Topic: Oil and Gas and Sulphur Operations in the Outer Continental Shelf — Lease Term Requirements Related to Continuing Operations

Question: What does this new rule change?

Answer: The Bureau of Safety and Environmental Enforcement (BSEE) amended regulations at 30 CFR 250.180. This amendment extends the period of time allowed between lease holding operations (i.e., drilling, well-reworking, and production in paying quantities) for leases continued beyond their primary terms from a 180-day period to a one-year period.  For consistency reasons, 30 CFR 250.171 was also amended to reflect the change to a one-year period.

Question: Why is BSEE changing these regulations?

Answer: Congress mandated the amendments to 30 CFR 250.180 through the passing of H.R. 244 – Consolidated Appropriations Act of 2017, Public Law No. 115-31, May 5, 2017.  The Act directed the Secretary of the Interior to change the 180-day period to a one-year period and to amend the regulations at 30 CFR 250.180 no later than 30 days after the Act was enacted. The amendment to 30 CFR 250.171 was made simply to ensure consistency with 30 CFR 250.180 regulations.

Question: What is the effective date of the amended rule?

Answer: The effective date of the amended rule is June 9, 2017. 

Question: What if my lease was beyond its primary term when the amended rule went into effect and I completed a lease holding operation less than 180 days prior to the effective date?

Answer: You will have a one-year period from the last day of lease-holding operations to either resume operations or receive a Suspension of Production (SOP) or Suspension of Operations (SOO) from the Regional Supervisor under §250.168-250.177.  In this case, if you already have a pending SOO or SOP request, your request may be returned for updating and resubmission (if applicable) prior to the new scheduled lease expiration. 

Question: What if my last lease-holding operation ceased more than 180 days before the amended rule went into effect, but I have a pending SOP or SOO request?

Answer: The lease is preserved from termination by the pendency of the suspension request only for purposes of allowing BSEE to act on the request. The lease is not subject to the amended rule, and the suspension request remains under BSEE review for final decision.

Question: What if my lease expired prior to the effective date of the rule, but I had a lease-holding operation within the last year?

Answer: This lease remains terminated and does not receive the benefit of the amended rule. 

Question: What if BSEE approved an SOP or SOO for my lease and that suspension ends before it has been one year since my last lease-holding operation?

Answer: In this case, the lease is held past the end of the approved suspension period to the date one year from the end of the last lease-holding operation.

Question: What if BSEE approved an SOP or SOO for my lease and that suspension ends more than one year after my last lease-holding operation?

Answer: In this case, the lease is held through the end of the approved suspension period.

Question: What is the impact of the amended rule on NTL No. 2008-N09?

Answer: NTL No. 2008-N09, “Extension of Lease and Unit Terms by Production in Paying Quantities,” issued October 29, 2008, will be amended with appropriate updates/annotations commensurate with the amended regulations.

Question: What is the impact of the amended rule on NTL No. 2015-G01?

Answer: NTL No. 2015-G01, “Time Between Drilling Operations,” issued June 9, 2015, will be rescinded, as it addresses the availability of extensions – to a maximum of 270 days – of the prior 180-day period allowed between lease-holding operations.  Since the amended regulations will provide a one-year period between all lease-holding operations on leases continued beyond their primary terms, this NTL is obsolete.

Question: Do I need to revise my Unit Agreement?

Answer: Unit Agreements that follow a BSEE-approved Model contain language (Article 9.2) requiring the Unit Operator to maintain the unit via production, drilling, or well-reworking operations “with lapses of no more than 180 days.” While not required by BSEE, a Unit Operator may file an amendment to a Unit Agreement to replace the language in Article 9.2 to read “with lapses of no more than one year,” instead of “with lapses of no more than 180 days.”

Question: Who should I contact if I’m still unclear on the expected expiration date of my lease? 

If you have any questions regarding the expected expiration date of your lease, please contact:

Gulf of Mexico Region

New Orleans District
David.troquet@bsee.gov
(504) 734-6740

Houma District
bryan.domangue@bsee.gov
(985) 853-5894

Lafayette District
Elliott.smith@bsee.gov
(337) 289-5100

Lake Charles District
mark.osterman@bsee.gov
(337) 437-4600

Lake Jackson District
john.mccarroll@bsee.gov
(713) 286-2300

Pacific Region
Drew.Mayerson@bsee.gov
(805) 384-6358

Alaska Region
Kyle.Monkelien@bsee.gov
(907) 334-5307

Who should I contact if I want written confirmation on the expected expiration date of my lease?

If you would like to request written confirmation regarding the expected expiration date of your lease, please contact:

Gulf of Mexico Region

New Orleans District
David.troquet@bsee.gov
(504) 734-6740

Houma District
bryan.domangue@bsee.gov
(985) 853-5894

Lafayette District
Elliott.smith@bsee.gov
(337) 289-5100

Lake Charles District
mark.osterman@bsee.gov
(337) 437-4600

Lake Jackson District
john.mccarroll@bsee.gov
(713) 286-2300

Pacific Region
Drew.Mayerson@bsee.gov
(805) 384-6358

Alaska Region
Kyle.Monkelien@bsee.gov
(907) 334-5307

How can I submit additional questions regarding the amended rule?

Submit any additional questions regarding the amended rule to bseeQandA@bsee.gov

Topic: Part 250 Subpart S (Safety and Environmental Management Systems)

Question: What information must be included in a SEMS audit report submitted to BSEE pursuant to 30 CFR 250.1920(c) and a SEMS Corrective Action Plan (CAP) submitted to BSEE pursuant to 30 CFR 250.1920(d)?

Answer:

Audit Report (30 CFR 250.1920(c))

Pursuant to 30 CFR 250.1920(c), “[y]ou must submit an audit report of the audit findings, observations, deficiencies identified, and conclusions to BSEE within 60 days of the audit completion date.”

BSEE interprets the elements that must be included in an audit report submitted to BSEE as follows:

Audit Findings are all of the information recorded by the auditor pursuant to COS-2-03 Sections 9.6 (Audit Reporting) and 9.7 (Audit Results). This information includes Audit Results, as defined in COS-2-03 Section 3.3 (Nonconformities, Concerns, and Opportunities for Improvement) and Good Practices (see COS-02-03 Section 9.7.1). BSEE considers Good Practices to include areas of conformance as well as program strengths (e.g., an aspect of a management system that an auditor believes is being implemented exceptionally well).

Observations are the factual support underlying every Audit Finding. Observations may include a listing of, or excerpts from, documents reviewed, descriptions of activities witnessed, and/or documentation of personnel interviews.

Deficiencies are shortcomings or points of weakness or vulnerability that threaten the success of the management system. BSEE considers deficiencies to encompass both Nonconformities and Concerns as defined in COS-2-03 Section 3.3. BSEE considers Concerns to be deficiencies because the auditor has concluded that additional or modified controls must be put in place to maintain the effectiveness of the management system or one of its elements and to avoid the manifestation of new nonconformities.

Conclusions are assessments by the auditors of the state of the design and implementation of the management system and its individual elements. They should take into account how well the management system design conforms to the 30 CFR Part 250 Subpart S SEMS regulatory requirements, as well as the effectiveness, competency, and consistency of its implementation.

Corrective Action Plan (CAP) (30 CFR 250.1920(d))

Pursuant to 30 CFR 250.1920(d), “[y]ou must provide BSEE with a copy of your CAP for addressing the deficiencies identified in your audit within 60 days of the audit completion date. Your CAP must include the name and job title of the personnel responsible for correcting the identified deficiency(ies). The BSEE will notify you as soon as practicable after receipt of your CAP if your proposed schedule is not acceptable or if the CAP does not effectively address the audit findings.” BSEE defines a CAP in 30 CFR 250.1903 as “a scheduled plan to correct deficiencies identified during an audit and that is developed by an operator following the issuance of an audit report.”

As stated above, BSEE interprets deficiencies to include all Nonconformities and Concerns as defined in Section 3.3 of COS-2-03. Accordingly, your CAP must address corrective actions for both Nonconformities and Concerns. Furthermore, Section 250.1920(d) requires the “name and job title of the personnel responsible for correcting the identified deficiency(ies)” to be part of the CAP. Finally, in order for BSEE to assess “if your proposed schedule is not acceptable or if the CAP does not effectively address the audit findings,” BSEE requires that the CAP describe the actions that will be taken to address the deficiency(ies) and include a schedule for carrying out those actions.

BSEE’s interpretation of the reporting requirements above is based on guidance that is incorporated by reference into the BSEE regulations (specifically the COS-2-03 Requirements for Third-party SEMS Auditing and Certification of Deepwater Operations, incorporated at 30 CFR 250.198(n)(2) and 250.1920(a)), common usage of the relevant terms, and a recognition of how they are used within standard auditing practices such as ISO 17021, Conformity assessment – Requirements for bodies providing audit and certification of management systems.

Question: Can the individual designated as being in charge of a facility authorize an alternate person to sign a Job Safety Analysis (JSA) in compliance with the regulation?

Answer: Yes, the individual designated as being in charge of a facility may authorize someone else to sign a JSA on their behalf. The individual designated as being in charge would be accountable for the signature applied on their behalf, and would remain responsible for approving the JSA to ensure that it complies with the regulations. If you intend to utilize this process, BSEE requires that it be fully documented in your SEMS, that the individual designated to be in charge and their authorized signatory are fully aware of the JSA requirements in your SEMS, and a record of this instance is maintained in accordance with the record keeping requirements. Regardless of who the individual designated to be in charge of the facility authorizes to sign the JSA on their behalf, the JSA must still be signed by all personnel involved in the activity and the immediate supervisor. (Answer last updated August 26, 2015)

Topic: NTL No. 2009-G36 - Using Alternate Compliance in Safety Systems for Subsea Production Operations

Question: Is NTL No. 2009-G36 (effective date January 1, 2010) still in effect even though the NTL has an expiration date of December 31, 2014?

Answer: NTL No. 2009-G36 is still in effect (see NTL 2014-N01- Elimination of Expiration Dates on Certain Notices to Lessees and Operators Pending Review and Reissuance).  However, a large portion of the substance of the NTL is incorporated into the new Subpart H regulations.

Topic: NTL No. 2009-G36 - Requirements for boarding shut-down valves (BSDVs)

Question: NTL No. 2009-G36 requires that BSDVs meet the requirements of API 6A and API Spec 6AV1 and be fire rated for 30 minutes.  Do these requirements for BSDVs remain in effect until the new BSDV requirements under the new Subpart H go into effect on September 07, 2017?

Answer: Yes.  If you installed a BSDV prior to the effective date of revised § 250.801, your BSDV must meet the requirements in place at the time of approval, until September 7, 2017.  After that date, your BSDVs must meet the requirements in §§ 250.801 and 250.802.  The table in § 250.802(d) addresses SPPE already in service and describes when you must install certified SPPE.

Topic: § 250.880(a)(1) - Production notification

Question: Is the notification of the District Manager at least 72 hours before commencing production required every time we restart production, facility modification and/or initial production?

Answer: This notification is for initial production, unless otherwise stated in the approval process.

Topic: § 250.880(c)(2)(i) - API RP 570 and PSV testing

Question: Will BSEE allow operators to follow API RP 570, which recommends relief valves in hydrocarbon service be overhauled every 5 years, and relief valves in non-hydrocarbon service be overhauled every 10 years?  API RP 570 is not incorporated by reference in Subpart H.  Will BSEE allow operators conforming to API RP 570 to annually lift the PSV pilot during testing and not the main valve piston?

Or will BSEE allow operators to follow the recommended testing practices of the PSV manufacturer?  If the manufacturer recommendations call for lifting the main valve piston to test the valve, then that test would be conducted annually. However, if the manufacturer recommends that only the pilot be lifted to test the valve, then that recommendation would be used for the annual compliance test.

Answer: No, BSEE will not consider operators’ satisfaction of API- or manufacturer-suggested practices for testing PSVs to be sufficient for compliance with Subpart H.  Previously, BSEE had allowed operators to just test the pilot of pilot-operated PSVs.  This is not allowed under the new regulations, which require that the main valve piston must lift during testing.  BSEE will consider granting alternate compliance requests and/or departures (extensions) for the required PSV testing (Lift Main Valve). If BSEE grants an alternate compliance request and/or departure (extension) from the requirement for the main valve piston to lift, the operator is still expected to test the pilot portion annually. 

Topic: § 250.842 - Modified systems and diagrams

Question: Do the requirements of this section apply to new or modified systems only? 

Do the requirements for review, approval and stamping by a professional engineer apply only to modifications of an existing system and not to the system in its entirety, or existing components of the system that are not impacted by the modification?

If existing systems are not modified, or the components of an existing system are not affected by a modification, do the unaffected components require professional engineering review and approval?

Answer: Under § 250.842(a), the operator must submit a production safety system application, including required drawings, before installing or modifying a production safety system and the District Manager must approve the production safety system application before the operator may commence production through or otherwise use the new or modified system.  The drawings do not need to be updated  to the new requirements until the operator submits a modification request to BSEE, however when such a request is submitted, it must include fully updated drawings with changes stamped by a registered professional engineer, as described in 250.842(c)(2).

Topic: § 250.842(a)(1)(v) - Existing chemical systems and schematic piping and instrumentation diagrams

Question: At which point would the operator need to include the chemical systems in the required design documentation and submit them to BSEE?

Answer: The operators do not need to update the existing design documentation to include the existing chemical systems until there is a modification made to the facility or an installation of a new system.

Topic: § 250.842 - PE stamps for system components

Question: For purposes of the application required under § 250.842, are the drawings and plans required to be stamped at the “system-level” as described in paragraph (a), and not at the “individual component-level”?  For example, for a new installation, the schematic P&ID must be reviewed, approved and stamped by a professional engineer.  However, design drawings of individual components shown on the P&ID, such as design drawings of a pump, do not require a professional engineer stamp under Subpart H.

Answer: The design drawings of individual components do not require a PE stamp.

Topic: § 250.842(d) - Certification letter

Question: Are the certifications under § 250.842(c) simply notification and certification statements contained in a letter to the District Manager from the operator, and not an independent, third party review and certification? May the certification statement be straightforward, such as, “(Name of operator) certifies that the equipment described in our application of (date) for (location name) was installed in accordance with the BSEE-approved design”? Once submitted, do these notifications require further action by the operator or regulator?

Answer: Section 250.842(c) requires the operator, not an independent, third party, to certify in a letter to the District Manager that the mechanical and electrical systems were properly installed in accordance with approved designs. An example of an acceptable certification statement would be, “(Name of operator) certifies that the equipment described in our application of (date) for (location name) was installed in accordance with the BSEE-approved design.”  No further action is required for this certification statement by the operator or BSEE, however, further actions per § 250.842(d), (e),  and (f) are required by the operator.

Topic: § 250.842 - Original drawings

Question: If drawings that were not previously required to be reviewed, approved and stamped by a professional engineer are modified, the professional engineer reviewing the modifications may be required to contact the engineer who prepared/reviewed the original drawings per engineering licensing rules.  There may be situations where the engineer who prepared/reviewed the original drawings cannot be contacted.  The engineer reviewing modifications may not be allowed to review/approve/stamp the modified drawings because of State licensing requirements.  Will there be an alternate compliance method to address such situations?

Answer: The following guidance should be used to determine when and how a drawing should be stamped.

1. All drawings of new installations must be stamped by a registered P.E. 

2. All modification drawings must be stamped by a registered P.E.; it is acceptable to stamp only the clouded areas.

3. For drawing packages that were designed before 11/7/2016, the effective date of this final rule, if the operator has the old certification letter required by the previous subpart H, BSEE will typically accept that letter as satisfying the certification requirements of the current regulation.

4. If the operator cannot locate the relevant old certification letter, never had one, or is creating a drawing package for an existing installation, the operator must submit a new certification letter. This certification letter must be stamped by a registered P.E. The letter should certify that the system was built according to the original plan submitted to BSEE.

In the event that an actual conflict arises between compliance with State law and these regulatory requirements, BSEE may consider requests for alternate compliance or departures on a case by case basis.

Topic: § 250.851(b) - Operating ranges

Question: Shifts and changes in the range of operating pressures can occur very quickly.  A single change in operating pressure does not always indicate that the normal range of operating pressure has shifted.  Can a 30-day time period be established to allow operators to monitor operating pressure ranges on pressure vessels to determine that the normalized operating pressure range has shifted, such that the process for the resetting of PSHLs must begin?

Answer: Yes.  The regulations under § 250.851(b) allow for up to 30 days monitoring of operating pressure ranges for pressure vessels to determine the normal pressure range.

Topic: Pipeline junction platforms

Question: How are the requirements of Subpart H applied to pipeline junction platforms that do not include production systems and wells?

Answer: Facilities associated with appurtenances to right-of-way pipelines are addressed in Subpart J. Subpart H may be applied on a case by case basis.

Topic: § 250.838 - Maximum allowable valve closure times and hydraulic bleeding requirements for an electrohydraulic control system.

Question: If an unexpected loss of communications can be quickly remediated by power cycling the subsea system or computers, or if an operator conducts a planned short, temporary loss of communications (such as power cycling the subsea system or rebooting a subsea server for software upgrade, or short field power-down to connect/disconnect an electrical flying lead), must the operator provide notification to the District Manager if the required valve closure times are met?

Answer: Yes, per § 250.838(c) the operator must provide notification to the District Manager under the following circumstances:
(c)  If you have an electro-hydraulic control system and experience a loss of communications (EH Loss of Comms), you must comply with the following:
(1)  If you can meet the EH Loss of Comms valve closure timing conditions specified in the table in paragraph (d) of [§ 250.838], you must notify the appropriate District Office within 12 hours of detecting the loss of communication.
(2)  If you cannot meet the EH Loss of Comms valve closure timing conditions specified in the table in paragraph (d) of this section, you must notify the appropriate District Office immediately after detecting the loss of communication.  You must shut-in production by initiating a bleed of the low pressure (LP) hydraulic system or the high pressure (HP) hydraulic system within 120 minutes after loss of communication.  You must bleed the other hydraulic system within 180 minutes after loss of communication.
(3)  You must obtain approval from the appropriate District Manager before continuing to produce after loss of communication when you cannot meet the EH Loss of Comms valve closure times specified in the table in paragraph (d) of [§ 250.838].  In your request, include an alternate valve closure timing table that your system is able to achieve.  The appropriate District Manager may also approve an alternate hydraulic bleed schedule to allow for hydrate mitigation and orderly shut-in.

Topic: §§ 250.880(c)(3)(viii) - Flame arrestor inspection

Question: Some flame arrestor designs allow in-place inspection; however, others must be removed from the vent nozzle.  Please elaborate what a visual inspection entails.  Is the use of instrumentation to detect pressure drop across the flame arrestor in lieu of visual inspection acceptable?

Answer: 

By itself, the use of an instrument to detect pressure drop does not satisfy the requirement of § 250.880(c)(3)(viii) that you undertake an annual visual inspection of the flame arrestor. If available, you should follow the recommendations of the manufacturer to complete your annual visual inspection. An example of a visual inspection would be:

1. Safely isolate the flame arrestor from possible fuel sources then purge the line or tank with inert gas before attempting to remove the arrestor for inspection.

2. Visually inspect the housing assembly for damage.

3. Visually inspect the flame element and supporting grids for damage or corrosion build up. If the flame element is damaged it should be replaced.

4. Verify that the element openings are not clogged.  If the element is dirty or clogged it should be cleaned per manufacturer recommendations.

Visually inspect the sealing gasket for damage and replace if necessary.