Update: Offshore Energy Fines Increasing

The Bureau of Safety and Environmental Enforcement (BSEE) is raising the cost for non-compliance by offshore oil, gas and wind companies.  BSEE has now posted the Notice to Lessees that explains the changes for different violations.  The change is an annual inflation adjustment and increases the maximum fine from $42,704 to $43,576.  The change of about $800 is not by itself a dramatic change.   However, violators need to consider that:

  1. The fine is per day – There is a certain cost to having to fix the problem immediately or watch the fines pile up.
  2. The fine is per violation – BSEE may tack on multiple citations to the original offense.  For example, an investigation of a gas leak may lead to citations on inadequate orientations, signage and training.
  3. The real threat is a shut-in – BSEE has the power to shut down an entire operation if the violation threatens the safety of the facility.  The fine may be a drop in the bucket compared to that fine.

Here is what BSEE defines as a violation:

Criminal violations are covered under Section 24(c) of the Outer Continental Shelf Lands Act (OCSLA or the Act) (43 U.S.C. 1350(c)). Criminal violations are those that are knowing and willful and may include:

  • Violation of any provision of the OCSLA, any lease term, license, or permit pursuant to the Act, or any regulation or order issued under the Act designed to protect health, safety, or the environment or to conserve natural resources;
  • Any false statement, representation, or certification in any application, record, report, or other document filed or required to be maintained under the Act;
  • Falsifying, tampering with, or rendering inaccurate any monitoring device or method of record required to be maintained under the Act; and
  • A disclosure of any data or information required to be kept confidential by the Act. Inspector General Act (IGA): The OIG is authorized to investigate violations of OCSLA under Section 2 of the IGA (5 U.S.C. App §§ 2 and 4 (1998)).

Need help getting your offshore safety management plan in shape?  Are your managers trained on the offshore SEMS rules?   Contact us at info@lifelinestrategies.com.

Leave a Reply