2023-12916: Risk Management and Financial Assurance for OCS Lease and Grant Obligations

Summary

The Department of the Interior (the Department or DOI), acting through BOEM, proposes to modify its criteria for determining whether oil, gas, and sulfur lessees, right-of-use and easement (RUE) grant holders, and pipeline right-of-way (ROW) grant holders may be required to provide bonds or other financial assurance above the current regulatorily prescribed base bonds to ensure compliance with their Outer Continental Shelf Lands Act (OCSLA) obligations. This proposed rule would also remove existing restrictive provisions for third-party guarantees and decommissioning accounts and would add new criteria under which a bond or third-party guarantee that was provided as supplemental financial assurance may be canceled. Additionally, this proposed rule would clarify bonding requirements for RUEs serving Federal leases. Based on the proposed framework, BOEM estimates that the aggregate amount of supplemental financial assurance required of lessees and grant holders under this proposed rulemaking available to the U.S. government for decommissioning activities would increase by an estimated $9.2 billion over current levels. This value represents less than one-quarter of all offshore decommissioning liabilities, which is currently estimated at $42.8 billion. This proposed rulemaking would not apply to renewable energy activities.

The agency’s own summary, as published.

What this changes

Amends 3 parts of the Code of Federal Regulations — the standing rules this notice rewrites.

• 30 CFR 550 Oil and Gas and Sulfur Operations in the Outer Continental Shelf
• 30 CFR 556 Leasing of Sulfur or Oil and Gas and Financial Assurance Requirements in the Outer Continental Shelf
• 30 CFR 590 Appeal Procedures