The USA’s Department of the Interior is proposing updates to reduce costly regulations on the offshore oil and gas industry, which would effectively reduce the amounts companies need to set aside for future decommissioning.
The proposal follows President Trump's Executive Order 14154 "Unleashing American Energy" which aims to exploit the full potential of the USA's energy resources by getting rid of "burdensome" regulations. It would rescind requirements from a 2024 rule that forced companies to set aside around US$6.9bn in supplemental financial assurance to cover potential costs of decommissioning activities. Around US$6bn of that would have fallen on small businesses, which make up most of the operators on the Outer Continental Shelf. At the time, the rule was challenged by the Republican-led states of Louisiana, Mississippi and Texas and oil and gas industry groups, who argued that it would result in "potentially existential consequences" for small and medium-sized companies.
The change is expected to save industry around US$484mn each year in compliance costs.
“For too long, Washington red tape has strangled American energy producers and held back small businesses,” said Interior Secretary Doug Burgum. “President Trump is delivering on his promise to put American workers first, cut burdensome regulations and unleash our vast energy potential. These updates will free up billions of dollars for exploration and development, create good-paying jobs and unlock domestic energy production so we are never forced to rely on foreign adversaries for the resources that power our economy.”
The proposal would modernise how the Bureau for Ocean Energy Management (BOEM) evaluates financial risks and lower the amounts companies must set aside for future decommissioning. By using updated risk metrics and data from the Bureau of Safety and Environmental Enforcement, BOEM would ensure taxpayer protections remain in place while allowing companies to invest more capital in new projects.
The proposal maintains strong accountability for lessees and grant holders under the Outer Continental Shelf Lands Act, but reduces excessive financial barriers that have slowed growth, according to the BOEM.
The proposed changes will be published in the Federal Register with a 60-day public comment period.
