In recent years, offshore companies have witnessed a marked uptick in the number of enforcement actions undertaken by the Bureau of Safety and Environmental Enforcement (BSEE). Operators face more BSEE inspections, Incidents of Non-Compliance (INCs), and civil penalties than ever before. Meanwhile, the average penalty amount has grown. For example, in 2014 the agency imposed a civil penalty of $1,230,000—an unprecedented figure in the history of the BSEE civil penalty program. BSEE has also begun to target offshore contractors, who, until recently, have not faced exposure to agency enforcement actions. See Island Operating Co., Inc., 186 IBLA 199 (2015). Together, these developments will undoubtedly lead to more litigation and a higher cost of doing business on the Outer Continental Shelf.
The number of civil penalty cases has risen gradually since 2009, with a sharp increase over 2013-2015. BSEE collected civil penalties in 22 cases in 2009, 26 cases in 2010, 30 cases in 2011, 31 cases in 2012, 42 cases in 2013, 53 cases in 2014, and 42 cases in 2015.
The civil penalty dollar amount has also grown significantly. Since 2010, the agency has collected over $19.5 million in civil penalties. This number roughly equates to the total amount collected for the twelve-year period from 1997-2009. Moreover, in 2014, BSEE collected $5,695,498 in civil penalties—the most ever collected in a single year by a margin of $2,851,000. In 2015, BSEE collected $3,659,018, the second highest amount in agency history.
The average civil penalty amount per case has also grown, especially in the last two years. In 2013, the average penalty was $67,714 over 42 cases. In 2014, the average penalty reached $107,462 over 53 cases. In 2015, the average penalty was $87,119 over 42 cases. Moreover, in July 2016, BSEE increased the maximum daily penalty rate from $40,000 to $42,017.
As civil penalty numbers continue to grow, appeals of BSEE enforcement actions will become more and more attractive to offshore companies. With contractors facing new penalty exposure, operators can expect additional demands for indemnification and higher day rates. For more information on the mechanics of BSEE enforcement actions and the process for challenging INCs and civil penalties, see Stephen W. Wiegand, “INCs, Civil Penalties, and the Appeals Process,” 2016 NO. 1 RMMLF-INST PAPER NO. 7 (2016).
 The data used to compile the statistics in this section are available at http://www.bsee.gov/Inspection-and-Enforcement/Civil-Penalties-and-Appeals/Civil-Penalties-and-Appeals/.
 Pursuant to the Oil Pollution Act of 1990, the Secretary of the Interior adjusts the maximum civil penalty on a regular basis to reflect increases in the Consumer Price Index.
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