BOEMRE increases OCS civil penalties

The U.S. Bureau of Ocean Energy Management, Regulation and Enforcement has announced increases in the civil penalties for infringements of the Outer Continental Shelf Lands Act. The penalties will increase to $40,000 per day from $35,000 per day, a rise that represents an adjustment to allow for inflation, the agency said in a June 29 announcement. Similarly, penalties for Oil Pollution Act financial responsibility violations will increase to $30,000 per day, from $25,000 per day.

However, the agency views the penalties as too low, even after the inflation adjustments, and President Obama has asked Congress to further raise the maximum penalty rates, BOEMRE said.

“Even with the inflation adjustment, which is the limit of our current regulatory authority, our civil fine authority is inadequate. That view is shared by energy companies operating on the OCS. The inadequacy of our civil authority hampers our ability to effectively regulate offshore activities, and renders such fines a trivial nuisance rather than an effective deterrent,” BOEMRE Director Michael Bromwich said. “Our hope is that new legislation will raise this amount significantly, which would enable us to use the threat and reality of civil fines as viable methods to encourage compliance with offshore oil and gas rules and regulations and meaningfully deter violations.”

BOEMRE imposes OCSLA civil penalties if an operator fails to correct a recorded violation or commits a violation threatening serious harm or damage to life, property, mineral deposits or to the environment, the agency said. The agency can also impose fines under OPA if there is evidence that an operator cannot meet liability requirements for oil spill contingencies.

—Alan Bailey