Following through with President Biden’s campaign promise to halt oil and gas drilling on federal lands, on January 20, 2021, the Acting Secretary of the U.S. Department of Interior (“Interior”) issued an order, effective immediately, mandating a 60-day moratorium on new oil and gas leases and drilling permits on public lands and waters (“Order”).
Continue Reading U.S. DEPARTMENT OF INTERIOR ISSUES 60-DAY MORATORIUM ON FEDERAL LEASING AND DRILLING PERMITS

The Bureau of Ocean Energy Management (“BOEM”) and the Bureau of Safety and Environmental Enforcement (“BSEE”) recently issued a proposed rule on Risk Management, Financial Assurance and Loss Prevention (“Proposed Rule”), which was published in the Federal Register on October 16, 2020 and is now open for public comment. The Proposed Rule is the result of an extended effort by the Department of Interior, through its subagencies BOEM and BSEE to “streamline its evaluation criteria for determining whether oil, gas and sulfur lessees, right-of-use and easement (RUE) grant holders, and pipeline right-of-way grant holders may be required to provide bonds or other security above the prescribed amounts for base bonds to ensure compliance with their Outer Continental Shelf (OCS) obligations,” primarily decommissioning obligations. The path to this Proposed Rule has been long and winding, beginning in 2014 with BOEM resisting making changes through formal notice and comment rulemaking pursuant to the Administrative Procedures Act, and instead continuing to regulate this issue through Notice to Lessee (“NTL”) guidance documents. BOEM issued the last and most controversial NTL, NTL No. 2016-N01, in 2016, which created widespread industry concern, and, as a result, was never fully implemented.

Below is a summary of the current regulations and some of the more significant proposed changes.
Continue Reading Department of Interior Proposes New Financial Assurance and Decommissioning Regulations

On July 15, 2020, The Third Circuit Court of Appeals issued an opinion awarding damages for a violation of due process rights against a private pipeline company.  Bayou Bridge Pipeline, LLC v. 38.00 Acres, More or Less, Located in St. Martin Parish, et al.[1] (“Bayou Bridge”) centers around the construction of a crude oil pipeline from the Clifton Ridge terminal in Lake Charles, Louisiana to a marketing hub in St. James, Louisiana.  The 38 acres relevant to this lawsuit were in St. Martin Parish and were needed for construction of the pipeline.  While Bayou Bridge Pipeline, LLC (“BBP”) identified approximately 470 heirs to the title of the property, it began construction on the Defendant Landowners’ (“Defendants” or “Landowners”) property in June 2018 prior to receiving servitude agreements from each person having ownership interest.
Continue Reading Louisiana Third Circuit Decision Imposes Damages for Due Process Violation on Private Company

The long-awaited proposed changes to the Department of Interior’s Financial Assurance Rule (“Proposed Rule”) were finally announced yesterday by the Trump Administration.  The announcement provides, among other things, that the proposed rulemaking is in efforts to clarify, streamline and provide greater transparency to the financial assurance requirements (e.g., supplemental bonding) for OCS lessees and grant holders of pipeline rights-of-way (“ROW”) and rights-of-use and easement (“RUE”), while protecting U.S. taxpayers against picking up the tab for high-risk decommissioning liabilities.  Once this Proposed Rule is published in the Federal Register (date yet to be announced), the public will have a 60-day comment period.
Continue Reading DOI Announcement of a Proposed Rule on Risk Management, Financial Assurance and Loss Prevention

In Mays v. Chevron Pipe Line Co., 2020 WL 4432025, a three-judge panel of the United States Fifth Circuit Court of Appeal held on August 3, 2020, that the Longshore Harbor Workers’ Compensation Act may apply to an injury in state territorial waters if there is a substantial nexus between an employee’s injury and his employer’s, both direct and statutory, extractive operations on the Outer Continental Shelf.
Continue Reading U.S. Fifth Circuit Clarifies “Substantial Nexus” Test for LHWCA

Today, countries worldwide are responding to a pandemic of respiratory disease spreading from person-to-person caused by a novel coronavirus.  The disease has been named “coronavirus disease 2019” (abbreviated “COVID-19”).  The pandemic poses a serious public health risk, and government response has included closure of schools and businesses, declarations of emergency, and issuance of a variety of “stay home” orders—typically instructing all but “essential personnel” to remain in their residences other than to gather necessaries.  These events have dramatically impacted the world economy, and wreaked havoc on the day-to-day functions of individuals and businesses in the United States and elsewhere.  Does this pandemic and resultant disruption constitute a force majeure event under Louisiana and Texas law?Continue Reading COVID-19 as a Force Majeure? The Texas and Louisiana Perspectives

In recent years, there has been an increase in the number of denials of applications to decommission offshore pipelines in place in a departure from the Bureau of Safety and Environmental Enforcement’s (“BSEE”) longstanding practices.  The denials are accompanied by an order from BSEE to decommission the pipelines by removal, with reference to Notice to Lessees (“NTL”) 2009-G04 and/or “significant sediment resource areas” (“SSRA”) in the vicinity of the pipeline.  BSEE is also issuing orders to companies to remove pipelines located in SSRAs that were previously decommissioned in place.

Continue Reading Federal Offshore Pipeline Decommissioning in BOEM Significant Sediment Resource Areas

The Texas Supreme Court issued an opinion today in Energy Transfer Partners, L.P v. Enterprise Products Partners, L.P., a case previously featured on the Blog.  This case began in 2011 when ETP and Enterprise explored the possibility of partnering to modify and extend, or construct anew, a pipeline to transport oil southbound from Cushing, Oklahoma.

Continue Reading Texas Supreme Court Decides Energy Transfer Partners v. Enterprise Products

In a stark reminder of the sanctity of Coast Guard investigations, and the consequences of impeding such investigations, the U.S. Department of Labor’s Occupational Safety and Health Administration (“OSHA”) recently took action against a maritime employer for allegedly retaliating against a seaman who cooperated with the Coast Guard in connection with its investigation of a maritime casualty.  On October 20, 2017, Bouchard Transportation’s ATB BUSTER BOUCHARD/B. NO. 255 suffered an explosion and fire while transporting roughly 2,000 barrels of oil off Port Aransas, Texas.  Two crewmembers perished as a result of the casualty.  The brother of one of the deceased crewmembers, who also happened to be a Bouchard Transportation employee, cooperated with the Coast Guard in the ensuing investigation.  Three months later, the surviving brother was terminated without explanation.  OSHA found the termination constituted a retaliatory discharge in violation of the Seaman’s Protection Act (46 U.S.C. §2114) (the “SPA”).  In broad terms, the SPA prohibits maritime employers from terminating or discriminating against seamen who cooperate with Coast Guard, Department of Labor or National Transportation Safety Board investigations.  The obvious intent of the SPA is to guaranty “that, when seamen provide information of dangerous situations to the Coast Guard, they will be free from the “debilitating threat of employment reprisals for publicly asserting company violations” of maritime statutes or regulations.”  Gaffney v. Riverboat Services of Indiana, Inc., 451 F.3d 424, 444 (7th Cir. 2006).  In 2010, Congress empowered OSHA to administer claims arising under the SPA.Continue Reading OSHA Awards Damages for Retaliatory Discharge of Jones Act Seaman in Violation of Seaman’s Protection Act

Last week the Texas Supreme Court granted review in Energy Transfer Partners, L.P. v. Enterprise Products Partners, L.P., a case concerning Texas partnership law.  Energy Transfer Partners has garnered significant amicus support on both sides of the “v.” and has been closely followed by the energy industry.

Continue Reading Texas Supreme Court to Review $500 Million Verdict in Case Involving Formation of Partnership to Construct Crude Oil Pipeline