Increased Safety Measures for Energy Development on the Outer Continental Shelf; Availability, Initial Regulatory Flexibility Analysis

AGENCY:

Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), Interior.

ACTION:

Availability of an Initial Regulatory Flexibility Analysis.

SUMMARY:

In the Federal Register of October 14, 2010, BOEM published an interim final rule implementing certain safety measures recommended in the report entitled, “Increased Safety Measures for Energy Development on the Outer Continental Shelf” (Safety Measures Report). The President directed the Department of the Interior to develop the Safety Measures Report to identify measures necessary to improve the safety of oil and gas exploration and development on the Outer Continental Shelf in light of the Deepwater Horizon event on April 20, 2010, and resulting oil spill. To implement the practices recommended in the Safety Measures Report, the Bureau of Ocean Energy Management, Regulation and Enforcement is amending drilling regulations related to well control, including: subsea and surface blowout preventers, well casing and cementing, secondary intervention, unplanned disconnects, recordkeeping, well completion, and well plugging.

This document provides the official BOEMRE notice of availability for the Initial Regulatory Flexibility Analysis (IRFA) for that interim rule and provides opportunity for comment.

DATES:

Submit comments by January 24, 2011. BOEMRE may not fully consider comments received after this date.

ADDRESSES:

You may submit comments on the IRFA by any of the following methods. Please use the Regulation Identifier Number (RIN) “1010-AD68 IRFA” as an identifier in your message.

• Federal eRulemaking Portal: http://www.regulations.gov. In the entry titled “Enter Keyword or ID,” enter BOEM-2010-0034 then click search. Follow the instructions to submit public comments and view other supporting and related materials available for this Notice. BOEMRE will post all comments for this IRFA.
• Mail or hand-carry comments to the Department of the Interior; Bureau of Ocean Energy Management, Regulation and Enforcement; Attention: Regulations and Standards Branch (RSB); 381 Elden Street, MS-4024, Herndon, Virginia 20170-4817. Please reference “Increased Safety Measures for Energy Development on the Outer Continental Shelf, 1010-AD68, IRFA” in your comments and include your name and return address.

FOR FURTHER INFORMATION CONTACT:

Amy C. White, Bureau of Ocean Energy Management, Regulation and Enforcement, Office of Offshore Regulatory Programs, Regulations and Standards Branch, 703-787-1665, amy.white@boemre.gov.

SUPPLEMENTARY INFORMATION:

This Notice is published pursuant to Regulatory Flexibility Act (5 U.S.C. 603) as a matter of information to the public and to solicit comments on the analysis for the Interim Final Rule, Increased Safety Measures for Energy Development on the Outer Continental Shelf (OCS). The preparation of this IRFA is an important step in the process for compliance with the Regulatory Flexibility Act (RFA). The RFA requires agencies to consider the impact of their regulatory proposals on small entities, analyze alternatives, and make the analysis available for public comment.

BOEMRE has updated the estimated compliance costs and small business impacts from the projections reported in the Regulatory Flexibility Analysis of the Safety Measures Rule. These changes are minor and mostly result from updated categorization of companies operating on the OCS and analysis of the number of wells drilled by small and large companies rather than only by lease ownership.

Our updated analysis shows there are currently about 140 Operators of Federal oil and gas OCS leases. Small entities that operate under the requirements of the Safety Measures Rule are coded under the Small Business NAICS codes 211111, Crude Petroleum and Natural Gas Extraction and 213111, Drilling Oil and Gas Wells. For these NAICS code classifications, a small company is one with fewer than 500 employees. Based on this criterion applied to the NAICS codes, approximately 90 (64 percent) of the companies operating on the OCS are considered small companies and 50 (36 percent) are considered large companies.

We estimate that about 90 percent of the regulatory costs will be imposed on deepwater lessees where small businesses only hold 8 percent of the leases and drill 12 percent of the wells. About 10 percent of the total costs will apply to shallow water leases where small companies hold 45 percent of OCS leases and also drill 45 percent of the wells. As a share of fiscal year 2009 revenues, this interim final rule is estimated to cost approximately 0.57 ($0.156/$27.2) percent of OCS revenue for large companies and 0.66 ($0.027/$4.1) percent for small companies.

The analysis can be obtained through the Federal eRulemaking Portal: http://www.regulations.gov. In the entry titled “Enter Keyword or ID,” enter BOEM-2010-0034 then click search. You may also request a copy through Amy C. White, Bureau of Ocean Energy Management, Regulation and Enforcement, Office of Offshore Regulatory Programs, Regulations and Standards Branch, 703-787-1665, amy.white@boemre.gov.

Comments on this IRFA will be considered and any changes to the regulation as a result of these comments will be included in the RIN 1010-AD68, Increased Safety Measures for Energy Development on the Outer Continental Shelf when the final regulation is published. The Safety Measures Rule was published in the Federal Register on October 14, 2010 (75 FR 63346) and comments are being accepted on the rule until December 13, 2010.