Oil Spill Financial Responsibility Adjustment of the Limit of Liability for Offshore Facilities, 22910-22912 [2023-07931]

Agencies

• DEPARTMENT OF THE INTERIOR
• Bureau of Ocean Energy Management

[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 [www.gpo.gov]
[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 [email protected] 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 [email protected] or at (703) 787-1025.

[[Page 22911]]


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 https://www.bls.gov/opub/hom/cpi/home.htm.

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