U.S. Interior to Revise Offshore Financial Assurance Rule to Foster Energy Development

The U.S. Interior Department has announced plans to revise the Bureau of Ocean Management’s risk management and financial assurance regulations and develop a new rule that is in line with the Trump administration’s 2020 proposed regulatory guidelines. The amended measure, based on the 2020 proposed rule, would significantly reduce expenditures and red tape associated with the current process and make available large amounts of funding for exploring, drilling, leasing, and producing oil and gas in the Gulf of America.

The department noted that this move underscores its commitment to supporting domestic energy production and alleviating regulatory burdens on oil and gas producers. The previous administration’s rule was projected to raise financial assurance requirements for offshore oil and gas operators by $6.9 billion in additional bonding, leading to an extra $665 million in premiums annually for businesses. This has restricted the ability of many companies operating in the Gulf of America to invest in energy development projects. That rule, finalized in April 2024, updated the criteria for determining when oil, gas, and sulfur lessees, right-of-use and easement grant holders, and pipeline right-of-way grant holders must provide financial assurance beyond the current minimum bonding levels to meet their Outer Continental Shelf Lands Act obligations. The rule raised the financial assurance available to the U.S. Government in the event of a lessee default, thereby reducing risk to the government and, in turn, to U.S. taxpayers.

The bureau will continue to require all operators on the Outer Continental Shelf to make available financial assurance for their decommissioning responsibilities. Under the current administration, the accountability for supervision remains with the industry, while the administration formulates a more balanced regulatory approach.

The department expects to finalize the rule during 2025.