The Department of the Interior (“DOI”) recently published its semi-annual regulatory agenda, which includes two new planned rulemakings affecting federal offshore leases. 89 Fed. Reg. 9598 (Feb. 9, 2024).
The DOI’s Bureau of Safety and Environmental Enforcement (“BSEE”) is slated to make further revisions to its decommissioning regulations, following other decommissioning amendments made last year as previously reported on The Energy Law Blog. BSEE’s 2024 decommissioning rule would update 30 C.F.R. 250 subpart Q which governs decommissioning activities on federal offshore oil, gas, and sulphur leases by:
- Adding a new definition of “idle iron” to clarify it applies to idle wells and structures on active leases;
- Adding new regulations addressing when BSEE may approve decommissioning-in-place of certain subsea equipment (i.e., allowing authorized lessees to avoid removal costs and instead abandon subsea infrastructure in place, creating artificial reefs by sinking platforms or pigging, flushing, and filling pipelines with seawater); and
- Addressing issues relating to “other operational considerations.”
The Notice of Proposed Rulemaking is scheduled to be published in December 2024, with public comments expected to close in February 2025.
BSEE also recently proposed amendments to the surety bonding requirements applicable to appeals of its civil penalties, the public comment period for which closed on February 12, 2024. BSEE is currently authorized to assess civil penalties of up to $52,646 per day per regulatory violation. 30 C.F.R. § 250.1403; NTL No. 2023-N02 (March 24, 2023). Since 1999, the regulations have required any entity appealing BSEE’s assessment of a civil penalty to either post a bond with the DOI’s Bureau of Ocean Energy Management (“BOEM”) for the full penalty amount, or to request BOEM use their lease-specific or area-wide bond on file, to ensure payment in the event the appeal is denied and to discourage appeals filed solely to delay payment. 64 Fed. Reg. 1930, 1966 (Jan. 12, 1999). The agency intended the bonding requirement to be a jurisdictional precondition for maintaining a civil penalty appeal with the DOI’s Interior Board of Land Appeals (“IBLA”). However, on July 7, 2022, in Petro Ventures, Inc. (IBLA No. 2020-48), the IBLA held the current version of 30 C.F.R. § 250.1409 is not phrased in such a way as to make the bonding requirement jurisdictional or to support summary dismissal of the appeal if not met. Following that decision, BSEE now proposes to revise 30 C.F.R. § 250.1409 (applicable to appeals of penalties assessed to federal offshore oil, gas, and sulphur leases) and § 290.4 (applicable to appeals of penalties assessed to all types of federal offshore leases, including renewable energy) to make clear the bonding requirements are a prerequisite which must be satisfied before a civil penalty appeal is deemed filed and within the 60-day period applicable to appeals of BSEE decisions; otherwise, the IBLA will be divested of jurisdiction and the appeal automatically dismissed—leaving no other no avenue to protest the penalty. BSEE anticipates issuance of the final version of the rule and response to public comments by the end of this year. 88 Fed. Reg. 86285 (Dec. 13, 2023).
Contact Liskow attorneys Jana Grauberger and Kyrie Buffa for more information on this topic and visit the Federal Offshore Regulatory practice page on our website.
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