What's New?
On April 15, 2024, the Administration released the Risk Management and Financial Assurance for OCS Lease and Grant Obligations Rule. With this action, financial assurance requirements for the offshore oil and gas industry operating on the U.S. Outer Continental Shelf (OCS) were simplified and strengthened.
Decommissioning liabilities on the OCS are substantial and costs are increasing. This rule finalizes amendments to existing regulations in order to better protect the American taxpayer from bearing the cost of oil and gas facility decommissioning and other financial risks associated with OCS development, such as environmental remediation.
Background
The Government Accountability Office (GAO) released two reports, one in December 2015 and another in February 2024, both affirming the need for strengthened financial assurance requirements for offshore oil and gas operations.
GAO recommended that BOEM complete and fully implement strengthened requirements that reduce financial risks, including by requiring higher levels of supplemental bonding. BOEM addresses concerns expressed in the GAO reports with the 2024 publication of the Risk Management and Financial Assurance Rule.
On June 29, 2023, BOEM published the Proposed Risk Management and Financial Assurance Rule for public comment that ended on September 7, 2023. BOEM carefully considered all comments before publishing the final rule on April 15, 2024.
- Press Release for Proposed Rule
- Proposed Rule Docket BOEM-2023-0027
- Regulatory Impact Analysis for the Proposed Rule
For More Information: