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September 15, 2006
In Reply Refer To:
3160 (310) P
Instruction Memorandum No. 2006-233
Expires: 09/30/2007
To:                   All Field Office Officials
From:               Assistant Director, Minerals, Realty and Resource Protection
Subject:           Policy and Procedures for Issuing “Notice To Lessees” (NTL) for Federal and Indian Gas Measurement Utilizing Electronic Flow Computers (EFC)
Program Area: Fluid Minerals
Purpose:  To provide State Offices (SO) and Field Offices (FO) with instructions on procedures necessary for the development, approval, and issuance of NTLs for gas measurement using EFCs on the BLM jurisdictional points of measurement.
Policy/ActionIf offices choose to issue an NTL for the use of EFCs, the following procedures must be used.
· The attached model NTL (Attachment 1) must be used for the proposed Notice.  No changes to the model NTL should be made in the proposed Notice other than filling in the office, jurisdiction, and NTL number, and listing specific existing NTLs that will not be affected, if applicable.  
·           Once the model NTL has been prepared, the regulations at 43 CFR 3164.2(a) require that the NTL be issued only after a specified public notice period and the opportunity for comments by the public. Attachment 2, “Public Notice and Comment Procedures for EFC NTL,” should be strictly followed to ensure consistency in regulation adherence and consideration of comments. A sample publication notice is shown in Attachment 3.
·           Once an NTL is issued as final, please provide a copy to Tim Spisak, Division Chief, Fluid Minerals (WO-310).

Timeframe: Effective immediately. 
Background:  The BLM is responsible for ensuring that gas removed from Federal and Indian leases is accurately measured and properly reported. Existing regulatory requirements and standards for gas measurement on Federal and Indian oil and gas leases were published in Onshore Oil and Gas Order (Order) No. 5, on February 24, 1989 (54 FR 8100).  Order No. 5 does not address new metering technology such as EFCs, which are now considered the industry standard, largely replacing analog chart recording devices. EFCs, when set up and operated correctly, provide increased accuracy of gas measurement. Therefore, the appropriate use of EFC devices is beneficial to both industry and the BLM. 
Without a revision to Order No. 5 or an existing local NTL, EFCs can only be approved through the variance process. It may take several years to publish a revision addressing EFCs due to the procedures necessary to revise the existing Order No. 5. In the interim, SOs, FOs, and industry need a mechanism that provides consistent standards and reduces workload impacts resulting from individual meter approvals required by the variance process.
Some of the main reasons for developing policy and procedures to establish a standardized EFC NTL for SO or FO use are:
1.      The overwhelming adoption of these types of devices by industry for the measurement of Federal and Indian gas;
2.      The inherent complexity and variety of these types of devices;
3.      Workload strains for both the industry and the BLM caused by the requirement to approve these devices on a case-by-case, or well-by-well basis under the variance allowance of Order No. 5;
4.      Lack of sufficient standards, policy and guidance for both industry and the BLM to follow when allowing the use of these devices; and
5.      Inconsistent application of requirements and standards when approving these devices.
Budget Impact: While this policy will require additional time, effort, and administrative support to implement, the policy has no significant budget implications.
Manual/Handbook Sections Affected:  None.
Coordination:  This IM was coordinated with various SO gas measurement personnel, the Washington Office Fluid Minerals Division, and the Department of the Interior Office of the Solicitor.  Comments from all SO and FO oil and gas personnel were also solicited and considered.
Contact: Any questions concerning this guidance should be referred to Tim Spisak at (202) 452-5061. Technical questions regarding the model NTL should be referred to Rich Estabrook at (707) 468-4052.
Signed by:                                                                   
Authenticated by:
Thomas P. Lonnie                                                        
Robert M. Williams
Assistant Director                                                        
Division of IRM Governance,WO-560
Minerals, Realty and Resource Protection
4 Attachments

Last updated: 10-21-2009