Agency Information Collection Activities: Proposed Collection; Comment Request; Coalbed Methane Extraction Sector Questionnaire (New), EPA ICR Number 2291.01, OMB Control No. 2040-NEW

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice.

SUMMARY:

In compliance with the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), this document announces that EPA is planning to submit a proposed Information Collection Request (ICR) to the Office of Management and Budget (OMB). This is a request for a new collection. Before submitting the ICR to OMB for review and approval, EPA is soliciting comments on specific aspects of the proposed information collection as described below.

DATES:

Comments must be submitted on or before March 25, 2008.

ADDRESSES:

Submit your comments, data and information for the Coalbed Methane Extraction Sector Questionnaire, Attention Docket ID No. EPA-HQ-OW-2006-0771, by one of the following methods:

(1) http://www.regulations.gov. Follow the on-line instructions for submitting comments.

(2) E-mail: OW-Docket@epa.gov, Attention Docket ID No. EPA-HQ-OW-2006-0771.

(3) Mail: Water Docket, Environmental Protection Agency, Mailcode: 4203M, 1200 Pennsylvania Ave., NW., Washington, DC 20460, Attention Docket ID No. EPA-HQ-OW-2006-0771. Please include a total of 3 copies.

(4) Hand Delivery: Water Docket, EPA Docket Center, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC, Attention Docket ID No. EPA-HQ-OW-2006-0771. Such deliveries are only accepted during the Docket's normal hours of operation and special arrangements should be made.

Instructions: Direct your comments to Docket ID No. EPA-HQ-OW-2006-0771. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http://www.regulations.gov,, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information through regulations.gov or e-mail that you consider to be CBI or otherwise protected. The federal regulations.gov website is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If you send an e-mail comment directly to EPA without going through regulations.gov, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses.

Docket: All documents in the docket are listed in the index at http://www.regulations.gov. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically at http://www.regulations.gov or in hard copy at the Water Docket in the EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Water Docket is (202) 566-2426.

FOR FURTHER INFORMATION CONTACT:

Mr. Carey A. Johnston at (202) 566-1014 or johnston.carey@epa.gov.

SUPPLEMENTARY INFORMATION:

What Information is EPA Particularly Interested in?

Pursuant to section 3506(c)(2)(A) of the PRA, EPA specifically solicits comments and information to enable it to:

(i) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;

(ii) Evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

(iii) Select appropriate entities to receive the questionnaire in terms of what units (e.g., well, operator) should be surveyed; how many should be surveyed; and the criteria used to select them;

(iv) Enhance the quality, utility, and clarity of the information to be collected; and

(v) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. In particular, EPA is requesting comments from very small businesses (those that employ less than 25) on examples of specific additional efforts that EPA could make to reduce the paperwork burden for very small businesses affected by this collection.

What Should I Consider When I Prepare My Comments for EPA?

You may find the following suggestions helpful for preparing your comments:

1. Explain your views as clearly as possible and provide specific examples.

2. Describe any assumptions that you used.

3. Provide copies of any technical information and/or data you used that support your views.

4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.

5. Offer alternative ways to improve the collection activity.

6. Make sure to submit your comments by the deadline identified under DATES.

7. To ensure proper receipt by EPA, be sure to identify the docket ID number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and Federal Register citation.

What Information Collection Activity or ICR Does This Apply to?

Affected Entities: Entities potentially affected by this action are operators of coalbed methane extraction activities.

Title: Coalbed Methane Extraction Sector Questionnaire (New).

ICR Numbers: EPA ICR No. 2291.01, OMB Control No. 2040-NEW.

ICR Status: This ICR is for a new information collection activity. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in title 40 of the CFR, after appearing in the Federal Register when approved, are listed in 40 CFR Part 9, are displayed either by publication in the Federal Register or by other appropriate means, such as on the related collection instrument or form, if applicable. The display of OMB control numbers in certain EPA regulations is consolidated in 40 CFR Part 9.

Abstract: The Clean Water Act (CWA) directs EPA to develop regulations, called effluent guidelines, to limit the amount of pollutants that are discharged to surface waters or to sewage treatment plants. Coalbed methane (CBM) extraction activities accounted for about 10 percent of the total U.S. natural gas production in 2004 and are expanding in multiple basin across the U.S. EPA's effluent guidelines do not currently regulate pollutant discharges from CBM extraction operations.

CBM extraction requires removal of large amounts of water from underground coal seams before CBM can be released. CBM wells have a distinctive production cycle characterized by an early stage when large amounts of water are produced to reduce reservoir pressure which in turn encourages release of gas; a stable stage when quantities of produced gas increase as the quantities of produced water decrease; and a late stage when the amount of gas produced declines and water production remains low. Pollutants often found in these wastewaters include chloride, sodium, sulfate, bicarbonate, fluoride, iron, barium, magnesium, ammonia, and arsenic.

EPA identified the CBM sector as a candidate for a detailed study in the final 2006 Effluent Guidelines Program Plan (71 FR 76656; December 21, 2006) and also identified that it would develop an industry questionnaire to support this detailed study and would seek OMB approval under the Paperwork Reduction Act (PRA). EPA is conducting this review to determine if it would be appropriate to conduct a rulemaking to revise the effluent guidelines for the Oil and Gas Extraction Point Source Category (40 CFR 435) to control pollutants discharged in CBM produced water. EPA also noticed it will conduct an ICR in the preliminary 2008 Plan (72 FR 61343; October 30, 2007). For each industrial sector, EPA's planning process considers four factors: Pollutants discharged, current and potential pollution prevention and control technology options, growth and economic affordability, and implementation and efficiency considerations of revising existing effluent guidelines or publishing new effluent guidelines. EPA will use this ICR to collect technical and economic information from a wide range of CBM operations to address these factors in greater detail than previously (e.g., geographical and geologic differences in the characteristics of CBM produced waters, environmental data, current regulatory controls, availability and affordability of treatment technology options). See final 2006 Plan (71 FR 76666). Response to the questionnaire is mandatory for recipients and EPA will administer the questionnaire using its authority under section 308 of the CWA, 33 U.S.C. 1318.

In 2007, EPA worked with a range of stakeholders (e.g., industry representatives; Federal, State, and Tribal representatives; public interest groups and landowners; and water treatment experts) to obtain the best available information on the industry and its CBM produced water management practices. EPA developed its outreach sequentially starting with teleconferences and continued afterwards with a series of meetings and site visits in the major CBM basins. In total EPA contacted over 700 people in eight states during the 63 outreach and data collection activities in 2007 and early 2008 (e.g., meetings, teleconferences, site visits). See DCN 05354. This outreach helped facilitate the development of the draft ICR as EPA incorporated data, comments, and suggestions from industry and other stakeholders into the questionnaire design prior to this Federal Register notice.

Burden Statement: The annual public reporting and recordkeeping burden for this collection of information is estimated to average 163 hours per response. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to, or for, a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements which have subsequently changed; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

The EPA burden estimate is based on the number of entities receiving the questionnaire. To reduce the questionnaire burden, EPA intends to select a statistical random sample of entities within the CBM industry. The resulting sample will minimize both the burden to respondents in completing the questionnaire and to the Agency in managing and effectively utilizing the data and information supplied by respondents.

EPA is soliciting comments on its assumptions for the burden estimate and its approach to selecting entities for the questionnaire. EPA is primarily interested in collecting information from “projects” but has used state data on CBM wells for developing the burden estimates. For purposes of the data collection, EPA is defining a CBM project to be comprised of a well, group of wells, lease, group of leases, or recognized unit operated as an economic unit when making production decisions. (EPA recognizes that industry has multiple definitions for the term “project.”) One reason that EPA is most interested in economic and technical data at the project-level, in addition to well specific data, is because EPA has observed that most projects handle the produced water in a single water management system. EPA also is interested in information about the operator of each project. The operator is the firm or division (if a profit center) that is responsible for management and the day-to-day operation of a project. This operator is generally a working-interest owner or a company under contract to the working interest owner(s). The working-interest owner bears the costs of exploration, development, and operation of the property and, in return, is entitled to a share of the mineral production from the property or to a share of the proceeds there from.

Although EPA's primary interest is about projects and operators, this notice assumes that wells are the “entities” because complete lists of wells are readily available. Complete lists are essential in statistically selecting random samples of populations. EPA considers its current list of wells to be relatively complete. It has used licensed database information on historic well production from HPDI, Inc. HPDI, Inc. compiles information from nearly all of the oil and gas producing states and provides detailed data in a consistent format to clients accessed through a Web-based query system. This information includes well identification information (such as API number, lease name and number, well name and number, operator name, location, basin designation, field, and reservoir/producing formation), historic production information (including summary information on first production, last production, cumulative production, and last 12 months production as well as detailed information on year-by-year production), status information (active/inactive), and operator contact information (where available). EPA has supplemented this information with information publicly available from States. From these sources, EPA estimates that approximately 400 operators maintain over 43,000 wells that were active CBM producers in the U.S. as of mid-2007.

In estimating the burden, EPA has assumed that each operator would answer certain questions only once, regardless of the number of its wells in the sample. For purposes of estimating the burden, EPA also assumed that each well is equivalent to a single project; however, operators will only be required to respond to the project-level questions once per project, regardless of the number of wells selected from the project. EPA's burden estimate assumes that the statistical selection of the wells will result in approximately 400 operators to be selected. EPA further estimates that the operators will be required to provide information for approximately 2,000 projects.

EPA solicits comments and supporting information that would allow it to evaluate alternative methods of selecting the random sample that will reduce the overall burden. First, EPA solicits information about publicly available data sources that would permit EPA to assign wells to individual projects so that it could select fewer entities.

Second, EPA solicits comments on approaches to obtaining project information from non-public sources. For example, one approach might be for EPA to conduct a two-phase questionnaire that would require all operators to complete a short questionnaire (“screener”) that identifies all of the projects and links the wells to each project ID. After receiving the results, EPA would statistically select a random sample of projects to receive a detailed questionnaire. In order to use this approach, EPA would require operators to return the completed screeners within a short period of time (e.g., 30 days), thereby lengthening the study schedule by a minimum of three months (assuming it takes EPA a month to process the completed screener results and another month to draw a representative sample and distribute the detailed questionnaire). EPA solicits comments on the two-phase approach and whether the assignment of all wells to projects is relatively easy for operators. EPA also solicits comment on other approaches that would provide information to assign wells to projects.

Third, EPA solicits comments on ways to reduce the burden to operators with many wells and still collect information in a manner that will allow for appropriate statistical inferences to be drawn from responses. Under the current assumptions, large operators may be required to respond for many wells, thus resulting in a relatively large burden for them. EPA also is concerned that it would be collecting more information than necessary to characterize practices by the operator. To reduce burden, one approach might be for operators to select the wells using criteria specified by EPA. EPA is interested in comments about the appropriate number of wells and selection criteria.

Fourth, EPA solicits comments on stratification variables to use in selecting the random sample. Existing information about the industry can be used to improve the questionnaire design and the precision estimates. One common technique is to use publicly available information to group similar entities together into mutually exclusive strata. Then, by selecting entities from each stratum to participate in the questionnaire, it ensures that the sample will include entities that have the various characteristics that are represented by the different strata. However, increasing the number of stratification variables also increases the number of entities selected and the overall burden. EPA is considering stratifying by basin, state, and operator size (e.g., small, large). Incorporating each additional variable in a statistical design will provide more information about the industry; however, more entities must be selected to provide statistically representative results. EPA solicits comments on whether all variables (e.g., basin, state, operator size as defined by total CBM production) are necessary and whether it also should consider other variables (e.g., type of coal seams and geology, maturity of CBM projects as defined by start date).

Fifth, EPA solicits comments on the extent to which the sample design should consider location of the CBM projects within a basin. EPA recognizes that location of the CBM project may result in wells being operated differently within each basin due to different produced water characteristics, geology, and available management options. EPA also recognizes that state requirements can impact the well operations and finances. EPA current statistical design selects wells at random within each basin, and can be easily modified to select wells within states. Because stratification is intended to distinguish between large groups, and thus, may not be the best statistical choice to distinguish between geographic locations, EPA also is researching an area-based design that uses location clusters of wells formed within the known basins, as well as within states. EPA then would randomly select clusters of wells. For each selected location cluster, EPA would require that the operators of the wells to provide information about all of their projects that fall within the cluster. Cluster sampling generally results in a higher burden because more entities must be selected (initial estimates range from 1.4 to ten times more), however, it will allow for more geographic and geologic representation. EPA solicits comments on the extent that basins and states should be considered within the statistical design. EPA further solicits comments on the extent to which statistical design should consider other geographic and geology features.

Sixth, since the industry is constantly adding new wells, EPA's questionnaire needs to incorporate industry changes between the time the data were collected and end of the study. This may require additional entities to be selected for the questionnaire. EPA solicits comments on the extent to which industry growth should be considered in selecting the entities for the questionnaire.

Finally, EPA will also use the questionnaire to collect data to evaluate potential impacts to small businesses that might occur due to alternative produced water management options. To minimize burden, the only information requested at the ultimate parent company level, if different from the level at which detailed financial information is provided, is employment and revenue data. EPA solicits comment on alternative survey questions to collect data for EPA's small business analyses.

The ICR provides a detailed explanation of the Agency's estimate, which is only briefly summarized here:

Estimated total number of potential respondents: 400.

Frequency of response: One-time.

Estimated total average number of responses for each respondent: One.

Estimated total annual burden hours: 65,100 hours.

Estimated total annual costs: $2,839,000. This includes an estimated burden cost of $2,815,000 and an estimated cost of $24,000 for operational costs (photocopying and postage).

What is the Next Step in the Process for this ICR?

EPA will consider the comments received and amend the ICR as appropriate. The final ICR package will then be submitted to OMB for review and approval pursuant to 5 CFR 1320.12. At that time, EPA will issue another Federal Register notice pursuant to 5 CFR 1320.5(a)(1)(iv) to announce the submission of the ICR to OMB and the opportunity to submit additional comments to OMB. If you have any questions about this ICR or the approval process, please contact the technical person listed under FOR FURTHER INFORMATION CONTACT.