Photo of an oil rig in the Gulf of Mexico, of the coast of Louisiana

In December of 2016, Republican John Kennedy won the United States Senate runoff election in Louisiana. On the campaign trail, Senator Kennedy promised to do his part in strengthening the declining oil and gas industry in Louisiana by easing restrictions imposed by the Obama Administration and fighting to bring back old jobs and create new ones in the energy sector. Now that President Donald Trump has taken office and Republicans control the United States House and Senate, Senator Kennedy has taken action.

In one of his first acts, Senator Kennedy sent President Trump a letter on January 23, 2017, addressing the importance of the oil and gas industry and offshore drilling in the Gulf of Mexico. He highlighted the prior administration’s rules and regulations, which have crippled Louisiana’s energy industry. Senator Kennedy stated that for decades drilling in the Gulf of Mexico has accounted for more than 90 percent of domestic offshore oil and natural gas, and Louisiana has been at the forefront of this work. However, Senator Kennedy noted that the “unelected bureaucracy within President Obama’s administration created an agenda that has left America’s domestic energy production at a significant competitive disadvantage.” Senator Kennedy pointed out that over the past two years there have been more than 140 rules and regulations that directly impact the oil and gas industry, and as a result, reports have shown Louisiana has lost over 25,000 jobs.

Senator Kennedy specifically addressed one immediate way that the new administration can begin to reverse the effects of the oil and gas industry rules and regulations passed during the last administration. Senator Kennedy pointed to the Bureau of Ocean Energy Management (“BOEM”) at the Department of the Interior and the Notice to Lessees (NTL 2016-NO1) it published in the summer of 2016 in order to clarify the procedures and criteria that BOEM Regional Directors use to determine if and when additional security may be required for Outer Continental Shelf leases, pipeline right-of-ways, and rights-of-use and easement. According to Senator Kennedy, BOEM’s new set of standards for financial assurance and bonding in the oil and gas industry “mandate unreasonable increases in capital for companies attempting to obtain offshore leases,” and would “inevitably bankrupt smaller operators and encourage larger ones to relocate.” Senator Kennedy asked President Trump to direct BOEM to rescind NTL 2016-NO1 and have BOEM work with industry leaders, both large and small, to develop a workable solution.

Senator Kennedy concluded by stating, “It’s time policies from unelected bureaucrats with extreme viewpoints be swept away so that we can put the American people back to work and make us less dependent on energy from the Middle East.”

If you have any further questions about Senator John Kennedy’s letter to President Donald Trump or the Bureau of Ocean Energy Management’s NTL 2016-NO1, please contact attorney Collin Melancon at cmelancon@liskow.com.

For the full text of Senator Kennedy’s letter and BOEM’s NTL 2016-NO1, please see the links below:

Senator John Kennedy’s Letter to President Donald Trump

Bureau of Ocean Energy Management – NTL 2016-N01