[Federal Register Volume 74, Number 173 (Wednesday, September 9, 2009)]
[Notices]
[Pages 46448-46451]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-21708]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

[Docket No. MMS-2009-OMM-0004]


MMS Information Collection Activity: 1010-0071, Relief or 
Reduction in Royalty Rates, Extension of a Collection; Submitted for 
Office of Management and Budget (OMB) Review; Comment Request

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of extension of an information collection (1010-0071).

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SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), we 
are notifying the public that we have submitted to OMB an information 
collection request (ICR) to renew approval of the paperwork 
requirements in the regulations under 30 CFR 203, Relief or Reduction 
in Royalty Rates, and related documents. This notice also provides the 
public a second opportunity to comment on the paperwork burden of these 
regulatory requirements.

DATE: Submit written comments by October 9, 2009.

ADDRESSES: You should submit comments directly to the Office of 
Information and Regulatory Affairs, OMB, Attention: Desk Officer for 
the Department of the Interior (1010-0071), either by fax (202) 395-
5806 or e-mail ([email protected]). Please also send a copy to 
MMS by either of the following methods:
     Electronically: Go to http://www.regulations.gov. Under 
the tab More Search Options, click Advanced Docket Search, then select 
Minerals Management Service from the agency drop-down menu, then click 
submit. In the Docket ID column, select MMS-2009-OMM-0004 to submit 
public comments and to view supporting and related materials available. 
Information on using Regulations.gov, including instructions for 
accessing documents, submitting comments, and viewing the docket after 
the close of the comment period, is available through the site's User 
Tips link. The MMS will post all comments.
     Mail or hand-carry comments to the Department of the 
Interior; Minerals Management Service; Attention: Cheryl Blundon; 381 
Elden Street, MS-4024; Herndon, Virginia 20170-4817. Please reference 
Information Collection 1010-0071 in your subject line and include your 
name and address.

FOR FURTHER INFORMATION CONTACT: Cheryl Blundon, Regulations and 
Standards Branch, (703) 787-1607. You may also contact Cheryl Blundon 
to obtain a copy, at no cost, of the regulation that requires the 
subject collection of information.

SUPPLEMENTARY INFORMATION: 
    Title: 30 CFR 203, Relief or Reduction in Royalty Rates.
    OMB Control Number: 1010-0071.
    Abstract: The Outer Continental Shelf (OCS) Lands Act, as amended 
by Public Law 104-58, Deep Water Royalty Relief Act (DWRRA), gives the 
Secretary of the Interior (Secretary) the authority to reduce or 
eliminate royalty or any net profit share specified in OCS oil and gas 
leases to promote increased production. The DWRRA also authorized the 
Secretary to suspend royalties when necessary to promote development or 
recovery of marginal resources on producing or non-producing leases in 
the Gulf of Mexico (GOM) west of 87 degrees, 30 minutes West longitude.
    Section 302 of the DWRRA provides that new production from a lease 
in existence on November 28, 1995, in a water depth of at least 200 
meters, and in the GOM west of 87 degrees, 30 minutes West longitude 
qualifies for royalty suspension in certain situations. To grant a 
royalty suspension, the Secretary must determine that the new 
production or development would not be economic in the absence of 
royalty relief. The Secretary must then determine the volume of 
production on which no royalty would be due in order to make the new 
production from the lease economically viable. This determination is 
done on a case-by-case basis. Production from leases in the same water 
depth and area issued after November 28, 2000, also can qualify for 
royalty suspension in addition to any that may be included in their 
lease terms.
    In addition, Federal policy and statute require us to recover the 
cost of services that confer special benefits to identifiable non-
Federal recipients. The Independent Offices Appropriation Act (31 
U.S.C. 9701), Office of Management and Budget (OMB) Circular A-25, and 
the Omnibus Appropriations Bill (Pub. L. 104-133 110 Stat. 1321, April 
26, 1996) authorize the Minerals Management Service (MMS) to collect 
these fees to reimburse us for the cost to process applications or 
assessments.
    Regulations at 30 CFR part 203 implement these statutes and policy 
and require respondents to pay a fee to request royalty relief. Section 
203.3 states that, ``We will specify the necessary fees for each of the 
types of royalty-relief applications and possible MMS audits in a 
Notice to Lessees. We will periodically update the fees to reflect 
changes in costs as well as provide other information necessary to 
administer royalty relief.''
    The MMS uses the information to make decisions on the economic 
viability of leases requesting a suspension or elimination of royalty 
or net profit share. These decisions have enormous monetary impacts to 
both the lessee and the Federal Government. Royalty relief can lead to 
increased production of natural gas and oil, creating profits for 
lessees and royalty and tax revenues for the government that they might 
not otherwise receive. We could not make an informed decision without 
the collection of information required by 30 CFR part 203.
    Regulations implementing these responsibilities are under 30 CFR 
part 203. Responses are mandatory or are required to obtain or retain a 
benefit. No questions of a sensitive nature are asked. The MMS protects 
information considered proprietary according to 30 CFR parts 203.63 and 
250, and the Freedom of Information Act (5 U.S.C. 552) and its 
implementing regulations (43 CFR part 2).
    Frequency: On occasion.
    Description of Respondents: Potential respondents comprise Federal 
OCS oil and gas lessees and/or operators. It should be noted that not 
all of the

[[Page 46449]]

potential respondents will submit information in any given year and 
some may submit multiple times.
    Estimated Reporting and Recordkeeping Hour Burden: The estimated 
annual hour burden for this information collection is a total of 2,635 
hours. The following chart details the individual components and 
estimated hour burdens. In calculating the burdens, we assumed that 
respondents perform certain requirements in the normal course of their 
activities. We consider these to be usual and customary and took that 
into account in estimating the burden.

----------------------------------------------------------------------------------------------------------------
                                    Reporting or
                                   recordkeeping                            Average No.  of      Annual  burden
     Citation 30 CFR 203         requirement 30 CFR      Hour  burden      annual  responses          hours
                                      part 203
----------------------------------------------------------------------------------------------------------------
                                                                        Application/Audit Fees
----------------------------------------------------------------------------------------------------------------
2(b); 3; 4; 70...............      These sections contain general references to submitting      0
                                    reports, applications, requests, copies, demonstrating
                                    qualifications, for MMS approval--burdens covered under
                                                    specific requirements.
----------------------------------------------------------------------------------------------------------------
               Royalty Relief for Ultra-Deep Gas Wells and Deep Gas Wells on Shallow Water Leases
----------------------------------------------------------------------------------------------------------------
31(c)........................  Request a refund of    1................  1 request............  1
                                or recoup royalties
                                from qualified ultra-
                                deep wells.
----------------------------------------------------------------------------------------------------------------
35(d); 44(e).................  Request to extend the  4................  2 requests...........  8
                                deadline for
                                beginning production
                                with required
                                supporting
                                documentation.
----------------------------------------------------------------------------------------------------------------
41(d)........................  Request a refund of    1................  1 request............  1
                                or recoup royalties
                                from qualified wells
                                >200 meters but <400
                                meters.
----------------------------------------------------------------------------------------------------------------
35(a); 44(a); 47(a)..........  Notify MMS of intent   1................  27 notifications.....  27
                                to begin drilling.
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35(c), (d); 44(b), (d), (e)..  Notify MMS that        2................  24 notifications.....  48
                                production has
                                begun, request
                                confirmation of the
                                size of RSV, provide
                                supporting
                                documentation.
----------------------------------------------------------------------------------------------------------------
46...........................  Provide data from      8................  4 responses..........  32
                                well to confirm and
                                attest well drilled
                                was an unsuccessful
                                certified well with
                                supporting
                                documentation and
                                request supplement.
----------------------------------------------------------------------------------------------------------------
49(b)........................  Notify MMS or           The MMS SOL requires that this reg text  0
                                decision to exercise     stay for legacy purposes only. Last
                                option to replace      time any respondent could use was 2004;
                                one set of deep gas               hence, no burden.
                                royalty suspension
                                terms for another
                                set of such terms.
----------------------------------------------------------------------------------------------------------------
    Subtotal...........................................................  59...................  117
----------------------------------------------------------------------------------------------------------------
                                     End of Life and Special Royalty Relief*
----------------------------------------------------------------------------------------------------------------
51; 83; 84 NTL...............  Application--leases    100..............  1 application every 3  34 (rounded)
                                that generate                             years.
                                earnings that cannot
                                sustain continued
                                production (end-of-
                                life lease);
                                required supporting
                                documentation.
                                                     -----------------------------------------------------------
                                                      application \1/3\ x $8,000 = $2,667 (rounded)* audit \1/3\
                                                                      x $12,500 = $4,167 (rounded)
----------------------------------------------------------------------------------------------------------------
52...........................  Demonstrate ability    1................  1 response...........  1
                                to qualify for
                                royalty relief or to
                                re-qualify.
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55...........................  Renounce relief        1................  1 letter every 3       1 (rounded)
                                arrangement (end-of-                      years.
                                life) (seldom, if
                                ever will be used;
                                minimal burden to
                                prepare letter).
----------------------------------------------------------------------------------------------------------------
80 NTL.......................  Application--apart     250..............  1 application every 2  125
                                from formal programs                      years.
                                for royalty relief
                                for marginal
                                producing lease
                                (Special Case
                                Relief); required
                                supporting
                                documentation.
                                                     -----------------------------------------------------------
                                                          application \1/2\ x $8,000** = $4,000 audit \1/4\ x
                                                                            $12,500 = $3,125
----------------------------------------------------------------------------------------------------------------
80 NTL.......................  Application--apart     1,000............  1 application every 2  500
                                from formal programs                      years.
                                for royalty relief
                                for marginal
                                expansion project or
                                marginal non-
                                producing lease
                                (Special Case
                                Relief); required
                                supporting
                                documentation.
                                                     -----------------------------------------------------------
                                                         application \1/2\ x $19,500** = $9,750 audit \1/4\ x
                                                                            $18,750 = $4,688
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                                                                         3 (rounded)..........  661
                              ----------------------------------------------------------------------------------
    Subtotal.................................$28,397 fees..............
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[[Page 46450]]

 
                                                   CPA Report
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81; 83-90....................  Required reports;                Burden included with            0
                                extension                           applications
                                justification.
                                                     -----------------------------------------------------------
                                                                 1 CPA report x $45,000 each = $45,000
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    Subtotal...........................................................  1....................  $45,000
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                                      Deep Water Royalty Relief Act (DWRAA)
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61; 62; 64; 65; 71; 83; 85-    Application--preview   900..............  1 application every 3  300
 89; NTL.                       assessment (seldom                        years.
                                if ever will be used
                                as applicants
                                generally opt for
                                binding
                                determination by MMS
                                instead) and
                                required supporting
                                documentation.
----------------------------------------------------------------------------------------------------------------
                                                                 application \1/3\ x $28,500 = $9,500
----------------------------------------------------------------------------------------------------------------
62; 64; 65; 71; 83; 85-89....  Application--leases    2,000............  1 application every 3  667 (rounded)
                                in designated areas                       years.
                                of GOM deep water
                                acquired in lease
                                sale before 11/28/95
                                or after 11/28/00
                                and are producing
                                (deep water
                                expansion project);
                                required supporting
                                documentation.
----------------------------------------------------------------------------------------------------------------
                                                                 application \1/3\ x $19,500 = $6,500
----------------------------------------------------------------------------------------------------------------
62; 64; 65; 203.71; 81; 83;    Application--leases    2,000............  1 application every 3  667 (rounded)
 85-89; NTL.                    in designated areas                       years.
                                of deep water GOM,
                                acquired in lease
                                sale before 11/28/95
                                or after 11/28/00
                                that have not
                                produced (pre-act or
                                post-2000 deep water
                                leases); required
                                supporting
                                documentation.
                                                     -----------------------------------------------------------
                                                      application \1/3\ x $34,000 = $11,334 (rounded)* audit \1/
                                                                         3\ x $37,500 = $12,500
----------------------------------------------------------------------------------------------------------------
70; 81; 90; 91...............  Submit fabricator's    20...............  1 report every 3       7 (rounded)
                                confirmation report;                      years.
                                extension
                                justification.
----------------------------------------------------------------------------------------------------------------
70; 81; 90; 92; NTL..........  Submit post-           50...............  1 report* every 3      17 (rounded)
                                production                                years.
                                development report;
                                extension
                                justification.
                                 Reserve
                                right to audit (1
                                audit every 6 years)
                                after production
                                starts to confirm
                                cost estimates of
                                the application.
----------------------------------------------------------------------------------------------------------------
                                                                audit \1/6\ x $18,750 = $3,125
----------------------------------------------------------------------------------------------------------------
74; 75; NTL..................  Redetermination and    500..............  1 redetermination      167 (rounded)
                                required supporting                       every 3 years.
                                documentation.
                                                     -----------------------------------------------------------
                                                            application \1/3\ x $16,000 = $5,334 (rounded)*
----------------------------------------------------------------------------------------------------------------
77...........................  Renounce relief        1................  1 letter every 3       1 (rounded)
                                arrangement (deep                         years.
                                water) (seldom, if
                                ever will be used;
                                minimal burden to
                                prepare letter).
----------------------------------------------------------------------------------------------------------------
79(a)........................  Request                  This was a regulatory requirement for   0
                                reconsideration of           leases issued prior to 1995
                                MMS field
                                designation.
----------------------------------------------------------------------------------------------------------------
79(c)........................  Request extension of   2................  1 request every 3      1 (rounded)
                                deadline to start                         years.
                                construction.
----------------------------------------------------------------------------------------------------------------
81; 83-90....................  Required reports;                Burden included with            0
                                extension                           applications
                                justification.
----------------------------------------------------------------------------------------------------------------
83; NTL......................  Application--short     40...............  1 application every 3  14 (rounded)
                                form to add or                            years.
                                assign pre-Act lease
                                and required
                                supporting
                                documentation.
                                                     -----------------------------------------------------------
                                                              application \1/3\ x $1,000 = $334 (rounded)
----------------------------------------------------------------------------------------------------------------
                                                                         3 (rounded)..........  1,841
----------------------------------------------------------------------------------------------------------------
    Subtotal....................................$48,627................
----------------------------------------------------------------------------------------------------------------

[[Page 46451]]

 
                                                  Recordkeeping
----------------------------------------------------------------------------------------------------------------
81(d)........................  Retain supporting      8................  2 recordkeepers......  16
                                cost records for
                                post-production
                                development/
                                fabrication reports
                                (records retained as
                                usual/customary
                                business practice;
                                minimal burden to
                                make available at
                                MMS request).
----------------------------------------------------------------------------------------------------------------
    Subtotal...........................................................  2 recordkeepers......  16
----------------------------------------------------------------------------------------------------------------
                                                                         68...................  2,635
    Total Annual Burden......................$122,024 Fees.............
----------------------------------------------------------------------------------------------------------------
* CPA certification expense burden also imposed on applicant.
** These applications currently do not have a set fee since they are done on a case-by-case basis.
Note: Applications include numerous items such as: Transmittal letters, letters of request, modifications to
  applications, reapplications, etc.

    Estimated Reporting and Recordkeeping Non-Hour Cost Burden: There 
are two non-hour costs associated with this information collection. The 
estimated non-hour cost burden is $122,024. This estimate is based on:
    (a) Application and audit fees. The total annual estimated cost 
burden for these fees is $77,024 (refer to burden chart).
    (b) Cost of reports prepared by independent certified public 
accountants. Under Sec.  203.81, a report prepared by an independent 
certified public accountant must accompany the application and post-
production report (expansion project, short form, and preview 
assessment applications are excluded). The OCS Lands Act applications 
will require this report only once; the DWRRA applications will require 
this report at two stages--with the application and post-production 
development report for successful applicants. MMS estimates 
approximately one submission each year at an average cost of $45,000 
per report, for a total estimated annual cost burden of $45,000.
    The total of the two burdens is estimated at $122,024.
    Public Disclosure Statement: The PRA (44 U.S.C. 3501, et seq.) 
provides that an agency may not conduct or sponsor a collection of 
information unless it displays a currently valid OMB control number. 
Until OMB approves a collection of information, you are not obligated 
to respond.
    Comments: Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3501, et 
seq.) 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.
    To comply with the public consultation process, on April 22, 2009, 
we published a Federal Register notice (74 FR 18393) announcing that we 
would submit this ICR to OMB for approval. The notice provided the 
required 60-day comment period. In addition, Sec.  203.82 provides the 
OMB control number for the information collection requirements imposed 
by the 30 CFR part 203 regulations. The regulation also informs the 
public that they may comment at any time on the collections of 
information and provides the address to which they should send 
comments. We have received no comments in response to these efforts.
    If you wish to comment in response to this notice, you may send 
your comments to the offices listed under the ADDRESSES section of this 
notice. The OMB has up to 60 days to approve or disapprove the 
information collection but may respond after 30 days. Therefore, to 
ensure maximum consideration, OMB should receive public comments by 
October 9, 2009.
    Public Availability of Comments: Before including your address, 
phone number, e-mail address, or other personal identifying information 
in your comment, you should be aware that your entire comment--
including your personal identifying information--may be made publicly 
available at any time. While you can ask us in your comment to withhold 
your personal identifying information from public review, we cannot 
guarantee that we will be able to do so.
    MMS Information Collection Clearance Officer: Arlene Bajusz, (202) 
208-7744.

    Dated: June 23, 2009.
E.P. Danenberger,
Chief, Office of Offshore Regulatory Programs.
[FR Doc. E9-21708 Filed 9-8-09; 8:45 am]
BILLING CODE 4310-MR-P