Environmental Groups File Amicus Brief in Defense of Rulemaking Strengthening Financial Requirements for Offshore Oil and Gas Operators

August 21, 2024

Environmental Groups File Amicus Brief in Defense of Rulemaking Strengthening Financial Requirements for Offshore Oil-and-Gas Operators

Big Oil also defending govt. rule, opposing Louisiana, Texas, Mississippi

Contacts

Jackson Chiappinelli, (585) 402-2005, [email protected]

Legal document

Washington, D.C.-

Environmental and Gulf-based groups filed an amicus brief today in defense of a federal rule that strengthens financial bonding requirements for offshore oil-and-gas projects thereby reducing the risk of leaving abandoned infrastructure in our oceans and their cleanup costs with taxpayers. The Interior Department published the rule in April.

Oil and gas companies are legally obligated to comply with decommissioning requirements, the last step in the fossil fuel extraction cycle. Decommissioning involves dismantling facilities and returning the surrounding areas to their natural state. Unplugged wells and abandoned infrastructure pose serious threats to public health and safety, vulnerable ecosystems and marine wildlife.

Louisiana, Texas, and Mississippi challenged the rulemaking in the U.S. District Court for the Western District of Louisiana in June. Louisiana Attorney General Liz Murrill told Reuters that the rule is "a really egregious direct assault on intermediate level producers of oil and gas, and that affects a lot of business in our state."

In fact, decommissioning Louisiana's total unplugged well inventory (which includes offshore wells) could create between 19,094 and 49,138 direct job-years in the state. Meanwhile, over 20,000 Louisiana oil-and-gas jobs have vanished in the last decade - a nearly 60% reduction.

The American Petroleum Institute, which represents the biggest oil companies in the country, is also defending the government's new rule.

Between $40-70 billion is currently needed to cover the costs of safely plugging wells, removing platforms, and cleaning up infrastructure. But the government only holds about $3.5 billion in collective financial assurances from the offshore fossil fuel industry to cover the costs of decommissioning if operators fail to pay, which means taxpayers would be the backstop. The new rule adds $6.9 billion to the government's decommissioning funds, which will not cover the entire $30 billion gap, but will be an important step towards holding operators accountable to pay their costs and meet their obligations.

"We're defending this rule because it's a commonsense measure to hold companies that extract oil from public waters accountable for cleaning up after themselves, instead of American taxpayers," said Earthjustice attorney Ava Ibanez Amador. "Still, this is only a first step in fixing the regulatory framework that has enabled the oil industry to degrade our oceans for decades."

Earthjustice filed the amicus brief on behalf of Center for Biological Diversity, Healthy Gulf, Oceana, and Ocean Conservancy.

The Development Driller III in the Gulf Of Mexico, off the coast of Louisiana. (Gerald Herbert / AP)

Additional Resources

• About the Oceans Program

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