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How to ensure compliance with BLM rules

In my new blog post, I would like to deal with some new rules and regulations. These directives concern the Bureau of Land Management orifice meter measurement (short form: BLM). I am the Sales Director – Americas. From this position, I have seen how the American oil and gas industry is struggling with the new BLM rules.

What’s new in the BLM rules and regulations?

In October 2016, the BLM confirmed three policies. The body designed these policies to ensure accurate measurement and recordkeeping, and to guarantee proper reporting of oil and natural gas produced from Indian and federal leases. The BLM developed these policies to ensure the correct paying of royalties. It made a comprehensive update of Onshore Oil and Gas Orders 3170, 3173, 3174, and 3175, the first in more than 25 years.

Gas regulation 43 CFR 3175 for measurement

From 2017, the natural gas industry has experienced changes. According to the new BLM rules, operators have to use gas regulation 43 CFR 3175 for measurement. Any installation after January 17, 2017, falls under this new regulation. Installations performed before that date fall under different timeframes. These timeframes are according to volume, and I have listed them below:

  • Very low volume of 35 (MCFD) Thousand Cubic Square feet per day or less have three years from January 17, 2017. These operations must update their equipment
  • Low volume of 35 to 200 (MCFD) per day had two years from January 17, 2017. These operations had to update their equipment
  • High volume of 200 to 1,000 (MCFD) per day had one year from January 17, 2017. These operations had to update their equipment
  • Very high volume of 1,000 (MCFD) or greater per day had one year from January 17, 2017. These operations had to update their equipment

What are the expected advantages?

According to BLM, the new rules incorporate the latest measurement technology. They also include industry standards and practices. They establish a one-stop national process for the review of new measurement technologies. These rules ease the approval of new practices and allow their quick deployment across BLM-managed leases.

The Government Accountability Office, the Department of the Interior’s Office of the Inspector General, and the Interior’s Royalty Policy Committee have all expressed concern about the adequacy of the BLM’s prior measurement rules.  The finalization of the rules concludes a seven-year effort to address their unease.

What`s the effect on Facility Measurement Point (FMP)?

The new BLM rules and regulations affect many areas. An example is FMP Application Software. The BLM required operators to apply for a Facility Measurement Point (FMP) under 3173.12(e). They had to do so on or before January 17, 2017. BLM has not finished the development of the online FMP application software, citing unforeseen delays. They expect completion of this software by summer 2019. The BLM has to send out another letter establishing the “new effective date” for 3173 and 3174 to inform operators when the FMP becomes functional.

What`s the effect on Sampling Analysis?

The new rules also affect the use of Automatic Tank Gauging and Coriolis Meters. They influence the processing of requests for Variances from Sampling Analysis Requirements of 3175.113(d)(5)-(6). They also affect the use of BLM-approved equipment. Also, they affect the Gas Analysis and Verification System.

I have listed the most significant changes affecting the Instrument Products below.

What is the challenge for gas producers?

Gas producers must follow BLM regulations. The regulations for 3175 establish minimum standards for proper reporting. They also allow for accurate measurement of gas. These rules are for gas removed or sold from Federal and Indian leases and units. They are also for Unit Participating Areas and areas subject to Communitization Agreements. They provide a system for production accountability by operators, lessees, buyers, and transporters.

(Image source: © iQoncept / Fotolia & AS-Schneider)