An Regulatory Minefield

•
•
•
•

Solicitor, U.S. Department of the
Interior
Deputy Solicitor, U.S. Department of
the Interior
Deputy Chief of Staff, U.S. Department
of the Interior
Counselor to the Secretary and Director
of Congressional and Legislative Affairs,
U.S. Department of the Interior

•
•
•
•

General Counsel, U.S. Environmental
Protection Agency
Assistant Administrator for Water, U.S.
Environmental Protection Agency
Regional Solicitor, U.S. Department of
the Interior
Associate Solicitor, U.S. Department
of the Interior

•
•

•

Deputy Director, U.S. Mineral
Management Service
Deputy Director, Office of
Congressional and
Legislative Affairs, U.S.
Department of the Interior
Deputy Director, Bureau of
Land Management

kjljkljksaddaaaaaaaaalljjljklasdjklasdjlasdlkjas
djklasljasdjklasdlsljklaslasdlasjkljkll
1

April 17, 2014

 DC Policymakers Typically React to Events

“A Lonely Bill on Capitol Hill” and New
Regulations

2

 One Reaction
•

18-months after the Macondo incident, BSEE issued Incidents of
Non-Compliance (INCs) to Halliburton and Transocean in
addition to the operator.

•

“This is the first time the Department of the Interior has issued
INCs directly to a contractor that was not the well’s operator.”

•

“I know it is a new view for this industry, but I am convinced it is
the right view.”

•

Contractor INCs: 2 in 2011, 0 in 2012, 7 in 2013.

•

CBO informally told to expect ½ of civil penalty revenue to come
from INCs by contractors.
3

 History of Application
•

Director of BOEMRE Press Release

•

Inquiry from NOIA

•

Congressional Letters of Inquiry

•

BSEE (Watson) Response to NOIA and Congress

•

Guidance to Employees

•

Administrative Appeal/Legal Challenge
4

 First Administrative Challenge to be Briefed
•

In March, 2013 Island Operating Co., Inc. is INC’d

•

Among other things, Island is challenging whether the agency
has authority to issue such INCs to contractors under the Outer
Continental Shelf Lands Act or its existing regulations

•

Briefs have been submitted by Island and the Agency

•

NOIA and an ally filed an amicus brief

5

 NOIA and an Ally Filed an Amicus Brief
•

Issue of first impression for Appeals Board that is important to the industry
and the public.

•

Recognizes that BSEE wants to insure that the operations conducted
pursuant to OCSLA are safe for persons, property and the environment, but
asserts that they must do so within legal parameters.

•

Asserts that agency’s current regulations do not impose liability on
contractors.

•

Explain that the agency’s actions create a minefield where regulations are
applied to an entire class of people to whom the application of the
regulations was never contemplated.

•

If BSEE wants to pursue its goals of imposing liability on contractors, it must
engage in the normal legislative and regulatory processes by which such
decisions are made in the context of full public debate.
6

 BSEE Position
•

“Whenever the regulations in 30 C.F.R. parts 250 through 282 …
require the lessee to meet a requirement or perform an action,
the lessee, operator (if one has been designated), and the
person actually performing the activity to which the
requirement applies are jointly and severally responsible for
complying with the regulation.” 30 C.F.R. 250.146(C).

•

Section 1334 states that, “notwithstanding any other provision”
of OCSLA, any regulations prescribed by BSEE “for the
prevention of waste and conservation of the natural resources”
of the OCS “shall … apply to all operations conducted under a
lease issued or maintained under the provisions…of OCSLA.”
7

 Amicus
•

“It shall be the duty of any holder of a lease or permit … to …
maintain all operations within [the] lease area or within the
area covered by [the] permit … in compliance with regulations
intended to protect persons, property, and the environment.”
43 U.S.C. § 1348(b)(2).

•

Regulations require that “you” must protect health, safety and
operations by preforming all “operations in a safe and
workmanlike manner,” and the regulations define “you” to only
include: 1) the lessee; 2) owners or holders of operating rights;
3) designated operators or agents of a lessee; 4) pipeline rightof-way holders; and 5) State lessees granted a right-of-use and
easement.
8

 Obvious Issues
•

Any individual employee of both operators and contractors
could be personally liable for compliance.

•

To be “jointly responsible” typically means that one is
responsible for an action even if one does not take the action
himself. Thus, individuals and contractors would be, in effect,
guarantors that lessees and operators would comply with BSEE’s
regulations, even though they have no control whatsoever over
how lessees and operators perform their duties.

•

Which duties that have been applied only to lessees apply to
both employees and contractors? Equipment maintenance?
See. Section 250.108.
9

 A Regulatory Minefield

•
•
•
•

Solicitor, U.S. Department of the
Interior
Deputy Solicitor, U.S. Department of
the Interior
Deputy Chief of Staff, U.S. Department
of the Interior
Counselor to the Secretary and Director
of Congressional and Legislative Affairs,
U.S. Department of the Interior

•
•
•
•

General Counsel, U.S. Environmental
•
Protection Agency
Assistant Administrator for Water, U.S. •
Environmental Protection Agency
Regional Solicitor, U.S. Department of
the Interior
Associate Solicitor, U.S. Department of •
the Interior

Deputy Director, U.S. Mineral
Management Service
Deputy Director, Office of
Congressional and
Legislative Affairs, U.S.
Department of the Interior
Deputy Director, Bureau of
Land Management

kjljkljksaddaaaaaaaaalljjljklasdjklasdjlasdlkjas
djklasljasdjklasdlsljklaslasdlasjkljkll
10

April 17, 2014