[Federal Register Volume 75, Number 171 (Friday, September 3, 2010)]
[Notices]
[Pages 54164-54175]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-22049]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management, Regulation, and Enforcement

[Docket No. MMS-2008-MRM-0031]


Agency Information Collection Activities: Submitted for Office of 
Management and Budget Review; Comment Request

AGENCY: Bureau of Ocean Energy Management, Regulation, and Enforcement 
(BOEM), Interior.

ACTION: Notice of an extension of a currently approved information 
collection (OMB Control Number 1010-0136).

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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 the Office of 
Management and Budget (OMB) an information collection request (ICR) to 
renew approval of the paperwork requirements in 30 CFR parts 202, 204, 
206, and 210. This notice also provides the public a second opportunity 
to comment on the paperwork burden of these regulatory requirements. We 
consolidated this ICR and ICR 1010-0090, Stripper Royalty Rate 
Reduction Notification, in order to facilitate program wide review of 
Federal oil and gas valuation. The new title of this ICR is ``30 CFR 
Parts 202, 204, 206, and 210, Federal Oil and Gas Valuation.''

DATES: Submit written comments on or before October 4, 2010.

ADDRESSES: Submit written comments by either FAX (202) 395-6566 or e-
mail ([email protected]) directly to the Office of Information 
and Regulatory Affairs, OMB, Attention: Desk Officer for the Department 
of the Interior (OMB Control Number 1010-0136).
    Please also submit a copy of your comments on this ICR to BOEM by 
any of the following methods. Please use ``ICR 1010-0136'' as an 
identifier in your comment.
     Electronically go to http://www.regulations.gov. In the 
entry titled ``Enter Keyword or ID,'' enter MMS-2008-MRM-0031, and then 
click search. Follow the instructions to submit public comments. The 
BOEM will post all comments.
     Mail comments to Hyla Hurst, Regulatory Specialist, Bureau 
of Ocean Energy Management, Regulation, and Enforcement, Minerals 
Revenue Management, P.O. Box 25165, MS 61013B, Denver, Colorado 80225. 
Please reference ICR 1010-0136 in your comments.
     Hand-carry comments or use an overnight courier service. 
Our courier address is Building 85, Room A-614, Denver Federal Center, 
West 6th Ave. and Kipling St., Denver, Colorado 80225. Please reference 
ICR 1010-0136 in your comments.

FOR FURTHER INFORMATION CONTACT: Hyla Hurst, telephone (303) 231-3495, 
or e-mail [email protected]. You may also contact Hyla Hurst to 
obtain copies, at no cost, of (1) the ICR, (2) any associated forms, 
and (3) the regulations that require the subject collection of 
information.

SUPPLEMENTARY INFORMATION:
    Title: 30 CFR Parts 202, 204, 206, and 210, Federal Oil and Gas 
Valuation.
    OMB Control Number: 1010-0136.
    Bureau Form Number: Forms MMS-4377 and MMS-4393.
    Abstract: The Secretary of the U.S. Department of the Interior is 
responsible for mineral resource development on Federal and Indian 
lands and the Outer Continental Shelf (OCS). The Secretary is required 
by various laws to manage mineral resource production from Federal and 
Indian lands and the OCS, collect the royalties and other mineral 
revenues due, and distribute the funds collected in accordance with 
applicable laws. Public laws pertaining to mineral leases on Federal 
and Indian lands are posted on our Web site at http://www.mrm.boemre.gov/Laws_R_D/PublicLawsAMR.htm.

[[Page 54165]]

I. General Information

    When a company or an individual enters into a lease to explore, 
develop, produce, and dispose of minerals from Federal or Indian lands, 
that company or individual agrees to pay the lessor a share in an 
amount or value of production from the leased lands. The lessee is 
required to report various kinds of information to the lessor relative 
to the disposition of the leased minerals. Such information is 
generally available within the records of the lessee or others involved 
in developing, transporting, processing, purchasing, or selling of such 
minerals.

II. Information Collections

    We use the information collected in this ICR to ensure that royalty 
is accurately valued and appropriately paid on oil and gas produced 
from Federal onshore and offshore leases. Please refer to the burden 
hour table for all reporting requirements and associated burden hours. 
All data submitted is subject to subsequent audit and adjustment.

A. Federal Oil and Gas Valuation Regulations

    The valuation regulations at 30 CFR part 206, subparts C and D, 
mandate that companies collect and/or submit information used to value 
their Federal oil and gas, including (1) transportation and processing 
allowances; and (2) regulatory allowance limitation information. 
Companies report certain data on Form MMS-2014, Report of Sales and 
Royalty Remittance (OMB Control Number 1010-0139). The information 
requested is the minimum necessary to carry out our mission and places 
the least possible burden on respondents. If BOEM does not collect this 
information, both Federal and state governments may incur a loss of 
royalties.
Transportation and Processing Regulatory Allowance Limits
    Lessees may deduct the reasonable, actual costs of transportation 
and processing from Federal royalties. These allowances are reported on 
Form MMS-2014.
Request To Exceed Regulatory Allowance Limitation, Form MMS-4393
    Lessees may request to exceed regulatory limitations. Upon proper 
application from the lessee, BOEM may approve an oil or gas 
transportation allowance in excess of 50 percent or a gas processing 
allowance in excess of 66\2/3\; percent on Federal leases. Form MMS-
4393 is used for both Federal and Indian leases to request to exceed 
allowance limitations. This ICR covers only Federal leases; therefore 
we have not included burden hours for Form MMS-4393 for Indian leases 
in this ICR. Burden hours for Form MMS-4393 for Indian leases are 
included in OMB Control Number 1010-0103.

B. Accounting and Auditing Relief for Marginal Properties

    In 2004, we amended our regulations to comply with section 7 of the 
Federal Oil and Gas Royalty Simplification and Fairness Act of 1996. 
The regulations provide guidance for lessees and designees seeking 
accounting and auditing relief for qualifying Federal marginal 
properties. Under the regulations, both BOEM and the state concerned 
must approve any relief granted for a marginal property.

C. Stripper Oil Royalty Rate Reduction Program

    Under 43 CFR 3103.4-2, the Stripper Oil Royalty Rate Reduction 
Program (Stripper Oil Program) was established by the Bureau of Land 
Management (BLM), the surface management agency for Federal onshore 
leases. The Minerals Revenue Management (MRM), who administered the 
Stripper Oil Program for BLM, approved royalty rate reductions for 
operators of stripper oil properties for applicable sales periods from 
October 1, 1992, through January 31, 2006. Effective February 1, 2006, 
the reduced royalty rates under this program were terminated. This 
change is not currently reflected in the CFR; however, BLM is 
processing a final rule to remove this citation from the regulations.
    For production through January 31, 2006, reporters used Form MMS-
4377, Stripper Royalty Rate Reduction Notification, to notify MRM of 
royalty rate changes. Although the royalty rate reductions were 
terminated, MRM continues to verify previously submitted notifications 
and may require the operator to submit an amended Form MMS-4377.

III. OMB Approval

    We are requesting OMB approval to continue to collect this 
information. Not collecting this information would limit the 
Secretary's ability to discharge his/her duties and may also result in 
loss of royalty payments. Proprietary information submitted to BOEM 
under this collection is protected, and no items of a sensitive nature 
are included in this information collection.
    For information collections relating to valuation requirements, 
responses are mandatory. For the remaining information collections in 
this ICR, responses are required to obtain a benefit.
    Frequency: Annually and on occasion.
    Estimated Number and Description of Respondents: 120 Federal 
lessees/designees and 7 states for Federal oil and gas valuation; and 
150 lessees/lessors for the Stripper Oil Program.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 9,378 
hours.
    We have not included in our estimates certain requirements 
performed in the normal course of business and considered usual and 
customary. The following chart shows the estimated burden hours by CFR 
section and paragraph:

                                                       Respondents' Estimated Annual Burden Hours
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                                                                                                                       Average number
         30 CFR 202, 204, 206, and 210                Reporting and recordkeeping requirement          Hour burden        of annual       Annual burden
                                                                                                                          responses           hours
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                                                                   PART 202--ROYALTIES
                                                            Subpart C--Federal and Indian Oil
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202.101.......................................  202.101 Oil volumes are to be reported in barrels    Burden covered under OMB Control Number 1010-0139.
                                                 of clean oil of 42 standard U.S. gallons (231
                                                 cubic inches each) at 60 [deg]F * * *.
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[[Page 54166]]

 
                                                                 Subpart D--Federal Gas
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202.152(a) and (b)............................  202.152(a)(1) If you are responsible for reporting   Burden covered under OMB Control Number 1010-0139.
                                                 production or royalties you must:
                                                (i) Report gas volumes and British thermal unit
                                                 (Btu) heating values, if applicable, under the
                                                 same degree of water saturation;
                                                (ii) Report gas volumes in units of 1,000 cubic
                                                 feet (mcf); and
                                                (iii) Report gas volumes and Btu heating value at
                                                 a standard pressure base of 14.73 pounds per
                                                 square inch absolute (psia) and a standard
                                                 temperature base of 60 [deg]F * * *.
                                                (b) Residue gas and gas plant product volumes
                                                 shall be reported as specified in this paragraph
                                                 * * *.
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                                                     PART 204--ALTERNATIVES FOR MARGINAL PROPERTIES
                                                        Subpart C--Accounting and Auditing Relief
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204.202(b)(1).................................  204.202(b) To use the cumulative royalty reports                  40                 1                40
                                                 and payments relief option, you must do all of
                                                 the following:
                                                (1) Notify MMS in writing by January 31 of the
                                                 calendar year for which you begin taking your
                                                 relief * * *.
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204.202(b)(2) and (b)(3)......................  204.202(b)(2) Submit your royalty report and         Burden covered under OMB Control Number 1010-0139.
                                                 payment * * * by the end of February of the year
                                                 following the calendar year for which you
                                                 reported annually * * *. If you have an estimated
                                                 payment on file, you must submit your royalty
                                                 report and payment by the end of March of the
                                                 year following the calendar year for which you
                                                 reported annually;
                                                (3) Use the sales month prior to the month that
                                                 you submit your annual report and payment * * *
                                                 for the entire previous calendar year's
                                                 production for which you are paying annually * *
                                                 *.
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204.202(b)(4), (b)(5), (c), (d)(1), (d)(2),     204.202(b) To use the cumulative royalty reports     Burden covered under OMB Control Number 1010-0139.
 (e)(1), and (e)(2).                             and payments relief option, you must * * *
                                                (4) Report one line of cumulative royalty
                                                 information on Form MMS-2014 for the calendar
                                                 year * * * and
                                                (5) Report allowances on Form MMS-2014 on the same
                                                 annual basis as the royalties for your marginal
                                                 property production.
                                                (c) If you do not pay your royalty by the date due
                                                 in paragraph (b) of this section, you will owe
                                                 late payment interest * * * from the date your
                                                 payment was due under this section until the date
                                                 MMS receives it * * *.
                                                (d) If you take relief you are not qualified for,
                                                 you may be liable for civil penalties.
                                                 Also you must:
                                                (1) Pay MMS late payment interest determined under
                                                 30 CFR 218.54 * * *
                                                (2) Amend your Form MMS-2014 * * *
                                                (e) If you dispose of your ownership interest in a
                                                 marginal property for which you have taken relief
                                                 * * * you must:
                                                (1) Report and pay royalties for the portion of
                                                 the calendar year for which you had an ownership
                                                 interest; and
                                                (2) Make the report and payment by the end of the
                                                 month after you dispose of the ownership interest
                                                 in the marginal property. If you do not report
                                                 and pay timely, you will owe interest * * * from
                                                 the date the payment was due * * *.
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[[Page 54167]]

 
204.203(b), 204.205(a) and (b), and             204.203(b) You must request approval from MMS * *                200                 1               200
 204.206(a)(3)(i) and (b)(1).                    * before taking relief under this option.
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204.208(c)(1), (d)(1), and (e)................  204.208(c) If a State decides * * * that it will                  40                 7               280
                                                 or will not allow one or both of the relief
                                                 options * * * within 30 days * * * the State
                                                 must:
                                                (1) Notify the Associate Director for Minerals
                                                 Revenue Management, MMS, in writing, of its
                                                 intent to allow or not allow one or both of the
                                                 relief options * * *
                                                (d) If a State decides in advance * * * that it
                                                 will not allow one or both of the relief options
                                                 * * * the State must: (1) Notify the Associate
                                                 Director for Minerals Revenue Management, MMS, in
                                                 writing, of its intent to allow one or both of
                                                 the relief options * * *
                                                (e) If a State does not notify MMS * * * the State
                                                 will be deemed to have decided not to allow
                                                 either of the relief options * * *
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204.209(b)....................................  204.209(b) If a property is no longer eligible for                 6                 1                 6
                                                 relief * * * the relief for the property
                                                 terminates as of December 31 of that calendar
                                                 year. You must notify MMS in writing by December
                                                 31 that the relief for the property has
                                                 terminated * * *
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204.210(c) and (d)............................  204.210(c) * * * the volumes on which you report     Burden covered under OMB Control Number 1010-0139.
                                                 and pay royalty * * * must be amended to reflect
                                                 all volumes produced on or allocated to your
                                                 lease under the nonqualifying agreement as
                                                 modified by BLM * * *. Report and pay royalties
                                                 for your production using the procedures in Sec.
                                                  204.202(b).
                                                (d) If you owe additional royalties based on the
                                                 retroactive agreement approval and do not pay
                                                 your royalty by the date due in Sec.
                                                 204.202(b), you will owe late payment interest
                                                 determined under 30 CFR 218.54 from the date your
                                                 payment was due under Sec.   204.202(b)(2) until
                                                 the date MMS receives it.
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204.214(b)(1) and (b)(2)......................  204.214(b) If you pay minimum royalty on             Burden covered under OMB Control Number 1010-0139.
                                                 production from a marginal property during a
                                                 calendar year for which you are taking cumulative
                                                 royalty reports and payment relief, and:
                                                (1) The annual payment you owe under this subpart
                                                 is greater than the minimum royalty you paid, you
                                                 must pay the difference between the minimum
                                                 royalty you paid and your annual payment due
                                                 under this subpart; or
                                                (2) The annual payment you owe under this subpart
                                                 is less than the minimum royalty you paid, you
                                                 are not entitled to a credit because you must pay
                                                 at least the minimum royalty amount on your lease
                                                 each year.
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    Accounting and Auditing Relief Subtotal.........................................................................                10               526
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                                                               PART 206--PRODUCT VALUATION
                                                                 Subpart C--Federal Oil
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206.102(e)(1).................................  206.102(e) If you value oil under paragraph (a) of                AUDIT PROCESS. See note.
                                                 this section: (1) MMS may require you to certify
                                                 that your or your affiliate's arm's-length
                                                 contract provisions include all of the
                                                 consideration the buyer must pay, either directly
                                                 or indirectly, for the oil.
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[[Page 54168]]

 
206.103(a)(1), (a)(2), and (a)(3).............  206.103 This section explains how to value oil                    45                 5               225
                                                 that you may not value under Sec.   206.102 or
                                                 that you elect under Sec.   206.102(d) to value
                                                 under this section. First determine whether
                                                 paragraph (a), (b), or (c) of this section
                                                 applies to production from your lease, or whether
                                                 you may apply paragraph (d) or (e) with MMS
                                                 approval.
                                                (a) Production from leases in California or
                                                 Alaska. Value is the average of the daily mean
                                                 ANS spot prices published in any MMS-approved
                                                 publication during the trading month most
                                                 concurrent with the production month * * *.
                                                (1) To calculate the daily mean spot price * * *
                                                (2) Use only the days * * *
                                                (3) You must adjust the value * * *
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206.103(a)(4).................................  206.103(a)(4) After you select an MMS-approved                     8                 2                16
                                                 publication, you may not select a different
                                                 publication more often than once every 2 years, *
                                                 * *
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206.103(b)(1).................................  206.103(b) Production from leases in the Rocky                   400                 2               800
                                                 Mountain Region. * * * (1) If you have an MMS-
                                                 approved tendering program, you must value oil *
                                                 * *
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206.103(b)(1)(ii).............................  206.103(b)(1)(ii) If you do not have an MMS-                     400                 2               800
                                                 approved tendering program, you may elect to
                                                 value your oil under either paragraph (b)(2) or
                                                 (b)(3) of this section * * *.
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206.103(b)(4).................................  206.103(b)(4) If you demonstrate to MMS's                        400                 2               800
                                                 satisfaction that paragraphs (b)(1) through
                                                 (b)(3) of this section result in an unreasonable
                                                 value for your production as a result of
                                                 circumstances regarding that production, the MMS
                                                 Director may establish an alternative valuation
                                                 method.
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206.103(c)(1).................................  206.103(c) Production from leases not located in                  50                10               500
                                                 California, Alaska or the Rocky Mountain Region.
                                                 (1) Value is the NYMEX price, plus the roll,
                                                 adjusted for applicable location and quality
                                                 differentials and transportation costs under Sec.
                                                   206.112.
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206.103(e)(1) and (e)(2)......................  206.103(e) Production delivered to your refinery                 330                 2               660
                                                 and the NYMEX price or ANS spot price is an
                                                 unreasonable value.
                                                (1) * * * you may apply to the MMS Director to
                                                 establish a value representing the market at the
                                                 refinery if: * * *
                                                (2) You must provide adequate documentation and
                                                 evidence demonstrating the market value at the
                                                 refinery * * *.
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206.105.......................................  206.105 If you determine the value of your oil       Burden covered under OMB Control Number 1010-0139.
                                                 under this subpart, you must retain all data
                                                 relevant to the determination of royalty value *
                                                 * *.
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206.107(a)....................................  206.107(a) You may request a value determination                  40                10               400
                                                 from MMS * * *
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206.109(c)(2).................................  206.109(c) Limits on transportation allowances.                    8                 2                16
                                                 (2) You may ask MMS to approve a transportation
                                                 allowance in excess of the limitation in
                                                 paragraph (c)(1) of this section * * *. Your
                                                 application for exception (using Form MMS-4393,
                                                 Request to Exceed Regulatory Allowance
                                                 Limitation) must contain all relevant and
                                                 supporting documentation necessary for MMS to
                                                 make a determination * * *
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[[Page 54169]]

 
206.110(a)....................................  206.110(a) * * *. You must be able to demonstrate                 AUDIT PROCESS. See note.
                                                 that your or your affiliate's contract is at
                                                 arm's length * * *.
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206.110(d)(3).................................  206.110(d) If your arm's-length transportation                    20                 2                40
                                                 contract includes more than one liquid product,
                                                 and the transportation costs attributable to each
                                                 product cannot be determined * * *
                                                (3) You may propose to MMS a cost allocation
                                                 method * * *
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206.110(e)....................................  206.110(e) If your arm's-length transportation                    20                 1                20
                                                 contract includes both gaseous and liquid
                                                 products, and the transportation costs
                                                 attributable to each product cannot be determined
                                                 from the contract, then you must propose an
                                                 allocation procedure to MMS.
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206.110(e)(1) and (e)(2)......................  206.110(e)(1) * * * If MMS rejects your cost         Burden covered under OMB Control Number 1010-0139.
                                                 allocation, you must amend your Form MMS-2014 * *
                                                 *
                                                (2) You must submit your initial proposal,
                                                 including all available data, within 3 months
                                                 after first claiming the allocated deductions on
                                                 Form MMS-2014.
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206.110(g)(2).................................  206.110(g) If your arm's-length sales contract                     5                 1                 5
                                                 includes a provision reducing the contract price
                                                 by a transportation factor, * * *
                                                (2) You must obtain MMS approval before claiming a
                                                 transportation factor in excess of 50 percent of
                                                 the base price of the product.
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206.111(g)....................................  206.111(g) To compute depreciation, you may elect                 30                 1                30
                                                 to use either * * *. After you make an election,
                                                 you may not change methods without MMS approval *
                                                 * *.
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206.111(k)(2).................................  206.111(k)(2) You may propose to MMS a cost                       30                 1                30
                                                 allocation method on the basis of the values * *
                                                 *.
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206.111(l)(1) and (l)(3)......................  206.111(l)(1) Where you transport both gaseous and                20                 1                20
                                                 liquid products through the same transportation
                                                 system, you must propose a cost allocation
                                                 procedure to MMS * * *.
                                                (3) You must submit your initial proposal,
                                                 including all available data, within 3 months
                                                 after first claiming the allocated deductions on
                                                 Form MMS-2014.
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206.111(l)(2).................................  206.111(l)(2) * * * If MMS rejects your cost         Burden covered under OMB Control Number 1010-0139.
                                                 allocation, you must amend your Form MMS-2104 for
                                                 the months that you used the rejected method and
                                                 pay any additional royalty and interest due.
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206.112(a)(1)(ii).............................  206.112(a)(1)(ii) * * * under an exchange                         80                 1                80
                                                 agreement that is not at arm's length, you must
                                                 obtain approval from MMS for a location and
                                                 quality differential * * *.
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206.112(a)(1)(ii).............................  206.112(a)(1)(ii) * * * If MMS prescribes a                       20                 2                40
                                                 different differential, you must apply * * *. You
                                                 must pay any additional royalties owed * * * plus
                                                 the late payment interest from the original
                                                 royalty due date, or you may report a credit * *
                                                 *
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[[Page 54170]]

 
206.112(a)(3) and (a)(4)......................  206.112(a)(3) If you transport or exchange at                     80                 4               320
                                                 arm's length (or both transport and exchange) at
                                                 least 20 percent, but not all, of your oil
                                                 produced from the lease to a market center,
                                                 determine the adjustment between the lease and
                                                 the market center for the oil that is not
                                                 transported or exchanged (or both transported and
                                                 exchanged) to or through a market center as
                                                 follows: * * *
                                                (4) If you transport or exchange (or both
                                                 transport and exchange) less than 20 percent of
                                                 your crude oil produced from the lease between
                                                 the lease and a market center, you must propose
                                                 to MMS an adjustment between the lease and the
                                                 market center for the portion of the oil that you
                                                 do not transport or exchange (or both transport
                                                 and exchange) to a market center * * *. If MMS
                                                 prescribes a different adjustment * * *. You must
                                                 pay any additional royalties owed * * * plus the
                                                 late payment interest from the original royalty
                                                 due date, or you may report a credit * * *.
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206.112(b)(3).................................  206.112(b)(3) * * * you may propose an alternative                80                 4               320
                                                 differential to MMS * * *. If MMS prescribes a
                                                 different differential * * *. You must pay any
                                                 additional royalties owed * * * plus the late
                                                 payment interest from the original royalty due
                                                 date, or you may report a credit * * *
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206.112(c)(2).................................  206.112(c)(2) * * * If quality bank adjustments do                80                 2               160
                                                 not incorporate or provide for adjustments for
                                                 sulfur content, you may make sulfur adjustments,
                                                 based on the quality of the representative crude
                                                 oil at the market center, of 5.0 cents per one-
                                                 tenth percent difference in sulfur content,
                                                 unless MMS approves a higher adjustment.
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206.114.......................................  206.114 You or your affiliate must use a separate    Burden covered under OMB Control Number 1010-0139.
                                                 entry on Form MMS-2014 to notify MMS of an
                                                 allowance based on transportation costs you or
                                                 your affiliate incur.
                                                                                                   -----------------------------------------------------
                                                MMS may require you or your affiliate to submit                   AUDIT PROCESS. See note.
                                                 arm's-length transportation contracts, production
                                                 agreements, operating agreements, and related
                                                 documents * * *.
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206.115(a)....................................  206.115(a) You or your affiliate must use a          Burden covered under OMB Control Number 1010-0139.
                                                 separate entry on Form MMS-2014 to notify MMS of
                                                 an allowance based on transportation costs you or
                                                 your affiliate incur.
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206.115(c)....................................  206.115(c) MMS may require you or your affiliate                  AUDIT PROCESS. See note.
                                                 to submit all data used to calculate the
                                                 allowance deduction * * *.
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                                                                 Subpart D--Federal Gas
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.152 (b)(1)(i) and (b)(1)(iii).............  206.152(b)(1)(i) * * * The lessee shall have the                  AUDIT PROCESS. See note.
                                                 burden of demonstrating that its contract is
                                                 arm's-length * * *. (iii) * * * When MMS
                                                 determines that the value may be unreasonable,
                                                 MMS will notify the lessee and give the lessee an
                                                 opportunity to provide written information
                                                 justifying the lessee's value.
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206.152(b)(2).................................  206.152(b)(2) * * * The lessee must request a                     80                 1                80
                                                 value determination in accordance with paragraph
                                                 (g) of this section for gas sold pursuant to a
                                                 warranty contract; * * *
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[[Page 54171]]

 
206.152(b)(3).................................  206.152(b)(3) MMS may require a lessee to certify                 AUDIT PROCESS. See note.
                                                 that its arm's-length contract provisions include
                                                 all of the consideration to be paid by the buyer,
                                                 either directly or indirectly, for the gas.
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206.152(e)(1).................................  206.152(e)(1) Where the value is determined          Burden covered under OMB Control Number 1010-0139.
                                                 pursuant to paragraph (c) of this section, the
                                                 lessee shall retain all data relevant to the
                                                 determination of royalty value * * *.
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206.152(e)(2).................................  206.152(e)(2) Any Federal lessee will make                        AUDIT PROCESS. See note.
                                                 available upon request to the authorized MMS or
                                                 State representatives, to the Office of the
                                                 Inspector General of the department of the
                                                 Interior, or other person authorized to receive
                                                 such information, arm's-length sales and volume
                                                 data for like-quality production sold, purchased
                                                 or otherwise obtained by the lessee from the
                                                 field or area or from nearby fields or areas.
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206.152(e)(3).................................  206.152(e)(3) A lessee shall notify MMS if it has                 10                10               100
                                                 determined value pursuant to paragraph (c)(2) or
                                                 (c)(3) of this section * * *.
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206.152(g)....................................  206.152(g) The lessee may request a value                         40                 5               200
                                                 determination from MMS * * *. The lessee shall
                                                 submit all available data relevant to its
                                                 proposal * * *.
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206.153(b)(1)(i) and (b)(1)(iii)..............  206.153(b)(1)(i) * * * The lessee shall have the                  AUDIT PROCESS. See note.
                                                 burden of demonstrating that its contract is
                                                 arm's-length * * *.
                                                (iii) * * * When MMS determines that the value may
                                                 be unreasonable, MMS will notify the lessee and
                                                 give the lessee an opportunity to provide written
                                                 information justifying the lessee's value.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.153(b)(2).................................  206.153(b)(2) * * * The lessee must request a                     80                 1                80
                                                 value determination in accordance with paragraph
                                                 (g) of this section for gas sold pursuant to a
                                                 warranty contract; * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.153(b)(3).................................  206.153(b)(3) MMS may require a lessee to certify                 AUDIT PROCESS. See note.
                                                 that its arm's-length contract provisions include
                                                 all of the consideration to be paid by the buyer,
                                                 either directly or indirectly, for the residue
                                                 gas or gas plant product.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.153(e)(1).................................  206.153(e)(1) Where the value is determined          Burden covered under OMB Control Number 1010-0139.
                                                 pursuant to paragraph (c) of this section, the
                                                 lessee shall retain all data relevant to the
                                                 determination of royalty value * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.153(e)(2).................................  206.153(e)(2) Any Federal lessee will make                        AUDIT PROCESS. See note.
                                                 available upon request to the authorized MMS or
                                                 State representatives, to the Office of the
                                                 Inspector General of the Department of the
                                                 Interior, or other persons authorized to receive
                                                 such information, arm's-length sales and volume
                                                 data for like-quality residue gas and gas plant
                                                 products sold, purchased or otherwise obtained by
                                                 the lessee from the same processing plant or from
                                                 nearby processing plants.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.153(e)(3).................................  206.153(e)(2) A lessee shall notify MMS if it has                 10                 2                20
                                                 determined any value pursuant to paragraph (c)(2)
                                                 or (c)(3) of this section * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.153(g)....................................  206.153(g) The lessee may request a value                         80                15             1,200
                                                 determination from MMS * * *. The lessee shall
                                                 submit all available data relevant to its
                                                 proposal * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 54172]]

 
206.154(c)(4).................................  206.154(c)(4) * * * A lessee may request MMS                      40                 1                40
                                                 approval of other methods for determining the
                                                 quantity of residue gas and gas plant products
                                                 allocable to each lease * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.156(c)(3).................................  206.156(c)(3) Upon request of a lessee, MMS may                   40                 3               120
                                                 approve a transportation allowance deduction in
                                                 excess of the limitation prescribed by paragraphs
                                                 (c)(1) and (c)(2) of this section * * *. An
                                                 application for exception (using Form MMS-4393,
                                                 Request to Exceed Regulatory Allowance
                                                 Limitation) must contain all relevant and
                                                 supporting documentation necessary for MMS to
                                                 make a determination * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(a)(1)(i)..............................  206.157(a) Arm's-length transportation contracts.                 AUDIT PROCESS. See note.
                                                 (1)(i) * * * The lessee shall have the burden of
                                                 demonstrating that its contract is arm's-length *
                                                 * *.
                                                                                                   -----------------------------------------------------
                                                The lessee must claim a transportation allowance     Burden covered under OMB Control Number 1010-0139.
                                                 by reporting it on a separate line entry on the
                                                 Form MMS-2014.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(a)(1)(iii)............................  206.157(a)(1)(iii) * * * When MMS determines that                 AUDIT PROCESS. See note.
                                                 the value of the transportation may be
                                                 unreasonable, MMS will notify the lessee and give
                                                 the lessee an opportunity to provide written
                                                 information justifying the lessee's
                                                 transportation costs.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(a)(2)(ii).............................  206.157(a)(2)(ii) * * * the lessee may propose to                 40                 1                40
                                                 MMS a cost allocation method on the basis of the
                                                 values of the products transported * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(a)(3).................................  206.157(a)(3) If an arm's-length transportation                   40                 1                40
                                                 contract includes both gaseous and liquid
                                                 products and the transportation costs
                                                 attributable to each cannot be determined from
                                                 the contract, the lessee shall propose an
                                                 allocation procedure to MMS * * *. The lessee
                                                 shall submit all relevant data to support its
                                                 proposal * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(a)(5).................................  206.157(a)(5) * * * The transportation factor may                 10                 3                30
                                                 not exceed 50 percent of the base price of the
                                                 product without MMS approval.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(b)(1).................................  206.157(b) Non-arm's-length or no contract. (1)      Burden covered under OMB Control Number 1010-0139.
                                                 The lessee must claim a transportation allowance
                                                 by reporting it on a separate line entry on the
                                                 Form MMS-2014 * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(b)(2)(iv) and (b)(2)(iv) (A)..........  206.157(b)(2)(iv) * * * After a lessee has elected               100                 1               100
                                                 to use either method for a transportation system,
                                                 the lessee may not later elect to change to the
                                                 other alternative without approval of the MMS.
                                                (A) * * * After an election is made, the lessee
                                                 may not change methods without MMS approval * *
                                                 *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(b)(3)(i)..............................  206.157(b)(3)(i) * * * Except as provided in this                100                 1               100
                                                 paragraph, the lessee may not take an allowance
                                                 for transporting a product which is not royalty
                                                 bearing without MMS approval.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(b)(3)(ii).............................  206.157(b)(3)(ii) * * * the lessee may propose to                100                 1               100
                                                 the MMS a cost allocation method on the basis of
                                                 the values of the products transported * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 54173]]

 
206.157(b)(4).................................  206.157(b)(4) Where both gaseous and liquid                      100                 1               100
                                                 products are transported through the same
                                                 transportation system, the lessee shall propose a
                                                 cost allocation procedure to MMS * * *. The
                                                 lessee shall submit all relevant data to support
                                                 its proposal * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(b)(5).................................  206.157(b)(5) You may apply for an exception from                100                 1               100
                                                 the requirement to compute actual costs under
                                                 paragraphs (b)(1) through (b)(4) of this section.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(c)(1)(i)..............................  206.157(c) Reporting Requirements. (1) Arm's-        Burden covered under OMB Control Number 1010-0139.
                                                 length contracts. (i) You must use a separate
                                                 entry on Form MMS-2014 to notify MMS of a
                                                 transportation allowance.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(c)(1)(ii).............................  206.157(c)(1)(ii) The MMS may require you to                      AUDIT PROCESS. See note.
                                                 submit arm's-length transportation contracts,
                                                 production agreements, operating agreements, and
                                                 related documents * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(c)(2)(i)..............................  206.157(c)(2) Non-arm's-length or no contract. (i)   Burden covered under OMB Control Number 1010-0139.
                                                 You must use a separate entry on Form MMS-2014 to
                                                 notify MMS of a transportation allowance.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(c)(2)(iii)............................  206.157(c)(2)(iii) The MMS may require you to                     AUDIT PROCESS. See note.
                                                 submit all data used to calculate the allowance
                                                 deduction * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.157(e)(2), (e)(3), and (f)(1).............  206.157(e) Adjustments. (2) For lessees              Burden covered under OMB Control Number 1010-0139.
                                                 transporting production from onshore Federal
                                                 leases, the lessee must submit a corrected Form
                                                 MMS-2014 to reflect actual costs, together with
                                                 any payment, in accordance with instructions
                                                 provided by MMS.
                                                (3) For lessees transporting gas production from
                                                 leases on the OCS, if the lessee's estimated
                                                 transportation allowance exceeds the allowance
                                                 based on actual costs, the lessee must submit a
                                                 corrected Form MMS-2014 to reflect actual costs,
                                                 together with its payments, in accordance with
                                                 instructions provided by MMS * * *.
                                                (f) Allowable costs in determining transportation
                                                 allowances. * * * (1) Firm demand charges paid to
                                                 pipelines. * * * if you receive a payment or
                                                 credit from the pipeline for penalty refunds,
                                                 rate case refunds, or other reasons, you must
                                                 reduce the firm demand charge claimed on the Form
                                                 MMS-2014 by the amount of that payment. You must
                                                 modify Form MMS-2014 by the amount received or
                                                 credited for the affected reporting period and
                                                 pay any resulting royalty and late payment
                                                 interest due;
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.158(c)(3).................................  206.158(c)(3) Upon request of a lessee, MMS may                   80                 8               640
                                                 approve a processing allowance in excess of the
                                                 limitation prescribed by paragraph (c)(2) of this
                                                 section * * *. An application for exception
                                                 (using Form MMS-4393, Request to Exceed
                                                 Regulatory Allowance Limitation) shall contain
                                                 all relevant and supporting documentation for MMS
                                                 to make a determination * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.158(d)(2)(i)..............................  206.158(d)(2)(i) If the lessee incurs                             80                 1                80
                                                 extraordinary costs for processing gas production
                                                 from a gas production operation, it may apply to
                                                 MMS for an allowance for those costs * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.158(d)(2)(ii).............................  206.158(d)(2)(ii) * * * to retain the authority to   Burden covered under OMB Control Number 1010-0139.
                                                 deduct the allowance the lessee must report the
                                                 deduction to MMS in a form and manner prescribed
                                                 by MMS.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 54174]]

 
206.159(a)(1)(i)..............................  206.159(a) Arm's-length processing contracts.                     AUDIT PROCESS. See note.
                                                                                                   -----------------------------------------------------
                                                (1)(i) * * *The lessee shall have the burden of      Burden covered under OMB Control Number 1010-0139.
                                                 demonstrating that its contract is arm's-length *
                                                 * *.
                                                The lessee must claim a processing allowance by
                                                 reporting it on a separate line entry on the Form
                                                 MMS-2014.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.159(a)(1)(iii)............................  206.159(a)(1)(iii) * * * When MMS determines that                 AUDIT PROCESS. See note.
                                                 the value of the processing may be unreasonable,
                                                 MMS will notify the lessee and give the lessee an
                                                 opportunity to provide written information
                                                 justifying the lessee's processing costs.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.159(a)(3).................................  206.159(a)(3) If an arm's-length processing                       20                 1                20
                                                 contract includes more than one gas plant product
                                                 and the processing costs attributable to each
                                                 product cannot be determined from the contract,
                                                 the lessee shall propose an allocation procedure
                                                 to MMS * * *. The lessee shall submit all
                                                 relevant data to support its proposal * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.159(b)(1).................................  206.159(b) Non-arm's-length or no contract. (1) *    Burden covered under OMB Control Number 1010-0139.
                                                 * * The lessee must claim a processing allowance
                                                 by reflecting it as a separate line entry on the
                                                 Form MMS-2014 * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.159(b)(2)(iv) and (b)(2)(iv) (A)..........  206.159(b)(2)(iv) * * * When a lessee has elected                100                 1               100
                                                 to use either method for a processing plant, the
                                                 lessee may not later elect to change to the
                                                 alternative without approval of the MMS.
                                                (A) * * * After an election is made, the lessee
                                                 may not change methods without MMS approval * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.159(b)(4).................................  206.159(b)(4) A lessee may apply to MMS for an                   100                 1               100
                                                 exception from the requirements that it compute
                                                 actual costs in accordance with paragraphs (b)(1)
                                                 through (b)(3) of this section * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.159(c)(1)(i)..............................  206.159(c) Reporting requirements--(1) Arm's-        Burden covered under OMB Control Number 1010-0139.
                                                 length contracts. (i) The lessee must notify MMS
                                                 of an allowance based on incurred costs by using
                                                 a separate line entry on the Form MMS-2014.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.159(c)(1)(ii).............................  206.159(c)(1)(ii) The MMS may require that a                      AUDIT PROCESS. See note.
                                                 lessee submit arm's-length processing contracts
                                                 and related documents * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.159(c)(2)(i)..............................  206.159(c)(2) Non-arm's-length or no contract.       Burden covered under OMB Control Number 1010-0139.
                                                (i) The lessee must notify MMS of an allowance
                                                 based on incurred costs by using a separate line
                                                 entry on the Form MMS-2014.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.159(c)(2)(iii)............................  206.159(c)(2)(iii) Upon request by MMS, the lessee                AUDIT PROCESS. See note.
                                                 shall submit all data used to prepare the
                                                 allowance deduction * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
206.159(e)(2) and (e)(3)......................  206.159(e) Adjustments.                              Burden covered under OMB Control Number 1010-0139.
                                                (2) For lessees processing production from onshore
                                                 Federal leases, the lessee must submit a
                                                 corrected Form MMS-2014 to reflect actual costs,
                                                 together with any payment, in accordance with
                                                 instructions provided by MMS.

[[Page 54175]]

 
                                                (3) For lessees processing gas production from
                                                 leases on the OCS, if the lessee's estimated
                                                 processing allowance exceeds the allowance based
                                                 on actual costs, the lessee must submit a
                                                 corrected Form MMS-2014 to reflect actual costs,
                                                 together with its payment, in accordance with
                                                 instructions provided by MMS * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Oil and Gas Valuation Subtotal..................................................................................               117             8,672
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               PART 210--FORMS AND REPORTS
                                         Subpart D--Special-Purpose Forms and Reports--Oil, Gas, and Geothermal
--------------------------------------------------------------------------------------------------------------------------------------------------------
210.155(a)....................................  210.155(a) General. Operators who have been                      1.2               150               180
                                                 granted a reduced royalty rate by the Bureau of
                                                 Land Management (BLM) * * * must submit Form MMS-
                                                 4377, Stripper Royalty Rate Reduction
                                                 Notification, under 43 CFR * * *
                                                NOTE: BLM terminated the benefits of this program
                                                 and is processing a final rule to remove this
                                                 program from the regulations.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total...........................................................................................................               277             9,378
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: AUDIT PROCESS--The Office of Regulatory Affairs determined that the audit process is exempt from the Paperwork Reduction Act of 1995 because MRM
  staff asks non-standard questions to resolve exceptions.

    Estimated Annual Reporting and Recordkeeping ``Non-hour'' Cost 
Burden: We have identified no ``non-hour'' cost burden associated with 
the collection of information.
    Public Disclosure Statement: 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.
    Comments: Section 3506(c)(2)(A) of the PRA requires each agency to 
``* * * provide 60-day notice in the Federal Register * * * 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, we published a 
notice in the Federal Register on April 12, 2010 (75 FR 18525), 
announcing that we would submit this ICR to OMB for approval. The 
notice provided the required 60-day comment period. We received no 
comments in response to the notice.
    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 4, 2010.
    Public Comment Policy: We will post all comments in response to 
this notice at http://www.mrm.boemre.gov/Laws_R_D/FRNotices/FRInfColl.htm. We also will post all comments, including names and 
addresses of respondents, at http://www.regulations.gov. Before 
including your address, phone number, e-mail address, or other personal 
identifying information in your comment, be advised 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 from public view your personal identifying information, we 
cannot guarantee that we will be able to do so.
    BOEM Information Collection Clearance Officer: Arlene Bajusz (703) 
787-1025.

    Dated: August 26, 2010.
Gregory J. Gould,
Associate Director for Minerals Revenue Management.
[FR Doc. 2010-22049 Filed 9-2-10; 8:45 am]
BILLING CODE 4310-MR-W-P