On June 29, 2023, the Department of Interior’s Bureau of Ocean Energy Management (BOEM) published a proposed rule that, if adopted, would substantially revise the financial assurance requirements applicable to offshore oil and gas operations.
The proposed rule is designed to address BOEM’s concern that under its current financial assurance regulations, taxpayers are vulnerable to “bearing the cost of facility decommissioning and other financial risks” associated with oil and gas development on the Outer-Continental Shelf (OCS). The proposed rule would change the current criteria used to determine whether OCS lease and grant holders are required to secure supplemental financial assurance.
If adopted, BOEM estimates that “the aggregate amount of supplemental financial assurance required of lessees and grant holders . . . would increase by an estimated $9.2 billion over current levels.”
