To amend the Mineral Leasing Act to provide for commingling.
This bill would add a new provision to the Mineral Leasing Act allowing “commingling” of production from multiple sources before royalties are measured. In practical terms, it would let the Secretary of the Interior approve combining (for measurement and royalty purposes) production from two or more sources—such as oil and gas leases, unit participating areas, communitized areas, or even non-Federal/non-Indian properties—regardless of who owns the sources or how many acres each source covers. To safeguard accuracy, the bill requires the operator to install measurement devices for each source or use an allocation method that keeps monthly volume measurement uncertainty within plus or minus 2 percent. The goal stated is to minimize surface-disturbing activities linked to multiple separate measurement points.
Key Points
- 1New authorizing provision: Adds subsection (h) “Commingling” to Section 17 of the Mineral Leasing Act, permitting the Secretary of the Interior to approve commingling of production from two or more sources before royalty measurement.
- 2Scope of sources: Commingling can involve oil and gas leases, unit participating areas, communitized areas, and non-Federal or non-Indian properties.
- 3Ownership and royalty implications: Commingling can occur regardless of ownership, royalty rates, or the number/percentage of acres allocated to each source.
- 4Measurement requirements: The applicant must either install measurement devices for each source or use an allocation meter/method that achieves a monthly volume measurement uncertainty of within +/- 2 percent.
- 5Accountability and reporting: Monthly reporting is required to ensure accurate allocation of volumes to each source after commingling.
- 6Administrative effect: The subsection is inserted after the current subsection (g) and shifts existing subsections (h–q) to (i–r), changing the numbering structure of Section 17.