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MMS Information Collection Activity: 1010-0071, Relief or Reduction in Royalty Rates, Extension of a Collection; Submitted for Office of Management and Budget (OMB) Review; Comment Request

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Minerals Management Service (MMS), Interior.


Notice of extension of an information collection (1010-0071).


To comply with the Paperwork Reduction Act of 1995 (PRA), we are notifying the public that we have submitted to OMB an information collection request (ICR) to renew approval of the paperwork requirements in the regulations under 30 CFR 203, Relief or Reduction in Royalty Rates, and related documents. This notice also provides the public a second opportunity to comment on the paperwork burden of these regulatory requirements.


Submit written comments by October 9, 2009.


You should submit comments directly to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for the Department of the Interior (1010-0071), either by fax (202) 395-5806 or e-mail ( Please also send a copy to MMS by either of the following methods:

  • Electronically: Go to Under the tab More Search Options, click Advanced Docket Search, then select Minerals Management Service from the agency drop-down menu, then click submit. In the Docket ID column, select MMS-2009-OMM-0004 to submit public comments and to view supporting and related materials available. Information on using, 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: Cheryl Blundon; 381 Elden Street, MS-4024; Herndon, Virginia 20170-4817. Please reference Information Collection 1010-0071 in your subject line and include your name and address.
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Cheryl Blundon, Regulations and Standards Branch, (703) 787-1607. You may also contact Cheryl Blundon to obtain a copy, at no cost, of the regulation that requires the subject collection of information.

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Title: 30 CFR 203, Relief or Reduction in Royalty Rates.

OMB Control Number: 1010-0071.

Abstract: The Outer Continental Shelf (OCS) Lands Act, as amended by Public Law 104-58, Deep Water Royalty Relief Act (DWRRA), gives the Secretary of the Interior (Secretary) the authority to reduce or eliminate royalty or any net profit share specified in OCS oil and gas leases to promote increased production. The DWRRA also authorized the Secretary to suspend royalties when necessary to promote development or recovery of marginal resources on producing or non-producing leases in the Gulf of Mexico (GOM) west of 87 degrees, 30 minutes West longitude.

Section 302 of the DWRRA provides that new production from a lease in existence on November 28, 1995, in a water depth of at least 200 meters, and in the GOM west of 87 degrees, 30 minutes West longitude qualifies for royalty suspension in certain situations. To grant a royalty suspension, the Secretary must determine that the new production or development would not be economic in the absence of royalty relief. The Secretary must then determine the volume of production on which no royalty would be due in order to make the new production from the lease economically viable. This determination is done on a case-by-case basis. Production from leases in the same water depth and area issued after November 28, 2000, also can qualify for royalty suspension in addition to any that may be included in their lease terms.

In addition, Federal policy and statute require us to recover the cost of services that confer special benefits to identifiable non-Federal recipients. The Independent Offices Appropriation Act (31 U.S.C. 9701), Office of Management and Budget (OMB) Circular A-25, and the Omnibus Appropriations Bill (Pub. L. 104-133 110 Stat. 1321, April 26, 1996) authorize the Minerals Management Service (MMS) to collect these fees to reimburse us for the cost to process applications or assessments.

Regulations at 30 CFR part 203 implement these statutes and policy and require respondents to pay a fee to request royalty relief. Section 203.3 states that, “We will specify the necessary fees for each of the types of royalty-relief applications and possible MMS audits in a Notice to Lessees. We will periodically update the fees to reflect changes in costs as well as provide other information necessary to administer royalty relief.”

The MMS uses the information to make decisions on the economic viability of leases requesting a suspension or elimination of royalty or net profit share. These decisions have enormous monetary impacts to both the lessee and the Federal Government. Royalty relief can lead to increased production of natural gas and oil, creating profits for lessees and royalty and tax revenues for the government that they might not otherwise receive. We could not make an informed decision without the collection of information required by 30 CFR part 203.

Regulations implementing these responsibilities are under 30 CFR part 203. Responses are mandatory or are required to obtain or retain a benefit. No questions of a sensitive nature are asked. The MMS protects information considered proprietary according to 30 CFR parts 203.63 and 250, and the Freedom of Information Act (5 U.S.C. 552) and its implementing regulations (43 CFR part 2).

Frequency: On occasion.

Description of Respondents: Potential respondents comprise Federal OCS oil and gas lessees and/or operators. It should be noted that not all of the Start Printed Page 46449potential respondents will submit information in any given year and some may submit multiple times.

Estimated Reporting and Recordkeeping Hour Burden: The estimated annual hour burden for this information collection is a total of 2,635 hours. The following chart details the individual components and estimated hour burdens. In calculating the burdens, we assumed that respondents perform certain requirements in the normal course of their activities. We consider these to be usual and customary and took that into account in estimating the burden.

Citation 30 CFR 203Reporting or recordkeeping requirement 30 CFR part 203Hour burdenAverage No. of annual responsesAnnual burden hours
Application/Audit Fees
2(b); 3; 4; 70These sections contain general references to submitting reports, applications, requests, copies, demonstrating qualifications, for MMS approval—burdens covered under specific requirements.0
Royalty Relief for Ultra-Deep Gas Wells and Deep Gas Wells on Shallow Water Leases
31(c)Request a refund of or recoup royalties from qualified ultra-deep wells11 request1
35(d); 44(e)Request to extend the deadline for beginning production with required supporting documentation42 requests8
41(d)Request a refund of or recoup royalties from qualified wells >200 meters but <400 meters11 request1
35(a); 44(a); 47(a)Notify MMS of intent to begin drilling127 notifications27
35(c), (d); 44(b), (d), (e)Notify MMS that production has begun, request confirmation of the size of RSV, provide supporting documentation224 notifications48
46Provide data from well to confirm and attest well drilled was an unsuccessful certified well with supporting documentation and request supplement84 responses32
49(b)Notify MMS or decision to exercise option to replace one set of deep gas royalty suspension terms for another set of such termsThe MMS SOL requires that this reg text stay for legacy purposes only. Last time any respondent could use was 2004; hence, no burden.0
End of Life and Special Royalty Relief*
51; 83; 84 NTLApplication—leases that generate earnings that cannot sustain continued production (end-of-life lease); required supporting documentation1001 application every 3 years34 (rounded)
application 1/3 × $8,000 = $2,667 (rounded)* audit 1/3 × $12,500 = $4,167 (rounded)
52Demonstrate ability to qualify for royalty relief or to re-qualify11 response1
55Renounce relief arrangement (end-of-life) (seldom, if ever will be used; minimal burden to prepare letter)11 letter every 3 years1 (rounded)
80 NTLApplication—apart from formal programs for royalty relief for marginal producing lease (Special Case Relief); required supporting documentation2501 application every 2 years125
application 1/2 × $8,000** = $4,000 audit 1/4 × $12,500 = $3,125
80 NTLApplication—apart from formal programs for royalty relief for marginal expansion project or marginal non-producing lease (Special Case Relief); required supporting documentation1,0001 application every 2 years500
application 1/2 × $19,500** = $9,750 audit 1/4 × $18,750 = $4,688
3 (rounded)661
Subtotal$28,397 fees
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CPA Report
81; 83-90Required reports; extension justificationBurden included with applications0
1 CPA report × $45,000 each = $45,000
Deep Water Royalty Relief Act (DWRAA)
61; 62; 64; 65; 71; 83; 85-89; NTLApplication—preview assessment (seldom if ever will be used as applicants generally opt for binding determination by MMS instead) and required supporting documentation9001 application every 3 years300
application 1/3 × $28,500 = $9,500
62; 64; 65; 71; 83; 85-89Application—leases in designated areas of GOM deep water acquired in lease sale before 11/28/95 or after 11/28/00 and are producing (deep water expansion project); required supporting documentation2,0001 application every 3 years667 (rounded)
application 1/3 × $19,500 = $6,500
62; 64; 65; 203.71; 81; 83; 85-89; NTLApplication—leases in designated areas of deep water GOM, acquired in lease sale before 11/28/95 or after 11/28/00 that have not produced (pre-act or post-2000 deep water leases); required supporting documentation2,0001 application every 3 years667 (rounded)
application 1/3 × $34,000 = $11,334 (rounded)* audit 1/3 × $37,500 = $12,500
70; 81; 90; 91Submit fabricator's confirmation report; extension justification201 report every 3 years7 (rounded)
70; 81; 90; 92; NTLSubmit post-production development report; extension justification. # Reserve right to audit (1 audit every 6 years) after production starts to confirm cost estimates of the application501 report* every 3 years17 (rounded)
# audit 1/6 × $18,750 = $3,125
74; 75; NTLRedetermination and required supporting documentation5001 redetermination every 3 years167 (rounded)
application 1/3 × $16,000 = $5,334 (rounded)*
77Renounce relief arrangement (deep water) (seldom, if ever will be used; minimal burden to prepare letter)11 letter every 3 years1 (rounded)
79(a)Request reconsideration of MMS field designationThis was a regulatory requirement for leases issued prior to 19950
79(c)Request extension of deadline to start construction21 request every 3 years1 (rounded)
81; 83-90Required reports; extension justificationBurden included with applications0
83; NTLApplication—short form to add or assign pre-Act lease and required supporting documentation401 application every 3 years14 (rounded)
application 1/3 × $1,000 = $334 (rounded)
3 (rounded)1,841
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81(d)Retain supporting cost records for post-production development/fabrication reports (records retained as usual/customary business practice; minimal burden to make available at MMS request)82 recordkeepers16
Subtotal2 recordkeepers16
Total Annual Burden$122,024 Fees
* CPA certification expense burden also imposed on applicant.
** These applications currently do not have a set fee since they are done on a case-by-case basis.
Note: Applications include numerous items such as: Transmittal letters, letters of request, modifications to applications, reapplications, etc.

Estimated Reporting and Recordkeeping Non-Hour Cost Burden: There are two non-hour costs associated with this information collection. The estimated non-hour cost burden is $122,024. This estimate is based on:

(a) Application and audit fees. The total annual estimated cost burden for these fees is $77,024 (refer to burden chart).

(b) Cost of reports prepared by independent certified public accountants. Under § 203.81, a report prepared by an independent certified public accountant must accompany the application and post-production report (expansion project, short form, and preview assessment applications are excluded). The OCS Lands Act applications will require this report only once; the DWRRA applications will require this report at two stages—with the application and post-production development report for successful applicants. MMS estimates approximately one submission each year at an average cost of $45,000 per report, for a total estimated annual cost burden of $45,000.

The total of the two burdens is estimated at $122,024.

Public Disclosure Statement: The PRA (44 U.S.C. 3501, et seq.) provides that an agency may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. Until OMB approves a collection of information, you are not obligated to respond.

Comments: Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3501, et seq.) requires each agency “* * * to provide notice * * * and otherwise consult with members of the public and affected agencies concerning each proposed collection of information * * *.” Agencies must specifically solicit comments to: (a) Evaluate whether the proposed collection of information is necessary for the agency to perform its duties, including whether the information is useful; (b) evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) enhance the quality, usefulness, and clarity of the information to be collected; and (d) minimize the burden on the respondents, including the use of automated collection techniques or other forms of information technology.

To comply with the public consultation process, on April 22, 2009, we published a Federal Register notice (74 FR 18393) announcing that we would submit this ICR to OMB for approval. The notice provided the required 60-day comment period. In addition, § 203.82 provides the OMB control number for the information collection requirements imposed by the 30 CFR part 203 regulations. The regulation also informs the public that they may comment at any time on the collections of information and provides the address to which they should send comments. We have received no comments in response to these efforts.

If you wish to comment in response to this notice, you may send your comments to the offices listed under the ADDRESSES section of this notice. The OMB has up to 60 days to approve or disapprove the information collection but may respond after 30 days. Therefore, to ensure maximum consideration, OMB should receive public comments by October 9, 2009.

Public Availability of Comments: Before including your address, phone number, e-mail 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.

MMS Information Collection Clearance Officer: Arlene Bajusz, (202) 208-7744.

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Dated: June 23, 2009.

E.P. Danenberger,

Chief, Office of Offshore Regulatory Programs.

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[FR Doc. E9-21708 Filed 9-8-09; 8:45 am]