TULSA, Okla. (Nov. 30, 2016) - On Nov. 17 the Bureau of Land Management (BLM) released three final onshore orders that impact measuring natural gas and oil that is produced on federal and most Native American lands.
GPA Midstream Association previously commented extensively on the onshore orders in December 2015, pointing out significant concerns that the orders would require a tremendous amount of resources to be spent by the association's members on equipment upgrades or entire measurement system replacements with no real benefit and the true likelihood that the upgrades/replacements would produce the exact same measurement results that current equipment provides.
Upon release of the orders, GPA Midstream is pleased to announce two significant changes that BLM made in response to the association's comments.
BLM grandfathered in a significant amount of midstream measuring equipment. GPA Midstream Vice President of Government Affairs Matthew Hite stated, "We are pleased BLM worked collaboratively with us, and through that collaboration, we were able to save GPA Midstream members valuable resources due to the significant amount of grandfathering, which greatly reduces our costs of implementation. This is a significant change since BLM's initial position included no grandfathering of equipment and would have resulted in our members spending many millions of dollars to replace existing measurement equipment."
Another significant change that BLM made, which GPA Midstream advocated for, was eliminating the 11-digit facility measurement point (FMP) number that BLM initially was going to require on all of GPA Midstream members' midstream flow computers (which convert meter signals to volume of gas or oil measured) and reports.
"GPA Midstream had significant concerns with this since our midstream systems are only able to handle up to 8 digits, and this would have required our members to upgrade or replace entire flow computer systems that would easily cost in the millions of dollars," Hite said. "We are pleased BLM was able to recognize the current limitations of technology of flow computers and realize they can still get accurate measurement results without placing millions of dollars in compliance costs on our membership."
Founded in 1921, the GPA Midstream Association is a trade organization with nearly 100 corporate members of all sizes engaged in the gathering and processing of natural gas, commonly referred to as "midstream activities" in the energy sector. Natural gas is one of the world's primary energy sources and much of it must be purified, or "processed," to meet quality standards and regulations and to make useful everyday products for homes, factories and businesses. Gas processing includes the removal of impurities from the raw natural gas stream produced at the wellhead, as well as the extraction for sale of natural gas liquid products (NGLs) such as ethane, propane, butane and natural gasoline. GPA Midstream members account for more than 90 percent of NGLs produced in the United States from natural gas processing. GPA Midstream members also operate hundreds of thousands of miles of domestic gas gathering pipelines, in addition to pipelines involved with storing, transporting and marketing natural gas and NGLs.