BLM Code § 3162.7-5 details regulations for Federal and Indian oil and gas leases. It states that the placement of uniquely numbered seals on valves in oilfields be changed out regulary and replaced properly – or you could face some very hefty Compliance Fines.
By this law, valves on fill lines, equalizer or overflow lines, sales lines, circulating lines, and drain lines must be securely sealed during the time when crude oil is delivered directly to storage facilities or when it is removed from storage for sales, transportation, or other purposes. Furthermore, records of these transactions must be kept for minimum of 6 years and must include seal numbers used on each valve, the connections they were used on, and when they were installed and removed.
Most times compliance data is not being captured and maintained for 6 years and in many cases it is not recorded at all. Luckily, today there are low cost digital oilfield solutions such as OilfieldX that automatically record production data for compliance, audits, and better efficiencies.
BLM Compliance § 3162.7-5 Site Security on Federal and Indian Oil and Gas Leases
(a) Definitions. Appropriate valves. Those valves in a particular piping system, i.e., fill lines, equalizer or overflow lines, sales lines, circulating lines, and drain lines that shall be sealed during a given operation.
Effectively sealed. The placement of a seal in such a manner that the position of the sealed valve may not be altered without the seal being destroyed.
Production phase. That period of time or mode of operation during which crude oil is delivered directly to or through production vessels to the storage facilities and includes all operations at the facility other than those defined by the sales phase.
Sales phase. That period of time or mode of operation during which crude oil is removed from the storage facilities for sales, transportation or other purposes.
Seal. A device, uniquely numbered, which completely secures a valve.
(b) Minimum Standards. Each operator of a Federal or Indian lease shall comply with the following minimum standards to assist in providing accountability of oil or gas production:
(1) All lines entering or leaving oil storage tanks shall have valves capable of being effectively sealed during the production and sales operations unless otherwise modified by other subparagraphs of this paragraph, and any equipment needed for effective sealing, excluding the seals, shall be located at the site. For a minimum of 6 years the operator shall maintain a record of seal numbers used and shall document on which valves or connections they were used as well as when they were installed and removed. The site facility diagram(s) shall show which valves will be sealed in which position during both the production and sales phases of operation.
(2) Each Lease Automatic Custody Transfer (LACT) system shall employ meters that have non-resettable totalizers. There shall be no by-pass piping around the LACT. All components of the LACT that are used for volume or quality determinations of the oil shall be effectively sealed. For systems where production may only be removed through the LACT, no sales or equalizer valves need be sealed. However, any valves which may allow access for removal of oil before measurement through the LACT shall be effectively sealed.
(3) There shall be no by-pass piping around gas meters. Equipment which permits changing the orifice plate without bleeding the pressure off the gas meter run is not considered a by-pass.
(4) For oil measured and sold by hand gauging, all appropriate valves shall be sealed during the production or sales phase, as applicable.
(5) Circulating lines having valves which may allow access to remove oil from storage and sales facilities to any other source except through the treating equipment back to storage shall be effectively sealed as near the storage tank as possible.
(6) The operator, with reasonable frequency, shall inspect all leases to determine production volumes and that the minimum site security standards are being met. The operator shall retain records of such inspections and measurements for 6 years from generation. Such records and measurements shall be available to any authorized officer or authorized representative upon request.