Listen to this post

What started in 2020 as a proposed joint rulemaking between the DOI’s Bureau of Safety and Environmental Enforcement (“BSEE”) and Bureau of Ocean Energy Management (“BOEM”) was recently finalized as a stand-alone BSEE rule addressing decommissioning. BSEE’s new regulations focus on Rights-of-Use and Easements (“RUEs”) and predecessor enforcement practices. At a later date, BOEM intends to issue a new proposed rule that addresses risk management, financial assurance, and loss prevention issues that were originally part of the proposed joint rulemaking.

BSEE’s final rule for the first time includes in the agency’s decommissioning regulations RUEs and RUE grant holders. RUE grants are authorizations from BOEM to use a portion of the seabed not encompassed by the holder’s lease to construct, modify, or maintain platforms, artificial islands, facilities, installations, and other devices that support exploration, development, or production of oil and gas or other energy resources from another lease. Historically, RUEs have been absent from BSEE’s Subpart Q decommissioning regulations, which addressed decommissioning obligations for lessees and ROW grant holders. In the final rule, BSEE amended its regulations to add a new regulatory definition of RUE and to incorporate RUEs, RUE holders, and prior RUE holders throughout the decommissioning regulations located at 30 C.F.R. § 250.1700, et seq. BSEE added a new paragraph (c) to 30 C.F.R. § 250.1701 providing that RUE holders and prior lessees or owners of operating rights of the parcel on whose leases there existed facilities or obstructions that remain on the RUE are jointly and severally liable for meeting accrued decommissioning obligations.

BSEE’s final rule also formally adds a new regulation at 30 C.F.R. § 250.1708, which formalizes BSEE’s procedures for enforcement of decommissioning orders issued to predecessors when a subsequent assignee defaults on its decommissioning obligations. When BSEE issues an order to predecessors, it requires them to monitor, maintain, and decommission all wells, pipelines, and facilities to minimize safety hazards, environmental harm, and interference with navigation or other uses of the OCS. Proposed 30/60/90-day timeframes were extended to 30/90/150-days in the final rule per commenter requests so that predecessors in receipt of a decommissioning order must now: (1) initiate maintenance and monitoring within 30 days of receiving the order; (2) designate an operator or agent for decommissioning activities within 90 days; and (3) submit a decommissioning plan to BSEE within 150 days. BSEE retains discretion to extend or shorten these timeframes under extenuating circumstances. The new regulations also make clear that a predecessor’s filing of an appeal and obtaining a stay of enforcement of a decommissioning order only precludes BSEE from proceeding with enforcement actions against that entity; all other predecessors that did not appeal remain subject to enforcement.

BSEE chose not to promulgate previously proposed regulations that would have required any party appealing a BSEE decommissioning order to file an appeal bond as part of the appeal procedure. Similarly, BSEE withdrew its proposal to require proceeding up the chain of title in “reverse chronological order” against predecessor lessees, grant holders, and owners of operating rights, in the event subsequent assignees fail to perform. Instead, BSEE decided to retain the current framework, under which BSEE’s position is that it may issue decommissioning orders to any or all jointly and severally liable parties in the chain of title on a case-by-case basis.

BSEE’s final rule can be found at 88 Fed. Reg. 23569 (April 18, 2023). The new regulations take effect on May 18, 2023.

Disclaimer: This Blog/Web Site is made available by the law firm of Liskow & Lewis, APLC (“Liskow & Lewis”) and the individual Liskow & Lewis lawyers posting to this site for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice as to an identified problem or issue. By using this blog site you understand and acknowledge that there is no attorney-client relationship formed between you and Liskow & Lewis and/or the individual Liskow & Lewis lawyers posting to this site by virtue of your using this site. The Blog/Web Site should not be used as a substitute for legal advice from a licensed professional attorney in your state regarding a particular matter.

Privacy Policy: By subscribing to Liskow & Lewis’ E-Communications, you will receive articles and blogs with insight and analysis of legal issues that may impact your industry. Communications include firm news, insights, and events. To receive information from Liskow & Lewis, your information will be kept in a secured contact database. If at any time you would like to unsubscribe, please use the SafeUnsubscribe® link located at the bottom of every email that you receive.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Jana Grauberger Jana Grauberger

Jana Grauberger is an oil and gas lawyer with more than 20 years experience. Clients turn to her as a trusted advisor in connection with their contract negotiations, regulatory advice and appeals, litigation, and arbitration related to onshore and federal offshore upstream and…

Jana Grauberger is an oil and gas lawyer with more than 20 years experience. Clients turn to her as a trusted advisor in connection with their contract negotiations, regulatory advice and appeals, litigation, and arbitration related to onshore and federal offshore upstream and midstream projects and facilities. Jana has represented clients in negotiating a wide variety of onshore and offshore contracts, including purchase and sale agreements, farmouts, participation agreements, joint operating agreements, production handling agreements, platform use agreements, gathering agreements, connection agreements, construction contracts, transportation contracts, and decommissioning agreements. She also represents clients in connection with regulatory matters involving Department of Interior agencies, including the Bureau of Ocean Energy Management (BOEM), the Bureau of Safety and Environmental Enforcement (BSEE), and the Office of Natural Resources Revenue (ONRR).

Photo of Steve Wiegand Steve Wiegand

Steve Wiegand’s practice focuses on complex regulatory issues impacting onshore and offshore energy and industrial operations.

In the offshore arena (including the Gulf of Mexico and the Pacific), he advises clients on a wide range of regulatory matters, including compliance with operational and…

Steve Wiegand’s practice focuses on complex regulatory issues impacting onshore and offshore energy and industrial operations.

In the offshore arena (including the Gulf of Mexico and the Pacific), he advises clients on a wide range of regulatory matters, including compliance with operational and safety requirements, appeals of Incidents of Non-Compliance and civil penalty assessments, incident response and associated agency investigations, lease suspensions, and National Pollutant Discharge Elimination System permit compliance.

Photo of Valkyrie "Kyrie" Buffa Valkyrie "Kyrie" Buffa

Valkyrie “Kyrie” Buffa has experience working in both the oil and gas industry and the environmental non-profit sector. Prior to joining Liskow, Kyrie supported corporate regulatory efforts ensuring compliance with EPA, FERC, FTC, Louisiana DEQ, and Texas CEQ regulations—as well as assisting with…

Valkyrie “Kyrie” Buffa has experience working in both the oil and gas industry and the environmental non-profit sector. Prior to joining Liskow, Kyrie supported corporate regulatory efforts ensuring compliance with EPA, FERC, FTC, Louisiana DEQ, and Texas CEQ regulations—as well as assisting with in-house counsel work involving administrative law, anti-bribery and anti-corruption (ABAC), contractual indemnities, international legislation, premises liability, privacy, and tax law. Kyrie has also clerked at three Louisiana law firms which gave her exposure to the management of litigation cases and handling transactional matters.

Kyrie’s work in Liskow’s Energy Practice Group primarily focuses on administrative appeals, alternative energy, carbon capture, utilization, transportation, and storage (CCUTS), offshore regulatory law, and oil and gas.