Recent Regulatory Developments Affecting Floating Production, Storage, and Offloading Systems
Authors: Daughdrill W.H. , Proctor R.C. , Cushing J.M. 
Published: October 2008

The U.S. Coast Guard (USCG) continues to make progress in developing an appropriate regulatory scheme for Floating Production, Storage, and Offloading (FPSO) systems. The USCG has worked closely with the U.S. Minerals Management Service (MMS) and the affected marine industry to clarify the applicability of USCG regulations to FPSOs. On December 7, 1999 the USCG proposed new regulations for FPSOs as part of a major rewrite of the Outer Continental Shelf (OCS) Activities requirements in Title 33, Code of Federal Regulations (CFR), Subchapter N. These proposed regulations provide additional clarification of the USCG's regulatory scheme for FPSOs but will require further refinement as the rulemaking process continues. The USCG has formed an internal project team to address continuing questions on FPSOs and determine the extent of needed regulatory changes and policy guidance. Finally, the USCG has reaffirmed the applicability of the Oil Pollution Act of 1990 (OPA-90) to FPSOs. This determination will have a significant impact on the design and construction of FPSOs should they be approved for use on the U.S. Gulf of Mexico (GOM) OCS.

Introduction

This paper strictly reflects the opinions of the authors and does not represent the official position of the U.S. Coast Guard or the U.S. MMS. Requests for official determinations regarding regulatory requirements applicable to FPSOs proposed for use on the U.S. OCS should be referred in writing to the appropriate agency.

A number of new developments have occurred since Daughdrill and Brown1 discussed the fundamental USCG regulatory scheme for FPSOs in 1999. On February 2, 2001, the MMS released the final Environmental Impact Statement (EIS) on the proposed use of FPSOs on the Gulf of Mexico OCS (Central and Western Planning Areas)2. Publication of the final EIS prepares the MMS to make a programmatic decision on the possible use of FPSOs within the study area. Actual FPSO project proposals are likely in the near future should the MMS accept the conceptual use of FPSOs in the deepwater OCS areas of the Western and Central Planning Areas of the Gulf of Mexico. Should this occur, both MMS and the USCG would be pressed by FPSO designers, builders and operators to rapidly clarify the U.S. regulatory scheme for these specialized vessels.

Background.

In 1999, Regg3 described the framework of the expected MMS regulatory scheme applicable to FPSOs. Likewise, Daughdrill and Brown1 outlined the expected USCG regulatory scheme for FPSOs based upon information available at that time. Both papers agreed that U.S. government regulation of FPSOs would be a joint process involving both the MMS and the USCG. These original assessments of the regulatory landscape have remained generally accurate, however both agencies have made additional progress in clarifying the regulatory requirements for FPSOs in the intervening years.

The Memorandum of Understanding (MOU) between the USCG and MMS remains the cornerstone document that defines the jurisdictional relationship between the agencies on FPSOs and other fixed and floating offshore structures.