BLM Tightens Oil and Gas Measurement Rules

     WASHINGTON (CN) – The Bureau of Land Management seeks comment on a proposed rule that would update and replace regulations for measuring natural gas and oil produced from onshore federal and Indian leases.
     Current rules have not been updated in 26 years, and the federal government is concerned that gas and oil extracted from the earth could be more accurately measured using the latest technology.
     “The requirements contained in the proposed rule reflect advances in measurement technology and critical updates in industry standards and practices,” the BLM said in a statement Oct. 2.
     The rule would also address questions surrounding the accuracy of royalty payments made to lease holders.
     “It (the proposed rule) also responds directly to concerns from the Government Accountability Office, the Department of the Interior’s Office of Inspector General, and Secretary’s Subcommittee on Royalty Management, that the BLM’s existing rules do not provide adequate assurance that gas production on public and Indian lands is being accounted for in a way that ensures that all royalties are accurately tracked and paid. These concerns have contributed to the department’s inclusion on the GAO’s high-risk list.”
     Specifically, the proposed rule would incorporate proven industry standards in gas measurement, require more frequent equipment inspections and heating-value determination (btu content) at high-volume facilities, require high-volume facilities to use updated measurement equipment and tools, and provide civil penalties to make sure recorded measurements are aligned with the “true cost of developing and overseeing a modern oil and gas well.”
     The proposed rule is the final piece in the BLM’s effort to bring its oil and gas measurement rules into the 21st century according to Janice Schneider, the agency’s assistant secretary for land and minerals management.
     “Just like the proposed updates to BLM’s oil measurement rules, this proposal addresses longstanding concerns about the adequacy of existing rules and will be critically important to ensuring proper measurement so that American taxpayers, Indian tribes and allottees, and states and local governments receive the full royalties they are due,” she said.
     The BLM’s oil and gas management program oversees about $33 billion in production annually and over $3 billion in royalties from federal leases. More than $1 billion in royalties are paid to Native American tribes or allottees, the BLM said.
     Comments on the proposed rule are accepted 60 days from the date of publication in the Federal Register.

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