MMS proposes revisions in its OCS production requirements

Offshore lessees would be required to measure all flared and vented natural gas on facilities producing more than 2,000 b/d of oil under changes the US Minerals Management Service proposed to its Outer Continental Shelf production requirements.

Nick Snow
Washington Correspondent

WASHINGTON, DC, Mar. 14 -- Offshore lessees would be required to measure all flared and vented natural gas on facilities producing more than 2,000 b/d of oil under changes the US Minerals Management Service proposed to its Outer Continental Shelf production requirements.

The proposals, "Oil and Gas Production Requirements, 1010-AD 12," would also eliminate production rate restrictions that are no longer needed, clarify requirements for documents that operators must submit to the MMS, as well as the timing for these submissions, and provide guidance on notifying operators of adjacent leases or units of production within 500 ft of their holdings, the agency said.

It said the proposed requirement for operators to install meters to measure flared or vented gas is based on a recommendation contained in a July 2004 Government Accountability Office report, "Natural Gas Flaring and Venting—Opportunities to Improve Data and Reduce Emissions" (GAO-04-809).

The report recommended that more accurate records were needed to determine the amount of flared and vented gas, and the volume of greenhouse gas such releases contribute to the atmosphere each year. MMS said it currently collects information on the total gas flared and vented, but operators are not required to differentiate between the two categories. To improve data collection, the proposed rule would require operators to report flaring and venting volumes separately to MMS.

The proposals also would eliminate some previous requirements that MMS considers unnecessary in today's petroleum industry. For example, in 1974, the federal government required operators to establish maximum production rates (MPRs) for producing well completions, and maximum efficient rates (MERs) for producing reservoirs, in OCS Order No. 11. This was during a period of oil shortages and energy crises, MMS observed. In 1988, the agency reduced the MER requirement. Currently, MMS requires MERs only on sensitive reservoirs.

Based on the past 25 years of experience, MMS said that it has concluded that maximum rate requirements and production balancing requirements can be largely eliminated without significant detriment to conservation and maximization of ultimate recovery. It would retain the authority to set MPRs and MERs when necessary under the proposed rule, MMS said.

Comments on the proposed revisions will be accepted through June 4.

Contact Nick Snow at nsnow@cox.net.

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