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MMS proposes rewrite of OCS oil and gas production requirements
The U.S. Minerals Management Service has proposed amendments to its oil and natural gas production regulations eliminating most restrictions on production rates and clarifying flaring and venting limits.
The agency said it has written the proposed rule in plain language and divided it into shorter, easier-to-read sections which reflect the actual sequence of events as wells are developed and the resources produced.
The proposed rule clarifies requirements for documents that the agency requires and the timing of submissions. It provides guidance on notifying adjoining operators about production within 500 feet of a common lease or unit line.
Meters required MMS said the proposed rule requires the installation of meters to accurately measure all flared and vented natural gas on facilities that process more than 2,000 barrels per day of oil.
The requirement is based on a report, “Natural Gas Flaring and Venting — Opportunities to Improve Data and Reduce Emissions,” issued by the Government Accountability Office in July 2004, which recommended that more accurate records were needed to determine the amount of gas flared and vented, and the volume of greenhouse gas these practices contribute to the atmosphere each year. MMS currently collects information on the total natural gas flared and vented, but operators are not required to differentiate between the two categories. The proposed rule would require flaring and venting volumes to be reported separately.
The proposed rule would also eliminate some requirements that are not necessary in today’s petroleum industry. In 1974 MMS required operators to establish maximum production rates for producing well completions and maximum efficient rates for producing reservoirs. This was during a period of oil shortages, and in 1988 MMS reduced the maximum efficient rate requirement and currently requires it only on sensitive reservoirs. Based on 25 years of experience MMS has concluded that the maximum rate requirements and production balancing requirements can be largely eliminated without significant detriment to conservation and maximization of ultimate recovery although under the proposed rule MMS would retain the authority to set the rates when necessary.
Comments are being accepted for 90 days, ending June 4; see information at www.mms.gov/.
—Petroleum News
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