30 CFR Part 550 - OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER CONTINENTAL SHELF

This rule adopts and finalizes the interim final rule which adjusted the level of the maximum civil monetary penalties contained in the Bureau of Ocean Energy Management (BOEM) regulations pursuant to the Outer Continental Shelf Lands Act (OCSLA), the Oil Pollution Act of 1990 (OPA), the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (FCPIA of 2015), and Office of Management and Budget (OMB) guidance. This rule also implements the 2017 adjustment of the level of the maximum civil monetary penalties contained in the BOEM regulations pursuant to OCSLA, OPA, FCPIA of 2015 and OMB guidance. The 2017 adjustment of 1.01636 percent accounts for one year of inflation spanning from October 2015 to October 2016.

This final rule clarifies the language in one section of a final rule that the Bureau of Ocean Energy Management (BOEM) published in the Federal Register on March 30, 2016, and that became effective on May 31, 2016.

The Bureau of Ocean Energy Management (BOEM) is announcing the availability of a guidance document entitled, “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—Requiring Additional Security” (NTL No. 2016-N01).

The Department of the Interior (DOI or the Department), acting through BOEM and BSEE, is revising and adding new requirements to regulations for exploratory drilling and related operations on the Outer Continental Shelf (OCS) seaward of the State of Alaska. This final rule focuses solely on the OCS within the Beaufort Sea and Chukchi Sea Planning Areas (Arctic OCS). The Arctic region is characterized by extreme environmental conditions, geographic remoteness, and a relative lack of fixed infrastructure and existing operations. This final rule is designed to help ensure the safe, effective, and responsible exploration of Arctic OCS oil and gas resources, while protecting the marine, coastal, and human environments, and Alaska Natives' cultural traditions and access to subsistence resources.

This rule adjusts the level of civil monetary penalties contained in the Bureau of Ocean Energy Management (BOEM) regulations pursuant to the Outer Continental Shelf Lands Act, the Oil Pollution Act of 1990, the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and Office of Management and Budget guidance.

On March 30, 2016, the Bureau of Ocean Energy Management (BOEM) published in the Federal Register a final rule that updates and streamlines the Outer Continental Shelf (OCS) oil and gas and sulfur leasing regulations, which will become effective on May 31, 2016. BOEM wishes to clarify the language in one section of that rule. Therefore, BOEM is proposing to revise that section and give the public an opportunity to comment. The final rule was issued under Docket ID: MMS-2007-OMM-0069, which has expired and is no longer accessible. Therefore, BOEM is utilizing a new Docket ID for this proposed rule (BOEM-2016-0031).

BOEM is extending the public comment period to submit comments on the proposed rule entitled “Air Quality Control, Reporting, and Compliance,” which was published in the Federal Register on April 5, 2016. The original public comment period to submit comments on this rulemaking would have ended on June 6, 2016. However, BOEM has received public comments requesting an extension of the comment period. BOEM has reviewed the extension requests and has determined that a 14-day comment period extension to June 20, 2016, is appropriate. The proposed rule specified a separate, shorter period to submit comments to the Office of Management and Budget on the information collection (IC) burden in this rulemaking. That comment period ended on May 5, 2016, and will not be extended.

This proposed rule would amend existing BOEM regulations related to air quality measurement, evaluation, and control with respect to oil, gas, and sulphur operations on the Outer Continental Shelf (OCS) of the United States (U.S.), in the Central and Western Gulf of Mexico (GOM) and the area offshore the North Slope Borough of the State of Alaska, as part of the BOEM approval process for offshore oil and gas exploration and development plans, right-of-use and easement (RUE), pipeline rights-of-way (ROW), and lease term pipeline applications. The proposed rule would: (1) Fulfill BOEM's statutory responsibility under section 5(a)(8) of Outer Continental Shelf Lands Act (OCSLA) by addressing all relevant criteria and major precursor air pollutants and by cross-referencing BOEM standards and benchmarks for those pollutants to those of the United States Environmental Protection Agency (USEPA); (2) change the manner in which lessees would evaluate and model vessel emissions attributed to OCS facilities; (3) change the methods for measuring and evaluating air emissions including measuring their impacts over State submerged lands; (4) provide a process by which exemption thresholds are established and updated; (5) change the circumstances when emission reduction measure(s) (ERM), including Best Available Control Technology (BACT), are required, and establish new criteria for the application of ERM; (6) formalize requirements for the consolidation of emissions from multiple facilities; (7) consistent with BOEM's existing regulatory authority, articulate a schedule and requirements for ensuring that all plans, including those previously approved, will remain compliant on an ongoing basis with these updated regulations; and (8) include an air quality component in the submission of RUE, ROW, and lease term pipeline applications. Key policy changes include the following: (1) Aligning the list of pollutants that are subject to an air quality review with the current National Ambient Air Quality Standards (NAAQS) and cross-referencing the ambient air quality standards and benchmarks (AAQSB) for those pollutants to those of the USEPA; (2) formalizing the concept and application of the term “attributed emissions;” (3) changing the locations where air emissions will be measured and evaluated; and (4) modifying the process by which exemption thresholds are established and updated. This rulemaking would be the first major re-write of the OCS air quality regulations in 35 years.

This final rule updates and streamlines the existing Outer Continental Shelf (OCS) leasing regulations and clarifies implementation of the Federal Oil and Gas Royalty Simplification and Fairness Act of 1996, which amended the Federal Oil and Gas Royalty Management Act of 1982 (FOGRMA). The final rule reorganizes leasing requirements to more effectively communicate the leasing process as it has evolved over the years. The final rule makes changes to regulations which relate to the oil, gas, and sulfur leasing requirements. The final rule does not, however, include substantive changes to regulations which relate to bonding, which will be the subject of a separate new proposed rulemaking.

In this rule, BOEM amends its existing regulations by: Updating address locations; removing an outdated Web site address and correcting a form number; changing the term “Associate Director” to “Deputy Director” in the regulations; and other housekeeping changes, such as removing reference to a URL hyperlink for a Web page that no longer exists.

BOEM and BSEE are extending the public comment period on the Notice of Proposed Rulemaking entitled, “Oil and Gas and Sulphur Operations on the Outer Continental Shelf—Requirements for Exploratory Drilling on the Arctic Outer Continental Shelf,” which was published in the Federal Register on February 24, 2015, (80 FR 9916). The original public comment period would have ended on April 27, 2015. However, BOEM and BSEE have received public comments requesting an extension of the comment period. BOEM and BSEE have reviewed the extension requests and determined that a 30-day comment period extension to May 27, 2015, is appropriate.

The Department of the Interior (DOI), acting through BOEM and BSEE, proposes to revise and add new requirements to regulations for exploratory drilling and related operations on the Outer Continental Shelf (OCS) seaward of the State of Alaska (Alaska OCS). The Alaska OCS has the potential to be an integral part of the Nation's “all of the above” domestic energy strategy. This proposed rule focuses solely on the OCS within the Beaufort Sea and Chukchi Sea Planning Areas (Arctic OCS). The Arctic region is characterized by extreme environmental conditions, geographic remoteness, and a relative lack of fixed infrastructure and existing operations. The proposed rule is designed to ensure safe, effective, and responsible exploration of Arctic OCS oil and gas resources, while protecting the marine, coastal, and human environments, and Alaska Natives' cultural traditions and access to subsistence resources.

BOEM has recognized the need to develop a comprehensive program to assist in identifying, prioritizing, and managing the risks associated with industry activities on the Outer Continental Shelf (OCS). BOEM intends to design and implement a more robust and comprehensive risk management, financial assurance and loss prevention program to address the complex issues and cost differences associated with offshore operations. As part of its overall effort to establish this program and associated changes to regulations, BOEM is seeking stakeholder comments regarding various risk management and monitoring activities pertaining to financial risks to taxpayers that may result from activities on the OCS. BOEM currently requires lessees to provide performance bonds and/or one of various alternative forms of financial assurance to ensure compliance with the terms and conditions of leases, Rights-of-Use and Easements and Pipeline Rights-of-Way. BOEM is seeking comments on who is best suited to mitigate risks and whether other forms of financial assurance should be used, as well as whether, or to what extent, the current forms of financial assurance are adequate and appropriate. BOEM has received comments to its Advance Notice of Proposed Rulemaking (ANPR) indicating that the number of issues being addressed and the complexity of the topics being considered would justify a longer comment period. Various groups have also requested that additional time be provided to review and analyze the ANPR. For these reasons, BOEM has agreed to extend the comment period by an additional 30 days. The new comment period will elapse 90 days from August 19, 2014, the date of the original of publication of the ANPR.