0068-11-ss

Supporting Statement A for Paperwork Reduction Act Submissions

30 CFR 250, Subpart M, Unitization

OMB Control Number 1010-0068

Current Expiration Date: November 30, 2011

Terms of Clearance: Agency added language to Justification #12 that clarifies the 'potential'

respondents is 130 but the actual response could be less.

Response: We revised the language to clarify respondents vs responses. Potential respondents include Federal OCS oil, gas, and sulphur lessees and holders of pipeline rights-of-way. It should be noted that not all of the potential respondents will submit information in any given year and some may submit multiple times.

General Instructions

A completed Supporting Statement A must accompany each request for approval of a collection of information. The Supporting Statement must be prepared in the format described below, and must contain the information specified below. If an item is not applicable, provide a brief explanation. When the question, “Does this information collection request (ICR) contain surveys, censuses, or employ statistical methods?” is checked "Yes," then a Supporting Statement B must be completed. The Office of Management and Budget (OMB) reserves the right to require the submission of additional information with respect to any request for approval.

Specific Instructions

A. Justification

1. Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection.

The Outer Continental Shelf (OCS) Lands Act, as amended (43 U.S.C. 1331 et seq. and 43 U.S.C. 1801 et seq.), authorizes the Secretary of the Interior (Secretary) to prescribe rules and regulations to administer leasing of the OCS. Section 1334(a) specifies that the Secretary “provide for the prevention of waste and conservation of the natural resources of the [O]uter Continental Shelf, and the protection of correlative rights therein” and include provisions for “unitization, pooling, and drilling agreements.”

The Independent Offices Appropriations Act (31 U.S.C. 9701), the Omnibus Appropriations Bill (Pub. L. 104-133, 110 Stat. 1321, April 26, 1996), and OMB Circular A-25, authorize Federal agencies to recover the full cost of services that confer special benefits. Unitization requests for approval are subject to cost recovery, and BOEMRE regulations specify service fees for these requests.

This authority and responsibility are among those delegated to the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). This ICR concerns the regulations at 30 CFR 250, Subpart M, concern Unitization.

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection. Be specific. If this collection is a form or a questionnaire, every question needs to be justified.

BOEMRE must approve any lessee’s proposal to enter an agreement to unitize operations under two or more leases and for modifications when warranted. Lessees submit consolidated Exploration Plans and Development and Production Plans for a unit area. We use the informa­tion to ensure that operations under the proposed unit agreement will result in preventing waste, conserving natural resources, and protecting correlative rights including the government’s interests.

3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also describe any consideration of using information technology to reduce burden and specifically how this collection meets GPEA requirements.

Currently, no respondents submit information using electronic technology. Unitization submittals are legal documents requiring original signatures. Also, some of the information submitted under subpart M is proprietary data and would not, at this time, be secure if submitted electronically.

4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item 2 above.

Each unit proposal is unique to two or more specific leases, and there is no duplication. Other Federal departments/agencies are not involved with the unitization of operations on OCS leases.

5. If the collection of information impacts small businesses or other small, describe any methods used to minimize burden.

This collection of information could have a significant economic effect on a substantial number of small entities. Any direct effects primarily impact the OCS lessees and operators. However, many of the OCS lessees and operators may have less than 500 employees and would be considered small businesses as defined by the Small Business Administration. It should be noted, that BOEMRE approval of voluntary unitization applications for business - small or large - results in various benefits. These can include holding the lease in effect without having to drill unnecessary wells, as well as other financial benefits during continued activities.

6. Describe the consequence to Federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing burden.

The number of reservoirs that are susceptible to exploration, development, and production under a unit agreement determines frequency of submission. If we did not collect the information, we could not ensure that unitization proposals will achieve the desired purpose. We could not monitor operations without lessees submitting annual updated operating plans.

7. Explain any special circumstances that would cause an information collection to be conducted in a manner:

(a) requiring respondents to report information to the agency more often than quarterly;

BOEMRE must be able to approve all types of modification(s)/revisions to Unit Agreement(s), Unit Operating Agreement(s), plan(s) of operation, change of unit operator(s) etc., when changes in circumstances warrant, so frequency is on occasion.

(b) requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it;

Not applicable in this collection.

(c) requiring respondents to submit more than an original and two copies of any document;

Not applicable in this collection.

(d) requiring respondents to retain records, other than health, medical, government contract, grant-in-aid, or tax records, for more than 3 years;

Not applicable in this collection.

(e) in connection with a statistical survey, that is not designed to produce valid and reliable results that can be generalized to the universe of study;

Not applicable in this collection.

(f) requiring the use of statistical data classification that has been reviewed and approved by OMB;

Not applicable in this collection.

(g) that includes a pledge of confidentiality that is not supported by authority established in statute or regulation, that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use; or

This collection does not include a pledge of confidentiality not supported by statute or regulation.

(h) requiring respondents to submit proprietary trade secrets, or other confidential information, unless the agency can demonstrate that it has instituted procedures to protect the information’s confidentiality to the extent permitted by law.

This collection does not require proprietary, trade secret, or other confidential information not protected by agency procedures.

8. If applicable, provide a copy and identify the date and page number of publication in the Federal Register of the agency’s notice, required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to submission to OMB. Summarize public comments received in response to that notice and in response to the PRA statement associated with the collection over the past 3 years and describe actions taken by the agency in response to these comments. Specifically address comments received on cost and hour burden.

Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.

Consultation with representatives of those from whom information is to be obtained or those who must compile records should occur at least once every 3 years – even if the collection of information activity is the same as in prior periods. There may be circumstances that may preclude consultation in a specific situation. These circumstances should be explained.

As required in 5 CFR 1320.8(d), BOEMRE published the required 60-day notice in the Federal Register (76 FR 28058, May 13, 2011). Also, 30 CFR 250.199 explains that BOEMRE will accept comments at any time on the information collection burden of our 30 CFR 250 regulations. We display the OMB control number where appropriate and provide the address for sending comments to BOEMRE. We received no comments in response to the notice or unsolicited comments covered under these regulations.

During the comment period, BOEMRE requested input from several respondents on the input to the availability of data, frequency of collection, clarity of instructions, and elements being collected. The burden estimates in Section A.12 reflect their input. The following respondents that commented were:

Anadarko Petroleum Corporation – Susan Hathcock – Regulatory Affairs Manager – (832) 636-8758 - Post Office Box 1330, Houston, Texas 77251-1330

LLOG Exploration Offshore, L.L.C. – Michael Altobelli – Vice President, Land – (281) 752-1105 - 11700 Katy Freeway, Suite 295, Houston, Texas 77079

Exxon Mobil Corporation – Bryan L Chapman – Regulatory Specialist, Regulatory Permitting

– (281) 654-1941 - Post Office Box 4358, Houston, Texas 77210-4358

Beta Offshore – Steve Liles – Executive Vice President and COO – (562) 628-1526 -

111 West Ocean Boulevard, Suite #1240, Long Beach, CA 90802

DCOR, LLC – Jeffrey H. Warren – Vice President, Land and Legal – (805) 535-2036 -

290 Maple Court, Suite 2909, Ventura, CA 93003

9. Explain any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees.

BOEMRE will not provide payment or gifts to respondents in this collection.

10. Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or agency policy.

We protect proprietary information according to the Freedom of Information Act (5 U.S.C. 552) and its implementing regulations (43 CFR 2), and 30 CFR 250.197, “Data and information to be made available to the public or for limited inspection,” and 30 CFR Part 252, “OCS Oil and Gas Information Program.”

11. Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private. This justification should include the reasons why the agency considers the questions necessary, the specific uses to be made of the information, the explanation to be given to persons from whom the information is requested, and any steps to be taken to obtain their consent.

The collection does not include sensitive or private questions.

12. Provide estimates of the hour burden of the collection of information. The statement should:

(a) Indicate the number of respondents, frequency of response, annual hour burden, and an explanation of how the burden was estimated. Unless directed to do so, agencies should not conduct special surveys to obtain information on which to base hour burden estimates. Consultation with a sample (fewer than 10) of potential respondents is desirable. If the hour burden on respondents is expected to vary widely because of differences in activity, size, or complexity, show the range of estimated hour burden, and explain the reasons for the variance. Generally, estimates should not include burden hours for customary and usual business practices.

(b) If this request for approval covers more than one form, provide separate hour burden estimates for each form and aggregate the hour burdens.

Potential respondents include Federal OCS oil, gas, and sulphur lessees and holders of pipeline rights-of-way. It should be noted that not all of the potential respondents will submit information in any given year and some may submit multiple times. The burden estimates include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. We estimate the total annual burden is 3,348 reporting hours. Responses are generally on occasion and are required to obtain or retain a benefit and mandatory. Refer to the following table for a breakdown of the burden.

BURDEN BREAKDOWN

Citation 30 CFR 250 subpart M	Reporting Requirement	Hour Burden	Average No. Annual Responses	Annual Burden Hours
		Non-Hour Cost Burdens*
Requests
1301	Description of requirements.	Burden included in the following sections.		0
1301(d), (f)(3), (g)(1), (g)(2) (ii)	Request suspension of production or operations.	Burden covered in 1010-0114.		0
1302(b)	Request preliminary determination on competitive reservoir.	80	1 request	80
1304(b)	Request compulsory unitization, including submitting unit agreement, unit operating agreement, initial plan of operation, obtain approval of Regional Supervisor if required, and supporting data; serving non-consenting lessees with documents.	205	1 request	205
1304(d)	Request hearing on required unitization.	1	1 request	1
Subtotal			3 responses	285 hours
Submittals
1302(b)	Submit concurrence or objection on competitiveness with supporting evidence.	35	1 request	35
1302(c), (d)	Submit joint plan of operations, supplemental plans, or a separate plan if agreement cannot be reached.	45	1 plan	45
1303; 1304	**Submit revisions or modifications to unit agreement, unit operating agreement, plan of operation, change of unit operator, etc.	8	50 revs/mods	400
		$831 fees x 50 revisions/modifications = $41,550
1303; 1304	**Submit initial, and revisions to, participating area.	54	10 submissions	540
1304(d)	Submit statement at hearing on compulsory unitization.	5	1 statement	5
1304(e)	Pay for and submit three copies of verbatim transcript of hearing.	1	1 submission	1
		Court reporter and 3 transcript copies for 1 hearing = $500
Subtotal			64 responses	1,026 hours
			$42,050 non-hour cost burdens
General
1303	Apply for voluntary unitization, including submitting unit agreement, unit operating agreement, initial plan of operation, obtain approval of Regional Supervisor if required, and supporting data; request for variance from model agreement and other related requirements.	185	11 apps / plans	2,035
		$11,698 fee x 11 applications/plans = $128,678
1304(f)	Appeal final order of compulsory unitization.	Exempt as defined in 5 CFR 1320.4(a)(2), (c).		0
1300-1304	General departure and alternative compliance requests not specifically covered elsewhere in subpart M regulations.	1	2 requests	2
Subtotal			13 responses	2,037 hours
			$128,678 non-hour cost burdens
Total Burden			80 responses	3,348 hours
			$170,728 Non-Hour Cost Burdens

* The non-hour cost burdens that are associated with cost recovery monies collected are based on actual submittals through Pay.gov for FY 2010.

** These requirements are specified in each Unit Agreement.

(c) Provide estimates of annualized cost to respondents for the hour burdens for collections of information, identifying and using appropriate wage rate categories. The cost of contracting out or paying outside parties for information collection activities should not be included here. Instead, this cost should be under “annual Cost to the Federal Government.”

The average respondent cost is $91/hour (rounded). This cost is broken out in the below table using the Bureau of Labor Statistics data for the Houston, TX area. See BLS website: http://www.bls.gov/bls/wages.htm.

Position	Level	Hourly Pay rate ($/hour estimate)	Hourly rate including benefits (1.4** x $/hour)	Percent of time spent on collection	Weighted Average ($/hour)
Secretaries and Administrative Assistants	6	$21	$29	5%	$1
Petroleum Engineer/ Geologist	All Workers	$68	$95	75%	$71
Supv. Petroleum Engineer/Geologist	All Workers	$68	$95	20%	$19
Weighted Average ($/hour)					$91

* Note that this BLS source reflects their last update from December 2009.

** A multiplier of 1.4 (as implied by BLS news release USDL 11-0849, June 8, 2011 (see http://www.bls.gov/news.release/ecec.nr0.htm)) was added for benefits.

Based on a cost factor of $91 per hour, we estimate the total annual cost to industry is $304,668 ($91 x 3,348 hours = $304,668).

13. Provide an estimate of the total annual non-hour cost burden to respondents or recordkeepers resulting from the collection of information. (Do not include the cost of any hour burden already reflected in Item 12).

(a) The cost estimate should be split into two components: (1) a total capital and start-up cost component (annualized over its expected useful life) and (2) a total operation and maintenance and purchase of services component. The estimates should take into account costs associated with generating, maintaining, and disclosing or providing the information (including filing fees paid for form processing). Include descriptions of methods used to estimate major cost factors including system and technology acquisition, expected useful life of capital equipment, the discount rate(s), and the time period over which costs will be incurred. Capital and start-up costs include, among other items, preparations for collecting information such as purchasing computers and software; monitoring, sampling, drilling and testing equipment; and record storage facilities.

(b) If cost estimates are expected to vary widely, agencies should present ranges of cost burden and explain the reasons for the variance. The cost of purchasing or contracting out information collection services should be a part of this cost burden estimate. In developing cost burden estimates, agencies may consult with a sample of respondents (fewer than 10), utilize the 60-day pre-OMB submission public comment process and use existing economic or regulatory impact analysis associated with the rulemaking containing the information collection, as appropriate.

(c) Generally, estimates should not include purchases of equipment or services, or portions thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory compliance with requirements not associated with the information collection, (3) for reasons other than to provide information or keep records for the government, or (4) as part of customary and usual business or private practices.

We have identified three non-hour cost burdens associated with this information collection. Section 250.1303 requires respondents to pay filing fees when (1) applying for a voluntary unitization proposal or unit expansion ($11,698), as well as a (2) unitization revision ($831). The filing fees are required to recover the Federal Government's processing costs. Section 250.1304(d) provides an opportunity for parties notified of compulsory unitization to request a hearing; therefore § 250.1304(e) requires the party seeking the compulsory unitization to (3) pay for the court reporter and three copies of the verbatim transcript of the hearing (approximately $500).

It should be noted there have been no such hearings in the recent past, and none are expected in the near future. We have not identified any other non-hour cost burdens associated with this collection of information. We estimate a total reporting non-hour cost burden of $170,728. Refer to the chart in Section A.12 of this supporting statement for the specific breakdown.

14. Provide estimates of annualized cost to the Federal Government. Also, provide a description of the method used to estimate cost, which should include quantification of hours, operational expenses (such as equipment, overhead, printing, and support staff), and any other expense that would not have been incurred without this collection of information.

The average government cost is $71/hour. This cost is broken out in the below table using the current Office of Personnel Management salary data for the REST OF THE UNITED STATES (http://www.opm.gov/oca/10tables/).

Position	Grade	Hourly Pay rate ($/hour estimate)	Hourly rate including benefits (1.5* x $/hour)	Percent of time spent on collection	Weighted Average ($/hour)
Clerical	GS-7/5	$21	$32	5%	$2
Petroleum Engineer/Geologist/Geophysicist	GS-13/5	$44	$66	75%	$50
Supv. Petroleum Engineer/Geologist/Geophysicist	GS-15/5	$62	$93	20%	$19
Weighted Average ($/hour)					$71

* A multiplier of 1.5 (as implied by BLS news release USDL 11-0849, June 8, 2011 (see http://www.bls.gov/news.release/ecec.nr0.htm)) was added for benefits.

To analyze and review the informa­tion required by 30 CFR part 250, subpart M, Unitization, we estimate the government will spend an average of 1 hour for each hour spent by respondents for a total of 3,348 burden hours. The average Federal cost is $71 per hour.

Based on a cost factor of $71 per hour, we estimate the total gross annualized cost to the Government is $237,708 (3,348 hours x 1 hour = 3,348 hours x $71 = $237,708).

15. Explain the reasons for any program changes or adjustment in hour or cost burdens.

The currently approved OMB inventory is 4,913 burden hours for this collection of information. This submission requests 3,348 burden hours. The adjustment decrease of 1,565 hours is due to decreases in the average number of annual responses based on consultations.

The currently approved OMB non-hour cost burden is $234,140. This submission requests $170,728. The adjustment decrease of $63,412 is a result of re-estimating the number of annual responses.

16. For collections of information whose results will be published, outline plans for tabulation and publication. Address any complex analytical techniques that will be used. Provide the time schedule for the entire project, including beginning and ending dates of the collection of information, completion of report, publication dates, and other actions.

BOEMRE will not tabulate or publish the data.

17. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.

BOEMRE will display the OMB control number and approval expiration date.

18. Explain each exception to the topics of the certification statement identified in, “Certification for Paperwork Reduction Act Submissions.”

To the extent that the topics apply to this collection of information, we are not making any exceptions to the “Certification for Paperwork Reduction Act Submissions.”

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