The Bureau of Ocean Energy Management (BOEM) will administratively increase the limit of liability for oil spill related damages from $137.66 million to $167.8 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 six years between 2016 and 2022. The increase is needed to keep pace with inflation and will go into effect 30 days after publication in the Federal Register.
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.
The liability cap is set by statute and may only be adjusted to address significant increases in the CPI. The increase to $167.8 million represents the maximum increase that may be implemented absent new legislation.
By 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 2016.
BOEM will publish a final rule to reflect these administrative changes in the Federal Register on April 14, 2023.
-- BOEM --
The Department of the Interior’s Bureau of Ocean Energy Management (BOEM) is responsible for America’s offshore energy and mineral resources. The bureau promotes energy independence, environmental protection and economic development through responsible, science-based management of energy and mineral resources on the U.S. Outer Continental Shelf.