BOEM to modernize financial assurance and risk management

The Bureau of Ocean Energy Management has issued an Advanced Notice of Proposed Rulemaking on Risk Management, Financial Assurance, and Loss Prevention to seek public input as it considers modernizing its risk management program and bonding regulations for offshore oil and gas operations on the outer continental shelf.

Offshore staff

WASHINGTON, DC – The Bureau of Ocean Energy Management (BOEM) has issued an Advanced Notice of Proposed Rulemaking (ANPR) on Risk Management, Financial Assurance, and Loss Prevention to seek public input as it considers modernizing its risk management program and bonding regulations for offshore oil and gas operations on the outer continental shelf.

This first step initiates a dialogue about BOEM’s existing regulations, which are 20 years old and have not kept pace with offshore infrastructure developments, including deepwater operations, current industry practices, and the growing costs of decommissioning.

“We would like to work with industry and others to determine how to improve our regulatory regime to better align with the realities of aging offshore infrastructure, hazard risks, and increasing costs of decommissioning,” says BOEM Acting Director Walter D. Cruickshank. “Today’s action is an important first step in initiating a dialogue on how to best enhance our risk management program to better match current practices, with the ultimate goal of ensuring that industry meets its decommissioning responsibilities and the burden of decommissioning a facility on the outer continental shelf does not fall to taxpayers.”

BOEM is seeking stakeholder comments regarding various risk management and monitoring activities related to offshore energy development on the outer continental shelf. The advanced notice of proposed rulemaking seeks comment on the bonding and financial assurance program for BOEM's offshore oil and gas program. The bureau is also accepting comments on the analogous bonding and financial assurance program for BOEM's offshore renewable energy and hard minerals programs. The notice also solicits comments on best practices to mitigate risks, as well as whether, or to what extent, the current forms of financial assurance are adequate and appropriate.

The ANPR will be published in the Federal Register on Aug. 19, and will be available for public viewing the day before. It includes a 60-day comment period which will close at midnight on Oct. 20. After the comment period closes, BOEM plans on continuing its outreach and hosting a workshop with stakeholders to have additional opportunities for discussion as it considers options for proposed regulations.

08/19/2014

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