination pursuant to 
Sec. 270.502(b) of this chapter that the notice is incomplete under 
Sec. 270.204 of this chapter.
    (2) Issue preliminary findings under Sec. 270.502(a)(1) of this 
chapter.

PART 381--FEES

Subpart D--Fees Applicable to the Natural Gas Policy Act of 1978

    4. The authority citation for part 381 continues to read as 
follows:

    Authority: 15 U.S.C. 717-717w; 16 U.S.C.791-828c, 2601-2645; 31 
U.S.C. 9701; 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C. 1-
85.


    5. Section 381.401 is added to read as follows:


Sec. 381.401  Review of jurisdictional agency determinations.

    The fee established for review of a jurisdictional agency 
determination is $115. The fee must be submitted in accordance with 
subpart A of this part and Sec. 270.301(c) of this chapter.

    Note: The form and appendix that follow will not appear in the 
code of federal regulations.

Federal Energy Regulatory Commission
Washington D.C.

FERC Form-121

(1/2000)

Form Approved

OMB No. 1902-0038

(Expires      )

Application for determination

General Instructions

    1. Purpose: This form is to be used to provide basic data on 
each application for a well category determination that is filed 
with a Jurisdictional Agency to qualify the natural gas produced 
from such well as (a) occluded natural gas produced from coal seams, 
under section 107(c)(3) of the Natural Gas Policy Act of 1978 [15 
U.S.C. 3301] (NGPA), (b) natural gas produced from Devonian shale, 
under section 107(c)(4) of the NGPA, or (c) natural gas produced 
from a designated tight formation, under section 107(c)(5) of the 
NGPA, in order to substantiate the eligibility of such natural gas 
for a tax credit under Section 29 of the Internal Revenue Code. The 
Commission will use this data, together with the other information 
contained in the Jurisdictional Agency's notice of determination, to 
evaluate whether substantial evidence exists to support the 
determination.
    2. Who must submit: Anyone who files an application with a 
Jurisdictional Agency identified under Section 270.401 of the 
Commission's Regulations for a well category determination.
    3. What and where to submit: The original of this form, and all 
of the information required by Section 270.302, 270.303, 270.304, or 
270.306 of the Commission's Regulations must be filed with the 
Jurisdictional Agency. The Jurisdictional Agency making a 
determination must file the original of this form, with all of the 
other information required under the applicable Commission 
Regulations, with the Office of the Secretary, Federal Energy 
Regulatory Commission, 888 First Street, N.E., Washington D.C. 
20426. Applicants should retain one copy of each completed form for 
their files for 4 years.
    4. These are mandatory filing requirements.
    5. The data on this form are not considered confidential and 
will not be treated as such.
    6. Where to send comments on the public reporting burden: The 
public reporting burden for this collection of information is 
estimated to average 0.25 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering

[[Page 45873]]

and maintaining the data needed, and completing and reviewing the 
collection of information. Send comments regarding this burden 
estimate, or any aspect of this collection of information, including 
suggestions for reducing this burden, to the Federal Energy 
Regulatory Commission, 888 First Street, N.E., Washington D.C. 20426 
(Attention: Mr. Michael Miller, CI-1) and to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Washington D.C. 20503 (Attention: Desk Officer for the Federal 
Energy Regulatory Commission). Persons subject to providing this 
information will not be penalized for failing to respond to these 
collections of information unless the collection of information 
displays a valid OMB control number.

A. THE NGPA WELL CATEGORY DETERMINATION IS BEING SOUGHT FOR A WELL 
PRODUCING:

    A1 __ occluded natural gas from coal seams.
    A2 __ natural gas from Devonian shale.
    A3 __ natural gas from a designated tight formation.

B. FOR ALL APPLICATIONS FOR DETERMINATION PROVIDE THE FOLLOWING:

1. Well Name and No.\*\------------------------------------------------
2. Completed in (Name of Reservoir)\*\---------------------------------
3. Field\*\------------------------------------------------------------
4. County\*\-----------------------------------------------------------
5. State\*\------------------------------------------------------------
6. API Well No. (14 digits maximum. If not assigned, leave blank.)
9. Measured Depth of the Completed Interval (in feet)
    TOP
    BASE

C. APPLICANT'S MAILING ADDRESS AND THE IDENTITY OF THE PERSON WHO IS 
RESPONSIBLE FOR APPLICATION:

1. Applicant's Name\*\-------------------------------------------------
2. Street\*\-----------------------------------------------------------
3. City\*\-------------------------------------------------------------
4. State\*\------------------------------------------------------------
5. Zip Code------------------------------------------------------------
6. Name of Person Responsible\*\---------------------------------------
7. Title of Such Person\*\---------------------------------------------
8. Signature-----------------------------------------------------------
    and Phone No. (    )       -      
    \*\Signifies that line entry may contain up to 35 letters and/or 
numbers.

Appendix--List of Commentors

Alabama State Oil & Gas Board
The American Gas Association
American Petroleum Institute
Burlington Resources Inc.
Calumet Oil
Coalbed Methane Association of Alabama
Colorado Oil and Gas Conservation Commission
Colorado Oil & Gas Association
Columbia Natural Resources
Cross Timbers Oil Company
United States Department of Energy
United States Department of Interior, Bureau of Land Management
Domestic Petroleum Council
Dominion Resources Inc.
Equitable Production Company
HS Resources, Inc.
Independent Oil and Gas Association
Independent Oil & Gas Association of New York
Independent Oil & Gas Association of Pennsylvania
Independent Oil & Gas Association of West Virginia
Independent Petroleum Association of America and Natural Gas Supply 
Association
Interstate Oil & Gas Compact Commission
Kansas Corporation Commission
Kentucky Public Service Commission
Louisiana Department of Natural Resources Office of Conservation
Marathon Oil Company
State of Michigan Department of Environmental Quality
New Mexico Oil & Gas Association
Non-Conventional Energy Inc.
New York State Department of Environmental Conservation
Northwest Fuel Development Inc
Ohio Department of Natural Resource
Oklahoma Corporation Commission
Producer Coalition
Railroad Commission of Texas
Texas Independent Producers & Royalty Owners
Union Pacific Resources
Vastar Resources, Inc
Virginia Department of Mines, Minerals & Energy
Virginia Oil & Gas Association
West Virginia Division of Environmental Protection
Williams Production Co.
[FR Doc. 00-18498 Filed 7-25-00; 8:45 am]
BILLING CODE 6717-01-P