Increase needed to keep pace with inflation
Washington - The Bureau of Ocean Energy Management (BOEM) will administratively increase the limit of liability for oil-spill related damages from $133.65 million to $137.66 million for offshore oil and gas facilities. The inflation adjustment is mandated by the Oil Pollution Act of 1990 (OPA) and is based on the increase in the Consumer Price Index (CPI) that has occurred over the three years between 2013 and 2016. The increase is needed to keep pace with inflation and will go into effect 30 days after publication in the Federal Register.
The liability cap is set by statute and may only be adjusted to address significant increases in the CPI. “The increase to $137.66 million represents the maximum increase that may be implemented absent new legislation.
The increase applies to facilities handling oil and gas in federal and state waters seaward of the coastline. The limit of liability cap applies to damages that result from oil spills, but does not apply to other liabilities such as oil spill removal costs, which remain unlimited.
Under regulation, BOEM must regularly update (at least every three years) the limit of liability cap in the future to reflect changes in inflation over time based on the CPI.
BOEM last adjusted for inflation the OPA offshore facility limit of liability for damages in December 2014.
BOEM will publish a final rule to reflect these administrative changes in the Federal Register on January 18, 2018 at https://www.federalregister.gov/.
The Bureau of Ocean Energy Management (BOEM) promotes energy independence, environmental protection and economic development through responsible, science-based management of offshore conventional and renewable energy resources.
Date: 1-17-18
Contact: Tracey Moriarty, 703-787-1571