[Federal Register Volume 67, Number 249 (Friday, December 27, 2002)]
[Notices]
[Pages 79142-79144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32623]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Agency Information Collection Activities: Proposed Collection, 
Comment Request

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of extension of a currently approved information 
collection (OMB Control Number 1010-0126).

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SUMMARY: To comply with the Paperwork Reduction Act (PRA) of 1995, we 
are inviting comments on a collection of information we will submit to 
the Office of Management and Budget (OMB) for review and approval. The 
information collection request (ICR) is titled ``Royalty-in-Kind (RIK) 
Pilot Program--Directed Communications by Operators of Federal Oil and 
Gas Leases.''

DATES: Submit written comments on or before February 25, 2003.

ADDRESSES: Submit written comments to Sharron L. Gebhardt, Regulatory 
Specialist, Minerals Management Service, Minerals Revenue Management, 
P.O. Box 25165, MS320B2, Denver, Colorado 80225. If you use an 
overnight courier service, our courier address is Building 85, Room A-
614, Denver Federal Center, Denver, Colorado 80225. You may also e-mail 
your comments to us at [email protected]. Include the title of the 
information collection and the OMB control number in the ``Attention'' 
line of your comment. Also include your name and return address. Submit 
electronic comments as an ASCII file avoiding the use of special 
characters and any form of encryption. If you do not receive a 
confirmation we have received your e-mail, contact Ms. Gebhardt at 
(303) 231-3211.

FOR FURTHER INFORMATION CONTACT: Sharron L. Gebhardt, telephone (303) 
231-3211, FAX (303) 231-3385, or e-mail [email protected].

SUPPLEMENTARY INFORMATION: Title: ``Royalty-in-Kind (RIK) Pilot 
Program--Directed Communications by Operators of Federal Oil and Gas 
Leases.''
    OMB Control Number: 1010-0126.
    Abstract: The Department of the Interior (DOI) is responsible for 
matters relevant to mineral resource development on Federal and Indian 
Lands and the Outer Continental Shelf (OCS). The Secretary of the 
Interior (Secretary) under the Mineral Leasing Act (30 U.S.C. 192) and 
the OCS Lands Act (43 U.S.C. 1353) is responsible for managing the 
production of minerals from Federal and Indian lands and the OCS; 
collecting royalties from lessees who produce minerals; and 
distributing the funds collected in accordance with applicable laws. 
MMS performs the royalty management functions for the Secretary.
    Most royalties are now paid in value. For example, when a company 
or individual enters into a contract to develop, produce, and dispose 
of minerals from Federal lands, that company or individual agrees to 
pay the United States a share (royalty) of the full value received for 
the minerals taken from leased lands. MMS has undertaken several pilot 
programs to study the feasibility of taking the Government's royalty in 
the form of production, that is, as RIK.
    Collection of RIK requires communication between MMS and the 
operators of a lease to assure accurate and timely delivery of MMS's 
royalty share of production volumes.
    MMS, as responsible steward of oil and gas royalties, must direct 
operators of affected MMS leases to carry out three types of 
communication to take MMS's RIK crude oil or natural gas. The types of 
information that operators must provide are as follows:
    (1) About 8-10 days before end of the month, report initial 
information about the projected volumes and qualities of RIK production 
the operator expects to make available in the next month, and 
corrections to those projected volumes and qualities for the month, 
submitted at varying frequencies during the month;
    (2) When needed, report billing information about transportation/
billing arrangements for the RIK to the delivery point, and
    (3) Report month-end summary information (lease imbalance 
statement) about total RIK volumes and qualities needed to carry over 
to the next month to resolve aggregated imbalances that have incurred 
in prior months of RIK deliveries.
    Experience with the Wyoming and Texas 8(g) Pilots demonstrate 
directed communication requirements differed according to the needs of 
each pilot situation. For example, in the Wyoming Pilot, RIK was 
delivered to the purchasers at the lease. Therefore, the direction to 
make transportation arrangements was included in ``Dear Operator'' 
letters issued to those operators. For these reasons, we are not 
requesting OMB approval of specific ``Dear Operator'' letters to 
operators but, instead, requesting OMB approval to continue collecting 
the three kinds of reporting requirements concerning communications 
between operators and

[[Page 79143]]

MMS. By obtaining continued approval for these three kinds of reporting 
requirements, MMS will be able to select the types of directed 
communications needed for each situation and include only those types 
in a ``Dear Operator'' letter appropriate to the operation.
    The types of communication and the supporting data MMS will require 
operators to use in setting up the monthly delivery of RIK to the 
purchaser are standard business practices in the oil and gas industry. 
The information in the directed communication is essential to the 
delivery and acceptance of verifiable quantities and qualities of oil 
and gas and is exchanged as a normal part of the conduct of those 
business activities, even when the operators are not directed to do so.
    In addition, due to their similarity, we are merging this ICR with 
OMB Control Number 1010-0130, Directed Communications between Operators 
of Federal RIK Leases and Deliverers of Equivalent Oil Production to 
the Strategic Petroleum Reserve (SPR).
    On February 11, 1999, DOI announced that it would assist in an 
initiative to refill the SPR. This initiative involved collecting RIK 
oil production from Federal lessees in the Gulf of Mexico and 
transferring it to the Department of Energy (DOE). DOE issued contracts 
to companies to take Federal RIK crude oil delivered by MMS's operators 
and, in exchange, to deliver to DOE's SPR an equivalent volume and 
quality of crude oil. DOE was projected to use 28 million barrels of 
RIK oil to refill the SPR.
    On November 6, 2001, President Bush announced an initiative to 
refill the SPR. MMS, in coordination with DOE, entered into a joint, 3-
year initiative to fill the remaining capacity of the SPR. Operators of 
Federal leases in the Gulf of Mexico will deliver MMS's royalty oil to 
MMS's exchange partner at or near the lease. MMS's exchange partner 
will then deliver similar quantities of crude oil to MMS or its 
designated agent at Gulf Coast market centers. MMS's designated agent 
will be either DOE or its exchange contractor. DOE will then contract 
for the exchange or direct movement of exchange oil to the SPR.
    MMS, as responsible steward of oil royalties, must direct operators 
of affected MMS leases to carry out three types of communication with 
MMS. The types of information operators must provide are as stated 
previously.
    These types of information are necessary so that DOE's exchange 
contractors can arrange to timely accept accurate amounts and qualities 
of royalty oil that will be delivered by MMS's exchange partner and for 
MMS to verify timely fulfillment of operators' and lessees' royalty 
obligations to the Federal Government.
    MMS received OMB approval for the three types of communications 
between MMS operators and MMS rather than approval of a single ``Dear 
Operator'' letter directing these communications. By obtaining approval 
for these kinds of reporting requirements, MMS is able to draft 
situation-specific ``Dear Operator'' letters--that is, letters 
addressing only the types of directed communications and other issues 
relevant to the specific situation.
    No proprietary information will be submitted to MMS under this 
collection. No items of a sensitive nature are collected. The 
requirement to respond is mandatory.
    Frequency of Response: Intra-monthly (variable).
    Estimated Number and Description of Respondents: 145 lessees or 
operators of Federal oil and gas leases participating in RIK.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 4,050 
hours.
    The following chart shows the breakdown of the estimated burden 
hours:

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                                                                   Burden hours    Annual number   Annual burden
         RIK pilot programs             Reporting requirement      per response    of responses        hours
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Wyoming Oil........................  Intra-monthly (variable)...               1             100             100
Natural Gas (Texas 8G and GOM).....  Intra-monthly (variable)...               1           3,600           3,600
GOM Oil............................  Intra-monthly (variable)...               1              50              50
SPR Fill Initiative................  Intra-monthly (variable)...               1             300             300
    Total..........................  ...........................  ..............           4,050           4,050
                                                                                 -----------------
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    Estimated Annual Reporting and Record keeping ``Non-Hour Cost'' 
Burden: We have identified no cost burdens for this collection.
    Comments: The PRA (44 U.S.C. 3501, et seq.) provides that an agency 
may not conduct or sponsor, and a person is not required to respond to, 
a collection of information unless it displays a currently valid OMB 
control number. Before submitting an ICR to OMB, PRA Section 
3506(c)(2)(A) requires each agency ``* * * to provide notice * * * and 
otherwise consult with members of the public and affected agencies 
concerning each proposed collection of information * * *. Agencies must 
specifically solicit comments to: (a) Evaluate whether the proposed 
collection of information is necessary for the agency to perform its 
duties, including whether the information is useful; (b) evaluate the 
accuracy of the agency's estimate of the burden of the proposed 
collection of information; (c) enhance the quality, usefulness, and 
clarity of the information to be collected; and (d) minimize the burden 
on the respondents, including the use of automated collection 
techniques or other forms of information technology.
    The PRA also requires agencies to estimate the total annual 
reporting ``non-hour cost'' burden to respondents or recordkeepers 
resulting from the collection of information. We have not identified 
non-hour cost burdens for this information collection. If you have 
costs to generate, maintain, and disclose this information, you should 
comment and provide your total capital and startup cost components or 
annual operation, maintenance, and purchase of service components. You 
should describe the methods you use to estimate major cost factors, 
including system and technology acquisition, expected useful life of 
capital equipment, discount rate(s), and the period over which you 
incur costs. Capital and startup costs include, among other items, 
computers and software you purchase to prepare for collecting 
information; monitoring, sampling, testing equipment; and record 
storage facilities. Generally, your estimates should not include 
equipment or services purchased: (i) Before October 1, 1995; (ii) to 
comply with requirements not associated with the information 
collection; (iii) for reasons other than to provide information or keep 
records for the Government; or (iv) as part of customary and usual 
business or private practices.

[[Page 79144]]

    We will summarize written responses to this notice and address them 
in our ICR submission for OMB approval, including appropriate 
adjustments to the estimated burden. We will provide a copy of the ICR 
to you without charge upon request and the ICR will also be posted on 
our Web site at http://www.mrm.mms.gov/Laws_R_D/FRNotices/FRInfColl.htm.
    Public Comment Policy: We will post all comments in response to 
this notice on our Web site at http://www.mrm.mms.gov/Laws_R_D/FRNotices/FRInfColl.htm. We will also make copies of the comments 
available for public review, including names and addresses of 
respondents, during regular business hours at our offices in Lakewood, 
Colorado. Individual respondents may request we withhold their home 
address from the public record, which we will honor to the extent 
allowable by law. There also may be circumstances in which we would 
withhold from the rulemaking record a respondent's identity, as 
allowable by law. If you request that we withhold your name and/or 
address, state this prominently at the beginning of your comment. 
However, we will not consider anonymous comments. We will make all 
submissions from organizations or businesses, and from individuals 
identifying themselves as representatives or officials of organizations 
or businesses, available for public inspection in their entirety.
    MMS Information Collection Clearance Officer: Jo Ann Lauterbach, 
(202) 208-7744.

    Dated: December 20, 2002.
Cathy J. Hamilton,
Acting Associate Director for Minerals Revenue Management.
[FR Doc. 02-32623 Filed 12-26-02; 8:45 am]
BILLING CODE 4310-MR-P