[Federal Register Volume 77, Number 99 (Tuesday, May 22, 2012)]
[Pages 30310-30312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-12304]



Bureau of Safety and Environmental Enforcement

[Docket ID BSEE-2012-0009; OMB Control Number 1014-0005]

Information Collection Activities: Relief or Reduction in Royalty 
Rates; Proposed Collection; Comment Request

ACTION: 60-day Notice.


SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), BSEE 
is inviting comments on a collection of information that we will submit 
to the Office of Management and Budget (OMB) for review and approval. 
The information collection request (ICR) concerns a renewal to the 
paperwork requirements in the regulations under 30 CFR 203, Relief or 
Reduction in Royalty Rates.

DATES: You must submit comments by July 23, 2012.

ADDRESSES: You may submit comments by either of the following methods 
listed below.
     Electronically: go to http://www.regulations.gov. In the 
entry titled ``Enter Keyword or ID,'' enter BSEE-2012-0009 then click 
search. Follow the instructions to submit public comments and view all 
related materials. We will post all comments.
     Email [email protected]. Mail or hand-carry comments 
to the Department of the Interior; Bureau of Safety and Environmental 
Enforcement; Regulations Development Branch; Attention: Nicole Mason; 
381 Elden Street, HE-3313; Herndon, Virginia 20170-4817. Please 
reference ICR 1014-0005 in your comment and include your name and 
return address.

FOR FURTHER INFORMATION CONTACT: Nicole Mason, Regulations Development 
Branch at (703) 787-1605 to request additional information about this 

    Title: 30 CFR part 203, Relief or Reduction in Royalty Rates.
    OMB Control Number: 1014-0005.
    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 be 
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, the Independent Offices Appropriations Act (31 U.S.C. 
9701), the Omnibus Appropriations Bill (Pub. L. 104-133, 110 Stat. 
1321, April 26, 1996), and OMB Circular A-25, authorize Federal 
agencies to recover the full cost of services that confer special 
benefits. Under the Department of the Interior's (DOI) implementing 
policy, BSEE is required to charge fees for services that provide 
special benefits or privileges to an identifiable non-Federal recipient 
above and beyond those which accrue to the public at large.
    Regulations at 30 CFR part 203 implement these statutes and policy 
and require respondents to pay a fee to request royalty relief. Section 
30 CFR 203.3 states that, ``We will specify the necessary fees for each 
of the types of royalty-relief applications and possible BSEE 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.''
    BSEE 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.
    We will protect information from respondents considered proprietary 
under the Freedom of Information Act (5 U.S.C. 552) and its 
implementing regulations (43 CFR 2) and under regulations at 30 CFR 
203.63, Does my application have to include all leases in the field, 
and 30 CFR 250.197, Data and information to be made available to the 
public or for limited inspection. No items of a sensitive nature are 
collected. Responses are mandatory or are required to obtain or retain 
a benefit.
    Frequency: On occasion.
    Description of Respondents: Potential respondents comprise Federal 
oil, gas, or sulphur lessees and/or operators.
    Estimated Reporting and Recordkeeping Hour Burden: The currently 
approved annual reporting burden for this collection is 2,635 hours. 
The following table details the individual components and respective 
hour burden estimates of this ICR. 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.

                                                                                          Hour burden
 Citation 30 CFR 203 and related     Reporting or recordkeeping requirement   ----------------------------------
             NTL(s)                                                                     Application fees
2(b); 3; 4; 70..................  These sections contain general references    0
                                   to submitting reports, applications,
                                   requests, copies, demonstrating
                                   qualifications, for BSEE approval burdens
                                   covered under specific requirements.

[[Page 30311]]

               Royalty Relief for Ultra-Deep Gas Wells and Deep Gas Wells on Shallow Water Leases
31(c)...........................  Request a refund of or recoup royalties      1
                                   from qualified ultra-deep wells...
35(d); 44(e)....................  Request to extend the deadline for           4
                                   beginning production with required
                                   supporting documentation.
41(d)...........................  Request a refund of or recoup royalties      1
                                   from qualified wells >200 meters but <400
35(a); 44(a); 47(a).............  Notify BSEE of intent to begin drilling....  1
35(c), (d); 44(b), (d), (e).....  Notify BSEE that production has begun,       2
                                   request confirmation of the size of RSV,
                                   provide supporting documentation.
46..............................  Provide data from well to confirm and        8
                                   attest well drilled was an unsuccessful
                                   certified well with supporting
                                   documentation and request supplement.
49(b)...........................  Notify BSEE or decision to exercise option   0
                                   to replace one set of deep gas royalty
                                   suspension terms for another set of such
                                  Note: BSEE SOL requires that this reg text   .................................
                                   stay for legacy purposes only. Last time
                                   any respondent could use was 2004; hence,
                                   no burden.
                                     End of Life and Special Royalty Relief*
51; 83; 84......................  Application--leases that generate earnings   100
NTL.............................   that cannot sustain continued production    Application = $8,000
                                   (end-of-life lease); required supporting    Audit = $12,500
52..............................  Demonstrate ability to qualify for royalty   1
                                   relief or to re-qualify.
55..............................  Renounce relief arrangement (end-of-life)    1
                                   (seldom, if ever will be used; minimal
                                   burden to prepare letter).
80 NTL..........................  Application--apart from formal programs for  250
                                   royalty relief for marginal producing       Application = $8,000**
                                   lease (Special Case Relief); required       Audit = $12,500
                                   supporting documentation.
80 NTL..........................  Application--apart from formal programs for  1,000
                                   royalty relief for marginal expansion       Application = $19,500**
                                   project or marginal non-producing lease     Audit = $18,750
                                   (Special Case Relief); required supporting
                                                   CPA Report
81; 83-90.......................  Required reports; extension justification..  Burden included with
                                                                               1 CPA report x $45,000
                                      Deep Water Royalty Relief Act (DWRAA)
61; 62; 64; 65; 71; 83; 85-89;    Application--preview assessment (seldom if   900
 NTL.                              ever will be used as applicants generally   Application = $28,500
                                   opt for binding determination by BSEE
                                   instead) and required supporting
62; 64; 65; 71; 83; 85-89.......  Application--leases in designated areas of   2,000
                                   GOM deep water acquired in lease sale       Application = $19,500
                                   before 11/28/95 or after 11/28/00 and are
                                   producing (deep water expansion project);
                                   required supporting documentation.
62; 64; 65; 71; 81; 83; 85-89;    Application--leases in designated areas of   2,000
 NTL.                              deep water GOM, acquired in lease sale      Application = $34,000*
                                   before 11/28/95 or after 11/28/00 that      Audit = $12,500
                                   have not produced (pre-act or post-2000
                                   deep water leases); required supporting
70; 81; 90; 91..................  Submit fabricator's confirmation report;     20
                                   extension justification.
70; 81; 90; 92; NTL.............  Submit post-production development report;   50
                                   extension justification.  Reserve  Audit = $18,750
                                   right to audit (1 audit every 6 years)
                                   after production starts to confirm cost
                                   estimates of the application.
74; 75; NTL.....................  Redetermination and required supporting      500
                                   documentation.                              Application = $16,000*
77..............................  Renounce relief arrangement (deep water)     1
                                   (seldom, if ever will be used; minimal
                                   burden to prepare letter).
79(a)...........................  Request reconsideration of BSEE field        0
                                  This was a regulatory requirement for
                                   leases issued prior to 1995.
79(c)...........................  Request extension of deadline to start       2
83; NTL.........................  Application--short form to add or assign     40
                                   pre-Act lease and required supporting       Application = $1,000
81(d)...........................  Retain supporting cost records for post-     8
                                   production development/fabrication reports
                                   (records retained as usual/customary
                                   business practice; minimal burden to make
                                   available at BSEE request).
* 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.

[[Page 30312]]

    Estimated Reporting and Recordkeeping Non-Hour Cost Burden: There 
are non-hour costs associated with this information collection. The 
currently approved non-hour cost burden is $122,024. This estimate is 
based on:
    (a) Applications and audit fees. The total annual estimated cost 
burden for these fees is $77,024 (refer to the table).
    (b) The cost of report(s) 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. We estimate approximately 
one report submitted at an average cost of $45,000 per report. We have 
not identified any other non-hour cost burdens for this collection.
    Comments: Before submitting an ICR to OMB, PRA section 
3506(c)(2)(A) requires each agency ``* * * to provide notice * * * and 
otherwise consult with members of the public and affected agencies 
concerning each proposed collection of information * * *''. Agencies 
must specifically solicit comments to: (a) Evaluate whether the 
collection is necessary or useful; (b) evaluate the accuracy 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 
    Agencies must also estimate the non-hour paperwork cost burdens to 
respondents or recordkeepers resulting from the collection of 
information. Therefore, if you have other than hour burden costs to 
generate, maintain, and disclose this information, you should comment 
and provide your total capital and startup cost components or annual 
operation, maintenance, and purchase of service components. For further 
information on this burden, refer to 5 CFR 1320.3(b)(1) and (2), or 
contact the Bureau representative listed previously in this notice.
    We will summarize written responses to this notice and address them 
in our submission for OMB approval. As a result of your comments, we 
will make any necessary adjustments to the burden in our submission to 
    Public Comment Procedures: Before including your address, phone 
number, email 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.
    Acting BSEE Information Collection Clearance Officer: Cheryl 
Blundon (703) 787-1607.

    Dated: May 15, 2012.
Robert W. Middleton,
Acting Chief, Office of Offshore Regulatory Programs.
[FR Doc. 2012-12304 Filed 5-21-12; 8:45 am]