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Notice

Agency Information Collection Activities: Proposed Collection, Comment Request

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AGENCY:

Energy Information Administration, DOE.

ACTION:

Agency information collection activities: Proposed collection, comment request.

SUMMARY:

The Energy Information Administration (EIA) is soliciting comments concerning proposed revisions and three-year extensions to the Oil and Gas Reserves Survey Forms EIA-23, EIA-23P and EIA-64A. Titles of these forms are “Annual Survey of Domestic Oil and Gas Reserves” (EIA-23), “Oil and Gas Well Operator List Update Report” (EIA-23P), and “Annual Report of the Origin of Natural Gas Liquids Production” (EIA-64A), respectively.

DATES:

Written comments must be submitted on or before June 19, 2000. If you anticipate difficulty in submitting comments within that period, contact the person listed below as soon as possible.

ADDRESSES:

Send comments to Rafi Zeinalpour, U.S. Department of Energy, Energy Information Administration, Reserves and Production Division, 1999 Bryan Street, Suite 1110, Dallas, Texas 75201-6801. Alternatively, Rafi Zeinalpour may be reached by phone at (214) 720-6191, at the e-mail address of rzeinalp@eia.doe.gov or by FAX at (214) 720-6155.

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FOR FURTHER INFORMATION CONTACT:

Requests for additional information or copies of the forms and instructions should be directed to Rafi Zeinalpour at the address listed above.

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SUPPLEMENTARY INFORMATION:

I. Background

II. Current Actions

III. Request for Comments

I. Background

The Federal Energy Administration Act of 1974 (Pub. L. No. 93-275, 15 U.S.C. 761 et seq.) and the Department of Energy Organization Act (Pub. L. No. 95-91, 42 U.S.C. 7101 et seq.) require the Energy Information Administration (EIA) to carry out a centralized, comprehensive and unified energy information program. This program collects, evaluates, assembles, analyzes and disseminates information on energy resource reserves, production, demand, technology and related economic and statistical information. This information is used to assess the adequacy of energy resources to meet near and longer-term domestic demands.

The EIA, as part of its effort to comply with the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. Chapter 35), provides the general public and other Federal agencies with opportunities to comment on collections of energy information conducted by or in conjunction with the EIA. Any comments received help the EIA to prepare data requests that maximize the utility of the information collected and to assess the impact of collection requirements on the public. Also, the EIA will later seek approval by the Office of Management and Budget (OMB) of the collections under Section 3507(h) of the Paperwork Reduction Act of 1995.

Operators of crude oil and natural gas wells are the target respondents of Forms EIA-23 and EIA-23P. The amount of crude oil, associated-dissolved natural gas, non-associated natural gas and lease condensate production and reserves by individual field are requested of large and intermediate size producers on Form EIA-23. A sample of small operators are required to submit less detailed information on a different version of the form and the majority of small operators are not asked to report annually on Form EIA-23. The selected sample of small operators provide production and available reserves information for crude oil, natural gas and lease condensate at a State or geographic sub-division level on the Form EIA-23. Form EIA-23P is a postcard form used to collect information on possible oil and gas well operators that may be included in future EIA-23 surveys. Information obtained Start Printed Page 21173from Form EIA-23P is used to confirm and/or update general operator information, primarily about small companies with which no contact has been made in the last few years.

Operators of natural gas plants are the target respondents of the Form EIA-64A. The amount of natural gas processed, natural gas liquids produced, resultant shrinkage of the natural gas and natural gas used in processing are requested of all natural gas plant operators.

In response to Public Law 95-91 Section 657, estimates of U.S. oil and gas reserves are to be reported annually. These estimates are essential to the development, implementation and evaluation of energy policy and legislation. Data are used directly in the EIA annual publication, U.S. Crude Oil, Natural Gas and Natural Gas Liquids Reserves, and are incorporated in a number of other publications and analyses. Secondary publications which use the data include EIA's Annual Energy Review, Annual Energy Outlook, Petroleum Supply Annual and Natural Gas Annual.

II. Current Actions

This notice is for a proposed three-year extension of Form EIA-23, “Annual Survey of Domestic Oil and Gas Reserves”, Form EIA-23P, “Oil and Gas Well Operator List Update Report”, and Form EIA-64A, “Annual Report of the Origin of Natural Gas Liquids Production”, until December 31, 2003. Form EIA-23P will be extended without modification. Currently available reliable State sources will be used to confirm and/or update operator information thereby reducing the number of Form EIA-23P mail-outs and thus the burden on respondents.

More efficient utilization of space on Form EIA-64A is proposed by reducing the number of available lines for sources of the natural gas and increasing the number of available lines for explanatory notes and comments. This change should allow for more complete information and a reduction in paper attachments.

Modifications to the Schedule A Form (field level detailed report) and the information collected on Form EIA-23 are proposed. First, a single page will now contain information on three individual fields instead of data on four fields as shown on the current form. This will increase the readability and the ease of manually completing this form.

Second, information on two additional reserves classifications will be requested from individual large and intermediate sized operators. These additions are the gross operated volumes of reserves sold and/or acquired by these companies during the survey year. This information should be readily available, since in the majority of cases, for companies selling properties this should be the same volume of reserves as those reported on the previous year's survey as year-end reserves. For companies acquiring properties, these gross reserves volumes would be the same as those determined during the evaluation process prior to the acquisition. The reserves volumes for sold and acquired properties will also provide a more complete understanding of the sources of growths and reductions in reserves and an independent evaluation of the gross annual volumes of reserves under new operators. These modifications to Form EIA-23 are also anticipated to reduce the reporting burden time for the large and intermediate operators.

The format for Form EIA-23, Schedule A, will be revised first to include these two new classifications and also to allow the reporting of production from wells without available values of reserves in the same location on the form as production from wells with available values of reserves. Reporting all production information in the same location should increase the accuracy of the data and the efficiency of completing the form. The form location for reporting proved non-producing reserves will be moved to the location previously used for reporting production associated with wells without available values of reserves. As a result of this move, the location of the total values of reserves will now be at the end of the rows on the Form EIA-23. These changes should increase data accuracy and reduce both confusion and the time required to complete the form.

On the Form EIA-23, Summary Report, which is completed by small operators, two changes are proposed. First, the form would not have the State and/or geographic sub-divisions preprinted. Instead, the operator would identify and enter on the form all areas in which they have operated properties. This will eliminate one page of the report and increase the accuracy and readability of the information. Additionally, the lines for data entry have been expanded to allow for easier manual input. The units for reporting crude oil, natural gas and lease condensate production and reserves would also be changed from thousands of barrels and millions of cubic feet units to barrels and thousands of cubic feet, which is more routinely used by small operators. This should increase accuracy and eliminate rounding errors for the small operators.

Many U.S. government agencies have an interest in the definitions of proved oil and gas reserves and the quality, reliability and usefulness of estimates of reserves. Among these are the Energy Information Administration (EIA), Department of Energy; Minerals Management Service (MMS), Department of Interior; Internal Revenue Service (IRS), Department of the Treasury; and the Securities and Exchange Commission (SEC). Each of these organizations has specific purposes for collecting, using or estimating proved reserves. The EIA has a congressional mandate to provide accurate annual estimates of U.S. proved crude oil, natural gas and natural gas liquids reserves and publishes an annual reserves report to meet this requirement. The MMS is second only to the IRS in generating Federal revenue. The MMS maintains estimates of proved reserves to carry out their responsibilities in leasing, collecting royalty payments and regulating the activities of oil and gas companies on Federal lands and water. For the IRS, proved reserves and occasionally probable reserves are an essential component of calculating taxes for companies owning or producing oil and gas. The SEC requires publicly traded petroleum companies to annually file a reserves statement as part of their 10-K filing. The basic purpose of the 10-K filing is to give the investing public a clear and reliable financial basis to assess the relative value, as a financial asset, of a company's reserves, especially in comparison to other similar oil and gas companies.

The Society of Petroleum Engineers (SPE) adopted new oil and gas reserves definitions in March 1997 for the three categories of proved, probable and possible reserves. The SPE is an international organization of petroleum engineers with 50,000 members worldwide. The World Petroleum Congresses (WPC) ratified the same definitions in October 1996 and is a co-sponsor of the definitions. These definitions were thoroughly discussed and reviewed for several years prior to adoption by the WPC. The EIA, through its observer's position on the committee, strongly supported the adoption of the new SPE/WPC definitions. Consequently, the EIA has recently adopted the SPE/WPC definitions. This action has been somewhat delayed, however, in order to allow time for all major U.S. government agencies having a significant interest in proved oil and gas reserves to adopt the new definitions concurrently. The MMS has Start Printed Page 21174adopted and currently uses the new SPE/WPC definitions and these definitions are fundamentally consistent with IRS usage. The SEC has had extensive dialogue starting in 1997 with the EIA, petroleum industry and investment community on the new SPE/WPC definitions. The SEC has yet to reach a decision to modify their definitions or to adopt the SEC definitions to be more consistent with the SPE/WPC definitions. The dialogue will continue. The EIA, SPE, WPC and the SEC all recognize that definitions of proved reserves are not static and will continue to evolve over time.

These new definitions contain at least two major changes from the previous SPE definitions adopted in 1987. First, probabilistic calculation techniques (i.e., a range of reserves estimates with uncertainties associated with each level of reserve estimates) were accepted as valid methods of estimating proved reserves along with the traditional deterministic techniques (i.e., a discrete reserve estimate with an associated level of certainty). Second, the use of an oil or gas price averaged over a longer historical period of time, typically one year, rather than the price listed on a single day was recommended in the SPE/WPC definitions to be consistent with the purpose of economic estimation of reserves.

The EIA believes that allowing and accepting probabilistic estimates of reserves is both state-of-the-art and a means for improving the understanding of proved reserves The EIA expects that most filers will continue to utilize the deterministic methodology to determine reserves but will accept probabilistic estimates when appropriate. Reserves calculated using any type of evaluation methodology rely upon the skill, integrity and judgment of the evaluator and require an ample amount of reliable data.

The EIA also believes that using an average annual price for oil and gas rather than a so called “market price” on December 31 of the reporting year as the SEC currently requires, will lead to more reliable proved reserves estimates, as well as more meaningful estimates of those reserves' economic value. Estimating reserves requires consideration of both technical and economic components. In 1998, U.S. proved reserves of crude oil registered the largest percentage decline in 53 years. The annualized oil price decline from $17.40 per barrel in 1997 to $10.88 per barrel in 1998 had a significant impact on proved reserves. Moreover, using end of year prices [$15.04 per barrel in December 1997 to $8.03 in December 1998], further exacerbated the reduction in proved reserves for most producers and for the nation. As the oil price falls, each additional dollar decline has a proportionally larger negative impact on the reported volume of proved reserves.

The adoption of these new definitions of proved reserves by the EIA will not require respondents to change the way they report information on Form EIA-23.

Respondents should use the same methods when estimating reserves for the EIA as they do for the SEC. If there is an apparent conflict in requirements and assumptions, give precedence to the methods used for the SEC.

Operators should note in the footnotes whether end of year or annual average prices were used and whether probabilistic or deterministic methods were utilized at the field level.

III. Request for Comments

Prospective respondents and other interested parties should comment on the actions discussed in Item II. The following guidelines are provided to assist in the preparation of comments. Please indicate to which form(s) your comments apply.

General Issues

A. Is the proposed collection of information necessary for the proper performance of the functions of the agency and does the information have practical utility? Practical utility is defined as the actual usefulness of information to or for an agency, taking into account its accuracy, adequacy, reliability, timeliness and the agency's ability to process the information it collects.

B. What enhancements can be made to the quality, utility and clarity of the information to be collected?

As a Potential Respondent

A. Are the instructions and definitions clear and sufficient? If not, which instructions need clarification?

B. Can the information be submitted by the due date?

C. Public reporting burden for this collection is estimated to average 4 hours for small operators, 32 hours for intermediate operators, and 160 hours for large operators on Form EIA-23. In addition, proposed Form EIA-23 modifications are anticipated to reduce these reporting burden estimates for intermediate operators by 4 hours and for large operators by 16 hours. For operators reporting on Form EIA-23P, reporting burden is estimated at 15 minutes. For natural gas plant operators reporting on Form EIA-64A, the reporting burden is estimated at 6 hours. The estimated burden includes the total time, effort or financial resources expended to generate, maintain, retain, disclose and provide the information. Please comment on the accuracy of the burden estimates.

D. The agency estimates that the only costs to the respondents are for the time it will take them to complete the collection. Please comment if respondents will incur start-up costs for reporting or any recurring annual costs for operation, maintenance and purchase of services associated with the information collection.

E. What additional actions could be taken to minimize the burden of this collection of information? Such actions may involve the use of automated, electronic, mechanical or other technological collection techniques or other forms of information technology.

F. Does any other Federal, State or local agency collect similar information? If so, specify the agency, the data element(s) and the methods of collection.

As a Potential User

A. Is the information useful at the levels of detail indicated on the form?

B. For what purpose(s) would the information be used? Be specific.

C. Are there alternate sources for the information and are they useful? If so, what are their weaknesses and/or strengths?

Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of the form. These comments will also become a matter of public record.

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Statutory Authority: Section 3506 (c)(2)(A) of the Paperwork Reduction Act of 1995 (Pub. L. No. 104-13, 44 U.S.C. Chapter 35).

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Issued in Washington, DC, April 14, 2000.

Jay H. Casselberry,

Agency Clearance Officer, Statistics and Methods Group, Energy Information Administration.

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[FR Doc. 00-9912 Filed 4-19-00; 8:45 am]

BILLING CODE 6450-01-P