[Federal Register Volume 83, Number 12 (Thursday, January 18, 2018)]
[Rules and Regulations]
[Pages 2540-2542]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00798]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

30 CFR Part 553

[Docket ID: BOEM-2017-0048; MMAA104000]
RIN 1010-AD98


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 is issuing 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 2013. This rule increases the OPA 
offshore facility limit of liability for damages from $133.65 million 
to $137.6595 million.

DATES: This rule is effective on February 20, 2018.

FOR FURTHER INFORMATION CONTACT: Questions regarding the inflation 
adjustment methodology or amount should be directed to Mr. Martin 
Heinze, Economics Division, BOEM, at <a href="/cdn-cgi/l/email-protection#bcd1ddcec8d5d292d4d9d5d2c6d9fcded3d9d192dbd3ca"><span class="__cf_email__" data-cfemail="45282437312c2b6b2d202c2b3f2005272a20286b222a33">[email protected]</span></a> or at 703-
787-1141. Questions regarding the timing of this adjustment or the 
applicability of the regulations should be directed to Deanna Meyer-
Pietruszka, Chief, Office of Policy, Regulation and Analysis, Bureau of 
Ocean Energy Management (BOEM), at <a href="/cdn-cgi/l/email-protection#0d69686c63636c23606874687f207d6468797f787e77666c4d6f626860236a627b"><span class="__cf_email__" data-cfemail="9efafbfff0f0ffb0f3fbe7fbecb3eef7fbeaecebede4f5ffdefcf1fbf3b0f9f1e8">[email protected]</span></a> or 
at (202) 208-6352.

SUPPLEMENTARY INFORMATION:
I. Background
II. Calculation of the 2017 Adjustment
III. Effective Date
IV. Procedural Requirements
    A. Regulatory Planning and Review (E.O. 12866, 13563 and 13771)
    B. Regulatory Flexibility Act
    C. Small Business Regulatory Enforcement Fairness Act
    D. Unfunded Mandates Reform Act
    E. Takings (E.O. 12630)
    F. Federalism (E.O. 13132)
    G. Civil Justice Reform (E.O. 12988)
    H. Consultation With Indian Tribes (E.O. 13175 and Departmental 
Policy)
    I. Paperwork Reduction Act
    J. National Environmental Policy Act
    K. Effects on the Energy Supply (E.O. 13211)

I. Background

    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 for any vessel or facility, including any offshore 
facility that discharges or poses a substantial threat of discharge of 
oil into or upon navigable waters, adjoining shorelines, or the 
exclusive economic zone, are liable for the removal costs and damages 
that result from such discharge or threat of discharge, as specified in 
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 OPA provided 
that responsible parties for an offshore facility incident were liable 
for ``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 limits of liability from 
declining over time as a result of inflation, and shifting the 
financial risk of oil spill incidents to the Oil Spill Liability Trust 
Fund (OSLTF), the OPA requires that the President adjust the limits of 
liability ``not less than every three years,'' by regulation, to 
reflect significant increases in the CPI. (33 U.S.C. 2704(d)(4)). This 
mandate, in place since 1990, preserves the deterrent effect and 
``polluter pays'' principle embodied in OPA.
    BOEM last adjusted for inflation the OPA offshore facility limit of 
liability for damages on December 12, 2014 (79 FR 73832). That 2014 
rule updated the offshore facility limit of liability based on the 
Consumer Price Index All Urban Consumer (CPI-U) using the 2013 annual 
average CPI-U. The Bureau of Labor Statisitcs (BLS) has published the 
2016 annual average CPI-U, which BOEM is using to calculate this three-
year inflation adjustment for the offshore facility limit of liability.
    BOEM is promulgating this rule pursuant to the provisions of Title 
I of OPA, Executive Order (E.O.) 12777, as amended, and BOEM 
regulations at 30 CFR part 553, subpart G--Limit of Liability for 
Offshore Facilities. A proposed rule is unnecessary, and BOEM thus has 
good cause for issuing this final rule under 5 U.S.C. 553(b), because 
the adjustment in the limit of liability is mandated by statute, the 
methodology for determining the amount is defined in BOEM's 
regulations, and those regulations at Sec. Sec.  553.703(b)(4) and 
553.704 provide that inflation adjustments to the offshore facilities 
limit of liability will be implemented through final rulemaking. The 
legislative and regulatory history for OPA limit of liability inflation 
adjustments can be found in the rulemaking preamble for the last 
inflation adjustment at 79 FR 73832.

II. Calculation of the 2017 Adjustment

    The methodology for calculating the offshore facilities limit of 
liability inflation adjustment is provided in Sec.  553.703.
    Section 553.703(b)(2) requires that, not later than every three 
years from the year the limit of liability was last adjusted for 
inflation, BOEM will evaluate whether the cumulative percent change in 
the annual CPI since that year has reached a significance threshold of 
three percent or greater. BOEM's regulations specify Annual CPI-U as 
the appropriate mechanism by which to measure CPI. The limit of 
liability was last adjusted using the 2013 Annual CPI-U and BOEM has 
determined that the cumulative percent change in the Annual CPI-U since 
2013

[[Page 2541]]

exceeds three percent. Therefore, as required by BOEM's regulations, 
BOEM must increase the offshore limit of liability for damages in Sec.  
553.702 by an amount equal to the cumulative percent change in the 
Annual CPI-U from the year the limit was last adjusted by regulation.
    The formula for calculating a cumulative percent change in the 
Annual CPI-U provided in Sec.  553.703(a) 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. 
Using the BLS Annual CPI-U index numbers for 2013 and 2016, the 
calculation is: (240.007-232.957) / 232.957 = 0.03026. Multiplying x 
100 yields a cumulative percent change of 3.026 percent. Section 
553.703(a) requires the cumulative percent change value to be rounded 
to one decimal place, resulting in a value of 3.0 percent.
    Under Sec.  553.703(c), BOEM calculates the adjustment to the 
offshore facilities limit of liability for inflation 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: $133.65 million + ($133.65 million x 0.03) = $137.6595 
million.
    Therefore, BOEM is revising the regulations at Sec.  553.702 to 
increase the limit of liability under OPA for a responsible party for 
any offshore facility, including any offshore pipeline, to the total of 
all removal costs plus $137.6595 million for damages with respect to 
each incident.
    Further information regarding the CPI and the methodology used by 
the BLS to develop the CPI is available at: https://www.bls.gov/cpi/cpi_dr.htm#2017.

III. Effective Date

    BOEM's regulations, at Sec.  553.704, provide for a 90-day delay in 
the effective date of the adjustment to the limit of liability. Section 
553.704 also provides that BOEM may, as part of a rule amending Sec.  
553.702, specify a different amount of time between the publication of 
the rule in the Federal Register and the effective date of that rule. 
The adjustment in the limit of liability is mandated by statute and the 
methodology for determining the amount of the update is defined in 
BOEM's regulations. Given that Sec.  553.704 specifically allows other 
than a 90-day delay in effective date to be announced in this rule 
amending Sec.  553.702, BOEM has determined that a 30-day delay in 
effective date is appropriate.

IV. Procedural Requirements

A. Regulatory Planning and Review (E.O. 12866, 13563 and 13771)

    E.O. 12866 provides that the Office of Information and Regulatory 
Affairs (OIRA) in the Office of Management and Budget (OMB) will review 
all significant rules. OIRA has determined that this rule is not 
significant.
    This rule is an update to the offshore facility limit of liability 
under the OPA. It is neither a new regulation, nor does it increase the 
regulatory burden on regulated entities. This final rule simply 
maintains the value of the limit of liability set by the OPA in 1990 by 
updating the limit of liability for three years of inflation as 
required by the OPA at 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. The OPA statutory mandate does not give BOEM the discretion 
to reduce burdens or maintain freedom of choice.
    E.O. 13771 of January 30, 2017, directs Federal agencies to reduce 
the regulatory burden on regulated entities and control regulatory 
costs. The E.O., however, applies only to significant regulatory 
actions, as defined in Section 3(f) of E.O. 12866. This rulemaking does 
not meet the definition for a significant regulatory action; thus, E.O. 
13771 does not apply to this rulemaking.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires an agency to prepare 
a 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.

C. Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act.
    Implementation of this rule will not:
    (a) Have an annual effect on the economy of $100 million or more;
    (b) cause a major increase in costs or prices for consumers, 
individual industries, Federal, State, or local government agencies, or 
geographic regions; or
    (c) result in significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises.

D. Unfunded Mandates Reform Act

    This rule does not impose an unfunded mandate on State, local, or 
tribal governments, or the private sector of more than $100 million per 
year. This rule does not have a significant or unique effect on state, 
local, or tribal governments or the private sector. A statement 
containing the information required by the Unfunded Mandates Reform Act 
(2 U.S.C. 1531 et seq.) is not required.

E. Takings (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.

F. 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.

G. 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.

H. Consultation With Indian Tribes (E.O. 13175 and Departmental Policy)

    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 continually strives to strengthen 
its government-to-government relationship with Indian tribes through a

[[Page 2542]]

commitment to consultation with Indian tribes and recognizes 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 the consultation policy of the 
Department of the Interior in Chapters 4 and 5 of Series 512 of the 
Departmental Manual and has 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. On the basis of this evaluation, BOEM has 
determined that consultation is not necessary to comply with any DOI 
policy.

I. Paperwork Reduction Act

    This rule does not contain information collection requirements, and 
a submission to the OMB under the Paperwork Reduction Act (44 U.S.C. 
3501 et seq.) is not required. We may not conduct or sponsor, and you 
are not required to respond to, a collection of information unless it 
displays a currently valid OMB control number.

J. National Environmental Policy Act

    A detailed environmental analysis under the National Environmental 
Policy Act of 1969 (NEPA) is not required if the rule is covered by a 
categorical exclusion (see 43 CFR 46.205). This final rule meets the 
criteria set forth at 43 CFR 46.210(i) for a Departmental Categorical 
Exclusion in that this final rule is ``. . . of an administrative, 
financial, legal, technical, or procedural nature . . .'' We have also 
determined that the rule does not involve any of the extraordinary 
circumstances listed in 43 CFR 46.215 that would require further 
analysis under NEPA.

K. Effects on the Energy Supply (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.

List of Subjects in 30 CFR Part 553

    Administrative practice and procedure, Continental shelf, Financial 
responsibility, Liability, Limit of liability, Oil and gas exploration, 
Oil pollution, Oil spill, Outer Continental Shelf, Penalties, 
Pipelines, Rights-of-way, Reporting and recordkeeping requirements, 
Surety bonds, Treasury securities.

    Dated: January 9, 2018.
Joseph R. Balash,
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 continues to read as follows:

    Authority:  33 U.S.C. 2704, 2716; E.O. 12777, as amended.


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 $137.6595 
million for damages with respect to each incident.

[FR Doc. 2018-00798 Filed 1-17-18; 8:45 am]
 BILLING CODE 4310-MR-P


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