Kathleen L. Doody

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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

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

On July 15, 2020, the Unites States Customs and Border Protection (“CBP”) issued a ruling (HQ H309672) in connection with the installation of an offshore wind farm located off the coast of Rhode Island and Massachusetts in U.S. territorial waters (the “July 15 Ruling”).  CBP determined that activities to be conducted in connection with the installation of offshore wind turbine generator (“WTG”) units using a non-coastwise-qualified jack up vessel (i.e., not a Jones Act compliant vessel) (the “Installation Vessel”) did not violate the Jones Act (46 U.S.C. § 55102) (or the Passenger Vessel Services Act (46 U.S.C. § 55103)).
Continue Reading U.S. Customs Revokes Recent Offshore Wind Ruling; Maintains Uncertainty Whether the Jones Act Applies to Wind Farm Installations on the OCS

Yesterday, the United State Department of Interior (DOI) announced the execution of a Memorandum of Understanding (MOU) with the Ministry of Petroleum and Energy of the Kingdom of Norway to formalize a partnership to share best practices, knowledge, experience, policy, and regulatory initiatives in connection with the development of as oil, gas, and wind energy resources.
Continue Reading U.S. Department of Interior Announces Formal Partnership with Norway to Promote and Share Offshore Energy Knowledge and Experience