Federal Deregulation Could Change Industry Rules for the U.S. Outer Continental Shelf

A notice from the Federal Register published on 16 November 2018 proposes streamlining how companies gain authorization for geophysical surveys in the Gulf of Mexico. It also indicates planned actions on other regulations for the offshore oil and gas industry, which range from blowout prevention and well control to pipeline right-of-way and air quality rules.

The proposed rule governing authorization for geophysical surveys would enable companies currently operating without incidental take authorizations to comply with the Marine Mammal Protection Act (MMPA).

Absent the rule, says the notice, “oil and gas industry operators would face a highly uncertain regulatory environment due to the imminent threat of litigation.” Under the current framework, “individual companies could apply for project-specific Letters of Authorization.”

The notice states that, “Providing for industry compliance with the MMPA through the requested regulatory framework, versus companies pursuing individual authorizations, would be the most efficient way to achieve such compliance for both industry and for NMFS, and would provide regulatory certainty for industry operators.”

However, the notice states, “industry operators have been, and currently are, conducting their work without MMPA incidental take authorizations.”

The rules cover any activity, “Where there is a reasonable likelihood of an activity resulting in the take of marine mammals--as is the case for certain methods of geophysical exploration, including the use of airgun arrays (i.e., ``seismic surveys'').”

Expected benefits of the proposed rule would include annualized cost savings of up to $182 million for NOAA (largely due to a reduction in administrative costs associated with processing letters of authorization), as well as a “lessened risk of harm to marine mammals” due to “mitigation measures applied to geophysical survey activities in the Gulf of Mexico (GOM) region.”

Absent the rule, says the notice, “survey operators in the GOM would likely be required to apply for an IHA. Although not monetized, NMFSs analysis indicates that the upfront work associated with the rule (e.g., analyses, modeling, process for obtaining LOA) would likely save significant time and money for operators.”

The comment period for this proposed rule has closed, and a final action for this propose rule is expected in February 2019.

Parallel legislation moves out of committee

Legislation currently in Congress also seeks to streamline permitting under the MMPA. It was moved out of the Committee on Natural Resources on 16 November 2018, with a recommendation for passing the bill. That proposed bill can be read here.

Also included in the notice are the Department of Interior’s planned regulatory actions for 2019, which include rolling back a handful of Obama-era rules:

BSEE is considering a potential regulatory action to revise the final rule entitled, ``Oil and Gas and Sulfur Operations on the Outer Continental Shelf--Blowout Preventer Systems and Well Control'' (81 FR 25887, Apr. 29, 2016). According to the notice, “BSEE carefully analyzed all 342 provisions of the 2016 Well Control Rule, and identified 59 of those provisions--or less than 18% of the 2016 Rule--as appropriate for revision or deletion.”

BOEM is reviewing and considering a potential regulatory action related to its Notice to Lessees No. 2016-N01, ``Notice to Lessees and Operators of Federal Oil and Gas, and Sulfur Leases, and Holders of Pipeline Right-of-Way and Right-of-Use and Easement Grants in the Outer Continental Shelf'' (Sep. 12, 2016).

BOEM is reconsidering the provisions of the proposed rule entitled, ``Air Quality Control, Reporting, and Compliance,'' (81 FR 19718, Apr. 5, 2016).

BSEE and BOEM are reviewing and considering a potential regulatory action related to the final rule entitled, ``Oil and Gas and Sulfur Operations on the Outer Continental Shelf--Requirements for Exploratory Drilling on the Arctic Outer Continental Shelf'' (81 FR 46478, Jul. 15, 2016).

Renewable energy

BOEM has also “identified deregulatory opportunities for reforming, streamlining, and clarifying its renewable energy regulations. This proposed rulemaking contains reforms that are intended to facilitate offshore renewable energy development, while not decreasing environmental safeguards.”

To read the full notice, entitled “Introduction to the Unified Agenda of Federal Regulatory and Deregulatory Actions,” click here.

By Greg Leatherman, ON&T Editor