In 2024, the Bureau of Ocean Energy Management (“BOEM”) issued new financial assurance (“FA”) regulations requiring an estimated $6.9 billion in new supplemental FA from federal offshore oil and gas lessees and grantees, all in excess of base-level bonding amounts (the “Rule”).
Continue Reading BOEM Now Considering Repeal of Its $6.9B Rule and Will Only Seek Supplemental Financial Assurance from Select Properties During Regulatory Review
The Offshore Parity Act of 2024 (H.R. 10183), introduced on November 20, 2024, by Congressmen Garret Graves (R-LA) and Troy A. Carter, Sr. (D-LA), looks to extend Louisiana’s state authority from 3 to 9 nautical miles offshore into the Gulf of Mexico.
Continue Reading Casting a Wider Net: Proposed Expansion of Coastal States’ Authority
In 2021, the Biden Administration set a goal of deploying 30 gigawatts (“GW”) of federal offshore wind projects by 2030, and in 2022, the U.S. Department of the Interior (“DOI”) set an additional goal of deploying 15 GW of floating offshore wind by 2035.
Continue Reading U.S. Federal Offshore Wind in 2024: Growth and Growing Pains
This week, a Maryland federal district court amended its prior Biological Opinion (“BiOP”) vacatur judgment, extending the timeline for vacatur from December 20, 2024, to May 21, 2025, which averts for now a potential shutdown of Gulf of Mexico (“GOM”) oil and gas operations.
Continue Reading Potential Shutdown of GOM Oil and Gas Operations Due to BiOp Vacatur Averted – For Now
On August 19, 2024, the U.S. District Court for the District of Maryland issued its merits decision in Sierra Club et al. v. NMFS, API, et al., No. 8:20-cv-03060-DLB, which vacated the U.S. Department of Commerce, National Marine Fisheries Service’s (“NMFS”) 2020 programmatic Biological Opinion on the Federally Regulated Oil and Gas Program Activities in the Gulf of Mexico (the “2020 BiOp”), and corresponding Incidental Take Statement (“ITS”), for violations of the Endangered Species Act (“ESA”), 16 U.S.C. §§ 1531 et seq., and Administrative Procedure Act (“APA”), 5 U.S.C. §§ 551 et seq.
Continue Reading Maryland Court’s Vacatur of Biological Opinion Could Cause Severe Disruption of Gulf of Mexico Oil & Gas Activities
On June 17, 2024, the States of Texas, Louisiana and Mississippi, and four oil and gas trade associations sued the Department of Interior (“DOI”) and its Bureau of Ocean Energy Management (“BOEM”) in the U.S. District Court for the Western District of Louisiana, State of Louisiana, et al. v. Haaland, et al., No. 2:2024-cv-00820, challenging BOEM’s new final rule entitled Risk Management and Financial Assurance for OCS Lease and Grant Obligations, 89 Fed. Reg. 31544 (Apr. 24, 2024) (the “Final Rule”).
Continue Reading Texas, Louisiana, and Mississippi Band Together to Stop BOEM’s New $6.9B Financial Assurance Rule
On May 17, 2024, the Texas Supreme Court held that when a lease requires royalties to be paid on all gas sold or used off the premises, but the valuation point for said royalties is “at the well,” gas used off premises as fuel is deductible as a matter of law.
Continue Reading Texas Supreme Court Determines That Off-Lease Fuel is Deductible from Royalties Valued at the Well
On April 15, 2024, the Bureau of Ocean Energy Management (“BOEM”) released a prepublication of its highly anticipated final rule revising financial assurance requirements for oil, gas, and sulfur operations on the federal outer continental shelf (“OCS”).
Continue Reading BOEM’s New Financial Assurance Requirements for Federal Oil & Gas Leases, ROWs, and RUEs
The United States Court of Appeals for the Fifth Circuit recently certified a question to the Texas Supreme Court asking what effect a free-use clause and an off-lease clause have on a royalty clause valuing royalties at the well. At issue was whether gas used as fuel off the leased premises could be deducted from royalties when the royalties were to be valued at the well under an oil and gas lease containing an off-lease clause and a free-use clause. Texas Supreme Court precedent provides that when a lease states that royalties must be valued on the gross proceeds received by lessees, free-use clauses do not allow for gas used as fuel off the leased premises to be deducted, but it is not clear on whether that same rationale would apply when royalties are valued at the well. Given that uncertainty, the Fifth Circuit could not confidently make an Erie guess on the issue and instead opted to certify the question to the Texas Supreme Court.
Continue Reading At the Well vs. Off the Lease: The Fifth Circuit Asks the Texas Supreme Court to Determine Whether Off-Lease Fuel May be Deducted from Royalties Valued at the Well
On February 9, 2024, the Department of the Interior (DOI) published its semi-annual regulatory agenda, which includes two new planned rulemakings affecting federal offshore leases.
Continue Reading DOI Regulatory Agenda Includes BSEE Rulemakings on Decommissioning and Bonding for Civil Penalty Appeals