Rule2023-07931
Oil Spill Financial Responsibility Adjustment of the Limit of Liability for Offshore Facilities
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 14, 2023
Effective
May 15, 2023
Issuing agencies
Interior DepartmentOcean Energy Management Bureau
Abstract
The Bureau of Ocean Energy Management issues this final rule to adjust the offshore facility limit of liability for damages under the Oil Pollution Act of 1990 (OPA) to reflect the increase in the Consumer Price Index (CPI) since 2016. This rule increases the OPA offshore facility limit of liability for damages from $137,659,500 to $167,806,900. In addition to damages, responsible parties continue to be liable for all removal costs associated with any oil spill or discharge.
Full Text
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<title>Federal Register, Volume 88 Issue 72 (Friday, April 14, 2023)</title>
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[Federal Register Volume 88, Number 72 (Friday, April 14, 2023)]
[Rules and Regulations]
[Pages 22910-22912]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-07931]
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DEPARTMENT OF THE INTERIOR
Bureau of Ocean Energy Management
30 CFR Part 553
[Docket ID: BOEM-2023-0002]
RIN 1010-AE18
Oil Spill Financial Responsibility Adjustment of the Limit of
Liability for Offshore Facilities
AGENCY: Bureau of Ocean Energy Management, Interior.
ACTION: Final rule.
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SUMMARY: The Bureau of Ocean Energy Management issues this final rule
to adjust the offshore facility limit of liability for damages under
the Oil Pollution Act of 1990 (OPA) to reflect the increase in the
Consumer Price Index (CPI) since 2016. This rule increases the OPA
offshore facility limit of liability for damages from $137,659,500 to
$167,806,900. In addition to damages, responsible parties continue to
be liable for all removal costs associated with any oil spill or
discharge.
DATES: This rule is effective on May 15, 2023.
FOR FURTHER INFORMATION CONTACT: Questions regarding the inflation
adjustment methodology or amount should be directed to Martin Heinze,
Economics Division, BOEM, at <a href="/cdn-cgi/l/email-protection#9df0fcefe9f4f3b3f5f8f4f3e7f8ddfff2f8f0b3faf2eb"><span class="__cf_email__" data-cfemail="c0ada1b2b4a9aeeea8a5a9aebaa580a2afa5adeea7afb6">[email protected]</span></a> or at 703-787-1010.
Questions regarding the timing of this adjustment or the applicability
of the regulations should be directed to Anna Atkinson, Office of
Regulations, BOEM, at <a href="/cdn-cgi/l/email-protection#ec8d82828dc28d988785829f8382ac8e838981c28b839a"><span class="__cf_email__" data-cfemail="95f4fbfbf4bbf4e1fefcfbe6fafbd5f7faf0f8bbf2fae3">[email protected]</span></a> or at (703) 787-1025.
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SUPPLEMENTARY INFORMATION:
I. Background and Purpose
II. Calculation of the 2022 Adjustment
III. Effective Date
IV. Statutory and Executive Order Reviews
A. Statutes
1. National Environmental Policy Act
2. Regulatory Flexibility Act
3. Paperwork Reduction Act
4. Unfunded Mandates Reform Act
5. Small Business Regulatory Enforcement Fairness Act
6. Congressional Review Act
B. Executive Orders (E.O.).
1. Governmental Actions and Interference With Constitutionally
Protected Property Rights (E.O. 12630)
2. Regulatory Planning and Review (E.O. 12866); Improving
Regulation and Regulatory Review (E.O. 13563)
3. Civil Justice Reform (E.O. 12988)
4. Federalism (E.O. 13132)
5. Consultation and Coordination With Indian Tribal Governments
(E.O. 13175)
6. Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use (E.O. 13211)
I. Background and Purpose
The OPA established a comprehensive regime for addressing the
consequences of oil spills, ranging from spill response to compensation
for damages to injured parties. Under title I of the OPA, the
responsible parties are liable for the removal costs and damages that
result from the discharge or substantial threat of discharge of oil
into navigable waters, shorelines, or the exclusive economic zone by
any vessel or onshore or offshore facility. See 33 U.S.C. 2702(a) and
(b). Under 33 U.S.C. 2704(a), however, the total liability of each
responsible party is limited, subject to certain exceptions specified
in 33 U.S.C. 2704(c). In 1990, the total liability of responsible
parties for an offshore facility incident was limited to ``the total of
all removal costs plus $75,000,000.'' 33 U.S.C. 2704(a)(3).
To prevent the real value of the OPA liability limits from
declining over time due to inflation and shifting the financial risk to
the Oil Spill Liability Trust Fund (OSLTF), the President must adjust
the limits ``not less than every three years,'' by regulation, to
reflect significant CPI increases. 33 U.S.C. 2704(d)(4). This mandate
preserves the deterrent effect and ``polluter pays'' principle embodied
in the OPA.
BOEM issues this rule under title I of the OPA, E.O. 12777, as
amended, and BOEM regulations at 30 CFR part 553, subpart G--Limit of
Liability for Offshore Facilities. BOEM has good cause under 5 U.S.C.
553(b) for issuing this as a final rule; a proposed rule is
unnecessary. The adjustment in the limit of liability is mandated by
statute, the methodology for determining the amount of the adjustment
is defined in BOEM's regulations, and BOEM's regulations provide that
inflation adjustments to the offshore facilities limit of liability
will be implemented through final rulemaking. Sec. Sec. 553.703(b)(4)
and 553.704.
II. Calculation of the 2022 Adjustment
The inflation adjustment methodology is provided in Sec. 553.703.
BOEM last adjusted the OPA offshore facility liability limit for
inflation on January 18, 2018 (83 FR 2540). BOEM evaluates whether the
liability limit should be adjusted for inflation not later than every 3
years since the previous adjustment. Sec. 553.703(b)(2). BOEM
calculates inflation by comparing the cumulative percent change in the
Annual Consumer Price Index for All Urban Consumers (CPI-U) since the
last adjustment. BOEM adjusts the liability limits when inflation
reaches a significance threshold of 3 percent or greater. The January
2018 adjustment used the 2016 annual CPI-U.
BOEM used the Bureau of Labor Statistics (BLS) annual average CPI-U
published in 2022 to calculate the inflation adjustment for the period
between 2016 and 2022. The cumulative percent change in the annual CPI-
U since 2016 exceeded 3 percent in 2022, the year that the annual CPI-U
was published most recently. Therefore, BOEM must increase the offshore
liability limit in Sec. 553.702 by an amount equal to the cumulative
percent change in the annual CPI-U since 2016.
Under Sec. 553.703(a), the formula for calculating a cumulative
percent change in the annual CPI-U is as follows: the percent change in
the annual CPI-U = [(annual CPI-U for current period-annual CPI-U for
previous period) / annual CPI-U for previous period] x 100 and round to
one decimal place. Using the BLS annual CPI-U index numbers for 2016
(previous period) and 2022 (current period), the calculation is:
(292.655-240.007) / 240.007 = 0.21936. Multiplying x 100 yields a
cumulative percent change of 21.936 percent. Rounding to one decimal
place, the resulting change is 21.9 percent.
Under paragraph (c) of Sec. 553.703, BOEM calculates the inflation
adjustment to the offshore facilities liability limit using the
following formula: New limit of liability = previous limit of liability
+ (previous limit of liability x the decimal equivalent of the percent
change in the annual CPI-U), rounded to the closest $100. The
calculation is: $137.6595 million + ($137.6595 million x 0.219) =
$167.8069 million.
Therefore, under Sec. 553.702, BOEM is revising the responsible
party's liability limit under OPA to cover all removal costs plus
$167.8069 million for damages caused by each oil spill from an offshore
facility, included any offshore pipeline.
Further information regarding the CPI and BLS's methodology for
developing it is available at <a href="https://www.bls.gov/opub/hom/cpi/home.htm">https://www.bls.gov/opub/hom/cpi/home.htm</a>.
III. Effective Date
Under BOEM's regulations, the effective date of an inflation-
adjusted liability limit is the 90th day after publication in the
Federal Register. Sec. 553.704. BOEM may select a different effective
date as part of the rule establishing a new liability limit. Id. Given
that this adjustment is mandated by statute and that the methodology
for determining the amount of the update is defined in BOEM's
regulations, BOEM determined that an effective date 30 days after this
rule's publication is appropriate, instead of the 90 days stated in
Sec. 553.704.
IV. Statutory and Executive Order Reviews
A. Statutes
1. National Environmental Policy Act
This rule does not constitute a major Federal action significantly
affecting the quality of the human environment because it is non-
discretionary and consistent with BOEM's statutory authority. See 40
CFR 1508.1(q)(1)(ii). The OPA requires that, ``not less than every
three years,'' BOEM adjust its liability limits by regulation to
reflect significant CPI increases, 33 U.S.C. 2704(d)(4), and the
formula for doing so is set by regulation. Accordingly, BOEM has no
discretion in adjusting its OPA liability limits as reflected in this
rule. Because this rule is not a major Federal action, it is therefore
not subject to the requirements of the National Environmental Policy
Act (NEPA, 42 U.S.C. 4321 et seq.). Even if this were a discretionary
action subject to NEPA, which it is not, a detailed statement under
NEPA is not required because this rule is administrative in nature and
covered by a categorical exclusion. See 43 CFR 46.210(i). BOEM also has
determined that the rule does not implicate any of the extraordinary
circumstances listed in 43 CFR 46.215 that would require further
analysis under NEPA. Therefore, a detailed statement under NEPA is not
required.
2. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) requires an agency to prepare
a
[[Page 22912]]
regulatory flexibility analysis for all rules unless the agency
certifies that the rule will not have a significant economic impact on
a substantial number of small entities. The RFA applies only to rules
for which an agency is required to first publish a proposed rule. See 5
U.S.C. 603(a) and 604(a). Thus, the RFA does not apply to this
rulemaking.
3. Paperwork Reduction Act
This rule does not contain information collection requirements,
and, therefore, a submission to Office of Management and Budget (OMB)
under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) is not
required.
4. Unfunded Mandates Reform Act
This rule does not impose an unfunded mandate on State, local, or
Tribal governments, or on the private sector, of more than $100 million
per year. The rule does not have a significant or unique effect on
State, local, or Tribal governments, or on the private sector.
Therefore, a statement containing the information required by the
Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required.
5. Small Business Regulatory Enforcement Fairness Act
This rule is not a major rule under 5 U.S.C. 804(2). This rule:
(a) Will not have an annual effect on the economy of $100 million
or more;
(b) Will not cause a major increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies, or geographic regions; and
(c) Will not have significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises.
6. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.)
this rule is not a major rule, as defined by 5 U.S.C. 804.
B. Executive Orders (E.O.)
1. Governmental Actions and Interference With Constitutionally
Protected Property Rights (E.O. 12630)
This rule does not effect a taking of private property or otherwise
have takings implications under E.O. 12630. Therefore, a takings
implication assessment is not required.
2. Regulatory Planning and Review (E.O. 12866); Improving Regulation
and Regulatory Review (E.O. 13563)
E.O. 12866 provides that the Office of Information and Regulatory
Affairs (OIRA) in OMB will review all significant rules. OIRA has
determined that this rule is not significant.
This rule updates the offshore facility liability limit under OPA.
It is neither a new regulation, nor does it increase the regulatory
burden on regulated entities. This rule simply updates the liability
limit for inflation that accrued over a 6-year period, pursuant to OPA.
33 U.S.C. 2704(d)(4).
E.O. 13563 reaffirms the principles of E.O. 12866 while calling for
improvements in the Nation's regulatory system to reduce uncertainty
and to promote predictability and the use of the best, most innovative,
and least burdensome tools for achieving regulatory ends. E.O. 13563
directs agencies to consider regulatory approaches that reduce burdens
and maintain flexibility and freedom of choice for the public where
these approaches are relevant, feasible, and consistent with regulatory
objectives. We have developed this rule in a manner consistent with
these requirements.
3. Civil Justice Reform (E.O. 12988)
This rule complies with the requirements of E.O. 12988.
Specifically, this rule:
(a) Meets the criteria of section 3(a) requiring that all
regulations be reviewed to eliminate errors and ambiguity and be
written to minimize litigation; and
(b) Meets the criteria of section 3(b)(2) requiring that all
regulations be written in clear language and contain clear legal
standards.
4. Federalism (E.O. 13132)
Under the criteria in section 1 of E.O. 13132, this rule does not
have sufficient federalism implications to warrant the preparation of a
federalism summary impact statement. Therefore, a federalism summary
impact statement is not required.
5. Consultation and Coordination With Indian Tribal Governments (E.O.
13175)
E.O. 13175 provides that Tribal consultation is not necessary for
regulations required by statute. Because this rule simply implements a
statutory mandate, Tribal consultation is not required by this
Executive Order.
The Department of the Interior (DOI) continually strives to
strengthen its government-to-government relationship with Indian Tribes
through a commitment to consultation with Indian Tribes and a
recognition of their right to self-governance and Tribal sovereignty.
BOEM is also respectful of its responsibilities for consultation with
corporations established pursuant to the Alaska Native Claims
Settlement Act, 43 U.S.C. 1601 et seq. (ANCSA).
BOEM has evaluated this rule under DOI's consultation policy in
chapters 4 and 5 of series 512 of the Departmental Manual. BOEM
determined that this rule has no substantial direct effects on any
Tribe or ANCSA Corporation, as defined in 512 DM 4.3 to include, among
others, federally recognized Alaska Native tribes. Based on this
evaluation, BOEM determined that consultation is not necessary to
comply with any DOI policy.
6. Actions Concerning Regulations That Significantly Affect Energy
Supply, Distribution, or Use (E.O. 13211)
This rule is not a significant energy action under the definition
in E.O. 13211. Therefore, a statement of energy effects is not
required.
The action taken herein is pursuant to an existing delegation of
authority.
List of Subjects in 30 CFR Part 553
Administrative practice and procedure, Continental shelf,
Environmental protection, Intergovernmental relations, Oil and gas
exploration, Oil pollution, Penalties, Pipelines, Rights-of-way,
Reporting and recordkeeping requirements, Surety bonds, Securities.
Laura Daniel-Davis,
Principal Deputy Assistant Secretary, Land and Minerals Management.
For the reasons stated in the preamble, BOEM amends 30 CFR part 553
as follows:
PART 553--OIL SPILL FINANCIAL RESPONSIBILITY FOR OFFSHORE
FACILITIES
0
1. The authority citation for part 553 is revised to read as follows:
Authority: 33 U.S.C. 2704, 2716, as amended; E.O. 12777.
Subpart G--Limit of Liability for Offshore Facilities
0
2. Revise Sec. 553.702 to read as follows:
Sec. 553.702 What limit of liability applies to my offshore facility?
Except as provided in 33 U.S.C. 2704(c), the limit of liability
under OPA for a responsible party for any offshore facility, including
any offshore pipeline, is the total of all removal costs plus $167.8069
million for damages with respect to each incident.
[FR Doc. 2023-07931 Filed 4-13-23; 8:45 am]
BILLING CODE 4340-98-P
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</html>Indexed from Federal Register on April 14, 2023.
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