Uses of oil or gas on a lease, unit, or communitized area that do not require prior written BLM approval for royalty-free treatment of volumes used.

§ 3178.4 Uses of oil or gas on a lease, unit, or communitized area that do not require prior written BLM approval for royalty-free treatment of volumes used. (a) Oil or gas produced from a lease, unit, or communitized area may be used royalty-free for operations and production purposes on the lease, unit, or communitized area without prior written BLM approval in the following circumstances: (1) Use of fuel to generate power or operate combined heat and power; (2) Use of fuel to power equipment, including artificial lift equipment, equipment used for enhanced recovery, drilling rigs, and completion and workover equipment; (3) Use of gas to actuate pneumatic controllers or operate pneumatic pumps at production facilities; (4) Use of fuel to heat, separate, or dehydrate production; (5) Use of gas as a pilot fuel or as assist gas for a flare, combustor, thermal oxidizer, or other control device; (6) Use of fuel to compress or treat gas to place it in marketable condition; (7) Use of oil to clean the well and improve production, e.g., hot oil treatments. The operator must document the removal of the oil from the tank or pipeline under Onshore Oil and Gas Order No. 3 (Site Security), or any successor regulation; (8) Use of oil as a circulating medium in drilling operations, if the use is part of an approved Drilling Plan under Onshore Oil and Gas Order No. 1; (9) Injection of gas for the purpose of conserving gas or increasing the recovery of oil or gas, if the BLM has approved the injection under applicable regulations in parts 3100, 3160, or 3180 of this title; and (10) Injection of gas that is cycled in a contained gas-lift system. (b) The volume to be treated as royalty free must not exceed the amount of fuel reasonably necessary to perform the operational function, using equipment of appropriate capacity.