[Federal Register: December 21, 2007 (Volume 72, Number 245)]
[Proposed Rules]
[Page 72652-72657]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21de07-23]
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DEPARTMENT OF THE INTERIOR
Minerals Management Service
30 CFR Parts 203 and 260
RIN 1010-AD29
[Docket ID: MMS-2007-OMM-0074]
Royalty Relief for Deepwater Outer Continental Shelf (OCS) Oil
and Gas Leases--Conforming Regulations to Court Decision
AGENCY: Minerals Management Service (MMS), Interior.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would amend 30 CFR parts 260 and 203 to
conform the regulations to the decision of the United States Court of
Appeals for the Fifth Circuit in Santa Fe Snyder Corp., et al. v.
Norton (the Decision). That decision found that certain provisions of
the MMS regulations interpreting section 304 of the Deep Water Royalty
Relief Act are contrary to the requirements of the statute.
DATES: Submit comments by February 19, 2008. The MMS may not fully
consider comments received after this date.
ADDRESSES: You may submit comments on the proposed rulemaking by any of
the following methods. Please use the Regulation Identifier Number
(RIN) 1010-AD29 as an identifier in your message. See also Public
Availability of Comments under Procedural Matters.
Federal eRulemaking Portal: http://www.regulations.gov.
Select ``Minerals Management Service'' from the agency drop-down menu,
then click ``submit.'' In the Docket ID column, select MMS-2007-OMM-
0074 to submit public comments and to view supporting and related
materials available for this rulemaking. Information on using
Regulations.gov, including instructions for accessing documents,
submitting comments, and viewing the docket after the close of the
comment period, is available through the site's ``User Tips'' link. The
MMS will post all comments.
Mail or hand-carry comments to the Department of the
Interior; Minerals Management Service; Attention: Regulations and
Standards Branch (RSB); 381 Elden Street, MS-4024; Herndon, Virginia
20170-4817. Please reference ``Royalty Relief for Deepwater OCS Oil and
Gas Leases--Conforming Regulations to Court Decision, 1010-AD29'' in
your comments and include your name and return address.
FOR FURTHER INFORMATION CONTACT: Marshall Rose, Chief, Economics
Division, at (703) 787-1536.
SUPPLEMENTARY INFORMATION:
Background
On November 28, 1995, President Clinton signed Public Law 104-58,
which included the Deep Water Royalty Relief Act (Act). The Act was
designed to encourage development of new supplies of energy. It
included incentives to promote investment in a particularly high-cost,
high-risk area, the deep waters of the Gulf of Mexico. These deep Gulf
of Mexico waters were viewed as having potential for large oil and gas
discoveries, but technological advances and multi-billion dollar
investments would be needed to realize that potential. Since the
enactment of the incentive, the deep waters of the Gulf of Mexico have
become one of the most important sources of domestic oil and gas
production.
The Secretary was required to suspend royalties for certain volumes
of production on all leases in more than 200 meters of water in the
central and western Gulf of Mexico issued in the first 5 years
following enactment of the Act. These royalty suspension volumes (RSVs)
(i.e., specified volumes of royalty-free production) ranged from 17.5
million to 87.5 million barrels of oil equivalent, depending on water
depth. The royalty suspension incentive
[[Page 72653]]
was intended to provide companies that undertook these investments
specific volumes of royalty-free production to help recover a portion
of their capital costs before starting to pay royalties. Once the
specified volume has been produced, royalties become due on all
additional production. This was not a matter of agency discretion.
We published an advance notice of proposed rulemaking (ANPR) in the
Federal Register on February 23, 1996 (61 FR 6958), and informed the
public of our intent to develop comprehensive regulations implementing
the Act. The ANPR sought comments and recommendations to assist us in
that process. We continued to collect comments and conducted a public
meeting in New Orleans on March 12-13, 1996, about the matters the ANPR
addressed. We published an interim rule on March 25, 1996 (effective 30
days later). We invited comments on the interim rule, and stated that
we would consider them as part of our review of responses to the ANPR
mentioned above. We further stated that based on comments received and
experience gained, we may include changes to the matters the interim
rule addresses in a comprehensive rulemaking implementing the Act.
Section 304 of the Act specifies RSVs for offshore oil and gas
leases in three defined water depth ranges deeper than 200 meters of
water issued in lease sales held in the first 5 years after the Act's
enactment on November 28, 1995. We stated in our March 25, 1996,
interim rule entitled Deepwater Royalty Relief for New Leases that
``[s]ection 304 of the Act does not provide specific guidance on how to
apply the royalty suspension volumes to leases issued during sales
after November 28, 1995'' and that ``[t]he primary question is how to
apply the minimum royalty suspension volumes laid out in the statute''
(61 FR 12023). We published a final rule implementing section 304 of
the Act in the Federal Register, with no substantive change in the
regulatory language, on January 16, 1998 (63 FR 2626), that became
effective on February 17, 1998.
On October 4, 2004, the U.S. Court of Appeals for the Fifth Circuit
in Santa Fe Snyder Corp., et al. v. Norton, 385 F.3d 884, agreed with
the conclusion of the U.S. District Court for the Western District of
Louisiana that the regulations implementing royalty relief under
section 304 are inconsistent with the statute. The regulations provided
that leases issued under section 304 that are assigned to a field with
a current lease that produced before November 28, 1995, are not
eligible for royalty relief. The regulations further provided that
where there is more than one section 304 lease in a field, leases share
in the statutory RSV. These requirements were promulgated in the
interim rule effective on April 24, 1996 (61 FR 12022).
The effect of the court's ruling in Santa Fe Snyder was that: (1)
The MMS could not condition royalty relief under section 304 on the
lease being part of a field that was not producing before November 28,
1995; and (2) the RSVs prescribed in section 304 apply to each lease,
not jointly to all leases in a particular field. An information to
lessees (ITL) dated August 8, 2005, alerted affected lessees that we
would respect the decision and revise the regulations to conform to
this decision, resulting in this proposed rule.
Regulatory Change
This proposed rule would revise 30 CFR part 260, which pertains to
OCS leasing, and 30 CFR part 203, which pertains to royalty relief, to
treat leases issued under section 304 (referred to in our regulations
as ``eligible leases'') in a manner consistent with the Santa Fe Snyder
ruling. These proposed revisions conform our regulations to the court
ruling and are non-discretionary. The revisions to the regulations in
part 260 would modify Sec. 260.3 relating to MMS's authority to
collect information and remove references in Sec. 260.113(a) to prior
production on the field to which a lease is assigned. Deletions in
Sec. 260.114 would remove paragraphs on procedures for notification,
determination of RSVs, and having more than one RSV on a lease because
they would no longer be required. Section 260.114(b) would also be
revised to change the reference to ``fields'' to a reference to ``each
eligible lease.'' Section 260.124 would be revised to remove a
reference to eligible leases establishing an RSV for a field, which is
not valid under section 304 of the Act, as interpreted in Santa Fe
Snyder. Thus, royalty-free production from an RS lease only counts
against the royalty suspension volume of a field if that volume was
established as a result of an approved application for royalty relief
for a pre-Act lease under part 203. Finally, all of Sec. 260.117 would
be eliminated, because provisions for allocation of royalty suspension
volumes among multiple leases on a field would no longer be needed.
Changes in 30 CFR part 203 would delete references to ``eligible
leases'' in Sec. 203.69 and would change the sharing rule in Sec.
203.71 for purposes of consistency. It would remove the eligible leases
from the section that discusses how to allocate RSVs on a field. Those
changes mean that regardless of the outcome of an application for
royalty relief for leases issued either before or after the 5-year
period covered by section 304, which may affect the field to which they
are assigned, both eligible leases and leases issued in sales held
after November 25, 2000 (referred to in the regulation as ``Royalty
Suspension'' (RS) leases), would get the full RSVs stated in the lease
instrument. Further, as with an RS lease, production from an eligible
lease would count against any RSVs available to pre-Act leases on a
field to which the eligible lease or RS lease has been assigned.
However, unlike RS leases, lessees of eligible leases may not initiate
an application seeking, or requesting a share in, an additional RSV
granted to an RS lease. This is because there would now be more than
enough financial incentive for any single lease.
Retroactive Effect
As explained above, the need for the change in this proposed rule
arises from the Fifth Circuit's decision. The effect of the Fifth
Circuit's decision was to declare void the relevant regulatory
provisions that the court found to be inconsistent with section 304.
Because section 304 had not changed, the necessary implication is that
the relevant regulations were unlawful from their inception. The Fifth
Circuit decision thus has created a regulatory void between the date on
which the interim rule became effective (April 24, 1996) and the
present. The Fifth Circuit plainly would apply its interpretation of
section 304 for all time periods, not just the period after the
decision. This proposed rule does nothing more than conform the
regulations to the Fifth Circuit's decision, and reflects the legal
interpretation of section 304 that the Fifth Circuit would apply. It is
therefore permissible to replace the rule that the court struck down
with this rule for the time period that the invalidated provisions
covered, so as to avoid having a gap and consequent ambiguity in the
rule between April 24, 1996, and the date of this rule. See, Citizens
to Save Spencer County v. EPA, 600 F.2d 844, 879-880 (DC Cir. 1979);
Beverly Hospital v. Bowen, 872 F.2d 483, 485-486 (DC Cir. 1989).
Therefore, this proposed rule will be effective immediately upon being
published as a final rule with retroactive effect to April 24, 1996.
[[Page 72654]]
Procedural Matters
Public Availability of Comments
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.
Regulatory Planning and Review (Executive Order (E.O.) 12866)
This proposed rule is not a significant rule as determined by the
Office of Management and Budget (OMB) and is not subject to review
under E.O. 12866.
(1) This proposed rule would conform the regulations with the Fifth
Circuit's decision. It would have an annual effect on the economy of
$100 million or more.
The Fifth Circuit's decision means that more production on many
section 304 leases will be subject to royalty relief than under current
regulations, resulting in larger fiscal costs to the federal
government. The magnitudes of these fiscal losses (on past and future
royalty collections) would vary significantly depending upon whether
the federal government ultimately prevails (low case) or does not
prevail (high case) in pending litigation over the MMS authority to
condition royalty relief on price thresholds (see Kerr McGee Oil and
Gas Corp. v. Allred Docket No. 2:06 CV 0439). In the low case, only
deepwater leases issued in 1998 and 1999 likely would be affected,
because those leases were not issued with price thresholds, and for the
other DWRRA leases, market prices most likely will exceed threshold
levels, thereby eliminating future royalty relief on these other
deepwater leases. In the high case, all deepwater leases issued
throughout the 1996 to 2000 period would be affected, because deepwater
leases issued in 1996, 1997, and 2000 then would be treated similar to
deepwater leases issued in 1998 and 1999 with respect to price
thresholds.
For section 304 leases placed on fields by MMS that consist of one
or more leases which produced prior to the DWRRA, we projected that
from 2000 through 2024, production of oil and gas could range from 4
million barrels of oil equivalent (BOE) in the low case to 27 million
BOE in the high case. The total royalty losses during this 25-year
period are estimated to range from $16 million in the low case to
almost $205 million in the high case (expressed in current year
dollars). Applying discount rates of 3 and 7 percent to the potential
cash flows, the range of fiscal losses becomes $17-192 million at 3
percent and $20-189 million at 7 percent (the lower bound figures
increase as the discount rate rises because all of the losses in this
case, associated with leases issued in 1998 and 1999, represent
historical royalties that must be paid back to the lessees).
The Fifth Circuit Court's ruling also means that the suspension
volumes cited in the DWRRA must apply to each lease, not shared by all
leases on a geologic field, as MMS interpreted the Act. Thus, the added
production from a field that could be eligible for royalty relief
consists of production from all the leases on the field in excess of
the single royalty suspension volume cited in the Act (for the
applicable water depth), up to an amount equal to that suspension
volume times the number of leases included in the field. In fact, the
vast majority of the royalty losses from section 304 leases will occur
as a result of this aspect of the court's ruling. We estimate the
additional production that will be subject to royalty relief from this
``lease-based'' court interpretation will be about 400 million BOE in
the 20-year period from 2007 through 2026 in the low case (covering
only DWRRA leases issued in 1998 and 1999), and approximately 1.3
billion BOE in the 28-year period from 2007 through 2034 in the high
case (covering all DWRRA leases). The royalty costs associated with
these production levels during the time periods of production are
estimated to be $3 billion in the low case and $10 billion in the high
case (expressed in current year dollars). Discounting at 3 and 7
percent yields ranges of royalty losses of $2.5-7.5 billion at 3
percent and $1.9-5.2 billion at 7 percent.
Thus, almost all of the fiscal costs of the Fifth Circuit Court's
ruling in Santa Fe Snyder can be attributed to the expansion of
designated amounts of royalty relief from geologic fields to individual
leases. The total royalty costs of the court's ruling, spanning the 35-
year period from 2000 through 2034, are estimated to be between $3.1
and $10.3 billion (expressed in current year dollars).
(2) This proposed rule would not create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency
because royalty relief is confined to leasing in Federal offshore
waters that lie outside the coastal jurisdiction of state and other
local agencies. Careful review of the lease sale notices, along with
stringent leasing policies now in force, ensure that the Federal OCS
leasing program, of which royalty relief is only a component, does not
conflict with the work of other Federal agencies.
(3) This proposed rule would not alter the budgetary effects of
entitlements, grants, user fees, or loan programs or the rights or
obligations of their recipients.
(4) This proposed rule would not raise novel legal or policy
issues.
Regulatory Flexibility Act
The Department of the Interior certifies that this proposed rule
would not have a significant economic effect on a substantial number of
small entities under the Regulatory Flexibility Act (5 U.S.C. 601, et
seq.).
This proposed rule conforms the regulations to the Fifth Circuit's
decision, and reflects the legal interpretation of section 304 that the
Fifth Circuit would apply. We are replacing the rule that the court
struck down with this rule for the time period that the invalidated
provisions covered, so as to avoid having a gap and consequent
ambiguity in the rule between April 24, 1996, and the date of this
rule.
A Regulatory Flexibility Analysis is not required because there are
no legal alternatives to the court's decision that deemed our current
regulations to be inconsistent with the statute, as cited in the
preamble, other than to publish this rule. We have determined that the
proposed rule will not have a significant economic effect on a
substantial number of small entities. A Small Entity Compliance Guide
is not required.
This change would affect lessees and operators of deepwater leases
in the OCS. This includes about 40 different companies. These companies
are generally classified under the North American Industry
Classification System (NAICS) Code 211111, which includes companies
that extract crude petroleum and natural gas. For this NAICS code
classification, a small company is one with fewer than 500 employees.
Based on these criteria, only 10 of these companies are considered
small. This proposed rule, therefore, would not affect a substantial
number of small entities.
Your comments are important. The Small Business and Agriculture
Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were
established to receive comments from small businesses about Federal
agency enforcement actions. The Ombudsman will annually evaluate the
enforcement activities and rate each agency's responsiveness to small
business. If you wish to comment on the actions of
[[Page 72655]]
MMS, call 1-888-734-3247. You may comment to the Small Business
Administration without fear of retaliation. Disciplinary action for
retaliation by an MMS employee may include suspension or termination
from employment with the DOI.
Small Business Regulatory Enforcement Fairness Act
This proposed rule is a major rule under 5 U.S.C. 804(2) of the
Small Business Regulatory Enforcement Fairness Act. This proposed rule:
a. Would have an annual effect on the economy of $100 million or
more, based on the analysis presented in the previous section. Current
MMS estimates indicate the royalty costs of the rule, occasioned by the
court ruling, will be from $3.1 billion to $10.3 billion, based on
applicable production amounts during the 35-year period from 2000
through 2034. This low case dollar amount represents the added royalty
losses to the Federal government only on deepwater leases issued
without price thresholds, i.e., in 1998 and 1999. The high case
estimate represents royalty losses on all DWRRA leases, and assumes MMS
cannot condition royalty relief on market prices for oil and gas. Note
that it is likely that all of the future production associated with
this added royalty cost would have occurred even without the royalty
relief offered in the Act. The decisions to develop at least some of
the fields responsible for this production occurred under incentive
terms in effect before the Santa Fe Snyder judgment. Moreover, oil and
gas prices have been and are expected to be much higher than
anticipated by the Act's authors.
b. Would not cause a major increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies, or geographic regions.
c. Would not have significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises.
Unfunded Mandates Reform Act
This proposed rule would not impose an unfunded mandate on State,
local, or tribal governments or the private sector of more than $100
million per year. The proposed rule would not have a significant or
unique effect on State, local, or tribal governments or the private
sector. A statement containing the information required by the Unfunded
Mandates Reform Act (2 U.S.C. 1531, et seq.) is not required.
Takings Implication Assessment (E.O. 12630)
Under the criteria in E.O. 12630, this proposed rule does not have
significant takings implications. The proposed rule is not a
governmental action capable of interference with constitutionally
protected property rights. A takings implication assessment is not
required.
Federalism (E.O. 13132)
Under the criteria in E.O. 13132, this proposed rule does not have
sufficient federalism implications to warrant the preparation of a
Federalism Assessment. This proposed rule would not substantially and
directly affect the relationship between the Federal and State
governments. To the extent that State and local governments have a role
in OCS activities, this proposed rule would not affect that role. A
Federalism Assessment is not required.
Civil Justice Reform (E.O. 12988)
This rule complies with the requirements of E.O. 12988.
Specifically, this rule:
(a) Meets the criteria of section 3(a) requiring that all
regulations be reviewed to eliminate errors and ambiguity and be
written to minimize litigation; and
(b) Meets the criteria of section 3(b)(2) requiring that all
regulations be written in clear language and contain clear legal
standards.
Consultation With Indian Tribes (E.O. 13175)
Under the criteria in E.O. 13175, we have evaluated this proposed
rule and determined that it has no potential effects on federally
recognized Indian tribes. There are no Indian or tribal lands in the
OCS.
Paperwork Reduction Act
This rulemaking does not contain any information collection subject
to the PRA, and does not require a submittal to OMB for review and
approval under section 3507(d) of the PRA. The one remaining
requirement in Part 260 (Sec. 260.124(a)(l)) is exempt from the PRA
under 5 CFR 1320.4(a)(2), (c).
An information letter was sent to all lessees of deep water leases
on August 8, 2005, and DOI informed the lessees that it would apply the
court's decision. It was neither necessary nor appropriate for the
Department to collect information used only for purposes of applying
the regulatory provisions that the court held invalid.
National Environmental Policy Act
This rule does not constitute a major Federal action significantly
affecting the quality of the human environment. The MMS has analyzed
this rule under the criteria of the National Environmental Policy Act
and 516 Departmental Manual 6, Appendix 10.4C(1). The MMS completed a
Categorical Exclusion Review for this action and concluded that ``the
rulemaking does not represent an exception to the established criteria
for categorical exclusion; therefore, preparation of an environmental
analysis or environmental impact statement will not be required.''
Data Quality Act
In developing this rule we did not conduct or use a study,
experiment, or survey requiring peer review under the Data Quality Act
(Pub. L. 106-554).
Effects on the Energy Supply (E.O. 13211)
This rule is not a significant energy action under the definition
in E.O. 13211. A Statement of Energy Effects is not required.
Clarity of This Regulation
We are required by E.O. 12866, E.O. 12988, and by the Presidential
Memorandum of June 1, 1998, to write all rules in plain language. This
means that each rule we publish must:
(a) Be logically organized;
(b) Use the active voice to address readers directly;
(c) Use clear language rather than jargon;
(d) Be divided into short sections and sentences; and
(e) Use lists and tables wherever possible.
If you feel that we have not met these requirements, send us
comments by one of the methods listed in the ADDRESSES section. To
better help us revise the rule, your comments should be as specific as
possible. For example, you should tell us the numbers of the sections
or paragraphs that you find unclear, which sections or sentences are
too long, the sections where you feel lists or tables would be useful,
etc.
List of Subjects
30 CFR Part 203
Continental shelf, Government contracts, Indians--lands, Mineral
royalties, Oil and gas exploration, Public lands--mineral resources,
Sulphur.
30 CFR Part 260
Continental shelf, Government contracts, Mineral royalties, Oil and
gas exploration, Public lands--mineral resources, Reporting and
recordkeeping requirements.
[[Page 72656]]
Dated: August 3, 2007.
C. Stephen Allred,
Assistant Secretary--Land and Minerals Management.
For the reasons stated in the preamble, the Minerals Management
Service (MMS) proposes to amend 30 CFR parts 203 and 260 as follows:
PART 203--RELIEF OR REDUCTION IN ROYALTY RATES
1. The authority citation for part 203 continues to read as
follows:
Authority: 25 U.S.C. 396, et seq.; 25 U.S.C. 396a, et seq.; 25
U.S.C. 2101, et seq.; 30 U.S.C. 181, et seq.; 30 U.S.C. 351, et
seq.; 30 U.S.C. 1001, et seq.; 30 U.S.C. 1701, et seq.; 31 U.S.C.
9701, et seq.; 43 U.S.C. 1301, et seq.; 43 U.S.C. 1331, et seq.; and
43 U.S.C. 1801, et seq.
2. Section 203.69(c) is revised to read as follows:
Sec. 203.69 If my application is approved, what royalty relief will I
receive?
* * * * *
(c) If your application includes pre-Act leases in different
categories of water depth, we apply the minimum royalty suspension
volume for the deepest such lease then assigned to the field. We base
the water depth and makeup of a field on the water-depth delineations
in the ``Lease Terms and Economic Conditions'' map and the ``Fields
Directory'' documents and updates in effect at the time your
application is deemed complete. These publications are available from
the MMS GOM Regional Office.
* * * * *
3. Section 203.71 is amended as set forth below:
A. Revise paragraphs (a)(1), (3), and (5).
B. Remove paragraph (b).
C. Redesignate paragraphs (c) and (d) as paragraphs (b) and (c).
The revisions read as follows:
Sec. 203.71 How does MMS allocate a field's suspension volume between
my lease and other leases on my field?
* * * * *
(a) * * *
------------------------------------------------------------------------
If * * * Then * * * And * * *
------------------------------------------------------------------------
(1) We assign an eligible We will not Production from the
lease to your authorized change your assigned eligible
field after we approve relief authorized lease(s) counts
field's royalty toward the royalty
suspension suspension volume
volume for the authorized
determined under field, but the
Sec. 203.69 eligible lease will
not share any
remaining royalty
suspension volume
for the authorized
field after the
eligible lease has
produced the volume
applicable under
Sec. 260.114 of
this chapter.
* * * * * * *
(3) We assign another lease In our evaluation (i) You toll the time
that you operate to your of your period for
field while we are evaluating authorized evaluation until you
your application field, we will modify your
take into application to be
account the consistent with the
value of any new field; (ii) We
royalty relief have an additional
the added lease 60 days to review
already has the new information;
under Sec. and (iii) The
260.114 or its assigned pre-act
lease document. lease or royalty
If we find your suspension lease
authorized field shares the royalty
still needs suspension we grant
additional to the new field. An
royalty eligible lease does
suspension not share the
volume, that royalty suspension
volume will be we grant to the new
at least the field. If you do not
combined royalty agree to toll, we
suspension will have to reject
volume to which your application due
all added leases to incomplete
on the field are information.
entitled, or the Production from an
minimum assigned eligible
suspension lease counts toward
volume of the the royalty
authorized suspension volume
field, whichever that we grant under
is greater Sec. 203.69 for
your authorized
field, but you will
not owe royalty on
production from the
eligible lease until
it has produced the
volume applicable
under Sec. 260.114
of this chapter.
* * * * * * *
(5) We reassign a well on a The past The past production
pre-Act, eligible, or royalty production from for that well will
suspension lease to another the well counts not count toward any
field toward the royalty suspension
royalty volume that we grant
suspension under Sec. 203.69
volume that we to the authorized
grant under Sec. field from which we
203.69 to the reassigned it. But,
authorized field if the well is on an
to which we eligible lease or
assigned the royalty suspension
well lease, production
from that well will
count toward the
volume applicable
under Sec. 260.114
or Sec. 260.124 of
this chapter.
------------------------------------------------------------------------
* * * * *
PART 260--OUTER CONTINENTAL SHELF OIL AND GAS LEASING
4. The authority citation for part 260 continues to read as
follows:
Authority: 43 U.S.C. 1331, et seq.
5. Section 260.3 is revised to read as follows:
Sec. 260.3 What is MMS's authority to collect information?
The information collected under 30 CFR 260 is exempt from the
Paperwork Reduction Act of 1995 under 5 CFR 1320.4(a)(2), (c).
6. Section 260.113 is revised to read as follows:
Sec. 260.113 When does an eligible lease qualify for a royalty
suspension volume?
(a) Your eligible lease will receive a royalty suspension volume as
specified in the Act. The bidding system in Sec. 260.110(g) applies.
(b) Your eligible lease may receive a royalty suspension volume
only if your entire lease is west of 87 degrees, 30 minutes West
longitude.
7. Section 260.114 is revised to read as follows:
Sec. 260.114 How does MMS assign and monitor royalty suspension
volumes for eligible leases?
(a) We have specified the water depth for each eligible lease in
the final Notice of OCS Lease Sale. Our determination of water depth
for each lease became final when we issued the lease.
(b) We have specified in the Notice of OCS Lease Sale the royalty
suspension volume applicable to each water depth. The following table
shows the royalty suspension volumes for each eligible
[[Page 72657]]
lease in million barrels of oil equivalent (MMBOE):
------------------------------------------------------------------------
Minimum royalty
Water depth suspension volume
(MMBOE)
------------------------------------------------------------------------
(1) 200 to less than 400 meters................ 17.5
(2) 400 to less than 800 meters................ 52.5
(3) 800 meters or more......................... 87.5
------------------------------------------------------------------------
8. Section 260.117 is removed.
9. The title of Sec. 260.124 and the introductory language of
paragraph (b) are revised to read as follows:
Sec. 260.124 How will royalty suspension apply if MMS assigns a lease
issued in a sale held after November 2000 to a field that has a pre-Act
lease?
* * * * *
(b) If we establish a royalty suspension volume for a field as a
result of an approved application for royalty relief submitted for a
pre-Act lease under part 203 of this chapter, then:
* * * * *
[FR Doc. 07-6161 Filed 12-20-07; 8:45 am]
BILLING CODE 4310-MR-P